Do you have consistent income? Do you like having a new car every 2-3 years? Do you not mind having a car payment of about $400-500 a month (minus insurance)? Do you not drive much or live close to your job? Do you like the piece of mind that if something weird happens to your car, about 95% of the time, you will not be responsible for it? If yes, then leasing might be for you! Do you have limited income, are you car savvy or know a mechanic, do not care for a new car all the time, don't mind getting a used car with a payment of about $200-400 a month, and want the peace of mind knowing you can do whatever you want with the car? Then buying is for you!
I agree 100% it’s hard to beat driving a car for 3 years turn it in and get the next new car. I have been leasing for over 12 years and have not been to a mechanic the whole time other than an oil change. I don’t even change the tires in three years. I get a nice dependable car and I don’t have to deal with hassle of selling my car at the end. I love it!
@@fabiannino4106 but how is it money down the drain to lease when at the end of the lease you would have paid the full price of the car just within an expanded time frame? I don’t understand, is there something more to this?
I believe you should do what works best for you. AND especially what you love because you never know when your time is up. My brother leased every 3 years since he was 18, yes I though it was a waste of money but it made him happy so in his mind it was money well spent. He died of ruptured brain aneurysm at 28 a few months ago. He was literally alive one minute and gone the next, he couldn’t be saved. Plus he had a lot more money in the bank then I do.
@@Anonymous-ji4sb I'm sorry to hear about your brother, I'm a physician and I literally am terrified for my patient's with aneurysms because we usually find them due to other reasons. Most of us are walking around right now not knowing we could have one. Hope you're staying safe out there.
They will never teach you these in school, that's how the whole system works. School will help you get basic understanding and education but you have to be the one to utilize them to figure out these loopholes in our system.
While I completely agree with you in the case of this type of car - a sub-compact at $17,700 - leasing can end up being the better choice for certain situations. Particularly with some luxury cars or high end trucks, where you're going to be hit with much greater depreciation rate and more expensive repairs when it's out of warranty. You also face certain risks in ownership that you don't in leasing, such as the diminished value you'll get from your car if you get in an accident at some point (even if the damage is repaired) or if the car turns out to be a lemon. And depending on your personal cash flow and/or how actively you invest, the value of the lower monthly payments in lease and having more liquid cash on-hand also shouldn't be ignored when considering options.
well, if you lease the car, and have an accident you will be crushed by the company, because you have to send it to a repair shop that the company agreed upon, and that's very expensive, and also while you want to return it you have to pay some money because you damaged the car, my opinion buying that piece of **** , and then you have a total feeling of owning it, and not everyday thinking if something happened to it, how much I have to pay the company.
@@Mr.PM1993 I have to disagree here. I leased 2018 Accord and was involved in an accident in 2020, the accident repair cost around 40% of car value. Later couple of months, the dealership contacted me randomly if I wanted to have a new lease car, I happily returned it and got even a better deal on 2020 model.
If you could afford a high end car, you wouldn't need his advice. Like a person who owns a Cadillac is a person who doesn't care about gas prices/consume.
Now that used cars are going through the roof, does that mean your new car now has a lower residual value and you won’t lose much when you drive off the lot?
Real life scenario, my friend and I got the same truck, same day, same price. He financed over 7 years with a down payment of $1,500. At a payment of $256 biweekly. For a total price of $48,000 over the 7 year term. I leased 3 years with a down payment of $2k. At a payment of $141 biweekly. After 7 years I will have paid $31,660 for leasing 3 trucks. His truck might still be worth around $10k after 7 years that he sells. So he paid $38,000 + the possible cost of repairs and maintenance. (Excluding oil changes) Where as I paid $31,660, drove 3 brand new trucks and had $0 in possible repairs and maintenance.
