Why so many leasees ?
Thread Starter
Rookie
Joined: Mar 2015
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From: TEXAS
Why so many leasees ?
Ok, I have a question for you guys. Why do so many of you guys lease these cars vs just buying them? I know some people have a car pmt budget for every month and like new cars every 24 months. I get that. Is that the only benefit or is there something else?
I have never leased a vehicle so this is an honest question and not meaning any offense to anyone. Isnt this the same as renting it with an option to buy out after your term is up?
I have never leased a vehicle so this is an honest question and not meaning any offense to anyone. Isnt this the same as renting it with an option to buy out after your term is up?
Lexus Fanatic
Joined: May 2012
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From: Maryland
This has been discussed on here ad nauseum. There are a lot of reasons, for me I know I'm going to want a new car every 3 years or so, and the most cost effective way to accomplish that goal is to lease. There are business tax advantages I take advantage of too.
I've done the math, and unless you're going to keep it for longer than 5 years, leasing these sorts of cars really makes sense. Its no more expensive than buying and trading after 5 years, they stay under warranty, etc.
Thats exactly what it is.
I've done the math, and unless you're going to keep it for longer than 5 years, leasing these sorts of cars really makes sense. Its no more expensive than buying and trading after 5 years, they stay under warranty, etc.
Isnt this the same as renting it with an option to buy out after your term is up?
Lexus Champion
Joined: Feb 2013
Posts: 2,954
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From: SoCal
That's pretty much it. Besides getting a new and updated car every few years, not needing to deal with out of warranty repairs (even though these cars are very reliable) or the hassle of selling/trading in the car are a few other reasons. It's basically paying for the time you use the car, but only works well for people who can stay somewhat within mileage limits.
There's nothing wrong with the GS, just the lease rates are too good to pass up. With how often they update (styling and tech) cars now, I like having the option of just getting a new car and making it part of my monthly expenses.
There's nothing wrong with the GS, just the lease rates are too good to pass up. With how often they update (styling and tech) cars now, I like having the option of just getting a new car and making it part of my monthly expenses.
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From: Maryland
For instance I was going to buy our new Kia Sedona minivan, but the lease was the lowest money factor I had ever seen, 0.00001. Thats 0.024% interest...almost free money...so I leased it too.
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Joined: Mar 2015
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From: TEXAS
Thanks for the responses. I get it and it makes sense if its in your budget to upgrade every few years. They brought up the lease the other day when I was at the dealer but I didnt even consider since I was there to buy.
Amazingly - when I bought my GS350, because of the $2500 lease cash, first month's payment free and super low money factor - it was cheaper for me to lease the car for 27 months (10k miles) and buy it at the end than it would have been if I bought it outright and got a 60 month loan. Even if I take a loan out after 27 months, I still would end up breaking even - but with the advantage that I've freed up some extra cash during the 27 months and I have the option to walk away from the lease at the end of it.
I also recently bought my wife a 2014 MDX, we didn't lease it - we bought it and a guy ran a stop sign and hit her car 5 days after we bought it. Car had less than 1000 miles on it. If I had leased it - I could have walked away from it at the end of the lease and let the depreciated value from the accident be someone else's problem.
Or in the event that you really regret the purchase (the 2014 MDX is one of those - in 2015 they upgraded the NAV considerably, in 2016 they added the 9-speed auto and a bunch of other features) ... and my 2014 MDX is less than a year old and the 2016s are already out
In my case it just gives me more options on what I want to do. With technology changing so much (Apple Carplay and Android Auto comes to mind) - it makes sense to me to lease, but thats just me.
I also recently bought my wife a 2014 MDX, we didn't lease it - we bought it and a guy ran a stop sign and hit her car 5 days after we bought it. Car had less than 1000 miles on it. If I had leased it - I could have walked away from it at the end of the lease and let the depreciated value from the accident be someone else's problem.
Or in the event that you really regret the purchase (the 2014 MDX is one of those - in 2015 they upgraded the NAV considerably, in 2016 they added the 9-speed auto and a bunch of other features) ... and my 2014 MDX is less than a year old and the 2016s are already out
In my case it just gives me more options on what I want to do. With technology changing so much (Apple Carplay and Android Auto comes to mind) - it makes sense to me to lease, but thats just me.
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Lexus Test Driver
Joined: Feb 2013
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From: California
Amazingly - when I bought my GS350, because of the $2500 lease cash, first month's payment free and super low money factor - it was cheaper for me to lease the car for 27 months (10k miles) and buy it at the end than it would have been if I bought it outright and got a 60 month loan. Even if I take a loan out after 27 months, I still would end up breaking even - but with the advantage that I've freed up some extra cash during the 27 months and I have the option to walk away from the lease at the end of it.
