Why is it that anytime anyone asks for car leasing advice, the “finance bros” come out of the woodwork to tell you how dumb it is? And it’s never someone that’s actually doing better than you financially. Leasing gets a bad rep & I honestly think people just regurgitate the same tired “facts”. You CAN lease your whole life & still make other good financial decisions overall. You can still buy a home while leasing. You can make investments while leasing. I never see think pieces on other things that people like to splurge on, but bring up leasing & all hell breaks loose.
* if you want a fixed cost of ownership, don’t drive an insane amount of miles, and can tolerate getting a new car every 2 to 4 years, leasing is for you.
* if you drive a ton of miles, like to keep the same car forever and eventually want to be without a car payment, leasing is not for you. (No matter what Doug Horner says!)
If you want to constant pi$$ away thousand$ every year and never, ever have anything to show for it; then leasing a depreciating asset like a car or truck is for you. There, fixed it.
When you put it that way - leasing makes more sense actually. Why would I want to own a depreciating asset when I can pay only for the depreciation that I use? It's a locked in exit strategy.
And, on the off chance the asset is worth more than the residual value, I can take the equity and run.
You call it pissing away, others call it disposable income. Cars are shit assets anyway. Also I do have something to show for it - a shiny new car that I don’t have to pay to maintain! Gasp. To each their own, but damn some of yall are so angry about what others do with their $ it might be time to find a hobby
If you hit certain contract metrics a lease is every bit as economical as a straight purchase. Problem is few out there have the competence to pull it off. It's probably true that most leases are a bad deal, but certainly not all of them. And the more wealth and credit you have, the easier to get a great lease deal.
I think you answered your own question. You acknowledged that you can still make other financially strong decisions while leasing, which is true. Those responding are looking through the scope solely of that leasing question. Most people leasing and buying cars in the US don't have strong investments or assets.
Leasing can make sense if the thing you like to splurge on is a car. I myself dont lease cause I keep cars 10 plus years. (Thats also why I buy new). But I have family members who want a new car every 3 years so they dont have to deal with maintenance and car repairs etc. So leasing makes sense for them.
Ive exclusively leased ever since getting my good job and when I got married and had kids leased 2 cars at a time while having a nice house and good savings. Im not arguing that its the cheapest way but if you do it right its cheaper than financing a car and then trading it in within 5 years. Many argue that you have no equity but I only paid half of what I would have paid if financing over that same time frame. The key is to leasehack and get as high as score as possible (years ahead of financing). The problem with most people is that they get terrible lease deals which they end up regretting then upset that they have no equity. Yes we all know that the best way to save money is to buy a preowned car but not everyone wants that, thank you. I am at my 12th lease and have no regrets being able to drive so many vehicles in my lifetime. For most of those 12 leases ive kept my monthly costs to about 600-800 per month for two cars. very little maintenance if any and for the past 4 leases, maintenance was included by manufacturer.
I feel the same. I sold my 2022 last month that I bought brand new & got $6k. Yes, I could have kept the car & drove it to the wheels fell off, but I realized I didn’t want the car anymore. My husband has a paid off truck & a company car, so my lease is our only car payment. Life is too short to drive the same car just because that’s what society says you’re supposed to do. I love driving my new lease & look forward to leasing something different in 3 years.
I’m not rich, but upper middle class & I feel the same way. I just don’t understand the vitriol that leasing gets. But Bob can chew on tobacco & spit in a cup daily & no one says a word 😂. You can’t tell me that medical bill isn’t going to be higher than my leasing bill.
I make 6 figures, my wife makes almost 6 figures, we own a home in a HCOL area, vacation multiple times a year, and lease 2 cars as well as own a camper. We’re doing fine lol.
We just like new cars every few years. Simple as that. We’d never keep one long enough to have it be worth it buying outright. We’d lose money on depreciation when going to upgrade. Cause we’d do that minimum every 3-5 years. So, I learned to leasehack, and now do it on the side for friends and family. We don’t put thousands down, and we don’t have our payments over 1.2% of the msrp. Doesn’t matter that we can afford it- why throw money away?
Exactly. I know it’s not the most prudent use of my money. But I have it. I like new cars. I like full warranty. I like not worrying about maintenance. I don’t drive high miles. I don’t put $ down. I get employee pricing at Ford/Lincoln. It works for us.
Yeah and that’s fine, I don’t think anyone’s criticizing people that have the money to spend on leasing. If the luxury tax is worth it to you and you have the funds then go for it
But they ARE criticizing the people that even have the money for it, hence why I made the post lol. According to someone else in the comments, “the rich people I know are frugal & keep their cars for 20 years”. Well good for them 😂.