Excellent video. One other thing to consider is the opportunity cost of the difference in money spent on purchasing vs leasing ($465 - $159 = $306/mo). Provided you return the car after the lease term ends, that’s a difference of $11,016 over 36 mos. True, you are forfeiting any equity in that car and were essentially just “renting” it for 3 years. However, you did likely get a lot of utility out of it, so that saying of flushing money down the drain that a lot of people parrot mindlessly isn’t entirely accurate. Putting that $11k to use on an investment or side hustle will likely generate far better returns (both monetarily and in terms of educating you), than the relatively nominal difference that would have been saved by purchasing over leasing then buying the car out ($1,184). Either lease a car to keep your monthly overhead low, return it when the term is over, and reinvest the difference into an asset that kicks off cashflow. OR buy a pre-owned car that’s 2-3 yrs old and has already depreciated substantially at someone else’s expense. Purchasing a brand new car is one of the worst investments a person can make. You’re buying a depreciating product which consumes a large chunk of your monthly income that you have to pay out of pocket to maintain. Buy used or lease new.
I've done both. Basically, if you like to drive a new car every 3-5 years, go with the lease. If you keep your car until the wheels fall off, then buy. Leasing does offer some advantages over financing..... 1) You can transfer the contract to anyone else. 2) You can drive a luxury car at an economy car payment. 3) You pay sales tax on the payment and not the entire vehicle. 4) You don't have to worry about trade-in value, just turn in the keys. Of course there's also downsides such as needing to carrying higher insurance limits, mileage limits, GAP insurance and fees like bank & disposition fees.
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Congratulations on your early retirement, Interesting indeed! Currently, I am in dire need of investment advice or tips. Last year, I hesitated and failed to take any action until the year concluded. However, this year, I am determined to try something new, as I am very receptive to various investment ideas. I want to be retired in my forties or fifties.
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Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them. Well, at least my advisor does too, jokingly
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The adviser I'm in touch with is *CAROLINA MELINA PHERSON* she works with Merrill, Pierce, Smith incorporated and interviewed on CNBC Television. You can use something else, for me she strategy works hence my result. She provides entry and exit point for the securities I focus on.
Things were missed which are pros to leasing and extra cost to owners: - paying insurance - paying we call casco(insurance in case you caused trouble) - changing tires - providing spare cars in case there is problem with the car. - in case of accident, they will take care of the lawful actions - paying mandatory service session are included
If you lease an electric car all you need to maintain for the duration is wiper blades, washer fluid, tire rotation, and cabin air filter. That's it. You won't need new tires or brakes in 36 months. Easier to budget with a lease, no surprises.
Now it made me think to lease instead of buy. I want to change my car every 3 years and I want to get rid of those costly maintenance fees when the car reached at least 5 years. Watching in 2020. Thanks for this very informative topic. Your voice sounds very pleasant to listen to.
I like to lease my car because I like luxury cars with the latest technology, body style, and very little maintenance. I also enjoy the way new cars drives versus broken in used cars. I negotiate the extra warranty and gap coverage. I factor in the amount of road trips I take a year into my mielage allowance. In three years I look forward to experiencing my next new car.
Remember , you are going to pay for the rest of your life . I don’t want to be a slave .If , I was a car dealer , I will love to have a costumers like you ! Better buy and keep it for a long time !
@@Chris-yp1cd You're going to spend your money on something weather it's a car or something else in life. I can't take the money with me when I die so I'm going to enjoy my life. My ride is a important part of my life that I enjoy.
WhoDatizz602 , nope , I am investing my savings. Have my own apartment/house or in the stock market instead of paying/renting eternally and leave nothing for my children when I die . I want to have good money when I retire and even leave a legacy for my children. That is why , I am spending my money wisely and making good financial decisions. Why should I spent hundreds of thousands of $ in the long term to upgrade a car that will never belong to me .
I lease as often as I can. I always trade them in for a different car, always have a positive equity when I trade in. I like most people always have car payments. Mileage is never an issue since I always trade them in before the lease term ends. So, it's the benefit of low monthly payments, positive equity during the trade in. No maintenance cost, and new car every 3 years!
