Did you Lease or Buy ?
04-22-17, 12:04 PM
#46
Lexus Fanatic
04-22-17, 12:16 PM
#47
I am trying to see the logic of how and why you are so impressed by this?
2012-2014 cost $12.5K (CAR was owned)
2014-2017 cost $14.400 (Car was leased) $400x36
In the above scenario you have driven for 5 years and it has cost you $26,900, but you still have no car. No asset (although yes a car asset that is depreciating)...
2012-2014 cost $12.5K (CAR was owned)
2014-2017 cost $14.400 (Car was leased) $400x36
In the above scenario you have driven for 5 years and it has cost you $26,900, but you still have no car. No asset (although yes a car asset that is depreciating)...
04-22-17, 12:17 PM
#48
Lexus Fanatic
Originally Posted by LexsCTJill
Please don't take offence to what I am about to say. So if you financed your cars, you wouldn't be able to finance the house you have? you would not able to able to finance both?
What he's saying is because his vehicle leases are a business expense they don't have to use them against him as a liability when approving him for a mortgage loan. When you drive expensive cars like he does, essentially that's $1,000 a month more mortgage they can qualify him for.
04-22-17, 12:31 PM
#50
The way I see it, the only time it makes financial sense to buy a car over lease is when you're buying a 3-4 year old luxury car that already depreciated a lot, and you get it for a good price and pray that its reliable. This is becoming harder and harder because of questionable reliability of todays turbo charged DI engines. Otherwise, the lease rates are lower than rate of depreciation for the most part, and you don't have to worry about anything else. Of course there are also rare cases when someone has high mileage requirements or other circumstances where leasing is not an option.
04-22-17, 01:57 PM
#51
Lexus Test Driver
I would agree that a total stranger asking questions like that is a bit rude; but if your friends and family ask, I don't think it's a big deal. I just see it as people trying to gauge what they should do themselves.
04-22-17, 01:59 PM
#52
Lexus Test Driver
And one thing I find funny is this idea that "leasing a car is financially irresponsible". My question is, how big a % of these people's monthly income is their car payment? My lease payments are a small enough % of my income that it doesn't impact my lifestyle or my ability to save or invest at all.
Im sure there are people out there spending 30+% of their monthly income on a lease payment, but that isn't leasing fault.
Im sure there are people out there spending 30+% of their monthly income on a lease payment, but that isn't leasing fault.
It's all a state of mind. "Ownership" vs not. I want to have a new car every 3-4 years, and the least costly way to do that is to lease. I don't want to tie up a bunch of money in a car, and my money earns better returns invested than it costs me to borrow money to buy cars.
Cars go down in value, in general a home does not. There are also intangible benefits to owning a home, for instance if you want a single family home or town home in general you have to rent from a private owner, there's instability there, what if the owner sells the home or wants to move back to the home, I have to leave. I also can't do improvements to the home if I'm renting.
I am in the real estate business and I will tell you, some times for some people you should rent and not buy real estate. If you anticipate a big change in your housing needs in the next 1-4 years you should rent. I have people who call me all the time and they bought a home 2 years ago or last year and they have to sell, and they are hosed. It's not that their home has lost value, it's that it costs 7-7.5% to sell it, transfer taxes, brokerage fees, closing costs. So that means their home needs to have gone up in value 7-7.5% before I can sell it and break them even.
The point is, not every piece of advice serves every person. The adage "always buy a home don't rent" doesn't always hold water, just as for every person and every set of needs and circumstances "pay cash for a car, never lease" doesn't always make sense. It would make no sense for me to buy vs lease because always when I get to year 2-3 I have the itch. Even now, I'm 2 years into the LS a car I've always wanted and assumed I would buy out of the lease...and I'm looking. It's just how I am, and I work hard to be able to afford to be this way.
Life isn't all about doing everything as cheaply as possible. You have to live also. I love cars, my car is a huge focus in my life and I spend a lot of money on it, but not so much that it impacts my family financially...so...who is anybody to say anything about it? Should I buy a used car and drive it forever and be miserable always looking at other cars I want? Why?! People belong to country clubs, they have boats, they have second homes, they take lavish vacations, I don't do any of those things, my thing is my cars. So, how am I wrong and they aren't? I have a buddy that isn't a car person and he doesn't understand why I spend so much money for a car. I remind him he spent $70,000 to join and spends $700 a month to belong to a Country Club he walks into twice a month if he's lucky. I spend several hours a day every day in this car...but I'm the overspender? LOL.
"What if you loose your job?" If you're smart you and your financial planners have prepared for bad things that can happen to you. And, even if you haven't you can sell the car, trade the car, etc. Might be upside down but if you really got into bad trouble, and couldn't sell it...just stop paying for it and give it back. Hurts your credit but if you are that bad off that this car is causing you not to be able to eat, your credit is probably ruined anyways.
