Car leasing

I might consider it for a company funded work vehicle. Other than that, not by bag. There is a really good blurb in the most recent "911" or maybe it was "GT Porsche" about it. I'm sure there are tons of things worthwhile written online as well. If you are bent on financing a vehicle, and have the means for a reasonable interest rate on an auto loan, you are going to sink a lot less money into "ownership" of a vehicle than on a lease IMHO, with a lot less restrictions and potential penalties. Granted that you incur a little more risk with resale value based on the market than you would with terminate/buy out in a lease, but at the end of the day, you are paying for the market depreciation of your car and nothing else with a loan (with a small fudge factor related to where you sell, your ability to collect market value for the car, etc).
 
We buy our personal cars outright. For our business we lease. We get a new car every 2 years, since it's just for business we don't co over 10K per year. Our tax guy does the negation with the dealer to maximize the tax benefits, in our case it is better then buying them.
 
jesse said:
For personal use, The only possible way I can ever imagine it makes sense is if you're the type of person that ABSOLUTELY NEVER wants to drive a car more than 2 years old.

That said I hate it on principle...so perhaps someone else will have better information :)
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That's how I used to think, too - I really hate the idea of having a monthly payment for something I don't own in the end. Two things led me to consider it: One is a coworker of mine who is quite savvy financially who is now leasing his vehicles (I guess that's what got me to consider it at all)...

The other is that I'm in a situation where I need a new (to me at least) car. In the course of researching various vehicles, it seems like every single one I've looked at had a model refresh in 2013 or 2014 - Probably a side effect of the Great Recession and lowered R&D budgets at the manufacturers. But, I don't want to get a 3-year-old car that already looks like it's 10 years old. In addition, being a fan of efficiency, I'm looking for modern powertrain options that have only come into existence in the last 2-3 years and are very difficult to find on the used market.

Specifically, I like the Ford Fusion Energi - It's a plug-in hybrid with the range to get me to work and back with little or no gas burned. I took a test drive the other day that was about the length of my round-trip commute and burned 0.14 gallons of gas for an average of 158 mpg! (Whether the cost differential between the gas I would have used and the electricity to charge it is worth the higher initial cost remains to be calculated.)

I'm of the "I drive old cars so I can fly old airplanes" camp, but I just don't feel like that's gonna work this time, and money is so cheap right now I'm looking at all my options. I wish I could find a used Energi but they're in high enough demand (and of course low supply) that they're going for almost what a new one would cost anyway.

The monthly payment on a regular loan is a bit stiff for my tastes right now, especially since our other car is getting long in the tooth as well and we're likely to end up with two car payments soon. But, the numbers on the leases look favorable, so my likely strategy would be to buy the car at the end of the lease. That would allow me to stretch the payments across a 3-year lease plus maybe a 5-year loan at a reasonable rate, whereas the rates on a new-car loan greater than 6 years start to become less reasonable.

Now, tell me why that's a dumb plan - I certainly wouldn't go in expecting to just turn the car in and get another one in three years.
 
flyingcheesehead said:
That's how I used to think, too - I really hate the idea of having a monthly payment for something I don't own in the end. Two things led me to consider it: One is a coworker of mine who is quite savvy financially who is now leasing his vehicles (I guess that's what got me to consider it at all)...

The other is that I'm in a situation where I need a new (to me at least) car. In the course of researching various vehicles, it seems like every single one I've looked at had a model refresh in 2013 or 2014 - Probably a side effect of the Great Recession and lowered R&D budgets at the manufacturers. But, I don't want to get a 3-year-old car that already looks like it's 10 years old. In addition, being a fan of efficiency, I'm looking for modern powertrain options that have only come into existence in the last 2-3 years and are very difficult to find on the used market.

Specifically, I like the Ford Fusion Energi - It's a plug-in hybrid with the range to get me to work and back with little or no gas burned. I took a test drive the other day that was about the length of my round-trip commute and burned 0.14 gallons of gas for an average of 158 mpg! (Whether the cost differential between the gas I would have used and the electricity to charge it is worth the higher initial cost remains to be calculated.)

