Paying cash for a car - or maybe I shouldn't


I used to have to travel about 1/2 mile of rough washboard gravel road crossing a marsh on the way home. Most people drove slowly over this rough patch but there were plenty of people that blasted through it without any hesitation whatsoever. Their vehicles bouncing wildly, suspension being hammered, you could see them trying to maintain control. I was always curious what would lead someone to treat their car like that and one day got my chance when one I followed stopped at a gas station. So I swung in to get some gas and struck up casual conversation about how nice their car was and thinking of buying one etc. How did they like it so far? Came out almost immediately, it’s a lease…thought so…


Wow, looks like that guy didn’t read the not-so-fine print, or maybe it was a company lease. But that reminded me of a conversation I had with a friend who had worked at Hertz. (This came up with me recently because somebody asked about buying used rental cars.) I made some comment to my friend about how people abuse their rental cars. He said, “That’s nothing compared to the way the employees abuse the cars.” Then he told me how the place where he worked had a car wash that was one level below the main parking lot, and had a ramp leading up and out of the car wash. He said the employees had a game among themselves where the objective was to come flying out of the car wash and see if you could get all 4 wheels off the ground- extra points for big cars like the Crown Vic. Sheesh.


My ex-neighbor has a way to lease and make some profit as well.

She has a business where she needs a vehicle full time. She leases a vehicle with high resale value and charges it 100% to her business. All tax-deductible.

At the end of the lease there is an attractive buy-out price, considerably below market retail value. She then buys the car as a non-business private citizen from her leasing company, cleans it up and then resells it privately. She makes up to $10,000 windfall profit (not taxable) that way.

Her last car was a loaded Honda CRV, very popular here.


BULL… Not even close. One guy I know who works for me and leases a new car every other year. For those 2 years he owns it - he does ZERO maintenance…and I mean ZERO…doesn’t even change the oil.

Most dealers will ignore the penalties or drastically reduce them if you trade in on a new vehicle.

And there are THOUSANDS like him.


How does that work?
Why would they give her such a great deal on the buyout when they are leaving all this money on the table? Something doesn’t sound right…


The vehicle has to be sold one way or the other. If without any effort or cost they can get the wholesale price without going to the auction, it’s money in the bank with no sales expense or commissions whatsoever…

I personally helped a friend buy a Taurus leased by a major oil company for a colleague.

The car had only 15,000 miles on it, was 3 years old and in like new condition. The leasing dealer was quite eager to make a quick cash deal for $12,000 for a car that cost new $24500 new at that time. The RETAIL price for this car after 3 years was a lot more than what my friend paid.

My friend could easily have resold this car and made a profit. As it stands, his widow (he died a few years ago) still drives this 1997 vehicle

If you still don’t believe me, go to a leasing company and price the lease and the “buy-out” price at the end of the lease,
Remember, this only works if you lease a vehicle that’s popular and has a good reliability record. A Volvo or VW won’t cut it.

Many large companies leasing cars allow their employees to buy the car at the buy-out price at the end of the lease. Everybody wins. I have bought 2 such vehicles in the past


I won’t get in an argument but I will state that I think your ex neighbor was embellishing some facts just to justify the leasing.


Just my two cents while I’m procrastinating writing a memo. I’ve bought two cars where one was a lease return and the other was a rental. I really had good luck with both of them. Both were bought from dealers though so they tend to pick the best ones for resale.

I returned a rental car in Orlando once and told the attendant that the front tire was losing air and I had to top it off several times (I always carry a tire gauge). The attendant just kind of looked at me with the deer in the headlights and I had to show him how to check the air pressure. I’m sure he did nothing about it because he seemed dumbfounded about what to do about it. Just wash them up and rent them again. Similar to the guy at the airport in Amsterdam that thought it was a weapon or bomb. I guess that’s why the rental companies have supervisors though.


I agree that leasing is not as advantageous as buying, as many here agree.

The neighbor in question managed to get $30,000 for her 3 year old Honda CRV with quite a few miles on it.

I used to work for a company that also rented out industrial tools and equipment. Our formula was that any piece of equipment should bring in enough rental income in two years to pay for itself.

So a quick sale at the end of the lease period keeps the cash flow coming and avoids a lot administrative overhead.


When I sell my next vehicle maybe I should have her sell it for me. The local Honda dealer here has the most expensive AWD CRV at a sticker of 35145.00.


Might be Canadian dollars vs US dollars. But yeah I knew one guy that no matter what he did, everything worked out. Selling house, selling boat, selling car, didn’t matter. Seemed like within a few days someone showed up with the cash. I don’t even think the guy went to church.

Some years ago I was discussing buying a rental car with our fleet manager. He was generally against it because he said that they pay so little for the cars and sell them after the warranty expires for about what they paid for them. So figure (just quick guess) $5-10,000 in rental fees per car and all they have to do is miscellaneous maintenance. We could do the same thing if we could buy them new cheap enough and had an outlet to sell them for retail at the end of the warranty.


I’m not sure how to quote that “I don’t think the guy even went to church” part without writing it out in another post. But that gave me a laugh, Bing.

Probably because I relate to it. Some folks have that Midas touch. You think “well that’ll end badly”, but they come out on top.