Agree I prefer leasing. I’m only 7 min away from work and if we need to travel long distance we use another vehicle. I also take care of my cars that I lease. If I’m making payments I consider Myself the owner. I prefer updates every 3 years.
Leasing is an incredibly viable option. Cars are an expense, and when you lease you don’t have to worry about the inevitable repairs and maintenance your car will need. And you get to always drive the newest cars with the best safety features. Selling a used car when you’re done with it is a huge pain as well. Leasing is much better for anyone with a decent influx of money.
As someone in the retail automotive industry. I wish I could show every customer this video. Too many times I've come across customers who have no idea what situation their in. Great video!
I am interested in purchaseing a new car. I am researching brands and have settled on two but Don't necessarily want to get locked in to one over the other. Is leasing a good option to see how each brand fits in my lifestyle?
Sadly you can watch how ever many videos you want on this topic but it still doesn't change the fact that it boils down to preference. For the person that wants the latest technology, safety features and new designs leasing is always a better option; but for those that like the ownership aspect as well as the hands on approach, purchasing is the better option. The only part that I would like to add is to the terminology, in my opinion you're "renting" both. You don't own either car through either method unless YOU complete paying through whatever method whether leasing, leasing to own, or purchasing. People preach ownership, ownership, but "lease" the latest iPhone... Remember to DO what FITS YOUR lifestyle.
Everyone’s preference is to have the latest and greatest. The safest shiniest most up to date. With a limited budget, I think it about choices. Where I live many families live together with several generations together. I see new Mercedes Lexus and Tesla’s. It’s all about choices imho
I think your comment makes the most sense. It is really about preference. I can own my home and lease my car. OR I can own both. It really boils down to what you want and what works for you. Of course, be wise in all your choices but the end all it is up to you. I replied a whole year later to this comment.
Interesting , the stock market is currently experiencing a decline while bond yields are on the rise. However, there seems to be skepticism amongst investors regarding the Federal Reserve's plan to continue increasing interest rates until inflation is stabilized. As for myself, I find myself at a crossroads, uncertain whether to liquidate my $250,000 stock portfolio. I'm seeking advice on the best strategy to capitalize on this current bear market.
@@travis1240 apparently this is the reason why people like you don't have a chance to be wealthy. We all heard of the term " time is money" but nobody really understands what it means because you guys are financially illiterate. Doing math on a value that depreciates over time is utterly useless .
Never buy new (let someone else eat the depreciation. Always lease a high end vehicle like a Benz Audi or BMW. Another thing I've come to learn is having one leased vehicle and one bought vehicle helps with payments and also helps with maintenance cost. What you save on the lease payments can go towards the bought vehicle. Plus that lease vehicle will always be under a bumper to bumper warranty so in theory you will never be down two vehicles at the same time if something were to happen. Which if you have my luck... it does
That's a whole other topic and irrelevant to this discussion. Obviously if you buy a older car you may save money but if something fails it could end up costing you more
That's your argument for being irrelevant to the discussion? Lease vs buy. Never buy new, If you want a high end vehicle lease it due to depreciation. But what do I and Dave Ramsey know...
@193001 kiplssd I cant speak for all dealerships but I know of some that are sticklers on scratches and dings,(Kia) but my experience is that if you have a good relationship with your dealer most of the dealers will be more generous on door dings. Also I have learned that a dealer that has its own body shop is not so fast to nickle and dime a dime size ding. Maybe I'm lucky but I've never been charged for anything. I also take very good care of my cars.
