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Old 03-14-2018, 06:42 AM   #21
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On economic grounds a lease is not very sensible.
+1

Unless the alternative is buying a new car every 3-4 years.
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Old 03-14-2018, 06:58 AM   #22
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Thanks. Here's the thing: If you're just looking at the numbers, leasing doesn't make sense.

But there's a 'knowing the cost of everything but the value of nothing' in that equation. We do sort of a reverse analysis where we decide on the car we want to drive and then figure out the cheapest way to drive it; leasing fits that bill.
Agree, it's more than just the cost of the car/payment, especially when you look over 10-12 year period. And it also is based on knowing a little something about negotiating a lease. Those who pay the retail advertised lease rates will typically get screwed.
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Old 03-14-2018, 07:08 AM   #23
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there's always something "on sale" in the leasing world

see leasehackr [sic] dot com
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Old 03-14-2018, 07:48 AM   #24
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Life time leaser here. Usually ~$60k MSRP cars. ~$5500 yearly top lease payments (~$450 pm) all in no cap reduction.

Incudes GAP insurance, all maintenance, roadside assistance, Sat Radio. AND MOST IMPORTANT. Resale after Accident insurance. If it gets hit and gets a Carfax / AutoCheck Scar, you can just give it back at the end of the lease no questions asked.

Skeptical? Try selling or trading a used car with a Carfax Scar....... Value Priceless.
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Old 03-14-2018, 07:58 AM   #25
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.... If I go shopping will will start by looking for a truck that is a model year old, no more than two. For one year old I will shop new as well as used. Often one-and two-year old trucks are scarce on the used car lots, so I may go with new. All cash, regardless....
When I replaced my truck a couple years ago I looked at both new and gently used. What I found was that the gently used trucks that I was interested in were priced so close to new that it made more sense to buy new and get the full manufacturer's warranty.
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Answer is "It Depends"
Old 03-14-2018, 08:12 AM   #26
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Answer is "It Depends"

As someone who buys all my cars, usually used, and pays cash, I still think leases can make sense. Depends on pricing, alternative uses of cash, vehicle involved, expected time to own and expected mileage.

Buying cars coming off lease can also make sense. It Depends.
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Old 03-14-2018, 08:30 AM   #27
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If I go shopping will will start by looking for a truck that is a model year old, no more than two. For one year old I will shop new as well as used. Often one-and two-year old trucks are scarce on the used car lots, so I may go with new. All cash, regardless.
New trucks are typically in the $40,000 to $50,000 price range, or higher. If you plan on buying it new and keeping it for 10 years I can possibly see paying cash. However, in today's changing technology climate I can't see having a 10 year old vehicle. So if you are going to have it for 5 years or less, why not keep all that cash invested somewhere and lease the vehicle? You're paying for depreciation either way but with the lease you are only paying for the depreciation you're using, not to mention avoiding the lump sum sales tax amount.
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Old 03-14-2018, 09:28 AM   #28
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Actually that one may not get replaced. We have two cars and the truck for only two drivers and our need for the truck is diminishing.

If I go shopping will will start by looking for a truck that is a model year old, no more than two. For one year old I will shop new as well as used. Often one-and two-year old trucks are scarce on the used car lots, so I may go with new. All cash, regardless.

