Reply to Am I a sucker for leasing all of our family cars?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]We do the same thing. It works for us. I'm always the one giving rides to people who have their cars stuck in the shop for one issue or another. They can sink their money into a depreciating asset if they want. Car payments are a line item in our budget, and we'd rather pay a fixed amount each month than end up with high car repair bills unexpectedly. It may not make sense to others but it makes sense to us.  [/quote]

The implication of this statement is that you will end up better off, financially, with a lease than by purchasing a new car.  That is just not true.  There are valid reasons to lease a car - you want a new car every year, you can write off the lease and its easier, you temporarily need low payments, etc. - but deluding yourself that it's a savvy financial move is not one of them.  It is unequivocally more economical to keep a car for 8-10 years than it is to lease it.  [/quote]

+1. If leasing was such a great deal, why do all the lease people have to constantly insist what a great deal it is? [b]I view leasing as a tool for people who are only capable of managing their money on a month-to-month basis. [/b]This describes every single person I know who leases. They can afford X per month and want the nicest, newest possible car for that X per month. That is literally their entire thought process about leasing. [/quote]

Not necessarily.  We are relatively high earners and right now our only fixed expense is our mortgage and basic living expenses like utilities.  Obviously we own our car outright but will need a new car soon. We are trying to invest as much as possible.  We bring home around 15k a month and are trying to invest a good 5-7k on top of maxing out retirement.  It's appealing to me that a low monthly lease is only $300-400.  More money I can save or invest.  I'm tempted to lease instead of buy because buying is $700-1000 a month for the same car.  We are conservative and not sure how long this gravy train is going to run and simply want to invest as much as possible.  I'd rather put an extra $300-400 in the market than invest it in a car.

I understand we'd be better off buying and driving the car for 8-10 years.  But it's still tempting to have that low monthly payment and not have a lot of expenditure on a car.  [/quote]

Echoing PP...check out 3-5 year old cars with low mileage. There is a lot of press about prices coming down based on glut of lease returns. If still covered by the original warranty, you can pay $1-2K (make sure you shop around for this online) to have the original warranty extended for up to 7 years from the original purchase date.

To me, paying $15-25K cash for a 3 to 5 year old car with the certainty of the original warranty sounds like the way you will save the most money. Any financing will only be more expensive.[/quote]

This is what we are considering doing.  We figure we can purchase something for around $25k with an extended warranty.  We should be able to easily pay $10k in cash and then probably take $15k out of savings for it.  [/quote]

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