I'm of the "I drive old cars so I can fly old airplanes" camp, but I just don't feel like that's gonna work this time, and money is so cheap right now I'm looking at all my options. I wish I could find a used Energi but they're in high enough demand (and of course low supply) that they're going for almost what a new one would cost anyway.

The monthly payment on a regular loan is a bit stiff for my tastes right now, especially since our other car is getting long in the tooth as well and we're likely to end up with two car payments soon. But, the numbers on the leases look favorable, so my likely strategy would be to buy the car at the end of the lease. That would allow me to stretch the payments across a 3-year lease plus maybe a 5-year loan at a reasonable rate, whereas the rates on a new-car loan greater than 6 years start to become less reasonable.

Now, tell me why that's a dumb plan - I certainly wouldn't go in expecting to just turn the car in and get another one in three years.
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Any deals in the works yet? If you write the specifics of the lease, costs, etc..then I'll do my best to poke holes in it and tell you why you shouldn't do it :)
 
I wouldn't say never, but you certainly need to look at the price vs value at the end of a lease. Anytime someone is predicting the future value of a vehicle, they can be wrong, either high or low. I've seen banks offer discounts plus low rates trying to get people to buy out their leases. ;) Other times, they want the cars turned in because the residual is set too low and they can make money at auction! :D

mrkbbd said:
Also on the subsidized leases, generally NEVER buy the car out at the end, the residual is likely to be more than it would cost to get the same car / mileage / year with a CPO warranty...just my experience
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Henning said:
Yep, the lower the miles you take, the better you could negotiate when I was selling.
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The mileage changes the residual, standard is now 12,000 miles on many leases. :D We all know a 3 yr old car with 30-36,000 miles is HOT in the used car market! :yes: And will it bring a premium!:D
 
flyingcheesehead said:
Specifically, I like the Ford Fusion Energi -
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I like the Fusion Energi and the Volt, both can work well in the right situation, but...

Look at this:

http://www.autotrader.com/cars-for-...MRY[CAMRY%7CLE]][]]&listingId=381311216&Log=0

Our local dealer offering a three year old Camry at $15k, and the car has only 4k miles on it. Searching autotrader I can find lots of other three year old <20k mile Camrys for ~$15k.

Yeah, not the most exciting vehicle, but it will serve you well for 15 years or more. And, you'd save ~$15k over a new Fusion Energy.

At 25mpg and $3/g, that $15k buys you 125,000mi of travel.

THAT would be the smart move if you need a newish car.
 
Bill Jennings said:
I like the Fusion Energi and the Volt, both can work well in the right situation, but...

Look at this:

http://www.autotrader.com/cars-for-...MRY[CAMRY%7CLE]][]]&listingId=381311216&Log=0

Our local dealer offering a three year old Camry at $15k, and the car has only 4k miles on it. Searching autotrader I can find lots of other three year old <20k mile Camrys for ~$15k.

Yeah, not the most exciting vehicle, but it will serve you well for 15 years or more. And, you'd save ~$15k over a new Fusion Energy.

At 25mpg and $3/g, that $15k buys you 125,000mi of travel.

THAT would be the smart move if you need a newish car.
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All true, but he'd have to get a cane and a can of metamucil to drive that car. :D

---

We are now devoted to buying lease return cars through an auction broker - he buys the cars at manufacturer auctions, and adds on a flat $500.00. Much pickier than I ever was, gets all services up to date before delivery, savings of around 15% to 20% compared to dealer prices. In buying two cars (a BMW and a Mustang), we have spent (aggregate) about 45 minutes.

The BMW was 3-ish years old and (at the time) looked just like the new ones, but it was about $30k less. Seriously.

Used cars, in general, are higher than a cat's back since the market was drained of inventory by the staggeringly-bad idea colloquially known as "cash for clunkers."
 
flyingcheesehead said:
That's how I used to think, too - I really hate the idea of having a monthly payment for something I don't own in the end. Two things led me to consider it: One is a coworker of mine who is quite savvy financially who is now leasing his vehicles (I guess that's what got me to consider it at all)...