I've owned and leased cars and it is a no brainer to me that leasing is better. + Car insurance costs are the same whether you are leasing or owning the same vehicle (unless of course the vehicle is paid off). + I've leased mini coopers, bmw's, mercedes and I've spent $0 on maintenance costs. I do not have to pay for tires, brakes, oil changes, etc. So that is ALOT of money you are saving by leasing. + A car is not an investment, a house is. A car depreciates the moment you drive it off the lot and you will be ripped off when it comes time to sell it. You will be ripped off when buying it as well for that matter. + I do agree that the best car payment is no payment but I treat cars the same way I treat iphones. Better ones come out every year but that doesn't mean I want to get a new one every year. Every 3 years...yes. Which is why I lease. + Most people don't do 36 month ownership terms, especially families since its too expensive for multiple cars. They will pick anywhere from 60 to 72 months, which means you are stuck with that car payment. Where as leases give you the opportunity to reset and adjust after 36 months (24 months and 42 months are available as well.) So for someone that wants to save money, leasing is better cause it gives you lower car payments, $0 maintenance costs and the opportunity to adjust after 3 years. + The downside of leasing is you have to pay for new registration every 3 years for each new vehicle. + Leases are awesome in that it can put you in your dream car. A $40,000+ bmw would be a very expensive car payment. However when you lease you can make a much more manageable monthly payment ($399 a month) and then when it comes time to buy it, if you want you can for a much lower price ($22,000) than if you bought it brand new. In the end there is no right or wrong answer as this video fails to see. Whether it is better to lease or to buy is an "opinion." My opinion is leasing is better. Stay safe!
Yes I agree. I leased a Ram 1500 4x4 bighorn. To buy, the payments would be outrageous me. I was able to lease 0 down $400 a month and 15K miles a year for 36 months. No brainer. To afford the truck to buy, ide have to make payments for 8 years. After I pay off the truck, it’s mow a junker and now need to trade it in and get another outrageous payment. To each their own but for me I can’t afford to drive new trucks and actually buy them.
I've run this scenario on a few different cars. I've found that it's a hit or miss, depending on the terms they give you for the lease. The muscle cars always worked out to heavily benefit the buyer, whereas brands like Mercedes Benz nearly always benefit the leaser, assuming the buyer also sells after 36 months and buys a new luxury car. You can keep it longer and it begins to balance out, but if you're the type of person who's already sold on buying luxury, you probably always want the newest one, so the lease will be your best option.
A closed end lease gives you the ability to purchase the vehicle at a prearranged price at lease end. If the vehicle value exceeds that number, you can purchase and resell, or use the equity as trade value. I’ve done both.
I think it all depends on what works best for you, which is why it's nice to have videos show you both options like this! My very first car I ever had was gifted from my parents, but it was a beat up used car for $2,000. It lasted me 3 years and I loved it. When that broke down I ended up financing a new Nissan with my dad as a co-signer because I drove a lot of miles to and from school, so I needed something reliable. What did I find out? Just because a car is new, does not mean it won't have issues. Now I'm negative in my car and can't wait to pay it off to get something different. Whether you decide to lease or finance, just do your research on the vehicle beforehand and make sure you really like it!
@@HM-dw4bp .did you read the word SOME before you responded???So i guess if someone said SOME guys are aggressive or liked casual sex,you would have something to say as well????So in response to your question,NO,you dont have a logical position to even ASSUME anyone is a misogynist...next!
@@madjackgamingandfitness498 ..yeah,i love when someone chimes in directing their two cents to anything except the subject..that should have been obvious that i did say some,yet because some folks have nothing to do but be petty,that's what makes the world what it is..
I’m trying to scroll down through comments for opinions on which one is better to lease or to buy. It makes it hard to find one cos everyone is talking about the green marker 😩
Like he said, it depends on you or your situation. He seems to lean toward buying (used), as most people will from a financial standpoint. Maybe you just gotta ask yourself some things or make a pros/cons list. Are you a car person? (yes-buy, no-lease) Do you develop emotional attachment to your cars or other things? (yes-buy, no-lease) Do you prefer to have "newer" things? (yes to both...) Don't take this as professional advice as it's just supposed to help you think.
Leasing is MUCH MUCH easier and you end up in the exact same place overall. His 12,200 sale price is approximate (good luck selling your car privately) and in the lease if you want to keep your car you know that is the right price to buy it for.