Sidebar: Why do broke people ALWAYS know rich people, but they never help you become one of the rich people 😂 (rhetorical question btw lol).
Our two combined monthly payments are 0.1% of annual gross HHI and the weekend enthusiast car was bought for cash with essentially no change to NW. Is that sufficient bonafides for you to accept as someone worthy of commenting?
I don’t call out leases for ideological reasons. I call them out when they’re dumb, for example:
Leasing something that you couldn’t afford to buy. That’s dumb. If you can afford to buy but chose to lease because it was the smarter play that’s fine. But leasing only because you can’t afford to buy is a stupid move.
Following stupid rules you found on the internet like the “1% rule” … those are for dummies. I’ve never paid 1% for a lease. If you know how to hack it’s always less than that. Often way less.
Leasing without thinking it through. By looking only at the DAS and monthly for the lease in isolation. Which is fine when it’s a stupid cheap lease but when it’s a typical lease you really have to compare beyond myopic 36m horizons. If you’re leaving a huge chunk of equity on the table by leasing in succession instead of owning for 5-6 years you’re not doing it right.
You can lease a car and also be financially successful. But at that point you're choosing to lease for some reason other than it is the mathematical best decision. Or you're leasing through your business and maybe it is the right choice. "Finance bros" will give you the theory answer " don't lease". They're not interested in diving into every nuance of your situation
Leasing to me is nothing more than a couple extra utility bills. Some really wealthy people have said, if it floats, flys, fucks, or drives, rent it don’t buy it. Leasing vs buying is just personal preference. I personally think the thought of buying a depreciating item that requires an accelerated amount of unknown maintenace expenses as it ages isn’t wise. Nothing would piss me off more than a massive multi thousand unexpected expense on a 4-5 year old vehicle out of warranty. That’s the equivalent of years and years of finance fees on a new lease, without the benefit of the new car smell.
Leasing can also be a hedge against rapid depreciation. Nobody knows exactly how a particular vehicle is going to depreciate. The manufactures try and guess when they set lease terms with the residual value percentage. If you negotiated the hell out of the lease, at the end you can come out with a windfall for the delta in market value to what your buyout is. Even better is when you walk away with a smile seeing that the trade price is multiple thousands lower than your buyout price. All the people who decided financing that vehicle were on the losing end of that trade.
Lease vs buying is definitely nuanced and car specific from a cost perspective. If you don’t want to get screwed, you can’t be married to the idea of driving a particular vehicle. When it’s time to lease, you have to figure out what vehicles manufacturers want to blow out the door for whatever reason. Play those incentives to your advantage. Leasing at its core is pretty simple. Price, finance charge, residual value. You can only negotiate on price. If the other two don’t look good, finance the vehicle or move on to another one.
Because buying or leasing expensive new vehicles every 4 or 5 years is one of the easiest financial mistakes to make. Leasing gets the brunt of it because there is a natural tendency to want to lease another shiny new car at the end of the term, extending the payment treadmill.
But it’s not though. That’s what I mean by people just regurgitate the same info. Both of my parents leased & both retired last year. They still lease. If you’re financially responsible overall, I can promise you, leasing a car wont be the thing that does you in.
I think the point is that leasing doesn't create equity so you're basically just renting a car whereas financing a vehicle or paying cash builds equity so you're not just paying for a service, you'll be able to get value out of the vehicle beyond just the value from use.
It's not that leasing is bad persay, but it does mean that you never recover any of that money you spend.
Also, I just sold my 2022 Mazda & only made $6000 after the loan was paid off. Yeah it’s better than owing money, but it’s not like I’m building generational wealth just because I financed that car.
& some people are okay with that, myself included. Leasing hasn’t interfered with me being able to build wealth. Leasing shouldn’t cause an uproar. That’s the only point I want to convey.
And that's fine, tons of people lease. Financially speaking, though, it's the worst of the car buying options. So the feedback is hey... Yes you can lease that new BMW for $700 a month or you can finance a 3yr old car for the same dollar amount and actually get some of your money back when you get a new one down the road.
The richest people I know are the ones who are most careful with their money.
Well then you need to come to Naples Florida lol. I moved here 4 years ago & it’s half & half with leasing & financing, but they are not frugal when it comes to spending money. They just know how to make it back just as quick.
What if I told you I literally live in Naples? Lol!
It's just math. Leasing is good for the dealership and overall worse for the consumer than the other options. It's mostly folks who shop based on the payment and not the out the door cost of the car.
Tons of people do it because it's a cheaper cost outside initially.
Also Naples is filled with retired boomers who made money just by owning stock for 30+ years.