The other is that I'm in a situation where I need a new (to me at least) car. In the course of researching various vehicles, it seems like every single one I've looked at had a model refresh in 2013 or 2014 - Probably a side effect of the Great Recession and lowered R&D budgets at the manufacturers. But, I don't want to get a 3-year-old car that already looks like it's 10 years old. In addition, being a fan of efficiency, I'm looking for modern powertrain options that have only come into existence in the last 2-3 years and are very difficult to find on the used market.

Specifically, I like the Ford Fusion Energi - It's a plug-in hybrid with the range to get me to work and back with little or no gas burned. I took a test drive the other day that was about the length of my round-trip commute and burned 0.14 gallons of gas for an average of 158 mpg! (Whether the cost differential between the gas I would have used and the electricity to charge it is worth the higher initial cost remains to be calculated.)

I'm of the "I drive old cars so I can fly old airplanes" camp, but I just don't feel like that's gonna work this time, and money is so cheap right now I'm looking at all my options. I wish I could find a used Energi but they're in high enough demand (and of course low supply) that they're going for almost what a new one would cost anyway.

The monthly payment on a regular loan is a bit stiff for my tastes right now, especially since our other car is getting long in the tooth as well and we're likely to end up with two car payments soon. But, the numbers on the leases look favorable, so my likely strategy would be to buy the car at the end of the lease. That would allow me to stretch the payments across a 3-year lease plus maybe a 5-year loan at a reasonable rate, whereas the rates on a new-car loan greater than 6 years start to become less reasonable.

Now, tell me why that's a dumb plan - I certainly wouldn't go in expecting to just turn the car in and get another one in three years.
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"Money is cheap right now" really does favor buying the car now, especially since you think you want to buy it out at the end of the lease.

Don't confuse "rate" with "payment" - every lease has an underlying cost of money and it's rarely favorable to you compared to the cost of money in a loan. The car dealers really, really try to sell based on "monthly payment" which is a number that can be manipulated.

Also, since you're looking at Ford, see if you qualify for a group purchasing price ("friends and family") - many companies can give you Ford "X-plan" pricing (some credit unions do, too) as part of employee/member benefits, and if you're a direct relative of a Ford employee you can get "A Plan" pricing. Both are better than dealer pricing and they take the price negotiation process out of the equation (you'll still have to fight on the packs and dealer add-ons). X plan should qualify for any incentive payments on top.
 
If it's a business vehicle you lease, 100% of the use is an expense.
If you buy a vehicle, then you can only expense the direct costs and the interest. You'll have to depreciate the rest.

In the long term it's probably still advantageous to purchase, but again if you are continually replacing the vehicle, you may do better with the lease.
 
Bill Jennings said:
I like the Fusion Energi and the Volt, both can work well in the right situation, but...

Look at this:

http://www.autotrader.com/cars-for-...MRY[CAMRY%7CLE]][]]&listingId=381311216&Log=0

Our local dealer offering a three year old Camry at $15k, and the car has only 4k miles on it. Searching autotrader I can find lots of other three year old <20k mile Camrys for ~$15k.

Yeah, not the most exciting vehicle, but it will serve you well for 15 years or more. And, you'd save ~$15k over a new Fusion Energy.

At 25mpg and $3/g, that $15k buys you 125,000mi of travel.

THAT would be the smart move if you need a newish car.
Click to expand...

No, the smart move is to get the car that you can drive to work and home with an empty gas tank and reduce the burden on the oil supply reducing the price and consumption as well as helping the general US economy using US energy.

The 'bottom line' is typically a poor metric for judging what the right thing to do is.
 
Henning said:
No, the smart move is to get the car that you can drive to work and home with an empty gas tank and reduce the burden on the oil supply reducing the price and consumption as well as helping the general US economy using US energy.

The 'bottom line' is typically a poor metric for judging what the right thing to do is.
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:rolleyes2:
 
flyingcheesehead said:
That's how I used to think, too - I really hate the idea of having a monthly payment for something I don't own in the end. Two things led me to consider it: One is a coworker of mine who is quite savvy financially who is now leasing his vehicles (I guess that's what got me to consider it at all)...

