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Suze Orman says lease it

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Suze Orman says lease it

  Time after time we as consumers struggle with the decision whether to Buy or Lease our  vehicles. Well, here’s food for thought.   1. Today, women purchase more than 55% of new cars in the U.S and influence up to 80% of  all vehicle purchases. That’s over $200 billion on automobiles each year. With the average  automobile costing $32,500 how does consumer afford a new vehicle in today’s market place?  I’ll tell you: Owner’s Option or LEASING! Louisianian desperately need to catch up with other  states when it comes to educating consumers on the financial benefits of leasing. Do you know  that when you lease a vehicle, you build and improve credit faster. You build what we in the  auto industry call Front​end Cash Equity versus Market Depreciating Equity. We need to stop  looking at vehicles as an appreciating asset but as an depreciating liability. When we  understand that 87% of people trade their vehicle purchases in 3.4 years is when we start to  understanding leasing. Simply put, leasing is just another form of auto financing. This is what we  do in Louisiana. We will knowingly let a financially institution ( Car Dealer, bank, credit union)  finance a vehicle for 72 months sometimes 84 months just to be able to afford the monthly  payments. Now that’s a bad investment. The math falls like this: 72 months ​ 3.4 years = 32  months. That says that you will never own a vehicle. So stop psyching your mind, by saying that  you are going to keep this one until the wheels fall off. That doesn’t happen. When a product  depreciate 28% in the first year of your 72 month automotive contract that should be a strong  indicator that you are going down the wrong road.   1. This is what Nissan, Toyota, Honda, GMC, CHEV, BMW, KIA, Mercedes Benz, Mazda  teaches the rest of the U.S.  If you Lease, your Down Payment will be lower.  You have lower  monthly payments, increase flexibility, options to trade, purchase or walk­​away, no trade hassle  because of the guarantee future valve, cheaper interest rate, lower taxes, relocating benefits,  lower maintenance cost, no warranty cost and maintain up­​ to­​date technology and safety  features.   The rule of Thumb: When a consumer is eligible to buy retail through the manufacturer’s  lending source (i.e. TMCC, NMAC or GMAC), the opportunity to Lease is more favorable than  Secondary Lenders that will finance you for 72 or 84 months. Never lease a vehicle for longer  than the manufacturer’s warranty. So women, next is to teach you how to spend $100 billion to  get the same ending results as you did when you financed your vehicle and spent $200 billion  Final thought:  ​When you assume that there is only a mileage limitation or mileage penalty  when it come to leasing, try trading a vehicle with higher miles than what the mileage guidelines  of the NADA Book, Kelly Blue Book or The Black Book recommends. You will be penalized for  driving over the mileage guidelines of these preferred automotive tools. So, to assume that  mileage penalties only occur in leasing, that’s a myth.

Message 1 of 44
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Super Contributor

Re: Suze Orman says lease it

Okayyy.. Thank you for sharing but can you break your post into paragraphs for easy reading?  Welcome to the board, by the way!!

Message 2 of 44
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Established Contributor

Re: Suze Orman says lease it

Time after time we as consumers struggle with the decision whether to Buy or Lease our vehicles.

 

Well, here’s food for thought.

 

1. Today, women purchase more than 55% of new cars in the U.S and influence up to 80% of all vehicle purchases. That’s
over $200 billion on automobiles each year. With the average automobile costing $32,500 how does consumer afford a new
vehicle in today’s market place?

 

I’ll tell you: Owner’s Option or LEASING! Louisianian desperately need to catch up with other states when it comes to
educating consumers on the financial benefits of leasing.

 

Do you know that when you lease a vehicle, you build and improve credit faster. You build what we in the auto industry
call Front​end Cash Equity versus Market Depreciating Equity. We need to stop looking at vehicles as an appreciating asset
but as an depreciating liability. When we understand that 87% of people trade their vehicle purchases in 3.4 years is
when we start to understanding leasing. Simply put, leasing is just another form of auto financing. This is what we do
in Louisiana. We will knowingly let a financially institution ( Car Dealer, bank, credit union) finance a vehicle for 72
months sometimes 84 months just to be able to afford the monthly payments.

 

 Now that’s a bad investment.

 

 The math falls like this: 72 months ​ 3.4 years = 32 months. That says that you will never own a vehicle. So stop
psyching your mind, by saying that you are going to keep this one until the wheels fall off. That doesn’t happen. When a
product depreciate 28% in the first year of your 72 month automotive contract that should be a strong indicator that you
are going down the wrong road.

 

 1. This is what Nissan, Toyota, Honda, GMC, CHEV, BMW, KIA, Mercedes Benz, Mazda teaches the rest of the U.S. If you
Lease, your Down Payment will be lower.

