4 ms·
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.
by 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 agoI 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 agoIt'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 agoAlso car markets are highly liquid. If you buy a common car there will be a buyer waiting to take it off you.
- LeifCarrotson 11y agoIt'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 agoI 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 agoLATCH 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 agoYour life is a debt with a life long term. To the extent that you need to eat food, your debt is forever.