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People are buying cars they can't really afford because the monthly payments seem to be affordable. I think they know it's an expensive way to have a nice car b
by dazc 9y ago
People are buying cars they can't really afford because the monthly payments seem to be affordable. I think they know it's an expensive way to have a nice car but the alternative (because they don't have the capital) may be buying an old banger or having no car at all.
- loeg 9y agoThe article seems to be talking about short term (2-3 year) interest-only leases. There's a middle ground your comment hasn't mentioned. Instead of leasing or buying a used car, consumers can finance a new car (e.g. 5 year loan). It requires slightly higher monthly payments to cover the principal, and you can't switch cars as frequently, but you have ownership of the car (and freedom from payments) after the loan ends. I tend to think that buying used is a much better value, especially in areas that don't regularly salt their roads. But it's good to know about all available options.
- DanBC 9y ago> Instead of leasing or buying a used car, consumers can finance a new car (e.g. 5 year loan). It requires slightly higher monthly payments to cover the principal, and you can't switch cars as frequently, but you have ownership of the car (and freedom from payments) after the loan ends. Yes, and it's important to know that hire-purchase has existed in the UK for years as a method to buy cars, and this new product hasn't, and there's some confusion from the public about the type of product they're buying.
- usaphp 9y agoBut the main reason people get short term leases is so that they can switch cars often and drive a new car all the time. They don't want to deal with selling a car, fixing it, worrying about it losing value after accident, with short term lease you pay a premium for an option to drive a new car and less worry about things
- bsamuels 9y agohow does road salting affect the value of leasing versus financing a used car?
- loeg 9y agoIt affects the value of buying a used car vs buying or leasing a new car.
- TrickyRick 9y agoI guess the idea is that salt wears more on the car and as such the leasing option would be better since the second-hand value is guaranteed. However I think car finance companies are clever enough to include this in their calculations and the second-hand value you get for a car in France is not the same as in Sweden where roads are commonly salted.