Yes, it is financially stupid.

I buy used and pay cash. Total waste of money to lease a vehicle or to buy one on credit. The less you owe, the more independent you are.

Has anyone ever taken on a second hand lease?
Should you ever need to break the lease agreement you have to get someone to buy you out

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why or why not?

Absolutely, positively this is the stupidest thing anyone can do from a financial perspective. If your objective is to always drive the latest and greatest, however, this idea isn’t so dumb.

This. If having the shiniest and newest of everything always is your goal, then yes I'm guessing there are some situations where leasers come out ahead. But living this way in general is a huge money suck. Maybe you make SO MUCH MONEY that you just don't care, and I've known people like that, but people on a budget looking to "save" money rarely fall into that category.

I would be completely miserable being married to someone always needing the newest, greatest next thing.

Right. When you lease a car, you’re basically borrowing it for a few years and then paying an amount commensurate with its anticipated depreciation. When you’re done, you just give it back and start over with a new one. Car depreciation is very nonlinear, though, so you never benefit from ownership in years 5-10, for example, when the loan payments are long gone, but the vehicle still has innate value as an asset that you can leverage when you resell or trade in.

Just know that it is really hard to end a lease early. So if you lease when you are older and then are unable to drive, you are still going to be stuck with that payment (not sure what happens if you die - hopefully there is a clause that allows your estate to end the lease early in that case. I don't lease because I buy slightly used cars and drive them for 10+ years. But we are now thinking about leasing an EV because the tech is changing so quickly.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Why or why not?

Absolutely, positively this is the stupidest thing anyone can do from a financial perspective. If your objective is to always drive the latest and greatest, however, this idea isn’t so dumb.

This. If having the shiniest and newest of everything always is your goal, then yes I'm guessing there are some situations where leasers come out ahead. But living this way in general is a huge money suck. Maybe you make SO MUCH MONEY that you just don't care, and I've known people like that, but people on a budget looking to "save" money rarely fall into that category.

I would be completely miserable being married to someone always needing the newest, greatest next thing.

+1

Anonymous wrote:

Anonymous wrote:Why or why not?

Absolutely, positively this is the stupidest thing anyone can do from a financial perspective. If your objective is to always drive the latest and greatest, however, this idea isn’t so dumb.

This. If having the shiniest and newest of everything always is your goal, then yes I'm guessing there are some situations where leasers come out ahead. But living this way in general is a huge money suck. Maybe you make SO MUCH MONEY that you just don't care, and I've known people like that, but people on a budget looking to "save" money rarely fall into that category.

I would be completely miserable being married to someone always needing the newest, greatest next thing.

Anonymous wrote:Why or why not?

Absolutely, positively this is the stupidest thing anyone can do from a financial perspective. If your objective is to always drive the latest and greatest, however, this idea isn’t so dumb.

Anonymous wrote:

Anonymous wrote:Leasing a car is like buying a new car every three years. Financially it is stupid. The best financial choice is to typically buy a 3-5 year old car and then drive it into the ground.

Not always. If you are a business owner, it is financially stupid to buy instead of lease. Leasing offer multiple tax benefits.

If you are leasing it as a business expense, it can't be for personal use, even commuting. You can't use it as a personal vehicle.

Yes, you is stupid

Anonymous wrote:DH and I have been discussing this recently. DH will need a new car next year, most likely. We are thinking EVs, but we think EV tech will change in 3 to 5 years as more and more companies move to EV.

So, DH is thinking of leasing for 3 years, EV or hybrid, then seeing what's on the market afterwards.

We did that a number of years ago on EV car. Worked out well for us. Leased the i3 for a while and then bought Tesla when they released the more affordable sedan model.

Anonymous wrote:Most leases are 3 years.

If you like a new car every 3 years then it’s cheaper to lease.

If you keep cars for 9+ years it’s much cheaper to buy, but you are driving a 0-9 year old car instead of a 3 0-3 year old cars.

At 6, buying is a little cheaper. But you could have had 2 cars instead of 1. I keep my cars so I buy, but I would lease if I kept them less then 6-7 years.

Yeah I need to convince my husband of this. We bought new cars in the fall of 2017. Then he got convinced by the dealership to trade his in for the same monthly payment on a new one. Then he hit a deer and totaled his car and because it was a new luxury car, it was not a total loss and he had to wait months for it be repaired only to get a car that was never quite right back.

Meanwhile, we are months away from paying off my car, and my husband seems overly excited about not having a car payment for someone who clearly should just lease.

I've said, please just lease if you're going to get a new car after 2 years. I think there's a disconnect between who he imagines himself to be (frugal!) and who he really is (likes shiny new things). And this disconnect is losing us money.

It's the same thing with iPhones. He can barely wait 2 years to upgrade his. Meanwhile I keep mine forever. Buying your phone a new case and giving it a good screen cleaning fixes the "wah my phone is old" blues. Same thing with your car . . . get it detailed.

Sometimes, the economics (dealer incentives, oversupply of a particular model, etc.) favor leasing over buying. It isn't always a loss.

Ultimately, this is a math problem. Figure out how long you want to keep the car, the purchase price, the expected sales price when you sell it or trade it in, and figure the monthly cost to own it. Then, consider maintenance (which is nontrivial on an older car).

In most cases, for most cars, buying is cheaper, but that assumes that the buyer will keep it longer than a standard three-year lease. For people who want new cars and want to replace them every few years, leasing could very well be cheaper. Also, for business use, the lease makes the paperwork easier for tax purposes, etc.

The big problem with leasing is that salesmen use it as a way to obfuscate the true cost of the car, often confusing buyers into thinking that it is a better deal than it is. Also, there are often fees when returning a car from a lease (damage, excess mileage, etc.) that need to be considered.

This isn't a one-size-fits-all thing. That is why plenty of non-stupid people buy cars and many others lease them.

Personally, I'm in the "buy-a-three-year-old-car-and-keep-it-forever" camp, but I don't care much about cars, don't really use them for business, and am generally cheap.

Anonymous wrote:

Anonymous wrote:DH and I have been discussing this recently. DH will need a new car next year, most likely. We are thinking EVs, but we think EV tech will change in 3 to 5 years as more and more companies move to EV.

So, DH is thinking of leasing for 3 years, EV or hybrid, then seeing what's on the market afterwards.

You don't get the federal tax credit if you lease. The dealership retains the tax credit. Something to consider.

I'd probably lease a hybrid right now then switch to EV in three years. They are extending the tax credits until 2032 in the new legislation.

But some of the companies (not dealers, the actual manufacturers who own/lease the cars through the dealers) are passing on the tax credit through the lease, in the form of a lower monthly lease payment.

Anonymous wrote:You is.

Haha good one.