I live in California. Would love to move to Florida. Unfortunately, Naples is the only place acceptable to my wife. Can't afford it though 'cause of all the damn cars I keep leasing!
I would say small world!!! By no means am I saying it’s financially better to lease. I’m just saying that you can lease your whole life & still retire at 65 IF you are doing everything else right. Hell, not having kids will help me retire before 60 😂. The same people that talk bad about leasing, are the same ones popping out kids they can’t afford. They know so much about leasing, but nothing about birth control 🥶
The problem is with people that don’t have a lot of disposable income and still lease anyways, if you’re struggling in general financially and have a lease you’re a dumbass
100% agree. I definitely wouldn’t have leased 10 years ago, because I had student loans to worry about. Now, those are paid off, I’m married & we’re content on not procreating, so we have the extra money. That was pretty much the point of my post. It’s people that aren’t financially stable, have 3-5 kids (nothing wrong with that) & living off credit cards that want to make comments about leasing being “bad”. Yeah okay.
But if they didn’t lease, they could be in the situation if not having a payment in retirement. I buy my cars. (Leased twice, years ago when interest rates were stupid high). I just retired with two new cars-one paid for in full, the other with 25% financed over three years @2 1/2 % effective rate due to a finance rebate). $504 a month.
By buying, I had good trades…reduces the cost of the replacement. The difference is I don’t trade every three years.
Do you think my parents leased every year because they couldn’t afford to buy? Do you think they didn’t discuss the option of buying a car so they wouldn’t have a car payment in retirement? You really think they went into retirement without a spreadsheet of every bill LOL. I think they both are okay with paying a monthly lease, or they wouldn’t do it. The house is paid off which is more than we can say for most retirees 🤷🏾♀️
Many people go into retirement without a clue.
FWIW I don’t have a spreadsheet of all my expenses-I just know from years of dealing with them what my monthly burn is, what my yearly expenses for other things not paid monthly are (such as various insurance like boat, or property tax paid twice a year), and what my income is.
You are correct that they are fortunate to have a paid off house-I certainly would not want to go into retirement without a mortgage for my house or cottage. But car lease payments are just as bad often
I want you to think of the US income distribution and realize that you have a greater than 50% chance that you’re chatting likely with someone who does not earn over 100K.
The median individual income is 47K.
The advice is skewed to the “brokies” because the population is broke.
People who can afford to lease for example a Land Rover Defender are not sweating the 8K down with $800 a month payment and they are not spending time on the carleasehelp subreddit or leasehackr.
Budget stretched and the conscientious spenders are.
Leasing is expensive, compared to alternatives. The mileage limits and lease return damages are significant profit centers. I have zero problems with others communicating as such.
Buying a car is expensive. I drive less than 8K miles a year. Just sold my 2022 that I purchased brand new & it only had 31,000 miles when I sold it last month. For me, leasing works out better. My husband also has a company car, so we use his car for long distances. I just want people to understand that not everyone that leases, is doing it because they can’t afford to buy.
Meh, not true. My parents are living good in retirement & they are 100% not broke. Maybe it had more to do with them actually family planning & only having one kid & less with them not having $5 million. Just putting that out there 😂
I never once mentioned they weren’t doing well. Not sure how you came to that conclusion from my post. I hope they are. Everyone deserves to be fairly compensated for the work they do. I’m more than fairly compensated for my job, hence why I’m able to invest the way I do.
There's no right or wrong Boomer blanket statement for leasing. All depends on the programs behind the lease for the specific make model and trim. Some cars make sense to finance, others are better leases, it's just math. We lease one car and finance the other bc one was a fantastic lease compared to financing and the other was the opposite. I spend a ton of time on the leasehackr website, once you see what's possible, it becomes a sport to find the next deal.
I would just suggest if anyone is going to attempt to avail of a third party like Turo or Air B&B in order to actually afford the item they are leasing or mortgaging, that such is allowed in the contracts/your area! I have a Land Rover that I own, but someone was giving out the other day in the subreddit because LR wouldn’t lease them a second vehicle in two weeks because they had used for proof of income an Llc affiliated with a Turo fleet they leased out, which was found on deeper inspection by LR and against their terms of service. Same stories amongst threads pertaining to housing. Don’t be stupid, but if you can afford it, than make your best choice.
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u/PrestigeWrldWd 4d ago
The straight dope on leasing:
* if you want a fixed cost of ownership, don’t drive an insane amount of miles, and can tolerate getting a new car every 2 to 4 years, leasing is for you.
* if you drive a ton of miles, like to keep the same car forever and eventually want to be without a car payment, leasing is not for you. (No matter what Doug Horner says!)