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I'm not a car nerd, I don't want a car. I want to transport me where I want to go at a certain level of comfort, reliability, cost, privacy, speed etc. If I ca

I'm not a car nerd, I don't want a car. I want to transport me where I want to go at a certain level of comfort, reliability, cost, privacy, speed etc. If I can get that for $200/month for a new car for 3 years then hand it back, with just known costs of insurance and gas, that's valuable. I don't care what the cost of the car is, only what the cash flow is. Sure, I could buy a car for $5k and hope that it's cheaper over the 3 years, hope it doesn't depreciate too much, and after 25 months (plus however many months to pay for the extra maintenance and servicing included in the first car) but I'm taking the extra risk. Maybe I'll come out on top, maybe I won't. Interest rates have been at record lows for over a decade, but the cost of the basket of goods the typical person buys hasn't changed much.

ed_elliott_asc 5y ago
I'm in the UK and I have really noticed in the last few months that life is getting more expensive - eating out is 10-20% more, groceries are up 10-20%. Now this is partly brexit, partly covid, partly we stopped doing anything for months - I can see people getting a bit of a shock when they realise that everything has gone up (the RPI in the UK is the average cost of a set of items in a basket and this confirms it, massive drop last year and now higher than the trend line shows it should have been: https://www.ons.gov.uk/businessindustryandtrade/retailindustry/timeseries/j5c4/drsi https://www.ons.gov.uk/businessindustryandtrade/retailindust...) - will be interesting to see if this drops down again next year
- iso1631 5y ago
  Our grocery bill is actually down over 18 months, and we rarely eat out but I comments how surprisingly cheap it was yesterday. RPI is not used by anyone as a serious measure of inflation, CPIH is the standard used and it's been really low for donkey's years
deleted 5y ago
[deleted]
reducesuffering 5y ago
> I'm not a car nerd, I don't want a car. I want to transport me where I want to go at a certain level of comfort, reliability, cost, privacy, speed etc. No need to waste money on a lease. Just buy a used Toyota at effectively 30-50% the cost of that lease you're getting.
- HWR_14 5y ago
  > No need to waste money on a lease. Just buy a used Toyota at effectively 30-50% the cost of that lease you're getting. The poster made it clear that he knows there are cars out there in the 50% range of the cost of his lease, but still thinks it's worth leasing. He said he believed the reliability (and presumably warranty) and improved style were worth it. Which is fine. He's making a reasonable choice.
  - reducesuffering 5y ago
    OP said nothing about style. My point is that a slightly used Toyota defies all of OP's concerns: "hope that it's cheaper over the 3 years, hope it doesn't depreciate too much, and after 25 months (plus however many months to pay for the extra maintenance and servicing included in the first car) but I'm taking the extra risk. Maybe I'll come out on top, maybe I won't." It definitely will be cheaper over the 3 years. Won't depreciate too much. Really won't have maintenance and servicing needed anymore than the lease. They aren't taking any risk and will come out on top. I know this, because lease financiers already bake all this into the lease for more unreliable cars with a hefty margin for extra profitability.
    - HWR_14 5y ago
      >OP said nothing about style "a certain level of comfort, reliability, cost, privacy, speed etc." His point was he knows he is paying more because he has to think less. He's paying for convenience and risk-aversion (and a slightly newer ride). That's fine as long as he recognizes it as an optional luxury expense.
      - 5y ago
jjav 5y ago
> If I can get that for $200/month for a new car for 3 years then hand it back So, that's $7200. > Sure, I could buy a car for $5k and hope that it's cheaper over the 3 years There's no hoping, of course it's way cheaper. $5K is less than $7.2K even if you dump the car off a cliff after the 3 years. But you wouldn't, you own it so you can sell it (unlike the lease). A car that you buy for $5K is so far down in the depreciation curve that it doesn't depreciate much anymore, you'll be able to sell it for close to the purchase price. If you sell it for $4K, that's a total cost of $1K for 3 years vs. $7.2K for the lease. No comparison. On both choices you still have insurance and operating costs on top, both have those. Insurance is bound to be much cheaper on the older cheaper car. In fact you can go liability-only on a $5K car, who cares. But on a lease you're forced to pay full coverage on a new car, far more money. So if you want to enjoy the luxury of a new car lease, enjoy! But there's no way to justify it on economic terms.
- iso1631 5y ago
  No it's not, it's $5k plus maintenence which can easily run to $2k to get it through the annual test, so that's $11k and will massively deprecate. There's then the opportunity or finance cost of that $5k.
  - jjav 5y ago
    $5K + $2K is not 11K, I don't understand how you get to that number. Also unless you get exceptionally unlucky (it can happen but is very rare), you're not spending 2K on maintenance. Even if you do, that's $7K, which is still less than the example lease payments of $7200. Don't forget the lease payments are just rent, the money is gone forever. The used car you can sell later and recover most of the cost. Also, it will not "massively depreciate". How often have you done this? The idea is to buy a car that has already bottomed on its depreciation curve and then sell it a few years later with barely any loss. If you want affordable transportation that's the way to go. Buy an early 00's Corolla or Civic for $3K-$5K, spend nothing on it, sell it a few years later for nearly the same money.
    - iso1631 5y ago

