OMG Suze Orman says LEASE!

[Creditaddict]

"If you buy a new car every 3 years there is no reason to buy it because you are taking all the loss right out the door but by not keeping it you loose that"

This is kind of how I thought it made sense but everyone has always been so clear on how horrible a lease is but I thought that was long term investment and if you were someone that bought the car after your lease was up... yes it's still a bad investment to turn over new car every 2-4 years because you always have a payment, it's like renting an apartment vs. buying a house... but some just do that so it makes more sense to lease in that case than to buy it!

[DaylightSlaving]

Ehhh, I think it just depends on your situation and personality honestly.

[Creditaddict]

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@DaylightSlaving wrote:

Ehhh, I think it just depends on your situation and personality honestly.

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yes of course.

But if you buy a car with no money down on finance and you sell it after just a year you don't "really" own anything... you probably OWE money to get out of the loan on it... so did you do better owning it vs renting it. that was point I think.

[DaylightSlaving]

Frankly, you're renting until the finance agency mails you that sweet, sweet pink piece of paper in the mail.

Again, it comes down to your personality. Are you happy going through that hassle every year? Doubt it. Are you the type of person who'll be happy with the same car for 2-3+ years? Will you be happy with a car for 5+ years? Totally depends.

I don't think a lot of people put 0 down on a car and sell it back after a year, but that's just me. I could be totally wrong. It just sounds intensely irresponsible LOL.

[Creditaddict]

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@DaylightSlaving wrote:

Frankly, you're renting until the finance agency mails you that sweet, sweet pink piece of paper in the mail.

Again, it comes down to your personality. Are you happy going through that hassle every year? Doubt it. Are you the type of person who'll be happy with the same car for 2-3+ years? Will you be happy with a car for 5+ years? Totally depends.

I don't think a lot of people put 0 down on a car and sell it back after a year, but that's just me. I could be totally wrong. It just sounds intensely irresponsible LOL.

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I have 2 personalities that I fight:

1. I wish I could have my Honda Accord back that was on a 24 month loan and would almost be paid off... it was a great car and in great shape.

2. I LOVED my Infiniti and it was only leased for 24 months, they are making so many changes with cars, i want the new one that is out... 24 months isn't to long to go before getting the latest.

long term I would like to be person 1 that is happy with a car for what it is and own it and put my cash elsewhere but honestly currently im person 2, rather i should be, can afford to be, i always want a different car... i practically want to buy a car each week as i drive on the road and see a new car, I want it!

[drkaje]

Why are people who can't afford down payments buying/leasing new cars every few years, anyway? Seems like they'll always be upside down or renting a vehicle.

[coterotie]

There are a few more reasons that leasing makes sense for some people   If you use your car for business purposes, leasing makes a lot of sense tax wise because you don't have to fool with depreciation/recapture and a whole bunch of other documentation.  If you live in a higher sales tax area, by paying the taxes monthly with the lease payment (instead of rolling into the loan) you're not paying any interest on the sales tax.  If you paid the tax up front in cash, you're not losing interest on that money.  But rather paying the taxes as incurred on only the amount of the car you are using, not the whole amount.

Finally, there are cars that are fun to drive great looking but have reliability issues or are expensive to repair.  By leasing, you match the warranty to the car and thus will not reach into your pocket for repairs EVER.  Also, if you get a car that is a bit of a lemon, you are out of it with minimal damage. 

Yes you don't "own" the car, but then sometimes ownership has some downside.

We used to lease one car and own the other car.  Drive one until the wheels fell off and it had to be dragged to the graveyard.  The other was the "nice" car which never had an expense and always looked new.  As the family changed, that car changed.  We're probably headed back in that direction as we move from a 2 car family to a 4 car family.

[Creditaddict]

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@drkaje wrote:

Why are people who can't afford down payments buying/leasing new cars every few years, anyway? Seems like they'll always be upside down or renting a vehicle.

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I mean I don't totally disagree but what the last poster makes sense too.

for $300 I can "Purchase" about $14k or so plus a very high tax/title, etc. rate

or I can lease a new Infiniti G37, Kia Optima, Hyundai Sonata, BMW, close to a Mercedes C, the list is long for cars that are $40k+ that I can get for under $400 a month but if I wanted to drive one of those cars "owning it, it would range in the $600-$800/month... That's why I get drawn into leasing

[drkaje]

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@Creditaddict wrote:

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@drkaje wrote:

Why are people who can't afford down payments buying/leasing new cars every few years, anyway? Seems like they'll always be upside down or renting a vehicle.

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I mean I don't totally disagree but what the last poster makes sense too.

for $300 I can "Purchase" about $14k or so plus a very high tax/title, etc. rate

or I can lease a new Infiniti G37, Kia Optima, Hyundai Sonata, BMW, close to a Mercedes C, the list is long for cars that are $40k+ that I can get for under $400 a month but if I wanted to drive one of those cars "owning it, it would range in the $600-$800/month... That's why I get drawn into leasing

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A lot of it comes down to long term goals and lifestyle.

Leasing isn't always throwing money away and there are times it makes financial sense.

Aside from driving upstate every few weekends (from Brooklyn), I barely use the car. By "barely" I mean the car gets 6-8 miles every two weeks between running a weekly errand and changing sides of the street to avoid tickets. For someone like me (who hates to drive) a new car would be a waste of money. Even if I liked cars, paying on one monthly wouldn't be worth it.

I just feel, on some weird level, that paying too much for vehicles is one of the reasons a lot of us can't get ahead. One of my closest friends is a multimillionaire... he actually drives vehicles into the ground, LOL! He just traded away a 99 Acura and 2000 Wrangler and would still be driving them if maintenance costs made sense.

When my 96 Saturn wagon finally dies something else cheap will come along. Just can't get behind the idea of a car payment with so many other obligations.

[RushXTC]

I signed up for a lease, Thank god it didn't go through... Felt bad returning the car after 2 weeks, But at least it wasn't my fault and it didn't affect me.

Now I will NEVER lease a car for sure! I was going to end up paying $15,000 more than the car is worth TODAY, Imagine 4 years from now? When the car is only worth $20,000 ($41,000 car right now) and you STILL have to pay those $20,000 even though it's a 4 year old car... lol... not cool!

I say purchase is the best way to go...