Re your Honda I would not worry about the age but would look very carefully if it had lived in a torture type climate like Arizona or the northern tier rust belt. 50K miles is just getting broken in, so I would look hard at replacing belts, especially the timing belt -- depending on what Honda's recommendations are. My wife had an Audi TT where the belt broke at 80K, stopping the engine cold and bending some valves. $4K! After some haggling, Audi paid for a brand new head but that was more luck than skill. So I am paranoid about timing belts. If an automatic I'd inspect the fluid carefully and maybe even drop the pan for a look. But generally I would expect it to be a good car. Tires & brakes would be a haggling point but I would not blink at having to pay for those soon after purchase.
I had the timing belt changed on my 2004 Audi TT at 49000 miles. That car has been as maintenance free as any car I have had. Maybe it is because I had that belt changed?
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Old 03-14-2018, 09:33 AM   #29
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New trucks are typically in the $40,000 to $50,000 price range, or higher. If you plan on buying it new and keeping it for 10 years I can possibly see paying cash. However, in today's changing technology climate I can't see having a 10 year old vehicle. So if you are going to have it for 5 years or less, why not keep all that cash invested somewhere and lease the vehicle? You're paying for depreciation either way but with the lease you are only paying for the depreciation you're using, not to mention avoiding the lump sum sales tax amount.
Essentially, you're saying that I should borrow money, paying non-deductible interest, and invest it. No thanks. If I want to borrow, I have a margin account and the investment interest is tax deductible. Also, I avoid some of the depreciation hit by not buying the current model year. Finally, if I want to borrow money somewhere else there are much cheaper ways to do that than leasing.

In truth, there is no question about borrowing money to buy things anyway. We are sitting on solid 7 figures in cash and fixed income investments right now and almost certainly will be for the rest of our lives.

Re "technology" every light truck I have ever seen has four wheels, an engine, and a transmission, plus a passenger compartment. That's what I buy. I try to avoid electronic dashboard toys both because they are a safety distraction and because replacements are very expensive when they fail. And they're gonna fail. Ambient conditions for electronics in cars are close to military spec limits, but the components, assemblies, and testing are not mil-spec.
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Old 03-14-2018, 09:42 AM   #30
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I had the timing belt changed on my 2004 Audi TT at 49000 miles. That car has been as maintenance free as any car I have had. Maybe it is because I had that belt changed?
Actually the story on those belts is kind of funny. IIRC the factory recommendation was that the belt be changed at 120,000km., which would be 75K miles. In my wife's owner manual, it said 120K miles. Someone forgot to do the conversion. It was about 80K miles when the thing let go. Hence, Audi finally caved and covered the failure.

It was obviously not an uncommon thing, as Audi stocked fully assembled heads in the US. No reason for that unless there is a recurring problem that destroys heads.
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Old 03-14-2018, 10:02 AM   #31
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not to mention avoiding the lump sum sales tax amount.
Another good reason. In Mass, saving 6.25% on a 60K car puts a big dent in the first year's monthly payment!
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Old 03-14-2018, 10:05 AM   #32
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Never leased - We're in the keep the car for a long, long time camp.

Maybe leasing a car would be a good idea when you kinda know it will be your last one?? As an example, when you are about to hit 80 yrs. old
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Old 03-14-2018, 10:30 AM   #33
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I recently read somewhere:

Yes - Lease if you want to keep car <5 years
No - if you want to keep car >= 5 years
I can't back this up with an article or study, but I feel like there's probably a donut hole here. But I certainly agree that how long you own the vehicle makes a big difference.

I'd say Lease if you want a car 3-5 years. Basically, you want a car never out of warranty.

I'd say buy if you want to drive it into the ground which would be more than 5 years for most. Say 10.

Between 5 and 10 years, there's probably situations where either option can yield good results.

As this thread indicates, it's more about lifestyle and how you see a car than it is about the finances. Many (me up until retirement) like to have a new car frequently. I think I did very well on my leases. I had my cost per mile in a very good range, never had repairs to pay for and always had the nice new features. Not that I've retired and I drive far less miles, my thought is that keeping them long term is a better option. I'm not firm on this yet and my backup position is that me and DW lease one car and drive the other into the ground. Kind of the best of both worlds.
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Old 03-14-2018, 10:58 AM   #34
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I lease, but I run the lease back through my business for some tax advantages. When I retire, I will buy...a previously leased vehicle.
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Old 03-14-2018, 11:18 AM   #35
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We live in the country and drive too many miles to make leasing worthwhile...
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Old 03-14-2018, 11:43 AM   #36
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I have a friend that just retired at 59 years old. His wife is still working and makes about $80,000. When he was working he made about the same amount.

