We would never buy a non Japanese car and keep it for 10 years. If there was a massive discount like GM does from time to time, maybe a cash purchase if it was like $8000 off or more would help sway the decision . Personally speaking, leasing a Japanese car is the strangest thing, they are built for the long haul....so the value is in the purchase. Everything else, I see some value in the lease, especially the higher priced German brands that update the tech far more frequently as well as the styling.

If someone has a working career of 30 years. And then buy (cash) three 4Runners, one every 10 years vs 30 years of interest leasing where you get a new 4Runner every 3 years....ouch...lots of money wasted (from my perspective)

The idea of having mile limits, interest payments (on something you don’t even own) is of little interest (pun intended) to my household

We are actually really open to the idea of buying a pre-owed vehicle the next time around. (Cash of course )

 

Agree.

To me, even buying a new Japanese car is a huge waste of money. I'm the go to for my friends/family/etc. on car advice. My spouse's friend asked me if a brand new 4 Runner was a good car bc her Jeep GC was a junk car imagine that. I was like "Honey buy a 2 year old one...save some money." There's a reason we won't be paying $90,000 for our LX when we get it.

That being said, I do get the allure of having a brand spanking new car. I do get it, the smell and everything. But the pragmatist in me usually trumps emotion when it comes to that stuff.

 

Not really, at least not for a daily driver. Lots of cars out there to love, I love new technology and I love the feel of a new car, I don't like worn cars.

And I wonder why you don't desire something new with all modern technology styling and feel. People just like different things.

I have no interest in driving old cars, and I have no interest in buying a used car.

And thats really the crux of the lease vs buy debate. If buying used cars and/or keeping them a long time works for you, then you will undoubtedly save money buying used cars or new cars and keeping them a long time vs trading every few years. If that doesn't work for you though, and you want a new car every 2-5 years leasing is going to be cheaper or at least no more costly.

I'm not a cheap person by any stretch, but I focus a lot on making sure that things I do buy I spend as little on them as I can. I have done this math back and forward over and over, and I'm very confident my math (and Allen's) is correct. In general, 5 years is a magic number. If you trade the car in within 5 years, you will break even and have less downside risk or save money if you lease. If you can keep it longer than 5 years then you start to save money by buying.

If you factor in business savings from lease write-offs, unless its a vehicle over 6,000 lbs GVWR you really have to lease. In 2020 it will cost me about $250 a month actual cost to me to drive my LS460L (not including running costs, just the actual lease payment)

But then I have to drive 4-10 year old 4 Runners which I don't want to do. So for 21 out of 30 years I'm not happy with my car and am denying myself something that I want (a new car) simply to save money, doesn't work for me.

You are right, doing that is much cheaper, but cars are important to me and bring me a lot of joy and I'd rather spend more and have what I want. Its not always about doing things the cheapest way. Hence, if you find comfort in buying cars outright vs leasing even if leasing saves you money, then thats your prerogative.

 

hallelujah, thank you!

he actually factored that in.
6 years leasing paid $20.7K

6 years buying (5yr finance) is $27.1 and ~$7600 car value, net cost thus $19.5K

so yes, you have $7.6K to put toward the next one, but your paid $7K more in the first place, so hardly a win.

plus with 2x 3yr leases you get to drive cars <3 yrs old instead of one for 6. and the 7K you didn't spend to buy the car you can put in your IRA or 401K which may be worth a fortune when you need it.


yes, that's why i was ok with the g90 lease - traded in my 3yr old jeep grand cherokee which still had 1 more year financing on it, and put that net money in to lower my lease g90 payments. this is why i likely won't be leasing another g90, although who knows.

 

$34000 beater ES
120000 miles
20 mpg = 6000 gallons of gas = ~$18000
$1500 average insurance per year last 17 years. $26000
2 sets of tires = $1200
misc and repairs = $3000

am i missing anything?

$82000 total /120000 miles,
$0.68 per mile is still less than uber

and it's not I can sell this worthless clunker.
I'd only get $2000 max.

 

No, he did not if you want to compare apples to apples on what a buy vs lease financial cycle looks like.

He addressed the asset value to the buyer of the car at the end of the loan cycle, but not the fact that a repeat buyer would also have a car at the start of this cycle to trade in that needs to be factored in. A repeat leaser would never have one at the start of the cycle as they simply turned their last car in.

So if you assume at the start of the purchase model that the traded in owned car was worth $5k or $6k on trade (assume it was a little cheaper than the current one being purchased when it was bought) it’s a very different and more accurate financial picture of what a repeat auto buyer actually pays over time during the finance cycle. They own something at the start they bring into the transaction and own something at the end of the transaction.

