patrick.net

edvard2 says

No.... I did not "lose" any money. I still own the cars.

You own something with 95% less value like the majority of cash buyers.

and at some point those cars will be in the ground netting you a 100% loss.

Thedaytoday says

You own something with 95% less value.

so. what. This is a very simple debate about monthly outflows of cash. So if I am paying zero in car payments and you- as you admitted- are, then how is it that I am "losing" money when I'm not losing any at all? The only way that your side of the argument works is if I too were in the new car market, using my cars as a down payment. If I did so, then I would be spending money every single month on payments. Car dealers sell and lease cars because you as the buyer pay them for their product. I am not paying anyone anything. You are. End of story.

One more thing. In CA you only pay taxes on the payments. Leasing is the best way to get a new car every few years.

Cars today have more safety features than cars just 5 yesrs ago.

My 10 year old Lexus does not even have rear curtain air bags.

edvard2 says

so. what. This is a very simple debate about monthly outflows of cash.

No it is not.

IDDQD says

I'm not dismissing anything, I just point to the fact that cost of maintenance in really not that big for newish cars. But your statement re zero out of pocket expenses is interesting. How do you get around paying for insurance, registration, sales tax (if you state has such thing)?

yes I paid registration, so do you. I pay insurance so do you. sales tax was swallowed by the dealer :)

I think we need to take a step back and look at where Thedaytoday is coming from. Early on he said:
For every penny I invest the government deducts it off my tax bill
Do you use this car for business purposes?
Perhaps he is in a sales position where he needs to have a newer car to create a good impression. Thedaytoday please clarify.

SFace says

You sound like a sixth grader.

Here's what happens in lease; You lease for 3 years or 30K miles, you pay X amount for that privilage. It's the most expensive 3 years in the car life cycle.

After three years, you hand the car back to the lessor. There is no equity. no car. In fact, you may be penalized for mileage or condition convenent.

Ask your mom and dad.

Nope, it does not have to be this way. I have profited as I have explained.

Just the fact you chose to ignore every word I posted shows your lack of intelligence.

Thedaytoday says

There is no equity.

You know nothing, I would say you are the one in 1st grade.

IDDQD says

Peter P says

One more thing. In CA you only pay taxes on the payments. Leasing is the best way to get a new car every few years.

On the difference between initial price and residual value, to be exact.

On financing costs too.

Peter P says

IDDQD says

Peter P says

One more thing. In CA you only pay taxes on the payments. Leasing is the best way to get a new car every few years.

On the difference between initial price and residual value, to be exact.

On financing costs too.

Zero finance costs and a much improved credit score.

Thedaytoday says

Nope, it does not have to be this way. I have profited as I have explained.

Just the fact you chose to ignore every word I posted shows your lack of intelligence.

The only person who actually profited was the dealer who leases the car to you.

edvard2 says

means payments and out of pocket expenses

It is not an out of pocket expense for me. That is the difference between your tax bill and mine.

SFace says

Thedaytoday says

For every penny I invest I retain at the end of the lease!!!!

after 4, 3yr leases the car is mine, brand new, zero finance, 100% deducted.

FREE FREE FREE!!!!

You sound like a sixth grader.

Here's what happens in lease; You lease for 3 years or 30K miles, you pay X amount for that privilage. It's the most expensive 3 years in the car life cycle regardless of your negotiating skills.

After three years of payments, you hand the car back to the lessor. There is no equity/car and definitely no money. In fact, you may be penalized for mileage or condition convenent. Your problem is how much you have to pay to get another car.

Ask your mom and dad.

Try leasing a used car. You will find that new cars are cheaper.

You need to play numbers with the depreciaion curve and the dealer incentives.

IDDQD says

Let's not kid ourselves: all it means is that you left enough money on the table while negotiating the price for them to be able to do that. ;)

Not in my case. I screwed them to the wall.

They were desperate to trade. It was during the fukishima meltdown which i took advanatge of.

Thedaytoday says

It is not an out of pocket expense for me. That is the difference between your tax bill and mine.

Writing a $25,000 car off of my taxes would do absolutely zero for me. And sorry, but you already said you have a car payment so yep- you're paying money every month while I'm not

Peter P says

Try leasing a used car. You will find that new cars are cheaper.

You need to play numbers with the depreciaion curve and the dealer incentives.

Yes and get a good deal or don't buy or trade. You must benefit from all the upsides not the dealer.

Thedaytoday says

Peter P says

Try leasing a used car. You will find that new cars are cheaper.

You need to play numbers with the depreciaion curve and the dealer incentives.

Yes and get a good deal or don't buy or trade. You must benefit from all the upsides not the dealer.

Also, first and foremost, negotiate a low sell price. Then, you talk about money factors separately. Pay no cap cost reduction and buy extra miles you need upfront.