 

You have lower monthly payments, increase flexibility, options to trade, purchase or walk­​away, no trade hassle because
of the guarantee future valve, cheaper interest rate, lower taxes, relocating benefits, lower maintenance cost, no
warranty cost and maintain up­​ to­​date technology and safety features.

 

The rule of Thumb: When a consumer is eligible to buy retail through the manufacturer’s lending source (i.e. TMCC, NMAC
or GMAC), the opportunity to Lease is more favorable than Secondary Lenders that will finance you for 72 or 84 months.
Never lease a vehicle for longer than the manufacturer’s warranty. So women, next is to teach you how to spend $100
billion to get the same ending results as you did when you financed your vehicle and spent $200 billion Final thought:
​When you assume that there is only a mileage limitation or mileage penalty when it come to leasing, try trading a vehicle
with higher miles than what the mileage guidelines of the NADA Book, Kelly Blue Book or The Black Book recommends. You
will be penalized for driving over the mileage guidelines of these preferred automotive tools.

 

So, to assume that mileage penalties only occur in leasing, that’s a myth.

 

 Is this better?


 Also people please stop using mobile devices if your going to create post like this...

Message 3 of 44
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Super Contributor

Re: Suze Orman says lease it


@Dj4Money wrote:

Time after time we as consumers struggle with the decision whether to Buy or Lease our vehicles.

 

Well, here’s food for thought.

 

1. Today, women purchase more than 55% of new cars in the U.S and influence up to 80% of all vehicle purchases. That’s
over $200 billion on automobiles each year. With the average automobile costing $32,500 how does consumer afford a new
vehicle in today’s market place?

 

I’ll tell you: Owner’s Option or LEASING! Louisianian desperately need to catch up with other states when it comes to
educating consumers on the financial benefits of leasing.

 

Do you know that when you lease a vehicle, you build and improve credit faster. You build what we in the auto industry
call Front​end Cash Equity versus Market Depreciating Equity. We need to stop looking at vehicles as an appreciating asset
but as an depreciating liability. When we understand that 87% of people trade their vehicle purchases in 3.4 years is
when we start to understanding leasing. Simply put, leasing is just another form of auto financing. This is what we do
in Louisiana. We will knowingly let a financially institution ( Car Dealer, bank, credit union) finance a vehicle for 72
months sometimes 84 months just to be able to afford the monthly payments.

 

 Now that’s a bad investment.

 

 The math falls like this: 72 months ​ 3.4 years = 32 months. That says that you will never own a vehicle. So stop
psyching your mind, by saying that you are going to keep this one until the wheels fall off. That doesn’t happen. When a
product depreciate 28% in the first year of your 72 month automotive contract that should be a strong indicator that you
are going down the wrong road.

 

 1. This is what Nissan, Toyota, Honda, GMC, CHEV, BMW, KIA, Mercedes Benz, Mazda teaches the rest of the U.S. If you
Lease, your Down Payment will be lower.

 

You have lower monthly payments, increase flexibility, options to trade, purchase or walk­​away, no trade hassle because
of the guarantee future valve, cheaper interest rate, lower taxes, relocating benefits, lower maintenance cost, no
warranty cost and maintain up­​ to­​date technology and safety features.

 

The rule of Thumb: When a consumer is eligible to buy retail through the manufacturer’s lending source (i.e. TMCC, NMAC
or GMAC), the opportunity to Lease is more favorable than Secondary Lenders that will finance you for 72 or 84 months.
Never lease a vehicle for longer than the manufacturer’s warranty. So women, next is to teach you how to spend $100
billion to get the same ending results as you did when you financed your vehicle and spent $200 billion Final thought:
​When you assume that there is only a mileage limitation or mileage penalty when it come to leasing, try trading a vehicle
with higher miles than what the mileage guidelines of the NADA Book, Kelly Blue Book or The Black Book recommends. You
will be penalized for driving over the mileage guidelines of these preferred automotive tools.

 

So, to assume that mileage penalties only occur in leasing, that’s a myth.

 

 Is this better?


 Also people please stop using mobile devices if your going to create post like this...


Thank you!! [See red].

Message 4 of 44
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Valued Contributor

Re: Suze Orman says lease it

What does the title have to do with the post? No mention of Suzy that I could find in the block of text that you posted?

Is this information that you copied from Susan?

 

Welcome, but next time maybe introduce yourself before getting up on the pulpit to educate the credit faithful.

Message 5 of 44
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Member

Re: Suze Orman says lease it

No this is not Suze information. I tried to make a comment on her site.
Message 6 of 44
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Frequent Contributor

Re: Suze Orman says lease it


@lease1 wrote:

  <snip>  We need to stop  looking at vehicles as an appreciating asset but as an depreciating liability. When we  understand that 87% of people trade their vehicle purchases in 3.4 years is when we start to  understanding leasing. Simply put, leasing is just another form of auto financing. 


