**** CARS: LEASE versus BUY ****

[RacersEdge]

IF your goal is minimizing costs assiciated with a car, buy a used car. If you value convenience, never having to deal with repairs, a lower monthly payment, the benefit of being able to have the latest model every 3 years, then lease.

I have leased twice in a row and really like it. The feature of always driving a car under warranty is pretty sweet.

[bigbrother36]

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it seems most of what you wrote doesnt take into account a more critical factor such as how long someone is planning to own the car.

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It sounds like you didn't read my post. I said "future plans"

The H3 is not the gayest car on the road. That is the HHR in that lavender color. 2nd is the Aztek. Third is the H3.

Buying a high line car is really -EV. You are better off leasing and using the exra cash to stake me to move up to 5/10. They depreciate faster than most other cars. Maintenance and repair costs can become astronomical as you reach higher mileages.

Above poster (bwana?) is misssing the point. Yes, after 5 years you own your 10k car. but if you lease, after 2-4 years you own the option to buy the car. If the option is better than market value then it's a good buy. If not, well that's obvious. Say at the maturity of the lease your residual on your G35 is 22k. Say the car is worth 18k. turn in the keys and the bank eats 4k. Go buy a similar one for 18k. leasing is the equivalent of the free card play.

BTW if that's how you wanna roll check out the Acura RL.

Also, edmunds.com can be your friend. Keep in mind their business model. They make money by getting you to request a quote and then selling your info to dealers. They are really [censored] towards dealers (their customers).

[surfinillini]

thanks big,

you've been awesomely helpful

now if you can now teach dbaggery how to not be a tool...

[Oski]

[ QUOTE ]
[ QUOTE ]
it seems most of what you wrote doesnt take into account a more critical factor such as how long someone is planning to own the car.

[/ QUOTE ]
It sounds like you didn't read my post. I said "future plans"

The H3 is not the gayest car on the road. That is the HHR in that lavender color. 2nd is the Aztek. Third is the H3.

Buying a high line car is really -EV. You are better off leasing and using the exra cash to stake me to move up to 5/10. They depreciate faster than most other cars. Maintenance and repair costs can become astronomical as you reach higher mileages.

Above poster (bwana?) is misssing the point. Yes, after 5 years you own your 10k car. but if you lease, after 2-4 years you own the option to buy the car. If the option is better than market value then it's a good buy. If not, well that's obvious. Say at the maturity of the lease your residual on your G35 is 22k. Say the car is worth 18k. turn in the keys and the bank eats 4k. Go buy a similar one for 18k. leasing is the equivalent of the free card play.

BTW if that's how you wanna roll check out the Acura RL.

Also, edmunds.com can be your friend. Keep in mind their business model. They make money by getting you to request a quote and then selling your info to dealers. They are really [censored] towards dealers (their customers).

[/ QUOTE ]

Not entirely: Although the bank does take the risk of the residual being higher than market value, it protects against this by front loading the residual percentage. So, just like a "free card" in poker, you still pay for it.

[surfinillini]

do you need higher liability limits with leases?

[cwsiggy]

Surf - why not buy a relatively semi new "used" car. Seems to me to be the best of both worlds. You get into a car that has low miles and most of the initail keller depreciation is off.

I'm suprised more people didn't mention this option.

[bigbrother36]

"font loading" ??? The lessor has to balance the risk vs. the salability of the lease. If they set the residual too low, the payment is then too high and nobody signs up.

liability limits: not usually, but read the contract. BTW manufacturer leases are usually much more friendly than independent banks. Manf. finance arms exist to help sell cars. Banks exist to make $$

[Oski]

[ QUOTE ]
"font loading" ??? The lessor has to balance the risk vs. the salability of the lease. If they set the residual too low, the payment is then too high and nobody signs up.



[/ QUOTE ]

Yes, I think "front loading" is an appropriate term. I am not stating there is anything wrong or deceptive here, its just common sense.

Yes, a savvy consumer will not take a lease if the residual is too low. By such terms, you are paying for more of the car than you will use. However, the bank is not going to offer the general public a true freeroll (if you will). The number is set as a forcasted arbitrage against what the real market should be.

In other words, the consumer pays for this up front, thus the appropriation of the real risk is "front loaded."

In the long run, the bank is not going to lose ... it has a built in pad.

[bigbrother36]

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In the long run, the bank is not going to lose ... it has a built in pad.

[/ QUOTE ]

Call up the folks at GE Capital and ask them why they are no longer in the consumer auto leasing business.

I don't see what your point is. I never said leasing was a freeroll. Just that it was, in most cases, +EV. FWIW, YMMV, SIIHP, etc. (I've always wanted to add SIIHP to a post!)

[jmillerdls]

[ QUOTE ]
IF your goal is minimizing costs assiciated with a car, buy a used car. If you value convenience, never having to deal with repairs, a lower monthly payment, the benefit of being able to have the latest model every 3 years, then lease.

I have leased twice in a row and really like it. The feature of always driving a car under warranty is pretty sweet.

[/ QUOTE ]

Yeah, it all sounds great...unless you would prefer to not have to make a car payment every month for the rest of your life.