4 ms·

True, but the average term of a lease is only 24-36 months while the length of term for financing a car is 60-84 months. (I had a 72 month plan). So you can ge

True, but the average term of a lease is only 24-36 months while the length of term for financing a car is 60-84 months. (I had a 72 month plan). So you can get out of a lease much earlier, and if you do exit early, you typically only have to make the next 6 months of payments.

BoorishBears 8y ago
To be fair, not long ago 24 months was the common loan term. Now people are getting 7 year and even 9 year loans. We live in a time when you can finance a 400$ watch for 2 years. The renewed focus on chipping away at people’s monthly income is almost impressive.
- spicymaki 8y ago
  That is not even the worst of it. There are people leasing vehicles (more expensive vehicles then they could buy) without saving the money they need to put down on a new vehicle after the term is up. Worse yet they drive the car past the mileage limits and then after the term is up they then roll the old lease into the financing for a new lease. It is a vicious cycle.
maccard 8y ago
A 6 year finance plan is quite a long term. I financed my first car over a 3 year term. You could equally have taken out a 72 month lease and been stuck in the same (possibly even worse) situation. > if you do exit early, you typically only have to make the next 6 months of payments. Two things here. 1) I doubt that most leases will let you terminate the contract that early, and 2) if you can, you still have 6 months of payments, which if you compare to the loss you made on your car selling it, the numbers probably compare (deliberately). Ultimately, you made medium term financial commitment and that's a bad decision if you need to exit it early.
- ShadowFaxSam 8y ago
  A 3 year term would not have been possible at my then current salary to finance the car. The standard term period (when I was buying) was 5-5.5 years. In hindsight its easy to look back on what I could have done differently, but I guess that's point. When first graduating, I wouldn't recommend entering into even a medium term financial commitment as things can change so quickly within your first few years in the professional world.
  - spicymaki 8y ago
    You could have also purchased a used vehicle at a 3 year term. I bought a new vehicle out of college and paid an high interest rate with expensive insurance over a 5 year term. It would have been great to reinvest that savings into the future.

BoorishBears 8y ago

To be fair, not long ago 24 months was the common loan term. Now people are getting 7 year and even 9 year loans. We live in a time when you can finance a 400$ watch for 2 years. The renewed focus on chipping away at people’s monthly income is almost impressive.

spicymaki 8y ago
That is not even the worst of it. There are people leasing vehicles (more expensive vehicles then they could buy) without saving the money they need to put down on a new vehicle after the term is up. Worse yet they drive the car past the mileage limits and then after the term is up they then roll the old lease into the financing for a new lease. It is a vicious cycle.

maccard 8y ago

A 6 year finance plan is quite a long term. I financed my first car over a 3 year term. You could equally have taken out a 72 month lease and been stuck in the same (possibly even worse) situation. > if you do exit early, you typically only have to make the next 6 months of payments. Two things here. 1) I doubt that most leases will let you terminate the contract that early, and 2) if you can, you still have 6 months of payments, which if you compare to the loss you made on your car selling it, the numbers probably compare (deliberately). Ultimately, you made medium term financial commitment and that's a bad decision if you need to exit it early.

ShadowFaxSam 8y ago
A 3 year term would not have been possible at my then current salary to finance the car. The standard term period (when I was buying) was 5-5.5 years. In hindsight its easy to look back on what I could have done differently, but I guess that's point. When first graduating, I wouldn't recommend entering into even a medium term financial commitment as things can change so quickly within your first few years in the professional world.
- spicymaki 8y ago
  You could have also purchased a used vehicle at a 3 year term. I bought a new vehicle out of college and paid an high interest rate with expensive insurance over a 5 year term. It would have been great to reinvest that savings into the future.