tfischer

Tucker, you are wrong on so many points, not including treating "someone" as a plural pronoun.
First, if you lease a car, the lessor is the owner, not the person renting the car, and he must return it at the specified end of the lease term, much as if you were renting an apartment. (You may "feel that is is mine," but it's not - the feeling, an admirable one, may motivate you to maintain it while it is in your custody and control.) How a lessor cares for the leased car varies, but misuse or abuse will be charged to him at the end of the lease. An owner can abuse his car also, and he pays pretty much the same amount in a lower resale value, which is money out of his pocket. Since abuse costs the owner and the renter about the same amount, a financial-based motivation regarding upkeep does not seem rational.
Finally, your last sentence is completely wrong. Both a cash purchaser and a borrower take legal title as owner of the car at delivery; the purchaser is given the Certificate of Title (called "clear," as it shows no liens). If there is a loan, the Certificate of Title to the owner's car (showing the buyer as owner, not the lender) is held by the bank as collateral for payment. This is a lien and is what gives the bank the right to take the car back if there is a default, sell the car, and apply the proceeds to the outstanding obligation; if there is money left over after the sale, that is given to the car owner. As evidence of ownership, the borrowing purchaser is given, depending on the state law, a "Memorandum of Title," or a similar document that shows he owns the car and shows that the car has a lien against it; this document shows ownership but cannot be used to transfer title (sell the car). To do that, the bank has to be paid off, at which time it will stamp "cancelled" on the lien listing and return the original Certificate of Title to the owner. At no time, even during the foreclosure sale, does the bank own the car in any respect, technically, legally, metaphorically or actually.
Still, it's nice that you keep "your car" in good shape.

shadow1118

gonna have to agree with @tfischer on that, if you lease a car its the dealerships and if you buy the car with getting a loan from the bank its the banks and unless you buy that car in cash its yours.

like @tuckere36 like dude you couldn't even mod it without worrying about it, i mean who the heck buys a 50k car on a loan? thats why i bought my rc200t in cash took me 5 years of saving up since i was 17. I'm hoping it last me till I'm 40.

Olasek

Many do. I did. It gives me flexibility in deciding when exactly I want to free cash to pay it off, I look at the stock market, other factors and decide. I could have purchased the car outright. The last I checked (2015 data) only 16% of luxury car buyers pay the whole thing up front.

NjDude

Ownership = the title in your hand/possession.
Lease = Dealership owns the car.
Finance = Bank owns until the payments are done and you get the title.
That being said, majority of people lease their cars. This is 80% true for people who get BMWs, Mercedes and Audis in this segment.
There are some people who finance if at the end they wish to take the possession of the car and hold on to it for long term.

tfischer

Doesn't anybody know what a lien is?
When you finance a car purchase, you own the car. Your name is on the title as the owner. The lender's information is also on the title, but as a lien holder, not as an owner.

bd5400

This is correct. It's a common misconception that the bank "owns" your car (or house*) until it is paid off. The vehicle serves as collateral for the loan. You're giving the bank permission to take possession of your personal/real property if you default on your loan but you are the owner/title holder. In some states the bank simply holds the title that has your name on it. In other states, you hold the title and the bank is listed as the lien holder.

*unless you have a land contract, in which case the seller retains title to the land/house until you've paid off the loan.

Arfboy

iTrader: (2)

Many people do, and not necessarily because they can't afford to pay the full cash price. That money will be available for smart investment opportunities, rather than being fully sunk into a depreciating asset.

bd5400

Having to save for 5 years to buy a car outright and needing to finance a purchase are quite nearly the same thing, especially if you qualify for a really low interest rate. Plus, as a younger person, the loan would have helped your credit score.

Davew77

This.

Unless you plan to pay cash for everything in your life, even a house, then you want to have good credit. If you save some money on a car but lose that money on a house, are you really helping yourself?

The only way to have good credit is to use it. If you have good enough credit then you can actually save money (such as with cash rewards credit cards).

I also ask; did the person pay cash for a new car or for a used car? If it was new then said person lost a lot of money right from the start by purchasing brand new. I never purchase brand new anymore. I let someone else take the initial depreciation hit. I buy them with less than 10k miles. Then I can finance with no money down and have the total payments still come in under the new car MSRP for what's essentially a new car. My credit is great so I can get the lowest APR currently available. But I do put money down, I was only making a point.