A repeat leaser would not have a car to trade at the start (they own nothing) and they often put down significant out of pocket $$$ up front to get their month payments down. Bit’s example above is somewhat different in that he got off the buy train and hopped onto the lease train using a trade in for the Jeep as part of a down payment. His example isn’t a standard model to compare but it does illustrate the point I’m trying to make with a buyer (as he was with his Jeep) having a vehicle at the start of the cycle to apply to the deal.

Also a lease often has significant constraints on allowed vehicle usage, limits on mileage, car condition expectations and sometimes picky nits at trade in, restrictions on customization, gap insurance costs, etc. All that nickel and dime adds more fees and stress I simply don’t want to ever deal with or track.

Each model definitely has its pros and cons and it’s very much an individual decision based on what you value! All sorts of factors... I also prefer to buy luxury cars CPO to get (IMO) a much better value and reduce the depreciation hit, but buy trucks and daily driver commuter cars new. All individual preference and YMMV.

 

I just don’t see how what you currently have impacts whether it makes sense to buy or lease going forward. If you own a car and trade it and then lease, you get that money for your trade in any event. It either goes down on a purchase, down on a lease, or into your pocket.

That would be a mistake. You don't want to put money down on a lease, all you're doing is prepaying rent by doing so and you put your money at risk if you total the car. When I lease, my drive off is $0 or first months payment and thats it. Everybody who advises on leasing recommends the same.

I've been leasing cars my whole life pretty much, and I have never paid $1 in excess mileage charges, never paid anything in excess wear charges. Customization is fine as long as the car is returned to stock when you trade, and I don't customize cars anyways, and gap insurance is almost always included in the lease. I almost always trade my cars in at the end of the lease vs turning them in which negates the issue of any charges. I'm always over mileage too, and never even think about it.

All of those things you mention also impact the value of a vehicle you own, more mileage reduces value, customizations usually reduce value, damage and wear reduce value. In a lease they are potential fees at the end, in a purchase they are potential reductions in value at the end. 6 of one 1/2 a dozen of the other.

​​​​​​​It really isn't very different from owning a car and trading it in.

 

i can't exactly follow your post to be honest. even a repeat buyer may have equity from the prior vehicle, but that's irrelevant because they paid more for it than leasing in the first place.

Let's do the cycle three times:

18 years leasing paid (20.7x3) $62.1.K (not taking into account inflation, etc. of course)

6 years buying (5yr finance) is $27.1 (~$7600 car value at end)
6 years buying second car (5yr finance) net cost thus $19.5K
6 years buying third car (5yr finance) net cost thus $19.5K
Total: 27.1k+39k = $66.1K
Even if we had a trade to 'start', that would be $58.5K, this 'saving' a whopping 3.6K over 18 years and having to keep cars 6 years. And with the leases the cars are never out of warranty and with some or all maintenance included, there's little to no out of pocket costs unlike the out years on the bought cars.

This shows to me the whole thing is basically irrelevant which way you go. Some people are comfortable buying, some leasing, that's it.

you're happy buying cpo luxury cars, i respect that, i'm not because i don't like outdated vehicles. works for you, doesn't work for me.

what none of us should do is say 'our' approach is 'best' because it isn't for everyone.

next time i may buy or lease, haven't decided yet, but i'll probably lease because i have to put out less money now, can invest the rest, can get 'more car' than i would get if i was buying (on payment basis of course, not car equity)... let's face it, cars are money pits basically. if we all wanted to be the most 'sensible' we'd buy a very reliable basic used car, and drive it until if fell into near dust and could no longer be repaired, but if i did that, i'd shoot myself before the car wore out.

my choice next time is probably between buying a car i think i'd be ok keeping a long time, or leasing a car i obviously won't be keeping long.

 

Agreed.

And the argument often used to denigrate those of us who lease is the amount of cost vs owning cars a long time. We all spend money on things we like. We take vacations, we go out to eat, we buy expensive TV setups or audio setups, people have boats, people belong to country clubs. For some of us, our cars are things we like...and we like new cars and driving different cars...and we spend more on them than other people would. Nothing wrong with that.

There is always someone there to look at what you do and shake their head. "Why would you go to Paris when you can go to Cleveland Ohio for way less money" "why would you ever eat at Morton's when you can grill a steak at home or go to the Outback for less" etc.

 

This has kind of turned into the lease/buy thread...

 

Always lol

But I think it does tie in, the question is going to be will this impact how we choose to acquire vehicles and what sort of vehicles we choose to acquire. For me, the answer would have to be no as I don't see this impacting how much we drive long term.