If you consider a high end car I’d lease . If you want just a nice car like Chevy ford consider buying a 1-2 year old one with factory watery left on it and extend the warranty too. Also stay away from 6-7 year car loans. They’re designed to put you in a car you’re not ready for same as a 30 year mortgage
Not sure what you ended up doing, but if you are looking at a quality vehicle that lasts, I’d say buy instead of lease. I was one of those people that constantly bought and traded in after like a year, and then leased a car for 3 years. I purchased an ‘11 Lexus suv with 32k back in like 2014, then traded it in a year and a half later for an Audi 2 dr then traded my Audi for a lease on a brand new civic touring. I liked the option of the civic. Anyway, now I’m looking for another car and I wish I had just kept my Lexus because it would’ve been paid off by now and I’d have a relatively nice quality vehicle with less than 100k miles on it. But if I want that same vehicle now, I’d have to find one with low miles and I’m looking at spending another $15k on top of all the money I’ve already spend to end up with no vehicle.
A car is a lifestyle decision. I don't care if my clients buy, rent, lease, take the bus, I don't care. The most financially efficient thing to do is take the bus with a free pass or steal a bike. Some want fancy cars, some want roller blades. I don't give a damn. The car they drive is a personal choice. But if you pay 17,700 for a car and sell it for 12,000 you did not purchase an asset. You purchased a liability. All cars are liabilities unless you are using it to make money. It is purely a lifestyle choice. The only thing that matters is that they are saving enough money and getting a high enough rate of return to live in the future the same way they are living today adjusted for inflation without their money running out before life expectancy. So if leasing a car, like in your example, allows them to save $300/mo that gets a person to save the required amount to live in the future the way they are now, when they cant't work anymore. Then saving the $300 is worth leasing
Awesome explanation. I leased a 2018 Honda Accord and don’t regret it at all. I’m not a car guy and don’t care to own a depreciating asset. I also would like to have the latest technology and safety features in my vehicle. I think the only negative part to leasing is worrying about miles. Very nice video!
but you do pay for the depreciation of the vehicle...you just don't own it ^^ For each its own of course - makes sense, especially for people who can write it off as a deductible for business.
The keep scenario changes everything...in my opinion it makes more sense to operate the car in a long term lease (rental scenario). You are never the owner of the car, but you don’t have the worries about carownership either. You pay a monthly fee and have no more worries about the car and after 5 years you get a new one! Edit: Also, cost of ownership includes maintnance and registration fees, as well as insurance which aren’t high in the us, but can cost a considirable amount in countries of Europe.
Purchasing is definitely the way to go.. With leasing you will NEVER stop paying monthly for your car. With each lease renewal and car swap, you will walk out with another 36 month payment plan. Then it's rinse, repeat. The dealers love that deal because you keep coming back to rent more cars. By the time you renew your lease to start another one, I have already finished paying my purchase and will end up with no more monthly payments. I will also have collateral/equity for a nice down payment should I wish to purchase another vehicle at a later time. No more money out of my pocket. the equity trade in alone drastically lowers your monthly should you want to trade for a newer model. And I won't have mileage limitations. With a purchase you can always sell the car if you find yourself in a financial pinch. Instant money in your pocket once the car is paid in full. And there are no prepayment penalties. Double up your monthly payments when things are good so you can get out sooner. Don't forget with leases you have the return fees, wear and tear item costs, mileage overages, etc. and God forbid you get into an accident with a leased vehicle. You will pay dearly when you return it. They will hit you with enough fees when you're up but the scam is they will waive those fees if you lease another vehicle from them. A Sucker's deal! But honestly, there really is no need to change your car every 3 years. Sound advise....Buy a good reliable car and keep it for awhile.. Stop throwing money out the window. Use it for smart investments. Or stay broke.
