Car Lease - 45K car - zero down?

[Anonymous]

Right. When you compare leasing to buying as an isolated comparison, you're not considering the opportunity cost of not spending as much money per month on the same vehicle.

Buying is basically paying additional money up front for a reasonably certain and reasonably strong payoff 6-15 years from now. It is often a great buy, but you still need to consider what else you could spend the money on.

Trying to dodge this analysis by saying that anyone who has better things to spend their money on must be overspending on a car misses the mark. Buying costs more than leasing even for non-luxury compact cars.

[Anonymous]

Anonymous wrote:Right. When you compare leasing to buying as an isolated comparison, you're not considering the opportunity cost of not spending as much money per month on the same vehicle.

Buying is basically paying additional money up front for a reasonably certain and reasonably strong payoff 6-15 years from now. It is often a great buy, but you still need to consider what else you could spend the money on.

Trying to dodge this analysis by saying that anyone who has better things to spend their money on must be overspending on a car misses the mark. Buying costs more than leasing even for non-luxury compact cars.

Right, the people who "drive cars into the ground" or even just keep them 10 years don't realize how much all the little repairs, routine maintenance (often covered under lease) and tires etc. add up.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Buy a 2012 used car for about $17k.

How does this address the issue at all? The point is that there's a higher monthly cost to owning than leasing, and in certain circumstances, that money could better be spent on other things.

Because in three years you have no more car payment, and you probably won't for five years, and you have a car worth $10k.

[Anonymous]

I don't think the type that "drive cars to the ground" should ever lease. They probably will pay heavily at the end for trashing/damaging the car (beyond normal wear and tear).

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Buy a 2012 used car for about $17k.

How does this address the issue at all? The point is that there's a higher monthly cost to owning than leasing, and in certain circumstances, that money could better be spent on other things.

Because in three years you have no more car payment, and you probably won't for five years, and you have a car worth $10k.

Isn't the standard purchase term five years? Assuming you can reduce it to three, that would make it many times more expensive per month than leasing. The point is that you usually shouldn't buy an investment that won't see returns for 60 months when you have outstanding credit card debt.

[Anonymous]

Anonymous wrote:I don't think the type that "drive cars to the ground" should ever lease. They probably will pay heavily at the end for trashing/damaging the car (beyond normal wear and tear).

Driving cars "into the ground" isn't slang for beating on them or taking terrible care of them. It just means that those owners will drive those cars until they really can't drive anymore without substantial/costly repair, instead of ditching the car for a new one every time it needs something new.

[Anonymous]

We learned that financing our own lease was even cheaper! Bought a new $33k Odyssey in 2011 for cash. Drove it for 39 months. Decided we wanted the built in DVD player (one package higher than we had) and the aftermarket ones were crap. So, we traded it in for a new 2014 with DVD. The new check we wrote for the difference was $8500. My husband is a great negotiator. So we drove the 2011 for $218/month all in. Way cheaper than the lease would have been, but no pressure to turn it in if we hadn't wanted to. We may try it again with this van, we'll see.

It was eye opening.

[Anonymous]

Anonymous wrote:We learned that financing our own lease was even cheaper! Bought a new $33k Odyssey in 2011 for cash. Drove it for 39 months. Decided we wanted the built in DVD player (one package higher than we had) and the aftermarket ones were crap. So, we traded it in for a new 2014 with DVD. The new check we wrote for the difference was $8500. My husband is a great negotiator. So we drove the 2011 for $218/month all in. Way cheaper than the lease would have been, but no pressure to turn it in if we hadn't wanted to. We may try it again with this van, we'll see.

It was eye opening.

But, if you invested the 33K in the vanguard index 500 fund, you would have ended up with in excess of 50K.

[Anonymous]

Anonymous wrote:We learned that financing our own lease was even cheaper! Bought a new $33k Odyssey in 2011 for cash. Drove it for 39 months. Decided we wanted the built in DVD player (one package higher than we had) and the aftermarket ones were crap. So, we traded it in for a new 2014 with DVD. The new check we wrote for the difference was $8500. My husband is a great negotiator. So we drove the 2011 for $218/month all in. Way cheaper than the lease would have been, but no pressure to turn it in if we hadn't wanted to. We may try it again with this van, we'll see.

It was eye opening.

That's great. Many people don't have 33k and the extra cash to upgrade when they decid they want movies in their car. Leasing is for people who need a low monthly payment on a newer car

[Anonymous]

Anonymous wrote:

Anonymous wrote:We learned that financing our own lease was even cheaper! Bought a new $33k Odyssey in 2011 for cash. Drove it for 39 months. Decided we wanted the built in DVD player (one package higher than we had) and the aftermarket ones were crap. So, we traded it in for a new 2014 with DVD. The new check we wrote for the difference was $8500. My husband is a great negotiator. So we drove the 2011 for $218/month all in. Way cheaper than the lease would have been, but no pressure to turn it in if we hadn't wanted to. We may try it again with this van, we'll see.

It was eye opening.

But, if you invested the 33K in the vanguard index 500 fund, you would have ended up with in excess of 50K.

Minus what I would have spend in lease/car payments. I still need transportation!

[Anonymous]

You have gotten some good advice already.

My observation in my own social circle is that people who are leasing vehicles have eyes bigger than their stomachs. They want something fancy that they can't afford, so they lease it.

Doesn't sound like you are in that situation, OP, since you have enough resources to buy the car. But be careful.

[Anonymous]

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

Oil changes are cheap. I just bought 5 quarts of oil at Walmart (premium oil so around $25). The gas station did the change for less than $20. So $45 and I got the best oil. I just bought a new car and it comes with oil changes, tire rotation, etc. for the first two years (no extra charge). Same as a lease really.

[Anonymous]

Leasing could be better than buying an unsafe old beater that broke down all the time. leasing = renting.

[Anonymous]

Buying your teen a 20+ year old beater is not that safe either.

[Anonymous]

Leasing could be better than buying an unsafe old beater that broke down all the time. leasing = renting.

There are many perfectly safe used vehicles for sale. You are exaggerating. Unsafe old beaters are usually sent to graveyards because nobody will buy them. If you have so little money, your teenager can use public transportation or walk or ride a bike. Geez. Buying your teenager a car is a luxury in itself. Just paying the insurance for a teenager is a luxury that many cannot afford!!