ed_elliott_asc 5y ago

I'm in the UK and I have really noticed in the last few months that life is getting more expensive - eating out is 10-20% more, groceries are up 10-20%. Now this is partly brexit, partly covid, partly we stopped doing anything for months - I can see people getting a bit of a shock when they realise that everything has gone up (the RPI in the UK is the average cost of a set of items in a basket and this confirms it, massive drop last year and now higher than the trend line shows it should have been: https://www.ons.gov.uk/businessindustryandtrade/retailindustry/timeseries/j5c4/drsi https://www.ons.gov.uk/businessindustryandtrade/retailindust...) - will be interesting to see if this drops down again next year

iso1631 5y ago
Our grocery bill is actually down over 18 months, and we rarely eat out but I comments how surprisingly cheap it was yesterday. RPI is not used by anyone as a serious measure of inflation, CPIH is the standard used and it's been really low for donkey's years

deleted 5y ago

[deleted]

reducesuffering 5y ago

> I'm not a car nerd, I don't want a car. I want to transport me where I want to go at a certain level of comfort, reliability, cost, privacy, speed etc. No need to waste money on a lease. Just buy a used Toyota at effectively 30-50% the cost of that lease you're getting.

HWR_14 5y ago
> No need to waste money on a lease. Just buy a used Toyota at effectively 30-50% the cost of that lease you're getting. The poster made it clear that he knows there are cars out there in the 50% range of the cost of his lease, but still thinks it's worth leasing. He said he believed the reliability (and presumably warranty) and improved style were worth it. Which is fine. He's making a reasonable choice.
- reducesuffering 5y ago
  OP said nothing about style. My point is that a slightly used Toyota defies all of OP's concerns: "hope that it's cheaper over the 3 years, hope it doesn't depreciate too much, and after 25 months (plus however many months to pay for the extra maintenance and servicing included in the first car) but I'm taking the extra risk. Maybe I'll come out on top, maybe I won't." It definitely will be cheaper over the 3 years. Won't depreciate too much. Really won't have maintenance and servicing needed anymore than the lease. They aren't taking any risk and will come out on top. I know this, because lease financiers already bake all this into the lease for more unreliable cars with a hefty margin for extra profitability.
  - HWR_14 5y ago
    >OP said nothing about style "a certain level of comfort, reliability, cost, privacy, speed etc." His point was he knows he is paying more because he has to think less. He's paying for convenience and risk-aversion (and a slightly newer ride). That's fine as long as he recognizes it as an optional luxury expense.
    - 5y ago

jjav 5y ago

> If I can get that for $200/month for a new car for 3 years then hand it back So, that's $7200. > Sure, I could buy a car for $5k and hope that it's cheaper over the 3 years There's no hoping, of course it's way cheaper. $5K is less than $7.2K even if you dump the car off a cliff after the 3 years. But you wouldn't, you own it so you can sell it (unlike the lease). A car that you buy for $5K is so far down in the depreciation curve that it doesn't depreciate much anymore, you'll be able to sell it for close to the purchase price. If you sell it for $4K, that's a total cost of $1K for 3 years vs. $7.2K for the lease. No comparison. On both choices you still have insurance and operating costs on top, both have those. Insurance is bound to be much cheaper on the older cheaper car. In fact you can go liability-only on a $5K car, who cares. But on a lease you're forced to pay full coverage on a new car, far more money. So if you want to enjoy the luxury of a new car lease, enjoy! But there's no way to justify it on economic terms.

iso1631 5y ago
No it's not, it's $5k plus maintenence which can easily run to $2k to get it through the annual test, so that's $11k and will massively deprecate. There's then the opportunity or finance cost of that $5k.
- jjav 5y ago
  $5K + $2K is not 11K, I don't understand how you get to that number. Also unless you get exceptionally unlucky (it can happen but is very rare), you're not spending 2K on maintenance. Even if you do, that's $7K, which is still less than the example lease payments of $7200. Don't forget the lease payments are just rent, the money is gone forever. The used car you can sell later and recover most of the cost. Also, it will not "massively depreciate". How often have you done this? The idea is to buy a car that has already bottomed on its depreciation curve and then sell it a few years later with barely any loss. If you want affordable transportation that's the way to go. Buy an early 00's Corolla or Civic for $3K-$5K, spend nothing on it, sell it a few years later for nearly the same money.
  - iso1631 5y ago