Couldn’t agree more. I bought my first car when I was a senior in highschool. I didn’t really have a need for a car so I decided to work and save for when I go to college. Now I’m in college and I still own the car and it’s still working. I bought a 2012 Outback and it’s been great. I don’t need a new car every three years and I think the whole enterprise of lease and dump is incredibly wasteful. Paying that much for a A to B transportation seems wrong to me. I know people complain about maintenance, but if you buy a good reliable car like mine, your golden. I let the other suckers deal with depreciation and now I can probably sell it for just as much as I paid for it given how crazy car prices are. That’s instant cash in my account if I need the money. Not a bad deal. My parents have always been stressing buying instead of leasing. If only more people would listen to them we wouldn’t have 1.5 trillion dollars in auto loan debt
My dad was the same way. He was frugal, saved all his money. I loved him dearly. He died and didn't really spend any of it. I work hard and love cars. I became a mechanic and worked on cars, trucks and boats till I got sick of it and did something else. I now lease new fancy cars and buy used fast cars. I budget for fun. If you just want to save your money and die with it, what is the point. I'm going to have lots of fun and I am. I still budget for a rainy day, but I know that its a balancing act and people should still have fun.
Car Leasing is the most economical if the car will be used SOLELY for business for tax offset benefits. While Car Purchase is the most economical if the car will be used for personal use. And car Leasing for personal use is the most expensive option. Never lease for personal use as he explained. Number does not lie!
Appreciate the video, thanks. Glad you mentioned it’s vehicle specific. I’ve leased many times where it ended up being cheaper over 3 years to lease vs buy and sell because the finance arms had inflated residuals that gave a good lease rate, but 3 yrs later the vehicles didn’t hold value as expected so selling it wouldn’t have netted the proper amount. I’d like to see a video explaining MF, converting to a APR, and the intricacies of lease payments with regards to all of the initials fees so one can easily see how most dealers rip you off on the lease rates. So many times the lease rates equate to a vehicle sale price significantly higher than sticker because the math for leases remains a mystery for many. Dealers perpetuate this myth by stating lease calculators aren’t always accurate, and ultimately that’s a bunch of bull. I’ve explained leases to friends many times, and I’ve negotiated many leases with proper math and end up with favorable rates, but 99% of the country simply doesn’t do the math on them. Obviously you prefer to buy, but with how many people out there ending up leasing it would be nice for them to go in more educated. Thanks again!
Hey man, that was an insightful comment you put there, can you please just expand a bit more on the maths you do on the lease rates and how you negotiate a better rate? I bought my first car (Ford focus 2005) and am looking to get into leasing a car with positive equity every 3 ish years.
I feel like there is one aspect missing: when buying for $459 vs. leasing at $159 for 3 years, what if you took the $300 you saved by leasing and invested it for the same 36 month period?
Most people won't do that, either because they don't have the discipline or the reason why they are leasing is because they can only afford $160 a month. Though I dig the idea.
Tried this in 2006 right after i got out of high school! I was one smart frootloop and could do math, of course you would want to invest it! Then the economy went bust in 2008, lost 50% of it investing and i learned that risk should be involved in the equation. On top of that, carrying dept is just plain stupid(even in the form of a lease).
@@jonwojcik4494 You only loose if you sell, the dow jones peaked at about 14k in '07, dropped to ~7k in '09. If you sold you lost 50 percent. If you rode it out the Dow is now up to 28.5k. You would have doubled what you had in by 07' plus all the gains of buying in from '09 to present.
You deserve 5 Stars for this presentation! Thank you for being very clear, considerate, and concise as well. You should teach elementary students because they tend to get distracted. I believe your teaching style will help them stay focused over a period of time.👍🏾👏
Buy used, no car payments is the way to go. I leased 2 cars for 3 yrs, over 20k later and I had nothing to show for my hard earned money. Such a waste. Live and learn
I'd say it definitely depends on your tax situation and whether or not you own a business. If if it's for personal use only and you don't have to drive for work then I'd agree completely.