I also recently bought my wife a 2014 MDX, we didn't lease it - we bought it and a guy ran a stop sign and hit her car 5 days after we bought it. Car had less than 1000 miles on it. If I had leased it - I could have walked away from it at the end of the lease and let the depreciated value from the accident be someone else's problem.
Or in the event that you really regret the purchase (the 2014 MDX is one of those - in 2015 they upgraded the NAV considerably, in 2016 they added the 9-speed auto and a bunch of other features) ... and my 2014 MDX is less than a year old and the 2016s are already out
In my case it just gives me more options on what I want to do. With technology changing so much (Apple Carplay and Android Auto comes to mind) - it makes sense to me to lease, but thats just me.
I also recently bought my wife a 2014 MDX, we didn't lease it - we bought it and a guy ran a stop sign and hit her car 5 days after we bought it. Car had less than 1000 miles on it. If I had leased it - I could have walked away from it at the end of the lease and let the depreciated value from the accident be someone else's problem.
Or in the event that you really regret the purchase (the 2014 MDX is one of those - in 2015 they upgraded the NAV considerably, in 2016 they added the 9-speed auto and a bunch of other features) ... and my 2014 MDX is less than a year old and the 2016s are already out
In my case it just gives me more options on what I want to do. With technology changing so much (Apple Carplay and Android Auto comes to mind) - it makes sense to me to lease, but thats just me.
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Lexus Fanatic
Joined: May 2012
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From: Maryland
Owning a home is the #1 source of wealth for Americans. Thats absolutely not the case with owning a car.
Its an expense, plain and simple. So, the question is how do you want to manage it and what are your priorities?
The cheapest way to drive a car is to buy a used car and keep it until it falls apart.
But, life isn't all about doing things the cheapest way possible. For me, I derive a a lot of enjoyment out of my car, and I want a new one with the latest style and technology every few years. Understanding that its a big expense, my goal is to fill that desire the least expensive way I can...and thats to lease.
Thread Starter
Rookie
Joined: Mar 2015
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From: TEXAS
Im not into making car pmts forever but I also dont get to have a new ride every 2 years. Leasing is not for everyone but I get it. You never really own anything in your life anyway, living on borrowed time.
Lexus Fanatic
Joined: May 2012
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From: Maryland
Thats the thing, it doesn't only make sense for people who want a new car every 2 years. I've done the math, and the break even point is 5 years. If you buy the car, pay it off in 5 years and trade it in around the same time, the cost is about equal to leasing every 3 years, even when you factor in the trade value at the end of 5 years. If you keep them longer than 5 years thats one thing, but if you buy and keep them 5 years or less, you really should consider leasing.
Pole Position
Joined: Aug 2013
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From: PA
Ok, I have a question for you guys. Why do so many of you guys lease these cars vs just buying them? I know some people have a car pmt budget for every month and like new cars every 24 months. I get that. Is that the only benefit or is there something else?
I have never leased a vehicle so this is an honest question and not meaning any offense to anyone. Isnt this the same as renting it with an option to buy out after your term is up?
I have never leased a vehicle so this is an honest question and not meaning any offense to anyone. Isnt this the same as renting it with an option to buy out after your term is up?
Last edited by Trek; May 3, 2015 at 07:10 AM.
Driver School Candidate
Joined: Feb 2015
Posts: 19
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From: CA
The reason why people lease is simple. For those who are not going to buy a Camry or an Accord and drive it till the wheels fall off, there is NO SENSE in paying for something that depreciates everyday. Some people call cars an "asset" once it's paid off. Well, it's really NOT because again, it continues to depreciate. I think the finance people call it a "depreciating asset". Why would you pour more money into something that loses value than exactly the depreciating amount?
Ok, I have a question for you guys. Why do so many of you guys lease these cars vs just buying them? I know some people have a car pmt budget for every month and like new cars every 24 months. I get that. Is that the only benefit or is there something else?
I have never leased a vehicle so this is an honest question and not meaning any offense to anyone. Isnt this the same as renting it with an option to buy out after your term is up?
I have never leased a vehicle so this is an honest question and not meaning any offense to anyone. Isnt this the same as renting it with an option to buy out after your term is up?
So as long as the interest rate is no more than 2-3%, I see no downside of leasing a car.
Lexus Fanatic
Joined: May 2012
Posts: 68,101
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From: Maryland
And if you buy out the car you get the depreciate it and deduct it again. Meaning leasing then buying gold extends the length and amount of your deductions.
No sales tax savings in some states though, including MD. We pay tax on the whole sales price
No sales tax savings in some states though, including MD. We pay tax on the whole sales price