6 ms·

This is already happening, at least in the UK. I don't have the numbers but leasing is being pushed heavily by advertisers and is becoming the normal way for pe

This is already happening, at least in the UK. I don't have the numbers but leasing is being pushed heavily by advertisers and is becoming the normal way for people to get hold of a new car who mightn't otherwise.

branchless 11y ago
All part of the culture of debt forever.
- shiftpgdn 11y ago
  A car is not an investment. I lease a new car every 3 years as a daily driver because the opportunity cost of dealing with maintenance and other issues is so high. I have no ownership, it is an expense just like gas and insurance. I am buying the ability to get around freely and not indebting myself as I would with a purchase. At the end of 3 years I can simply walk away. You can get a lease for a silly small amount of money if you play your cards right. Check out leasehackr.com . Right now I could walk into a Ford dealer and walk out with a Ford Fusion for $147/month. Or if I don't want to deal with gas I could get a Fiat 500e for $99/month. I spend more on coffee than that!
  - gvb 11y ago
    Your lease is a debt with a three year term. To the extent that you lease a new car every three years, your debt is forever.
    - shiftpgdn 11y ago
      I don't need a car forever. If I decide to move to Singapore or Honk Kong or even San Francisco/Manhattan proper I will probably not need a car. The Fiat 500e lease example above is a great example because I'm only in for $3600 for 36 months. Name a car that you can purchase outright for $3600 that will never need unplanned service, replacement tires, etc.
      - LeifCarrotson 11y ago
        It's not about purchasing a car outright for $3600, it's that at the end of the lease you have to (not "get to") walk away. I put 50-100,000 miles on cars that start with about 100,000 that I buy for $3000-$5000. I haven't needed much unplanned service, largely due to luck and buying well-maintained cars. When I am done with the car, I sell it for about $1000-$1500 less than I paid for it. And the insurance on these cars is MUCH cheaper than for a new car. So by not "getting to" walk away at the end, my total cost is not $3600, but $1500. You could buy a car for $10000 and sell it at $6400 if you wanted a newer model. But the big difference is that if I get laid off or have to file for disability or something, I have an asset that I can keep using instead of upgrading if I want, or sell if I need the money. A lease is a liability!
        branchless 11y ago
        Also car markets are highly liquid. If you buy a common car there will be a buyer waiting to take it off you.
      - LeifCarrotson 11y ago
        It's not about purchasing a car outright for $3600, it's that at the end of the lease you have to (not "get to") walk away. I put 50-100,000 miles on cars that start with about 100,000 that I buy for $3000-$5000. I haven't needed much unplanned service, largely due to luck and buying well-maintained cars. When I am done with the car, I sell it for about $1000-$1500 less than I paid for it. And the insurance on these cars is MUCH cheaper than for a new car. So by not "getting to" walk away at the end, my total cost is not $3600, but $1500. You could buy a car for $10000 and sell it at $6400 if you wanted a newer model. But the big difference is that if I get laid off or have to file for disability or something, I have an asset that I can keep using instead of upgrading if I want, or sell if I need the money. A lease is a liability!
    - massysett 11y ago
      I used to be in this "leasing is stupid" camp but now I understand why people do it. As a lessee you are essentially paying for the depreciation on the car while you drive it. The depreciation on a new car is the worst, but that's for a good reason: those first few years of car ownership are the most hassle-free. No random breakdowns, no going to the shop and hearing "you need a new xxx" or, even worse, "hard to tell what that sound is, leave it here for a day while we figure it out." That's the last thing I need to hear when I need a car to get to work. Leasing can be seen as a fixed payment that always gets you reliable, newish transportation with less hassle. Sure it costs more than buying a car and keeping it for ten years, but after taking my ten-year-old car to the shop and putting thousands into it, and after seeing that it lacked newer features like the car seat "LATCH" points, I see that driving a ten-year-old car is no panacea either and might not be worth the cost savings.
      - sokoloff 11y ago
        LATCH became essentially standard in fall of 2002, so is probably no longer a factor in a leasing decision. Modern cars are wildly more reliable than even 20 years ago, IMO. The 10-year old piece of crap I drove 15 years ago is not the same as the same as the 11-year old car my wife drives everyday.
    - yulker 11y ago
      Your life is a debt with a life long term. To the extent that you need to eat food, your debt is forever.
  - UweSchmidt 11y ago
    Yes but back in the day people were "ahead" in that they had money saved up to buy a car, rather than just breaking even by making enough to be able to "afford" a car. The idea of "indebting yourself for ownership" - a contradiction in itself - wasn't respected, nor taking on too many monthly commitments that depend on a steady income.
    - branchless 11y ago
      Exactly, it's taking a greater share of income over the same time period because repayments are staggered.
  - sokoloff 11y ago
    Some might suggest more frugality on the coffee expense as well. ;) There's nothing wrong with leasing, particularly if you prefer (and have the means to readily afford) to always drive a car 0-3 years old. If you have that preference, leasing is often the best choice. The real problem is that preference is a very expensive preference and is being opted into by many people who probably should be being more frugal.
bsder 11y ago
> I don't have the numbers but leasing is being pushed heavily by advertisers and is becoming the normal way for people to get hold of a new car who mightn't otherwise. At least in the US, the problem is that if you total the car during your lease, you owe the remaining value of the car. That makes leasing an absolutely horrible decision in the US--all the downside of buying a car with none of the upside. How is the UK dealing with that?
- scrumper 11y ago
  Insurance is surely required to cover the financial exposure on the lease?
- zo1 11y ago
  Here in South Africa, you can't do either without proving that you have insurance for full-coverage of the value of the car.
- pc86 11y ago
  What state are you in? Gap insurance has been a requirement for every lease contract I've ever signed. Which means that the difference is paid by insurance. And no, leasing is sometimes an excellent decision, let's not be silly.