The other is that I'm in a situation where I need a new (to me at least) car. In the course of researching various vehicles, it seems like every single one I've looked at had a model refresh in 2013 or 2014 - Probably a side effect of the Great Recession and lowered R&D budgets at the manufacturers. But, I don't want to get a 3-year-old car that already looks like it's 10 years old. In addition, being a fan of efficiency, I'm looking for modern powertrain options that have only come into existence in the last 2-3 years and are very difficult to find on the used market.

Specifically, I like the Ford Fusion Energi - It's a plug-in hybrid with the range to get me to work and back with little or no gas burned. I took a test drive the other day that was about the length of my round-trip commute and burned 0.14 gallons of gas for an average of 158 mpg! (Whether the cost differential between the gas I would have used and the electricity to charge it is worth the higher initial cost remains to be calculated.)

I'm of the "I drive old cars so I can fly old airplanes" camp, but I just don't feel like that's gonna work this time, and money is so cheap right now I'm looking at all my options. I wish I could find a used Energi but they're in high enough demand (and of course low supply) that they're going for almost what a new one would cost anyway.

The monthly payment on a regular loan is a bit stiff for my tastes right now, especially since our other car is getting long in the tooth as well and we're likely to end up with two car payments soon. But, the numbers on the leases look favorable, so my likely strategy would be to buy the car at the end of the lease. That would allow me to stretch the payments across a 3-year lease plus maybe a 5-year loan at a reasonable rate, whereas the rates on a new-car loan greater than 6 years start to become less reasonable.

Now, tell me why that's a dumb plan - I certainly wouldn't go in expecting to just turn the car in and get another one in three years.
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Well, basically you have given us a much more detailed version of what your original post implied: You want badly to have something that you can't afford and you are willing to do something financially unwise to get it. Nothing wrong with that. We are all guilty of the first part and, to a degree, probably all guilty of the second part at one time or another. For example, I could have bought something less expensive than my (one model year old, but new) RX-8 and still had good transportation. But I ponied up the extra cash (no loan, remember) for the pleasure of driving a car with excellent performance and handling. So it is really a matter of each of us deciding for oneself where our stopping point on the "financially unwise" spectrum is. Some comments:

" ... a coworker of mine who is quite savvy financially who is now leasing his vehicles ..." He's not financially savvy. Or he has so much money that he doesn't care about wasting it.

" ... I'm looking for modern powertrain options that have only come into existence in the last 2-3 years and are very difficult to find on the used market. ... " When you want to rationalize something, a good way to do it is to set some ground rules that appear to force you into the decision that you have already made. If you do the mathematical analysis comparing the total costs of car that you can afford (maybe your current car!) and the total costs of that zippy hybrid, you will almost certainly find that the "modern powertrain" does not come close to generating a payback.

" ... we're likely to end up with two car payments soon. ..." Ack! Someone with a gun is going to force you? You expect to accidentally sign some loan agreements without realizing it -- maybe in your sleep? There isn't any "likely" or "unlikely," there is only a choice.

" ... Now, tell me why that's a dumb plan. ..." Well, it's a dumb plan financially. But if the pleasure of obtaining something you want at the cost of doing something that is financially unwise is a good tradeoff for you, then I guess that for you it's not dumb. Virtually all the posts I see here are addressing the financial dumbness. That's only half of your equation.
 
airdale said:
[snip]" Well, it's a dumb plan financially. But if the pleasure of obtaining something you want at the cost of doing something that is financially unwise is a good tradeoff for you, then I guess that for you it's not dumb. Virtually all the posts I see here are addressing the financial dumbness. That's only half of your equation.
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I agree with what you wrote.

I am marveling at this appearing on a pilot board. As pilots we all choose to spend what many would consider a ridiculous amount of money to do something we enjoy.

Carry on.

