patrick.net

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.

Thedaytoday says

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.

Except in the end I have more money in my pocket, that's all.

SFace says

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

You can write off the car. In fact, with bonus depreciation, heavy vehicle enhancement or whatever, you can write off most of the car in Dec. While you get 450 in deduction a month, the buyer gets something like 47K right away.

Not necessarily:
There's also the price of the car to consider. The IRS' luxury auto tax rules limit depreciation write-off for the portion of the car's price that is in excess of $17,000 for the first few years of use. In other words, a new Rolls Royce and a Saturn will receive the same depreciation," says Stephen Nelson, who heads a Washington-based tax firm. "They're not going to let you tool around in your Silver Cloud and use tax law to subsidize it."

http://smallbusiness.blogs.cnnmoney.cnn.com/2008/06/10/can-i-write-off-my-personal-car/

As for a buying a beater and driving for 25 years, you may be right. The average person probably holds on to their purchased car for 7-8 years. The cost for buying a new car is the most with its financing and all sales tax upfront, followed I believe by a lease and buying a 2-3 yr old used car.

I'm not putting my wife and young daughters in a 25 yr old car. Too much at stake for me.

It isn't an either or proposition. The OP talked about Bimmers, SUVs, etc. I prefer a nice $26-$28K new leased car and saving for retirement and college education over a Range Rover any day.

Peter P says

Also, it is important to have at least 200 lb-ft of torque available at low rpm for merging and passing.

Torque by itself in no way describes passing ability. In order for that torque to have any meaning, you have to combine it with time, or effectively RPM (Once you do that it's called horsepower). For a more complete picture you want to also know the mass and gearing of the car.

Horsepower describes passing ability, not torque.

Horsepower = Torque x rpm/5252

A 30k car may not be much cheaper to lease than a 40k car. Plug in some numbers and you will be surprised.

I think the best thing to do is to buy a new car outright (save up for it so there won't be any need to finance) and ride it as long as possible. Honda accords are very reliable - should make 300,000 miles no problem as long as you do proper maintenance as scheduled. Hypothetically, if you use it for 12 years and assuming that you paid $30000 for it, the monthly cost would be $30,000/144 = $208 per month. And it will still have some resale value. I doubt you can get a better deal via constant leasing over a 12 year period and best thing about owning - no B.S. miles restrictions, no need to watch the odometer.

they are worth the money IMO. nothing look better than BMW and Benz. i think Porsches and Toyota's/Scion's are ugly, however. i would never drive one even free.

the body design of a BMW 335i coupe alone is worth like $50K. (maybe because I own one).

chanakya4773 says

No cell phone, TV, Restaurant food, games, movies , parks ...etc since all these
are purely emotional needs.

Without any entertainment at all, pretty soon absenteeism will increase at work not to mention alcoholism. Soviet union was a testament to that.

@Thedaytoday, I just finished reading this entire thread and either you are making some off the wall personal assumptions, making up your own reference points, know some uncommon tax loop-hole, committing tax fraud, or just plane insane.

I've never heard anyone talk about "building" equity with a leased car (that only depreciates) and must be returned to it's rightful owner at the conclusion of the lease. Unless the dealership is willing to sell you the car for less than they are willing to buy it back from you at the conclusion of the lease, which would mean they are as insane as you.

And rather than arguing and name calling, why not explain how you are doing it and earn your gold star. Otherwise, poof, be gone. No sense it just posting the same one liner over and over.

Well whats the fucking point of working hard and going to college if u cant buy nice bling?

If everyone had the attitude of the OP our entire economy would collapse.

You are what you drive. Retire early!? Why so you can hoard cats? Keep
Working man!

PockyClipsNow says

Well whats the fucking point of working hard and going to college if u cant buy nice bling?

If everyone had the attitude of the OP our entire economy would collapse.

You are what you drive. Retire early!? Why so you can hoard cats? Keep

Working man!

Well put.

And the only reason I would ever want to "retire early" is so that I can "work" on other business ventures that I enjoy more than my current day job (without having to worry about whether those ventures will pay my bills).

PockyClipsNow says

Well whats the fucking point of working hard and going to college if u cant buy nice bling?

If everyone had the attitude of the OP our entire economy would collapse.

You are what you drive. Retire early!? Why so you can hoard cats? Keep
Working man!

With cars it all about value for me. For instance, I consider honda accord to be a better value vs either BMW or Kai Rio for that matter. The car that I currently own I bought new. Sure beats the hand me down beater mistubishi that I got as a hand me down college graduation present. Having been exposed to both of these scenarios, I don't think I will ever buy used or lease anything.

edvard2 says

Thedaytoday says

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.

Except in the end I have more money in my pocket, that's all.

Idiot, you don't the same equity, the balloon payment of $21k is GONE! You have lost your entire investment. Wow, you are stupid.

While I retain over $13k in equity with zero down and I still have the $23k in the bank instead of putting it down and losing it!

Edvard, your a foolish idiot. Start to listen or stop posting drivel.

dublin hillz says

think the best thing to do is to buy a new car outright

Your an idiot.

BayArea says

I've never heard anyone talk about "building" equity with a leased car (that only depreciates) and must be returned to it's rightful owner at the conclusion of the lease. Unless the dealership is willing to sell you the car for less than they are willing to buy it back from you at the conclusion of the lease, which would mean they are as insane as you.

NO NO NO!!!!! NO!

Seriously you guys are stupid

You have no idea what you are saying.

Which is why you have never leased a vehicle.

dublin hillz says

PockyClipsNow says

Well whats the fucking point of working hard and going to college if u cant buy nice bling?

If everyone had the attitude of the OP our entire economy would collapse.

You are what you drive. Retire early!? Why so you can hoard cats? Keep

Working man!

With cars it all about value for me. For instance, I consider honda accord to be a better value vs either BMW or Kai Rio for that matter. The car that I currently own I bought new. Sure beats the hand me down beater mistubishi that I got as a hand me down college graduation present. Having been exposed to both of these scenarios, I don't think I will ever buy used or lease anything.

I'm trying really hard but I can't see the point you are making here. At least not any well defended point.

The only person here who seems to get it is Peter.

Peter these fools have no clue how to use the US tax system.

Thedaytoday says

BayArea says

I've never heard anyone talk about "building" equity with a leased car (that only depreciates) and must be returned to it's rightful owner at the conclusion of the lease. Unless the dealership is willing to sell you the car for less than they are willing to buy it back from you at the conclusion of the lease, which would mean they are as insane as you.

NO NO NO!!!!! NO!

Seriously you guys are stupid

You have no idea what you are saying.

Which is why you have never leased a vehicle.

Stupid I'm not, but inexperienced in leasing vehicles I certainly am.

1.) What's the MSRP on you your last vehicle lease?
2.) What price did you agree to?
3.) You said your monthly payment is $250
4.) You said $0 down
5.) What's the duration of the lease?
6.) What will the car be worth at the conclusion of the lease roughly?
7.) What happens next?

8.) How are you using the US tax system to your advantage here?

Simple :-)