Car Lease - 45K car - zero down?

[Anonymous]

Leasing is hardly ever the right option.

[Anonymous]

Anonymous wrote:Leasing is hardly ever the right option.

Edited for accuracy: Leading is the right option in well under 50% of cases, if your sole goal in purchasing a car is to preserve net worth.

[Anonymous]

Leasing, rather

[Anonymous]

Anonymous wrote:Your question is going to elicit a lot of non-responsive commentary on your leasing a car. Leasing a car can actually make sense under a lot of circumstances, and if you're going to lease, minimizing money down also makes sense.

As to your actual question, 7:59 is correct. Essentially, the lease price of a car is the purchase price of the car minus the residual value at the end of the lease term, divided by the lease term. You haven't told us two of the three parts of the equation.

It's a Lexus. Say 3 year lease, not sure what residual value would be.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Leasing is hardly ever the right option.

Edited for accuracy: Leading is the right option in well under 50% of cases, if your sole goal in purchasing a car is to preserve net worth.

Cars are depreciating assets, though.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Leasing is hardly ever the right option.

Edited for accuracy: Leading is the right option in well under 50% of cases, if your sole goal in purchasing a car is to preserve net worth.

Cars are depreciating assets, though.

That's why I said "preserve," not "increase." If the sole thing you're thinking about when acquiring a car is "How am I going to do this while minimizing my loss to my net worth," than buying is very likely to be the correct answer.

What people who say leasing is always a bad choice miss is two-fold: First, the financial difference between buying and leasing is often much smaller than they're assuming. Second, leasing has other benefits to which some people reasonably ascribe value. Where the effect on net worth is minor and you value the other benefits of leasing, you should lease, rather than fret about how Dave Ramsey would feel about the matter.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Your question is going to elicit a lot of non-responsive commentary on your leasing a car. Leasing a car can actually make sense under a lot of circumstances, and if you're going to lease, minimizing money down also makes sense.

As to your actual question, 7:59 is correct. Essentially, the lease price of a car is the purchase price of the car minus the residual value at the end of the lease term, divided by the lease term. You haven't told us two of the three parts of the equation.

It's a Lexus. Say 3 year lease, not sure what residual value would be.

If you're just looking for a ballpark, I would say low $500s. They will quote you between $399-$450, but when you get rid of the due at signing, the number will jump $50-100.

[Anonymous]

Thanks

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Leasing is hardly ever the right option.

Edited for accuracy: Leading is the right option in well under 50% of cases, if your sole goal in purchasing a car is to preserve net worth.

Cars are depreciating assets, though.

That's why I said "preserve," not "increase." If the sole thing you're thinking about when acquiring a car is "How am I going to do this while minimizing my loss to my net worth," than buying is very likely to be the correct answer.

What people who say leasing is always a bad choice miss is two-fold: First, the financial difference between buying and leasing is often much smaller than they're assuming. Second, leasing has other benefits to which some people reasonably ascribe value. Where the effect on net worth is minor and you value the other benefits of leasing, you should lease, rather than fret about how Dave Ramsey would feel about the matter.

+1, I have seen leases where all routine maintenance is included including oil changes. That's a nice perk.

[Anonymous]

Perks aside, I have never seen an example outside of a business use vehicle where the numbers have worked out in favor of leasing vs paying cash for something like a new Accord (approx. 22k) and driving it for 10-15 years. If it does make sense in some cases would anybody care to share the numbers? I'd like to know if it can work so I can drive fancier/newer cars.

[Anonymous]

Leasing, IMHO, is simply stupid. End of the day, you have nothing to show.

[Anonymous]

Anonymous wrote:Leasing, IMHO, is simply stupid. End of the day, you have nothing to show.

I have always maintained that it is a vehicle to drive a car that you can't afford or one that is too impractical to own long term (both of which are poor decisions). I am honestly interested in what PP posted above. Do the numbers work in some circumstances or not? Every time I have looked at it you end up spending tens of thousands over the course of 10-15 years if you lease several cars back to back rather than buying one and driving it into the ground.

[Anonymous]

For some electric vehicles, the car manufacturers need to generate sales to generate compliance credits so they offer very favorable lease terms.

For example, the Chevy Spark EV can now be leased in MD for $139/month ($0 down)-- that's $5k for three years, and you have pretty much no fuel costs or maintenance. I can pretty much guarantee it's the cheapest way to own a car over the next three years out there.

Now, it's a small car, with limited range (80 mile or so) and the interior is not luxe, so it's not for everyone but it's actually got a lot of pep and is fun to drive.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Leasing, IMHO, is simply stupid. End of the day, you have nothing to show.

I have always maintained that it is a vehicle to drive a car that you can't afford or one that is too impractical to own long term (both of which are poor decisions). I am honestly interested in what PP posted above. Do the numbers work in some circumstances or not? Every time I have looked at it you end up spending tens of thousands over the course of 10-15 years if you lease several cars back to back rather than buying one and driving it into the ground.

I am the one posting above that leasing is often a decent choice. To be clear, I am not saying there is any significant number of circumstances where the total cost of ownership from leasing will be lower than the total cost of ownership from buying if you are actually committed to driving every car you own into the ground. What I'm saying is that the difference in cost is often substantially overstated and that the "perks" do in fact have their own value. It is also not the case that even people who claim they drive cars into the ground really do. If, say, you own a car for six years and then replace it, there is a decent chance you will get fleeced sufficiently on the trade in that you would have been better off leasing two cars during that time, particularly once you factor in the non-trivial benefit of getting to drive new cars with the latest gadgets that are under warranty.

Additionally, it is kind of tiresome to hear people argue about financial responsibility in a way that takes literally no account for the subjective value of an experience. Treating car buying as exclusively about total cost of ownership of a bit like saying that someone who buys a hamburger at five guys is being fiscally irresponsible because McDonalds has less expensive hamburgers. Fine, it does, but if somebody tells me the two dollar upcharge is subjectively worth it to them, great. Use your money to make yourself happy. I can well see scenarios where the cost difference between leasing and owning is relatively small and the benefit of having new cars and having all service be under warranty is enough to justify someone not committing themselves to driving the same car for 15 years. Acting like anyone who chooses to lease is trying to grasp at a car they couldn't afford is silly.

[Anonymous]

Anonymous wrote:For some electric vehicles, the car manufacturers need to generate sales to generate compliance credits so they offer very favorable lease terms.

For example, the Chevy Spark EV can now be leased in MD for $139/month ($0 down)-- that's $5k for three years, and you have pretty much no fuel costs or maintenance. I can pretty much guarantee it's the cheapest way to own a car over the next three years out there.

Now, it's a small car, with limited range (80 mile or so) and the interior is not luxe, so it's not for everyone but it's actually got a lot of pep and is fun to drive.

LEVs bring up another non-trivial benefit of leasing: it is entirely plausible that in the next 3-5 years, cars with dramatically better gas mileage will emerge. People who have committed to driving their current model cars into the ground will end up paying much higher hell costs than people who leased once or twice more and then bought a new generation hybrid or ZEV.

Heck, by the time a car you purchase today is 15 years old, the majority of cars on U.S. roads could be self-driving and you'll be required to apply for an antique license plate.