John
 
Henning said:
Seriously, things don't change until people act.
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I understand your viewpoint, but not everyone is in a financial position to do the "right thing" from that viewpoint. Even better would be for Kent to buy a brand new Tesla, but I doubt he could afford it.
 
Henning said:
No, the smart move is to get the car that you can drive to work and home with an empty gas tank and reduce the burden on the oil supply reducing the price and consumption as well as helping the general US economy using US energy.

The 'bottom line' is typically a poor metric for judging what the right thing to do is.
Click to expand...
The empty gas tank philosophy works only to a point - what is the manufacturing cost of the electric car vs the gas car? The overall maintenence costs? Insurance? How much of the US oil supply was used to make that electric car? What energy source isnused to charge up the car?

Either way, look first to a credit union for financing before you shop for the car.
 
Bill Jennings said:
I understand your viewpoint, but not everyone is in a financial position to do the "right thing" from that viewpoint. Even better would be for Kent to buy a brand new Tesla, but I doubt he could afford it.
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But can he afford the plug in hybrid Ford? My buddy spends $12 a week on electricity commuting 60 miles a day 7days a week. In a 27mpg Camry that would be $47 so that's $35 a week or $140 a month in energy savings.

The lease deal on these may make more sense as well because residual value has a factor of obsolescence that is a wildcard at this stage. You can also mitigate lease costs by buying out your lease up front. Given improvements in technology, this may be the best option, you pay a predetermined amount for the use of the vehicle for two or three years.
 
Henning said:
But can he afford the plug in hybrid Ford? My buddy spends $12 a week on electricity commuting 60 miles a day 7days a week. In a 27mpg Camry that would be $47 so that's $35 a week or $140 a month in energy savings.
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True, but looking only at energy costs is misleading. The analysis has to look at the all-up costs including maintenance, interest, and most importantly the depreciation difference between a new car and buying an older one. If the new car drops $8K in the first year, not unreasonable, that's $650 a month to save $140 a month. More broadly, to get that $140 all other costs will almost certainly be higher than the alternative choice, an affordable, mostly depreciated, conventional car at maybe half the price.

Henning said:
The lease deal on these may make more sense as well because residual value has a factor of obsolescence that is a wildcard at this stage. You can also mitigate lease costs by buying out your lease up front. Given improvements in technology, this may be the best option, you pay a predetermined amount for the use of the vehicle for two or three years.
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True again, but you can be sure that the lessor has looked at this issue and priced the lease for his anticipated worst-case residual value scenario. And he is probably better qualified to make this estimate than are his fleece customers. So it's unlikely that the customer will win.
 
airdale said:
True again, but you can be sure that the lessor has looked at this issue and priced the lease for his anticipated worst-case residual value scenario. And he is probably better qualified to make this estimate than are his fleece customers. So it's unlikely that the customer will win.
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Not altogether complete. You are forgetting the marketing of new technology factor. They may actually be gambling on the quality of their product and trying to assure residual value by making sweetheart deals and flooding the market with a new technology people wanted by making it so everyone could afford it. Wouldn't be the first time Ford had done this.;) It's what made Ford what it is today.

What is the deal available?
 
Henning said:
Not altogether complete. You are forgetting the marketing of new technology factor. They may actually be gambling on the quality of their product and trying to assure residual value by making sweetheart deals and flooding the market with a new technology people wanted by making it so everyone could afford it. Wouldn't be the first time Ford had done this.;) It's what made Ford what it is today
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Agreed. I was thinking of third party lessors where the lease has to stand on its own and make business sense. But still Ford is still here because more of their decisions made business sense than not. So somehow, somewhere, they are making more money by offering leases than by not offering them. So I'm still a skeptic.
 
Leases are awful almost always for the average Joe. A few "reasons" above are correct for having a lease on a massively depreciating asset, but mostly are based in attempting to limit the effects of a severe lack of self control.

If you do a lease, make sure you have gap coverage insurance. Watched two friends get the joy of totaling vehicles and making payments on them for a couple of years after the vehicles were hauled away. This can happen with leveraged standard purchases also, of course.
 