TuckerE36

Yes, thank you for educating me on how a lien is placed on a vehicle that was financed.... -____-
I guess what I was trying to convey was that unless you pay cash in full, you won't have the title physically in hand, I know the bank holds it as collateral with a lien stamped on it...Common knowledge. I still think that people who prefer to lease take more care of the vehicle to avoid excessive wear.

Most Lexus cars lease very well, I would never purchase a luxury car brand new. Saving for 5 years to purchase a car that will only retain roughly 47% of its residual value after 3 years is horrible.

shadow1118

true , true some super smart replies in the thread, i could of just put half down done payments and invest in something else, i just rather not worry about it. at least i don't worry about the bank coming to take my car one morning.

Olasek

I must be a very cool customer because I can manage simply monthly payments - for example I don't worry that bank is coming to take my (financed) home from me. Somehow I am not losing sleep over it.

tfischer

The last thing a lender wants is to foreclose (real estate) or to repossess (vehicle). (It's not actually a re-possession, since an auto lender never previously possessed the car; still, that's the word that is used.) The borrower has to miss at least several payments and be unresponsive to inquires before an attachment is commenced. Anyone living with a fear that repossession is imminent is not an organized person, or is someone living way beyond his means.

lexusrus

Believe it or not, prior to the Great Depression (for those of you old enough to experience it or told through parents or grand parents/family) the bank who holds the mortgage on a person's home can "DEMAND" FULL PAYMENT OF THE BALANCE AT ANY TIME. This DEMAND feature caused a lot of people to be homeless.

BTW, the "DEMAND FEATURE" was outlawed. This is partly why folks grew up in that era prefer to have the "HOME" PAID OFF IN FULL. To most people today, this is not the norm. Not because one does not want to or unable to. It is because most people move again in some 3 to 5 years. When it comes time to sell, one's home is not worth more simply because it is "PAID OFF ". The home is worth the same meaning whatever the buyer is willing to pay/owner is willing to sell or whatever the buyer can get a loan on it (or somewhere in between). The home owner may have saved some "loan processing fees" if paid in full. This usually is not the norm.

So in today's environment, unless one fails to pay the monthly mortgage in a timely manner (and property taxes/HOA dues), no need to worry about the bank coming to get the home.

Here is a question (your answer may vary):

Suppose one paid cash for the RC-F (Let's say he got a great deal. A fully loaded with MRSP OF $79K for $62K out the door). But he still has a BIG mortgage balance on his home. At the time of the RC-F purchase he really WANTED a "nice newer car". And his old car is on its last leg. And he was very dillegent about saving up enough money to buy it. So he goes and buy the RC-F with CASH and fully paid for (and drained his cash reserve).

So three months later, the company he works for decided to DOWNSIZE and he gets laid off.

Now he wished he still got that $62K reserve to tie him over until he finds another high paying job.

I've seen the above happen many times where the guy goes out and buys a highly modified jacked up big full sized pickup truck with BIG GANSTER LOOKING tires for some crazy price of $75k++ when gas prices were high and since he worked for an oil company, the money just kept flowing in. Then gas prices bottomed out and he gets laid off. The pickup truck is worth way less than what he paid for. None of his buddies can buy it bc they got laid off too. Now, he wished he had just leased or financed the truck (or just bought a regular pickup truck). Even if the truck got repoed, he can still make the mortgage payment for a long time until he finds another high paying job (if he had not pay in full with cash ealier). At least he will not be homeless.

I guess what I'm trying to say is that in today's economy, unless one has a lot of liquid reserves, it makes more sense to just finance (or lease if one can write it off as business expense ) the car especially with the low interest rates or zero interest (it is almost like free money, almost ).

Also I think it makes no difference to me if "I own the car or not". I just want to be able to "USE the car" when I need it to go somewhere. Assuming the same car (not a Zip car where every time it maybe a different car). So if one wants to pay cash, finance, or lease it, it's all good. It just depends on that person's situation at the time.

Just my 2 cents. ...

lexual_rc

Yea that ^^

I lease practically for free as a business expense at an incredible rate and keep the miles low. After the lease is up, the car is worth more than I owe left! Great way to get really nice cars for cheaper.