Cars go down in value, in general a home does not. There are also intangible benefits to owning a home, for instance if you want a single family home or town home in general you have to rent from a private owner, there's instability there, what if the owner sells the home or wants to move back to the home, I have to leave. I also can't do improvements to the home if I'm renting.
I am in the real estate business and I will tell you, some times for some people you should rent and not buy real estate. If you anticipate a big change in your housing needs in the next 1-4 years you should rent. I have people who call me all the time and they bought a home 2 years ago or last year and they have to sell, and they are hosed. It's not that their home has lost value, it's that it costs 7-7.5% to sell it, transfer taxes, brokerage fees, closing costs. So that means their home needs to have gone up in value 7-7.5% before I can sell it and break them even.
The point is, not every piece of advice serves every person. The adage "always buy a home don't rent" doesn't always hold water, just as for every person and every set of needs and circumstances "pay cash for a car, never lease" doesn't always make sense. It would make no sense for me to buy vs lease because always when I get to year 2-3 I have the itch. Even now, I'm 2 years into the LS a car I've always wanted and assumed I would buy out of the lease...and I'm looking. It's just how I am, and I work hard to be able to afford to be this way.
Life isn't all about doing everything as cheaply as possible. You have to live also. I love cars, my car is a huge focus in my life and I spend a lot of money on it, but not so much that it impacts my family financially...so...who is anybody to say anything about it? Should I buy a used car and drive it forever and be miserable always looking at other cars I want? Why?! People belong to country clubs, they have boats, they have second homes, they take lavish vacations, I don't do any of those things, my thing is my cars. So, how am I wrong and they aren't? I have a buddy that isn't a car person and he doesn't understand why I spend so much money for a car. I remind him he spent $70,000 to join and spends $700 a month to belong to a Country Club he walks into twice a month if he's lucky. I spend several hours a day every day in this car...but I'm the overspender? LOL.
"What if you loose your job?" If you're smart you and your financial planners have prepared for bad things that can happen to you. And, even if you haven't you can sell the car, trade the car, etc. Might be upside down but if you really got into bad trouble, and couldn't sell it...just stop paying for it and give it back. Hurts your credit but if you are that bad off that this car is causing you not to be able to eat, your credit is probably ruined anyways.
04-22-17, 01:59 PM
#53
Lexus Champion
Comparing leasing a car with buying with cash is not a good comparison. The better comparison is to compare leasing with financing. So let's not talk about comparing leasing with straight-out cash purchases.
04-22-17, 02:10 PM
#54
Lexus Test Driver
04-22-17, 03:24 PM
#55
It is sometimes a good idea not to pay your insurance upfront for the whole term (usually 6 month or 1 years), but instead make monthly payments. This way, in case the car is totaled you don't have to fight with insurance company to get whatever you've overpaid back.
04-22-17, 05:51 PM
#56
Cars are much easier to finance than homes. When you're self employed like he is and I am, you write off a lot of deductions from your taxes which reduces your taxable income, your taxable income is what they use to qualify you for a home mortgage. Automotive loans they really don't care about ratios. When you're self employed it's always a balancing act when buying a home between overpaying your taxes and maximizing your taxable income so you can qualify for as much as you can, and still minimizing your tax liability.
What he's saying is because his vehicle leases are a business expense they don't have to use them against him as a liability when approving him for a mortgage loan. When you drive expensive cars like he does, essentially that's $1,000 a month more mortgage they can qualify him for.
What he's saying is because his vehicle leases are a business expense they don't have to use them against him as a liability when approving him for a mortgage loan. When you drive expensive cars like he does, essentially that's $1,000 a month more mortgage they can qualify him for.
Thank you Steve! You always state what I wanna say the better way!
b
04-22-17, 06:17 PM
#58
Lexus Champion
Many manufactures are including GAP insurance included as part of the lease payment
04-22-17, 07:47 PM
#59
Lexus Champion
I can't believe the "Leasing vs. Financing" argument has resurfaced. There are so many threads on this. And I can't imagine someone asking me whether I leased or financed my car. None of my friends would ask me, and for anyone else I wouldn't even respond to them.
04-22-17, 08:21 PM
#60
Lead Lap
Thread Starter
It's has taken a turn for the worse I started this thread wanting to know if people get annoyed when strangers ask if you leased or purchased your car... I told someone I was going to mod my car and the reaction was " why would you do this it's a lease"... I'm thinking this person is assuming I leased my car? Also if you do lease what's wrong with modding a car you will drive for several years...