I can never figure out why people like to bash car leases. There are a lot of ways ignorant people can get ripped off at a car dealer. A crappy lease is just one of them.

I have leased a new car every 3 years for the last 15 years. I have not paid for a car repair or bought a tire during that time period. I have never been hit with any sort excess wear charge, etc.

It's not fair to compare - from a financial perspective - leasing a new car to buying a used car. However, leasing a new car can be very favorable to buying a new car, provided that you don't plan on putting a lot of miles on the car.

The key is to realize you are shopping for a lease not a car. You need to find the best manufacturer's leasing program and take the car that comes with it.

You also need to understand the math on which lease payments are calculated and the different factors involved (MSRP, Selling Price, Money Factor and Residual). That is the only way to negotiate a fair deal. Excel is your friend.

Honda/Acura, Nissan/Infiniti, VW and Volvo almost always have good lease deals available. Toyota/Lexus, US Brands and BMW rarely do. You can almost always find a lease where the effective interest rate is close to zero - then you are really only paying for depreciation which you would be doing anyway if you purchased instead of leased.

I will say that the usefulness of leasing has been hurt recently by steady increases in acquisition and disposition fees charged by manufacturers' finance companies.
 
denverpilot said:
A few "reasons" above are correct for having a lease on a massively depreciating asset, but mostly are based in attempting to limit the effects of a severe lack of self control.
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I would much rather rent a massively depreciating asset than own it.
 
The thing to consider about leasing is that all the "advantages" you get are because somebody else(the Leasing Company) is doing something for you. Leasing Companies expect to be compensated, as they should, for these services.

In a normal Buy/Borrow/Sell transaction on a car, you just have a bank taking a lending risk on you that you will make all the payments. At the end of the loan, they are happy to mail you the title and never hear from you again.

In a Lease transaction, the benefit of "just toss them the keys" at the end of the lease makes the Leasing Company have to be compensated for the transaction costs of getting the car back, prepping for sale, and then selling in a used car market, 3-4 years in the future. Not only does the Leasing Company take on risk you make the payments, they also take on market risk that the car is valuable on the back end to cover their residual value estimates.

The Leasing Company, on their books, might have some tax advantages that the average buyer can't benefit from, therefore the Leasing Company can offer what seems to be attractive rates on the financing, but, they still have the costs associated with getting the vehicle back and trying to sell it.

As one poster above claimed, he is buying lease returns for 15-20% discounts to retail. That is a cost that the Leasing Company is going to want to be compensated from by the person originally leasing the car.

No free lunches in car buying.
 
airdale said:
you can be sure that the lessor has looked at this issue and priced the lease for his anticipated worst-case residual value scenario.
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Not true in my experience. The residual is often spot on and sometimes a little high.
 
airdale said:
Agreed. I was thinking of third party lessors where the lease has to stand on its own and make business sense. But still Ford is still here because more of their decisions made business sense than not. So somehow, somewhere, they are making more money by offering leases than by not offering them. So I'm still a skeptic.
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What I said is the same business model Henry Ford chose with the Model T. That was undoubtedly a wise financial decision. That decision along with with the $5 a day wage are what kicked off Consumerism the result of which was consumer credit and involvement of the financial industry in the day to day lives of people. This infuriated Henry Ford since he hated the financial industry with a passion.
 
TedR3 said:
I would much rather rent a massively depreciating asset than own it.
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So would I, but a lease isn't renting. You are paying for that massive depreciation directly, over the timeframe in that asset's life that it loses the most money.

If it works for you, then great. And it does work for people that have the desire to have a new car every 3 years for the long term, but lets not pretend it is the best financial option...

It's like buying a twin :)
 
Kent, buy a used car. Save some money. Our newest car is 11 years old.
 
My newest is 13 years old with my daily driver being 17 years old. My girlfriend has the same model car that is 3 years old. I prefer my 17 year old one, it has more character, and doesn't have a cracked windshield.
 
Ted DuPuis said:
Kent, buy a used car. Save some money. Our newest car is 11 years old.
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Concur. Done right, you get as good as new car, any mx issues the breed develops are dealt with, and like avionics, someone else suffered the depreciation.

