That is the beauty of saving up and then paying cash. The revolving door stops periodically....or maybe doesn't spin as fast?
Lease or Buy a new car?
- Thread starter Dryburn
- Start date
That is the beauty of saving up and then paying cash. The revolving door stops periodically....or maybe doesn't spin as fast?
Maui lasts for what? A week? Maybe two? That’s what like a hundred hours or so? A normal person is in their car probably lets just say an hour a day, you can cut it in half if you want the same thought process still applies.
See this post is angry, you want to make it a war, like you’re weak if you want a nice car. The “everything and everyone is trying to take me for a fool!” thing that is just SO prevalent right now. The car company makes money, you spend money. No one is winning or losing unless you’re keeping score like that.
A trip to Maui is a respite and adventure and lasts a week. You are ok with that.
A new car can be a respite and an adventure that could last way longer than a week. But you aren’t ok with that.
Neither are smart financial decisions.
Well we posted nearly the same thing.
Also, if I go to a bar and spend $100, that bar made money off me. But at least it was an adventure.
That is the beauty of saving up and then paying cash. The revolving door stops periodically....or maybe doesn't spin as fast?
Not really because you basically have to start saving again for the next go around right after you put down all that cash and you’re getting burned by inflation and massive depreciation on asset you fully own. I like to keep as much of my cash as I can because 19k could have become 25k really fast but you got a car that you could have probably financed for a pittance of interest and you couldn’t take advantage of the opportunity because you don’t like to make a little payment every month.
So how does that work? Do you just walk in and say **** you, I'm not giving you anything, now where do I sign?
They never care if you want to put any down. Or at least in my experience in taking with about 10 dealerships.
They don’t care either way. Just tell them you aren’t putting anything down. Now if you want to get real on them you say “**** you im not putting a first months payment down either or you can watch me as I wave the next time I drive by your dealership in my new (insert competitors car)”
I'm not looking forward to purchasing a vehicle. I'm gonna need a newer one sooner rather than later, but man, it gets intimidating reading and thinking about all this.
I went through this exercise to estimate the depreciation on our car that we bought new. Granted this was a Subaru base package. I think the higher end / fancy cars depreciate more than that practical cars. Brand new list price was like 26k. Going by KBB it seemed like the value depreciated by a steady 3-4k each year After 6 years it would probably sell for ~12k if my wife hadn't put a dent in two deer and a coyote.
So in comparison we've paid probably $15,000 in depreciation costs and $2,500 in interest. Throw in tags, insurance, and tires and the damn things are expensive. Still shows that depreciation expense is far more than interest at these low rates, even with a longer term.
fascinating how passionate anonymous people on CF are when it comes to personal finance.
i just chimed into this thread because I like cars and over the years have bought new, used, CPO and leased. they all have their purposes depending on one's needs.
heck if we're just talking basic transportation a 12 yr old used civic works for 90% of the population to get from point A to B. and if you drive more than 15k miles per year, you can't really lease anyway.
but there's also a lot of misinformation out there in regards to a lease. manufacturers up residuals and layer on incentives to sell cars, and with very low interest rates and free maintenance there are some deals to be had on very nice cars. you can earn $ on your savings, have a guaranteed trade in value, and have zero risk if you get a lemon or an accident or whatever.
whether you buy a used accord or camry vs a new audi/bmw is a separate debate and based on personal preferences. but leasing that bmw instead of buying it might be a better option.
and for people that want a 70k Tahoe or a 50k F-150, i can't help you....
i just chimed into this thread because I like cars and over the years have bought new, used, CPO and leased. they all have their purposes depending on one's needs.
heck if we're just talking basic transportation a 12 yr old used civic works for 90% of the population to get from point A to B. and if you drive more than 15k miles per year, you can't really lease anyway.
but there's also a lot of misinformation out there in regards to a lease. manufacturers up residuals and layer on incentives to sell cars, and with very low interest rates and free maintenance there are some deals to be had on very nice cars. you can earn $ on your savings, have a guaranteed trade in value, and have zero risk if you get a lemon or an accident or whatever.
whether you buy a used accord or camry vs a new audi/bmw is a separate debate and based on personal preferences. but leasing that bmw instead of buying it might be a better option.
and for people that want a 70k Tahoe or a 50k F-150, i can't help you....
My elderly dad's lease on a 2015 Altima is coming to an end in 2 months. They have told him the buyout for the car is around $16,000. He stopped driving the car almost 2 years ago and it only has 14,000 miles.
i want to know how I should bargain for the car. They'll give dad the best deal because of past purchases.
I'll pay in cash through my dad.
Could i ask for a warranty ext.? How about service?
i want to know how I should bargain for the car. They'll give dad the best deal because of past purchases.
I'll pay in cash through my dad.
Could i ask for a warranty ext.? How about service?
We are at the point of paying cash for vehicles now but when we did borrow we just took out a home equity loan. The interest is then tax deductible and usually lower.
In today’s nearly interest free environment, your financing ratings are off.
We are not much for leases, but when my wife needed a new vehicle, and we were in limbo of whether or not we were going to make a major move, lease was a good option for us to bridge the transition. Also, it isn't a bad option if you are in other transition phases where your situation in 2 or 3 years will be much different financially, or where the potential of moving up in your career/job change may require you have a different kind of vehicle.
How many years is the home equity loan for 5, 10, more? You may have paid cash for the car, but you are still paying for it over the lifespan of the home equity loan, So if your loan is for 10 years, you just financed the vehicle for 10 years. What if you want a new car in three years, are you going to take the money from current car and payoff the home equity loan or apply it toward the new car? If you apply it to the new car, you are still paying off the old car and the new car.
If this is the case why not use a home equity loan for every purchase? Going to buy a TV get a HELOC, buying a lot of groceries this weekend get a HELOC, property taxes due get a heloc, etc.
I don't think you understand how interest rates work. The true "interest rate" on a car lease comes in the form of a money factor. Interest rates for A tier credit leasers are usually between 2.5% and 3.5%.
Is it really a bad financial decision?
The average consumer trades their car every 2-3 years.
The average consumer also owes $2k-$10k more on their "financed" car than it's worth.
Through my 7 years in the car business, almost half of our new car sales were through leases, and it was trending to be more than that.
You are 100% backwards on who should look into leasing. Folks who are well off should not lease, ever.
However, most Americans are absolutely terrible at managing their finances. (Under water on their house, under water on 2 cars, the average American has over $10k in credit card debt).
For these people...they should lease for the cheaper payment, full warranty, and a chance to flush any vehicle inequity they have in 3 years.