IDDQD says

Peter P says

IDDQD says

Peter P says

One more thing. In CA you only pay taxes on the payments. Leasing is the best way to get a new car every few years.

On the difference between initial price and residual value, to be exact.

On financing costs too.

I didn't know that.

Moreoever, financing is on the entire sell price. Even if you prepay all lease payments you will still have a financing cost. So you need to get rock bottom money factors.

IDDQD says

You need to play numbers with the depreciaion curve and the dealer incentives.

Isn't it like gambling: both you and manufacturer trying to guess the residual for particular car in 2-3 years. The one who guesses better - wins.

But you have the option to buy at the fix price. :-)

Remember, the dealer and the manufacturers want different things. This is how good deals can exist at all.

Peter P says

Also, first and foremost, negotiate a low sell price. Then, you talk about money factors separately. Pay no cap cost reduction and buy extra miles you need upfront.

Yep, only take the mileage you need no more no less.

IDDQD says

Well, negotiating price and then asking them to eat sales tax is no different than negotiating 10% lower price and then paying sales tax yourself. Matter of tactics, I guess.

I got lower than sticker price for a new car - Upside 1
I got the tax included - Upside 2
I got a higher trade in, 3k more!!! - Upside 3
I increased my equity - Upside 4

Do your homework and you can own a new car every 3 years at no cost.

Business do it all day long.

IDDQD says

Isn't it like gambling: both you and manufacturer trying to guess the residual for particular

No. Residual information is available the moment the car hits the dealers. Ask your dealer the residual before you buy. Again Subaru THE BEST!

Leather , GPS add ons will lower your residual.

To my friend who invested $21K 20 years ago, you talk about no monthly payment and you forget your own balloon payment 20 years ago.

Do you think I put $20k into a car, no. That's stupid.

That ties up my capital.

While my investment builds your's evaporates. Every 3 years I get a new car and my 4th will be free.

I am building between 6k and 9k every 3 years.

Peter P said: Yep. I lease new European cars and buy used Japanese cars.
When you buy used, do you get seat covers, or just purchase new seats?

EBGuy says

Peter P said: Yep. I lease new European cars and buy used Japanese cars.

When you buy used, do you get seat covers, or just purchase new seats?

Huh? Did I miss something?

Thedaytoday says

While my investment builds your's evaporates. Every 3 years I get a new car and my 4th will be free.

You are clearly not understanding the mathematics here. I've explained this already. Pretend we're not talking about cars for a moment. If you have a never-ending vehicle payment because you have elected to perpetually lease then you are doing just that: paying money every month for a new car. My cars were paid off a very long time ago and the money that I have saved NOT paying for cars stayed in my pocket and was also invested in actual investments that actually gives me real equity, not the trade-in equity you are using as a reason.

SFace says

edvard2 says

not the trade-in equity you are using as a reason.

There is no equity. At the end of lease term, no car, no money. If anything, there may be more payments to send the car back to the lessor because of convenent..

Exactly, how can someone who leases cars claim any "equity"? Equity belongs to someone who has ownership rights to a vehicle and can trade it in/sell it for fair market value. The person who leases however is a basically a renter, hence no equity!

Dan8267 says

edvard2 says

Why do people waste so much money on cars?

Now I'LL be in MY bunk!

Is that a Firefly reference?

SFace says

Thedaytoday says

While my investment builds your's evaporates. Every 3 years I get a new car

and my 4th will be free.

I am building between 6k and 9k every 3 years.

Nominated

For what? ;)

Peter P said: Huh? Did I miss something?
Sorry, I'll stick to caldo verde references.

Peter P says

Is that a Firefly reference?

One of Dan's favorites

dublin hillz says

SFace says

edvard2 says

not the trade-in equity you are using as a reason.

There is no equity. At the end of lease term, no car, no money. If anything, there may be more payments to send the car back to the lessor because of convenent..

Exactly, how can someone who leases cars claim any "equity"? Equity belongs to someone who has ownership rights to a vehicle and can trade it in/sell it for fair market value. The person who leases however is a basically a renter, hence no equity!

Equity, no. Saving money over buying and losses due to depreciation and maintenance yes.

New Renter says

dublin hillz says

SFace says

edvard2 says

not the trade-in equity you are using as a reason.

There is no equity. At the end of lease term, no car, no money. If anything, there may be more payments to send the car back to the lessor because of convenent..

Exactly, how can someone who leases cars claim any "equity"? Equity belongs to someone who has ownership rights to a vehicle and can trade it in/sell it for fair market value. The person who leases however is a basically a renter, hence no equity!

Equity, no. Saving money over buying and losses due to depreciation and maintenance yes.