I've never heard of anyone looking at their daily driver car as an appreciating asset. If someone does, they

have an exceptionally rare car. Cars depreciate. New cars depreciate the fastest.

 

87% of people trading in purchases at 3.4 years is an odd stat, but somewhat believable. Couple that

statistic with the fact that cars are a depreciating asset and depreciate fastest when new leads one to the

primary reason that people spend too much on their cars.

 

Leasing is just another form of auto financing. It tends to be slightly more expensive than purchasing if

examined for the same term, but not enormously so. The real problem with leasing for individuals (not talking

businesses here), is that the assumption is built in of a trade in at 2-3 years, which is very expensive. Repeat

an expensive discretionary act every 2-3 years and over the course of a lifetime you're talking real money -

retirement sized money - home purchase sized money.

 

If you really want to know what Suze Orman says about leasing just google it;

http://www.cnbc.com/2013/10/11/-road-rules-for-car-buying.html

 

Suze's road rules

—Never finance a car for more than three years

Never lease a car

—Keep your car for at least 10 to 15 years

 

+ 850 FICO8 since 2015, Thanks MyFICO - 5+ years since last HP
Message 7 of 44
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Moderator Emerita

Re: Suze Orman says lease it


@bada_bing wrote:

@lease1 wrote:

  <snip>  We need to stop  looking at vehicles as an appreciating asset but as an depreciating liability. When we  understand that 87% of people trade their vehicle purchases in 3.4 years is when we start to  understanding leasing. Simply put, leasing is just another form of auto financing. 


I've never heard of anyone looking at their daily driver car as an appreciating asset. If someone does, they

have an exceptionally rare car. Cars depreciate. New cars depreciate the fastest.

 

87% of people trading in purchases at 3.4 years is an odd stat, but somewhat believable. Couple that

statistic with the fact that cars are a depreciating asset and depreciate fastest when new leads one to the

primary reason that people spend too much on their cars.

 

Leasing is just another form of auto financing. It tends to be slightly more expensive than purchasing if

examined for the same term, but not enormously so. The real problem with leasing for individuals (not talking

businesses here), is that the assumption is built in of a trade in at 2-3 years, which is very expensive. Repeat

an expensive discretionary act every 2-3 years and over the course of a lifetime you're talking real money -

retirement sized money - home purchase sized money.

 

If you really want to know what Suze Orman says about leasing just google it;

http://www.cnbc.com/2013/10/11/-road-rules-for-car-buying.html

 

Suze's road rules

—Never finance a car for more than three years

Never lease a car

—Keep your car for at least 10 to 15 years

 


^^^Agree with this.  I'm not a fan of leasing anyway, but most especially when I see people using it to "purchase" (rent) a vehicle they can not afford but for the attractive lease terms with the kicker buried at the end when you turn in the vehicle.

 

BTW, as an aside, did you notice that the math in the original post is totally incorrect where he states: "The math falls like this: 72 months ​ 3.4 years = 32  months. That says that you will never own a vehicle. ..."  <= This is car dealer math. 3.4 years is not 32 months.   Real math is 3 years is 36 months + .4(12) = 4.8 months = 40.8 months.  Smiley Happy   The conclusion is false too - you can change the variables and own the vehicle. I suspect the OP is in the business of convincing consumers that leasing is better than owning.

Message 8 of 44
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Re: Suze Orman says lease it

72 - 40 = 32 😄 Leasing is not like renting. Leasing is a financial tool. Leasing shows up on your credit report, renting does not. Use leasing 2 help increase your installment credit score. If you buy a vehicle and it takes you 72 months to afford the vehicle is where the problem occurs. Suzy talks about financing a vehicle for only three years who can afford to finance a $32,500 new vehicle for three years, oh i forgot, she can. Susie does not talk about how to manipulate the credit score system into your favor by short term financing or leasing of a new vehicle. Using the formula from the fair Isaac Corporation office or better known as FICO you would increase your FICO score by 70 points if you finance a vehicle for 3 years. So, for me to be able to afford a 3 year note the best way is to lease a vehicle for two 3 year terms that would increase my FICO score 140 points in 6 years. Susie should have been preaching that you should buy a pre-owned vehicle 2 to 3years old, letting someone else take the hit for depreciation not you. This would be the only way I would purchase a vehicle and keep it 5 to 10 years but I'm trying to increase my FICO score to 800
Message 9 of 44
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Re: Suze Orman says lease it

 
Message 10 of 44
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