When is leasing better than buying?

[Anonymous]

Anonymous wrote:

Anonymous wrote:I was also a big believer in buying, and have had my current car for 18 years, the previous car for 10 years.

But... Now I want to drive an EV. But I'm convinced that the technology is going to be much, much better in 2 or 3 years (battery life longer, etc). So for the first time, I'm considering leasing an EV for 3 years, and then purchasing a newer car after that, when the technology is better.

Friend of mine just did this with exactly the same reasoning. Time will tell if he was correct.

did he say what technology advancement will take place 3 years from today?

[Anonymous]

Sometimes there are really good promotions on leases. There is also a loophole right now that allows you to take 7500 tax credit if you lease an ev even if your income is high. If I were getting an ev I would definitely go for a lease to take advantage of that. Also, I think ev leases way overestimate the residual value of the car, which keeps the lease payments low.

This is what we did. We usually pay cash for a new car. We recently leased a luxury EV under a manufacturer subsidized lease offer with the $7500 tax credit taken off the price by the dealer. If we buy out the lease at the end we will have didn’t less than we would have to purchase the car new from the start.

[Anonymous]

^ meant Will have spent less than if purchased

[Anonymous]

For BMW there can be a sweet spot in leasing a dealer loaner with less than 5000 miles. They still qualify for new incentives but the dealer will mark down the MSRP as if it's used. I have leased several over the years for my wife and myself at more than 18% off MSRP with plenty of incentives. Residual always ends up lower than the actual value at the end of the lease so I roll the equity into a new one.

[Anonymous]

Anonymous wrote:For BMW there can be a sweet spot in leasing a dealer loaner with less than 5000 miles. They still qualify for new incentives but the dealer will mark down the MSRP as if it's used. I have leased several over the years for my wife and myself at more than 18% off MSRP with plenty of incentives. Residual always ends up lower than the actual value at the end of the lease so I roll the equity into a new one.

Is that cheaper than buying outright and owning for 6 years?

[Anonymous]

The only time leasing is better is if you can write off the payments for your business. Otherwise, it's just a money pit.

[Anonymous]

Eh, my aunt leases cars for years before she finally settled (on a Subaru).

She's single, a worry wort, anxious, and having a relatively new/safe/reliable car with no (major) maintenance issues to deal with was priceless for her.

Different strokes for different folks.

[Anonymous]

Anonymous wrote:The only time leasing is better is if you can write off the payments for your business. Otherwise, it's just a money pit.

I think there are some relatively recent lease accounting standard changes, but I don't know the details. Do those changes have any impact on lease expense deductions?

[Anonymous]

Anonymous wrote:If you keep a car 7-10 years, is leasing ever the lower cost method?

No

[Anonymous]

Anonymous wrote:Eh, my aunt leases cars for years before she finally settled (on a Subaru).

She's single, a worry wort, anxious, and having a relatively new/safe/reliable car with no (major) maintenance issues to deal with was priceless for her.

Different strokes for different folks.

I have become your aunt. I've suddenly become paranoid about having a breakdown.

[Anonymous]

Leasing was great 10years ago when the electric car subsidies were insane and the cars had short lifespan.

[Anonymous]

Anonymous wrote:Sometimes there are really good promotions on leases. There is also a loophole right now that allows you to take 7500 tax credit if you lease an ev even if your income is high. If I were getting an ev I would definitely go for a lease to take advantage of that. Also, I think ev leases way overestimate the residual value of the car, which keeps the lease payments low.

We did this once. Only downside os we couldn’t buy out the car at the because the book value of the car was like 50% higher than the actual value (so it sold at auction to a dealer in PA)

[Anonymous]

Leasing is better than buying right now for quite a few EV models: VW ID.4, Subaru Solterra, Toyota Bz4x, etc.

Ridiculous lease deals in order for the brands to comply with EV mandates

[Anonymous]

Leasing is better than buying for any new EV right now

[Anonymous]

Anonymous wrote:Leasing is better than buying right now for quite a few EV models: VW ID.4, Subaru Solterra, Toyota Bz4x, etc.

Ridiculous lease deals in order for the brands to comply with EV mandates

No-- it's to take advantage of the tax credit