Docnick, you are overlooking that $15,000 loss of depreciation. Or whatever it is. Owning a new car is expensive via depreciation even if you get no repairs. But, be prepared for $500 repairs a few times a year once the car has some miles.
@UE2UBMW: As I said before, it’s cheaper (for the lessor) to own that Civic, than it is for you (the lessee) to lease it, right? Otherwise, how does the lessor stay in business? He might be wrong from time to time, but he’ll quickly go broke if he isn’t right most of the time.
So how does leasing work, ECON-wise, if the lease is cheaper than owning the car?
Which1978 model car did you drive until 2011 !?! @UsedEconobox2UsedBMW
The car was a 1978 Oldsmobile Cutlass Salon with the 4-4-2 trim package. The dealer had the car from April of 1978 until I purchased it in October of 1978. The Olds did not have a big engine–it had the 260 cubic inch V-8 with the 3 speed automatic transmission. The hotrod set didn’t want it since it didn’t have a big engine with the 4 speed manual transmission and older drivers didn’t want the car since it had the big 4-4-2 numbers on the door. My son did take the car to college which was about 50 miles away from home in 1992. However, by the next year, he had an internship 350 miles away, so I put him in a newer car and took the Oldsmobile back.
It seems strange to me that many of the people who lease a car want to own their home rather than lease living quarters.
I’ve been thinking about leasing vs. owning and the people who lease a car because they can drive a more upscale car by leasing. Some purebred dogs are expensive. It might be profitable to start a business where a pet owner can lease the dog, thus allowing the person to have a more snobbish pooch. As for me, I’ll stick with buying my own vehicle and adopting my rescue dogs.
Can you provide a link to the "$99/mo with $0 down" deal that you mentioned in your opening post?
NO HE CAN’T. Been asking that every time he brings this leasing cr*p up. He just makes things up and expects us to believe it. He sounds like he’s been watching TAP’s too much.
UE2UBMW said: "Docnick, you are overlooking that $15,000 loss of depreciation. Or whatever it is. Owning a new car is expensive via depreciation even if you get no repairs. "
This is the WORST myth the ‘leasing is cheaper’ folks put out. In fact, depreciation is EXACTLY what you pay when you’re leasing, along with interest and profit to the leasing company. Leasing in NO way gets around it. And by leasing, one is MAXIMIZING the depreciation costs they’ll pay - the first 2 to 3 years of depreciation are ALWAYS more than the subsequent years, on a $/year basis.
@texases Well said. You beat me to it. My Toyota will be fully depreciated by the time we get rid of it at about 19 years. That’s $22,000 over 19 years or $1158 per year or $96 per month, all inclusive. Even if we sell the car now at 7 years, we have foregone 2-3 leases, and our cost will be only $15,000 over 6.5 years or $2143 per year or $179 per month, all inclusive. The insurance also drops as the car ages.
The costs I mentioned were Maintenance and repairs total; a lease car needs maintenance as well to keep it running and to meet the terms of the lease.
If your business requires you to drive a car no older than 2 or 3 years, leasing can make sense; most who do this also do little or no maintenance and rely on the next owner to inherit the neglect.
Even if you trade in at 5 years, or the end of your payment for a newer car like I did, you get back your trade in value, have no mileage limit (I drive at least 18k a year) and come out near or better than leasing if you factor out maintenance that you have to do on a lease…
I have never seen a true $99/month lease with nothing down on anything. They are always with a trade or specified down payment, taxes and fees. The fees are not specified in the ad and are quite steep I have seen lease ending fees, dealer fees and lease starting fees. Besides, I don’t fit in an econobox.
Somebody posted a link to that ‘$99/mo’ lease, had something like $4,000 down - $4,000/24 = $167/month, so it’s actually a $265/month lease, plus the interest cost on that $4,000…close to a $300/month for no money down, I’d bet.
Maybe it’s $139 or $159. With some downpayment. Still cheaper than the almost constant $700 repair bills you’ll get with that 1993 Chevy Cavalier or whatever SEEMS to be “cheap”
The other part is opportunity cost of your $20,000. Invested in a good stock, and it would have grown to triple that.
Are you implying that, while you are leasing a fine machine, we car owners are driving ancient, beat up, worthless POS cars?
I’m not sure what cars you have been exposed to, but as for me, I’ve never owned a car that constantly needed those kind of expensive repairs. As it so happens, my previous car was nearly that old, but it never needed those constant, expensive repairs.
You are obviously very much in favor of leasing
Did you used to own cars that you considered to be money pits?
If so, is that the reason why you are dead-set against owning cars?
As I stated in an earlier post, I drove a 1978 Oldsmobile Cutlass for 33 years and 240,000 miles and never had a $700 repair bill. I drove a 1990 Ford Aerostar to 125,000 miles and only had a repair bill of about $700 for the air conditioning system. I owned a 2006 Chevrolet Uplander minivan that my son now owns. It has 115,000 miles and has never had a repair bill as high as $700. Now, I don’t know anything about a 1993 Chevrolet Cavalier, but I can’t imagine one having constant $700 repair bills.
I don’t compare investing in stocks with automobile ownership. An automobile is not an investment (except possibly for a few classic cars from the 1930s), but a necessity for most of us. When we purchased a house, we had a large enough down payment that even at the beginning of our mortgage, part of the monthly payment went toward paying down the principal, so we were building up some equity. Now, if all the monthly payment is doing on a house is paying interest on the principal, then one is “renting” money and still having the maintenance on the house. In that case, one is better off renting or leasing a house with the landlord responsible for the upkeep and repairs on the house. In leasing a car, one builds up nothing equivalent to the equity on a house and is still responsible for the maintenance that isn’t a warranty item (e.g. tires).
The Honda Dealers of New England are offering a lease special for a Honda Civic. The terms are $12K miles/year, $159/month with $1999 down, excluding taxes and dealer fees. There’s also an added caveat “Dealer contribution may vary and could affect actual lease payment.”
That means you’re paying $2000 + 36*$1999 =$7724 to drive a maximum of $36K miles. That works out to $0.215/mile.
Update:
To purchase that car, they show a list price of $19,755. If you buy it outright and drive it for 150K miles, that works out to $0.13/mile.
The difference ($0.215 - $0.13) is $0.085/mile. That means on average, you’ll pay 8.5 cents more for every mile driven on a leased car.
Over the course of 150K miles, that works out to $12,750 extra to lease.
" Still cheaper than the almost constant $700 repair bills you’ll get with that 1993 Chevy Cavalier or whatever SEEMS to be “cheap”"
Why do you destroy any credibility with such BS statements? Who’s talking about a '93 Cavalier? We’re talking about a 2014 Cruze, buying it and keeping it for 10 years vs. leasing.