branchless 11y ago

All part of the culture of debt forever.

shiftpgdn 11y ago
A car is not an investment. I lease a new car every 3 years as a daily driver because the opportunity cost of dealing with maintenance and other issues is so high. I have no ownership, it is an expense just like gas and insurance. I am buying the ability to get around freely and not indebting myself as I would with a purchase. At the end of 3 years I can simply walk away. You can get a lease for a silly small amount of money if you play your cards right. Check out leasehackr.com . Right now I could walk into a Ford dealer and walk out with a Ford Fusion for $147/month. Or if I don't want to deal with gas I could get a Fiat 500e for $99/month. I spend more on coffee than that!
- gvb 11y ago
  Your lease is a debt with a three year term. To the extent that you lease a new car every three years, your debt is forever.
  - shiftpgdn 11y ago
    I don't need a car forever. If I decide to move to Singapore or Honk Kong or even San Francisco/Manhattan proper I will probably not need a car. The Fiat 500e lease example above is a great example because I'm only in for $3600 for 36 months. Name a car that you can purchase outright for $3600 that will never need unplanned service, replacement tires, etc.
    - LeifCarrotson 11y ago
      It's not about purchasing a car outright for $3600, it's that at the end of the lease you have to (not "get to") walk away. I put 50-100,000 miles on cars that start with about 100,000 that I buy for $3000-$5000. I haven't needed much unplanned service, largely due to luck and buying well-maintained cars. When I am done with the car, I sell it for about $1000-$1500 less than I paid for it. And the insurance on these cars is MUCH cheaper than for a new car. So by not "getting to" walk away at the end, my total cost is not $3600, but $1500. You could buy a car for $10000 and sell it at $6400 if you wanted a newer model. But the big difference is that if I get laid off or have to file for disability or something, I have an asset that I can keep using instead of upgrading if I want, or sell if I need the money. A lease is a liability!
      - branchless 11y ago
        Also car markets are highly liquid. If you buy a common car there will be a buyer waiting to take it off you.
    - LeifCarrotson 11y ago
      It's not about purchasing a car outright for $3600, it's that at the end of the lease you have to (not "get to") walk away. I put 50-100,000 miles on cars that start with about 100,000 that I buy for $3000-$5000. I haven't needed much unplanned service, largely due to luck and buying well-maintained cars. When I am done with the car, I sell it for about $1000-$1500 less than I paid for it. And the insurance on these cars is MUCH cheaper than for a new car. So by not "getting to" walk away at the end, my total cost is not $3600, but $1500. You could buy a car for $10000 and sell it at $6400 if you wanted a newer model. But the big difference is that if I get laid off or have to file for disability or something, I have an asset that I can keep using instead of upgrading if I want, or sell if I need the money. A lease is a liability!
  - massysett 11y ago
    I used to be in this "leasing is stupid" camp but now I understand why people do it. As a lessee you are essentially paying for the depreciation on the car while you drive it. The depreciation on a new car is the worst, but that's for a good reason: those first few years of car ownership are the most hassle-free. No random breakdowns, no going to the shop and hearing "you need a new xxx" or, even worse, "hard to tell what that sound is, leave it here for a day while we figure it out." That's the last thing I need to hear when I need a car to get to work. Leasing can be seen as a fixed payment that always gets you reliable, newish transportation with less hassle. Sure it costs more than buying a car and keeping it for ten years, but after taking my ten-year-old car to the shop and putting thousands into it, and after seeing that it lacked newer features like the car seat "LATCH" points, I see that driving a ten-year-old car is no panacea either and might not be worth the cost savings.
    - sokoloff 11y ago
      LATCH became essentially standard in fall of 2002, so is probably no longer a factor in a leasing decision. Modern cars are wildly more reliable than even 20 years ago, IMO. The 10-year old piece of crap I drove 15 years ago is not the same as the same as the 11-year old car my wife drives everyday.
  - yulker 11y ago
    Your life is a debt with a life long term. To the extent that you need to eat food, your debt is forever.
- UweSchmidt 11y ago
  Yes but back in the day people were "ahead" in that they had money saved up to buy a car, rather than just breaking even by making enough to be able to "afford" a car. The idea of "indebting yourself for ownership" - a contradiction in itself - wasn't respected, nor taking on too many monthly commitments that depend on a steady income.
  - branchless 11y ago
    Exactly, it's taking a greater share of income over the same time period because repayments are staggered.
- sokoloff 11y ago
  Some might suggest more frugality on the coffee expense as well. ;) There's nothing wrong with leasing, particularly if you prefer (and have the means to readily afford) to always drive a car 0-3 years old. If you have that preference, leasing is often the best choice. The real problem is that preference is a very expensive preference and is being opted into by many people who probably should be being more frugal.

bsder 11y ago

> I don't have the numbers but leasing is being pushed heavily by advertisers and is becoming the normal way for people to get hold of a new car who mightn't otherwise. At least in the US, the problem is that if you total the car during your lease, you owe the remaining value of the car. That makes leasing an absolutely horrible decision in the US--all the downside of buying a car with none of the upside. How is the UK dealing with that?

scrumper 11y ago
Insurance is surely required to cover the financial exposure on the lease?
zo1 11y ago
Here in South Africa, you can't do either without proving that you have insurance for full-coverage of the value of the car.
pc86 11y ago
What state are you in? Gap insurance has been a requirement for every lease contract I've ever signed. Which means that the difference is paid by insurance. And no, leasing is sometimes an excellent decision, let's not be silly.