 

Not sure that math is right and not motivated enough to break out excel to build a model... that's ok,.. I'm done trying to explain the apples to apples compare and just adding more years doesn't make any remote sense to me . Buyers can bring a the value of an owned vehicle asset both into and out of a true comparative model, leasers do not.... Your math works for you, my math works for me. and totally agree it's an individual decision with lots to consider, but many are arguing awfully hard that leasing is so much better and cheaper, lol.

I didn't say that it influences the decision you or anyone should make, I simply disagree with the premise of the approach. Allen looked like he was trying to do an apples to apples comparison between a buyer and leaser over time. IMO he missed that if you are comparing a repeat buyer they would have an asset of an owned and paid-for vehicle to apply at the first purchase when building the generic financials to compare the two options over six years. Granted that's not every buyer will have a trade or bring equity from a previous sale in, but if folks want to hold the math up to see "look it makes so much sense to lease" then it needs to be considered as a likely starting point assumption. If you are a buyer with an owned vehicle who wants to shift to a lease lease like you mention or like bit did, that's a different equation. Apples to apples without a shifting from buy to lease model, I think the math is inaccurate without including the value of that starting vehicle asset in the equation. That's something a repeat buyer will often have, but a repeat leaser never will have coming into the deal.

I totally agree, yet SO many people do it. It'd also be same thing you suggest above about trading in a car and putting it down into a lease. I wonder what percentage put $$ down or trade in a vehicle towards an attractive lower monthly lease payment. I'd wager it's a surprisingly high number.
Really? You go way over mileage and turn in with damages and you don't ever get charged? Will you pull out your carplay mod and take off your tint or just turn in with those still on the car? I'd wager you get away with that because they want to transition you in another new Lexus and are trying to make it an easy decision... if you were just turning it in, washing your hands of Lexus and clearly not negotiating for another new car I wonder how you'd be treated differently. I've known several people that let their leased cars sit to keep the miles down which seemed stupid to me and many who who go to extraordinary lengths to detail and obfuscate wear and tear at lease turn in.

If I want to sell the vehicle and get something else next week, or drive out of the country, or if I want to put an aftermarket stereo in, or lower my car, or if I want to drive it back and forth each week to Atlanta and put a ton of miles on it... that's my decision and I don't have any other party looking over my shoulder that I have to ask permission of, or is going to assess some steep penalty or arbitrary cost later. I agree ultimately it's a cost impact to the value of the car when it's disposed of, but it's my decision about my car and not a second party that has me under a very specific, very detailed contract about using their car. This is my opinion and what I value, there is certainly a lot of value in getting a newer car more frequently and (if you finance, I don't), potentially having a lower payment. All my personal preference! Others value and weigh these factors and others differently, and that's totally OK (just don't try to tell me your way is always better and cheaper than mine, lol).

 

FOR ME and the way I use cars, leasing is unquestionably cheaper. I’ve done the math on it many times, discussed it with my CPA and my financial planner, because I want a new car every 3 years or so, leasing just makes way more sense. Because I can write a vehicle off for business it makes it even more of a no brainer.

As for mods and mileage and all, remember I TRADE my leased cars in I don’t turn them in. At the end of the lease as long as the dealer will give you the residual you can trade it in and pay the lease off like any other finance. When you trade the car in there are no fees for wear, mileage etc because those things are just factored into the value the dealer assigns to the car as a trade.

Of course it’s because they want to sell me another car, it’s all part of the deal. It’s not just Lexus, I lease all my cars so I’ve done this with my non Lexus cars too, changing brands, etc.

Carplay mod, tint, etc just all goes with the car. Even with a turn in they don’t care about that sort of thing. Wheels, suspension, etc that’s another story.

I don’t even think about mileage limits or restrictions, but I get that if you aren’t accustomed to leasing. A lot of the hang ups about it center around it not being “your car” but I just view it as another form of financing.

You can trade or sell a leased car anytime. Might get killed, but that’s true whenever you trade or sell an almost new car. More miles you drive reduce the value of any car.

A lot of it is just a mindset thing.

 

Agree with this too, though I don't think anyone is/was doing that in this thread. I clearly get why people lease, but it's just not for me. I like owning things outright. I buy used cars. I guess at the expense of not having the newest and newest in tech, but that's okay.

Like I said, a paid off car that you truly love is a great thing. Can lease people meet me halfway and say they understand that, like in the way I understand why people lease?

 

I understand and respect that’s important to and a great thing to you.