And most of the sheeple out there don't care if it's 5-10 years old.
 
Except the technology he wants to support is not available in an 11 year old car.
 
Just for fun. I used to think leasing was stupid, but I'm not convinced that it is all that bad as some people make it out to be anymore.

As an example.

One of my prior co-workers was bragging about her car lease and said she could guarantee she was paying less than any of us for our cars. So I ran the numbers over a 3 year period. She has a Cadillac, not sure which model but the cheapest lease is advertised at $299/month for 36 months + $2439 due at signing.

Over the last 36 months I have spent $8,310 in maintenance costs on my car, which is higher than I would like but not much I can do about it. A good portion of that was a rebuilt transmission. Maintenance is included on the Cadillac leases.

If you go back 4 years, she would have had two signings so total $19230. Price for me if you add in the car purchase, $28310. So a $9000 difference in her favor, however I still have something I can sell. OTOH that $9000 invested over the 4 years might eat that equity benefit quickly.
 
My experience is the factory supported leases are now a better deal than the third party ones. The factories will adjust the residual to achieve a certain payment, where leasing companies don't care which make or model you buy, it's just a financing deal.;) Ford wants you to replace the car at the end of the lease and keep the factories running, GE wants you to buy the car at the end and refi it with them. ;)

airdale said:
Agreed. I was thinking of third party lessors where the lease has to stand on its own and make business sense. But still Ford is still here because more of their decisions made business sense than not. So somehow, somewhere, they are making more money by offering leases than by not offering them. So I'm still a skeptic.
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Speed said:
Just for fun. I used to think leasing was stupid, but I'm not convinced that it is all that bad as some people make it out to be anymore.

As an example.

One of my prior co-workers was bragging about her car lease and said she could guarantee she was paying less than any of us for our cars. So I ran the numbers over a 3 year period. She has a Cadillac, not sure which model but the cheapest lease is advertised at $299/month for 36 months + $2439 due at signing.

Over the last 36 months I have spent $8,310 in maintenance costs on my car, which is higher than I would like but not much I can do about it. A good portion of that was a rebuilt transmission. Maintenance is included on the Cadillac leases.

If you go back 4 years, she would have had two signings so total $19230. Price for me if you add in the car purchase, $28310. So a $9000 difference in her favor, however I still have something I can sell. OTOH that $9000 invested over the 4 years might eat that equity benefit quickly.
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And that is the key, now try it over 5, 8 and 10 years?

It all depends..
 
We're operating and maintaining a "fleet" with 6, 10, 13, 15, and 23 year old vehicles, for WAY less than the numbers given for one vehicle in the lease vs buy numbers above.

That includes an engine and ground up front suspension and steering rebuild on the 13 year old diesel along with all new rear brakes, after it blew a head gasket this year and still towed a 12,500 lb trailer back here from OSH on 5 cylinders.

And my number includes insurance which is nothing to sneeze at.

Other than batteries and tires, the occasional brake job and oil/fluid changes, the largest expenses in the last few years were a timing belt on mileage on the 14 year old, and a heater core on the 6 year old and maybe a heater core on the 14 year old. I'm putting it off because it won't matter until colder temps get here.

Only other outstanding squawk is the dash cluster on the 10 year old is flaking out, but it's a known issue that GM weaseled out of having to do a forever recall on and they mileage limited the recall on electronics. It'll cost $150 to completely rebuild it.

The 23 year old needs tires I guess. I'll probably do that in the spring. Tire covers would also be good. It doesn't move much and they're cracking, not worn. I don't hesitate to drive it, but my number also includes roadside assistance pre-paid through the insurance company.

We sold the 17 year old Suburban and the 23 year old roadster to pay for most of the diesel truck.

I will admit that we have a significant advantage here. Virtually no rust. It just doesn't happen if you wash/wax on a reasonable schedule and catch paint nicks and touch them up. Way too dry.

The hardest thing on the finish is dirt and magnesium chloride in the winter. That stuff is nasty nasty nasty.
 
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