Absolutely. That last paragraph is precisely what car purchasing is all about. It’s kinda like I probably don’t need to go to Maui for a week, but damnit it’ll be fun when I’m there (I’m not going to Maui btw, but I wish I were).
Lease or Buy a new car?
- Thread starter Dryburn
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Absolutely. That last paragraph is precisely what car purchasing is all about. It’s kinda like I probably don’t need to go to Maui for a week, but damnit it’ll be fun when I’m there (I’m not going to Maui btw, but I wish I were).
You can do whatever you want. I save up, pay with cash, and keep total household vehicle value under 15% of my annual income.
The leasing company has to make money by owning the car and renting it to you.
The leasing company has to make money by owning the car and renting it to you.
That sounds good....I think.....but can you dumb it down a bit for some of us?
Bottom-line: Please explain how locking oneself into having a consistent monthly obligation of several hundred dollars for a depreciating asset (that you'll never own) makes sense vs using that same amount instead for savings/investment (e.g.....retirement, education fund, etc.)?
I suggest this because it is my strong belief and personal experience that when you save for vehicle, you make much better choices (and thus spend several thousand dollars less in the long run). It is no fun writing that check. ON the flip side, it is pretty painless signing that lease agreement. When you pay cash for vehicles, you'll eventually have the monthly cashflow for savings/investments that those that lease do not.
When does a lease make sound financial sense for the average person? I'm not suggesting there might never be that case (e.g....I can make arguments for renting vs buying for certain circumstances when it come to housing), so I'm open to hearing the scenarios.
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I’m not sure that even makes sense.
Let me ask the Ramseyites: what’s the most you’ve ever paid in cash for a car?
I can only speak form personal experience. This is only one example.
Try buying a small pickup truck, low mileage, good condition on the used car market. About 3 yrs ago I was able to buy a brand new, Nissan Frontier for $19,000. Granted, it was manual windows/door, manual transmission, but I couldn't find jack for a decent used small pickup.
Is that true anymore? If I look at the listings for 4 year old cars, even private sellers, they're asking a hell of a lot more than 30% of the original purchase price.
What doesn't make sense?
I don't consider myself a Ramseyites (although I appreciate a lot he has to say...it is just too simple at times), but why ask that question? Just curious or will the answer somehow invalidate something he preaches?
No idea and really don't care to be honest.
Why do you ask?
In my book it was a necessary evil living in an auto dependent city so I tried my best to make it the least damaging financial decision as possible.
Let's be honest, it is never a win when you buy a vehicle (unless you are a part of the auto industry). Agreed?
Pretty much this. He plays a big mental game that doesn’t always equate to good dollars and sense and it’s tagged as “financial freedom” when it is exactly the opposite. I think paying cash for a car is the best example of this brainwashing because there are so many factors that can come in to play and the only question Tamsey cares about is “how much does it cost”. The main one with cars is advances in safety and safety features. Secondly and secondarily, the advances in fuel saving technologies. Has anyone done the math on the price of your life?
Agreed. If you live in a car dependent area then it’s a revolving door of auto payments whether it’s a finance, lease, or full cash.
But it is not like trip to Maui...or shouldn't be.
Be practical about buying vehicles....because the auto industry is banking on the fact you will instead be emotional.
A vacation to Maui could be argued will provide you a needed respite and/or or adventure in your life.
If you are looking for that in a car, chalk one up to the marketing department. They win, your pocketbook loses.
It probably varies on a number of things (type of car, mileage, ect). This site would suggest it might not be 70%, but still a lot.
https://www.omnicalculator.com/finance/Car-depreciation
I agree it is frustrating to listen to him at times, but the reality is, most Americans would be better off following his simplistic advice vs what they are doing currently. The statistics bear that out. As a general rule:
* we have too much debt
* we aren't saving enough for retirement
* we are one unexpected financial crisis away from personal backrupcy
Because of this on a forum asking the general question - should I lease? IMO, the general answer best answer is NO. Why? Because that answer provides zero downside.
That calculator does not show any source data and acts as if every car depreciates at the exact same rate. That doesn't exactly inspire a lot of confidence in it's accuracy.
Like, it doesn't even ask you mileage. Much less make or model.