My understanding is that leasing is only beneficial if and only if a customer insists on having a new car every four years and does not go over or significantly under the mileage restrictions that are associated with the lease terms. Additionally the leasee would have to take care of basic maintenance and ensure that interior is not damaged via issues such as kids and pets. If the customer however were OK to have the car over a 4 year period, owning is advantageous and the longer the subject owns that car the more advantageous it is.

bob2356 says

That being said I agree cars are light years better. EFI is the biggest winner. I was totally amazed with my 5.0 mustang. It just started and run perfectly every time. Carbs were always crude and ragged running at best. Getting rid of ancient pushrod engines was second. Today's ohc engines are like sewing machines rather than farm tractors. The huge push to minimize NVH (noise, vibration, harshness) in the 90's was third. The 2 generations difference between my 89 e32 bmw and my wife's 98 e39 bmw is just amazing. So much smoother and refined it's hard to believe.

I'll agree with EFI and add electronic ignition.

I will disagree on pushrods though. I used to believe that until a friend of mine, a former mechanic, convinced me otherwise:

http://en.wikipedia.org/wiki/GM_LS_engine

GM's LS engine series is a modern pushrod V8 which in the Corvette can produce 350+ HP and 350+ ft-lbs torque yet still achieve 30 MPG highway when driven judiciously.

http://www.youtube.com/embed/AtPwnsyGTxw

Add in cylinder deactivation, regenerative braking, electric steering and electric A/C and you can push those numbers even higher.

People here are determined not to listen. Keep losing money As long as I make the payments, the car is mine. The equity is mine.

Which is why I have over $13k equity in my lease and my payoff balance is

is $10k on a $23k car.

Don't listen drop $20k cash and sit on the same car for 25 years until it depreciates to ZERO at which time you will buy a new car.

There is a substantial benefit to leasing and that is if you own a business, you can write off the lease. I don't believe you can do this with a purchased car. On a $350/month lease, that could be as much as $80/month. Also, many here forgot the money is tied up so there is opportunity cost on paying cash for a used car.

Unless you buy a beater, I don't think that it's that much better to buy a lesser priced used car than a brand new car you lease. The monthly nut, even after depreciation, brakes, tires, etc is about the same.

OP, reading the original post, it's clear that you view automobiles as a functional tool that gets you from a to b. My father shares your sentiments.

On the flip side... I'm an engineer and a car guy, it's in my blood. I see cars as art. I enjoy tinkering with them, modifying them, and comparing their performance. I perform all my own work on them. Nothing puts a smile on my face like mashing the go-pedal in a powerful V8 and getting firmly planted in my seat or taking a corner while on the brink of the tires letting go.

I will say that despite my adoration for cars, I'm still financially minded and have never (and don't expect ever - never say never right?) bought a new car new off the show-room floor. It's simply too much of a liability to consider. When a car loses 1/2 it's value after just 4 years, I'm not going to be jumping at the chance to have the latest greatest. At the same time, there are a lot of cool 4 year old cars out there to choose from, many that can still be purchased with warranty.

I have friends that gain energy and derive pleasure from wrist watches, some from computers, some from fashion, some from working out at the gym, some from cars...

If you think of cars strictly from a practical stand-point, you will never understand car culture and the pleasure derived by car enthusiasts.

Also, don't be fooled. There are a lot of $15-25K BMWs out there (few years old) that give the impression to the mainstream viewer that a $50-60K car just went by. Case and point. We have a 15yr old E-class Mercedes in the family. It's a 3rd car so never really gets used. I drove it to the office one day and one of the assistants here says to me, "Was it you who was driving that Benz into the office today." I looked at her puzzled considering that there wasn't a single Camry/Accord in the lot that was worth less.

But there is some truth to maintenance costs. Whether you own a 2012 $75K Benz or a 1997 $7K Benz, the maintenance costs aren't far off. You may have heard the saying, "Many can afford to buy a Ferrari, but very few can afford to own a Ferrari." With $3500 brake jobs, they aign't kidding.

Also, what you drive or how you dress does make an impression. And not only to attract the opposite sex. If I drove a $1000 Hyundai into the office as someone who makes decent money, I expect that my judgement and decision making would be called into question. Of course beyond the first impression it matters less and less, but 1st impressions can last and be tough to break.

Waitingtobuy says

There is a substantial benefit to leasing and that is if you own a business, you can write off the lease. I don't believe you can do this with a purchased car. On a $350/month lease, that could be as much as $80/month. Also, many here forgot the money is tied up so there is opportunity cost on paying cash for a used car.

Of course, I have now said what you have posted more than three times, no one is listening.

Even though what you and I have said is accurate there will be people who think dropping $20K balloon on two beaters and owning them for 25years is better than getting a new care every 3 years at no cost.