They invested early and often and have saved just short of $2 million. No debt, no mortgage. Their kids are grown and in their 30's. He drives a six year old Hyundai Santa Fe and she drives an eight year old Hyundai Sonata.

He always gives me grief when I get a new leased truck. I explain it's for business.
"Man, I wish I could get a new truck" he always says.
"Why don't you do it. You have the money. What are you saving it for if not for something like this?"
"The wife won't let me."
"What?"
"Leasing is not as cost effective as buying a used car."
"Dude, you've got 2 million dollars! The interest you earn on some of your investments for a couple of months would pay for the lease!"
"Wife won't let me do it."

He then tells me about the European vacations his wife takes him on.
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Old 03-14-2018, 12:10 PM   #37
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I've never leased because I keep cars eight years+ then bite the bullet and return to the dealer for a good used car, typically 2-3 yrs. old with about 20-40K on them, keep them 5, 6 years until paid, enjoy ~ 2yrs. of 0 payments and use that savings to rinse, repeat. Got a 2010 RAV 4 with 217K on it, going strong.
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Old 03-14-2018, 01:11 PM   #38
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I've never leased because I keep cars eight years+ then bite the bullet and return to the dealer for a good used car, typically 2-3 yrs. old with about 20-40K on them, keep them 5, 6 years until paid, enjoy ~ 2yrs. of 0 payments and use that savings to rinse, repeat. Got a 2010 RAV 4 with 217K on it, going strong.
Cars today last much longer than the junk sold decades ago, especially if you maintain them properly. Just curious, how much did you pay for the Rav 4 and how much have you spent on repairs and maintenance?
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Old 03-15-2018, 12:08 AM   #39
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Life time leaser here. Usually ~$60k MSRP cars. ~$5500 yearly top lease payments (~$450 pm) all in no cap reduction.

Incudes GAP insurance, all maintenance, roadside assistance, Sat Radio. AND MOST IMPORTANT. Resale after Accident insurance. If it gets hit and gets a Carfax / AutoCheck Scar, you can just give it back at the end of the lease no questions asked.

Skeptical? Try selling or trading a used car with a Carfax Scar....... Value Priceless.
Could you explain this? I'm not sure what you are saying. Are you see that when figuring the cost of a lease you include your cost for gap insurance, maintenance and Sat Radio or are you saying you get that included in the lease?

Also what is Resale after Accident Insurance? Is this something you are buying or that is included with the lease?

As for leasing - I have literally never done a lease. I've mostly been a buy new and keep a long time person. Currently we have 2 vehicles. I have an Explorer I've had about 6 1/2 years. Still running great. Has a lot of safety features that are important to me (like adaptive cruise control) so I don't have a need to get rid of it. Our other vehicle is a small that is almost 6 years old. We are thinking to make a change for another SUV moving the Explorer to our back up car.

The first thought was just to buy new (most newer used cars nowadays really don't seem worth it). But, our money is mostly in retirement funds. So withdrawing money to pay cash for a car hurts us from a tax standpoint. We could get a loan, of course, but I am not really thrilled with that idea. I had thought about leasing. Part of what I am thinking about is ease of maintenance and known expenses so not having to worry about unanticipated repair cost.

My only real issue is with mileage. We don't drive as much as we used to but we sometimes take driving vacations so I am worried about going over on mileage. Still this is an option I would consider for one car.
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Old 03-15-2018, 07:10 AM   #40
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Are you see that when figuring the cost of a lease you include your cost for gap insurance, maintenance and Sat Radio or are you saying you get that included in the lease?
Yes, they all came with the lease.

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Also what is Resale after Accident Insurance? Is this something you are buying or that is included with the lease?
That is my term. No additional actual insurance, just peace of mind. These days you cannot sell a used car with a Carfax Scar, you should not buy one that has any either. If you have an accident of any kind it ruins the resale value on any car. With a lease it does not matter.
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