@@gabrieleward why would you sell? Buy used and drive that baby till it doesn't drive no more. I'm not fascinated with new cars, I'm fascinated with not wasting money.
Informative, and I can appreciate and thank you for making these videos. Maybe think about the fact that your leasing or buying guide doesn't take into account that today's cars are so advanced that it's more cost effective to get a new car every 3 years. I say this because the cost of upkeep will be crazy if you plan to hold onto these advanced cars, especially electric cars. When they develop faults, the cost of repairs will be crazy and you won't have the option of doing it yourself like older model cars. You'll be stuck into going to the dealership for repairs. Getting rid of these advanced cars after 3 years by leasing makes more sense to me. The technology for vehicles changes too quickly. Buying outright used to be the better option, until the vehicles became too advanced to repair yourself.
Its really simple: you LEASE a car that will be expensive for you to maintain after 3 years. You BUY a car if its going to be cheap for you to maintain. On a 100k income, you can buy a Toyota or Honda, but I'd suggest leasing a BMW or Audi. On a 300k+ income, that concern fades away, of course.
Igor L on a 100k/year I’d be rolling in a Ferrari .. people are really bad with money, 100k/year is a LOT OF MONEY man, you could be saving 60k/year while living large and traveling the world ..I’m living off 35k/year (willingly) and still manage to save around 15/year XD .. btw I’m all for car ownership, there’s no point in switching cars every 3 years unless you’re trying to show off
Clarity with Teekay On 100k/year while owning a Ferrari you would be living in a cardboard box and eating ramen noodles for breakfast, lunch, and dinner.
benjamin reynolds oh absolutely not. A Ferrari costs what, 250? That’s less than 5 years of savings on a 100k/year (living very comfortably of course). People are just bad with money ;)
Clarity with Teekay Not possible. To save $250,000 in five years you would need to put away $50,000 per year. If you’re earning $100,000 per year, after you factor in taxes, retirement savings, and healthcare you would be LUCKY to see $60,000 in net income each year that actually hits your bank account. Now lets figure some real basic necessities, like a mortgage payment, property taxes, food, and utilities. For a modest house including the tax and insurance payments you might be looking at $1,500 per month, utilities are going to cost maybe $300 per month if you skip things like cable, and food you might be able to get by on $400 per month. So we’re talking at the very least $2,200 in expense each month (and this is assuming you’re single and have no kids, you better expect all of those bills to go up with more mouths to feed and electricity to waste). So now we’re already down to somewhere around $34,000 remaining for the year... which seems like a lot but let’s not forget there’s a ton of other expenses like car insurance, gas, home repairs, childcare, vacations, clothing, etc.
benjamin reynolds bro, don’t tell me what’s possible ans what’s not. I’ve lived off less than 20k/year for almost 11 years. In the same time period, I’ve visited around 30 countries, lived in 5 different ones all while being a student (for most part, which explains why I made less than 35 a year) I only eat organic (which is always more expensive than regular food), I don’t dress in Gucci nor do I waste money on fast fashion, but I definitely own some nice Patagonia jackets, Nike’s and all the basics. I have a MacBook Pro for work, an iPhone, AirPods, PS4 like everyone else, and a nice bike that cost roughly 2K. I don’t drive a Ferrari cause I don’t want to, nor do I need to, but I’ve owned a nice little Jeep that I bought after a couple of years of saving (second hand of course). I was 20, started with 2000$ to my name at 18 :). My expenses, rent included, food, gas, clothes, insurance, travel, electronics never exceeded 2k, and that’s the upper bar. Right now I’m at around 1.5k/month. I don’t own a house and probably never will (i don’t believe in owning a home that u live in) although I technically could buy one in cash in two years tops (given I don’t lose my job tmrw lol). I don’t want kids cause I’m not crazy so that’s one less massive expense. If I made 60k today after taxes, I’d be saving 40k a year, probably for the rest of my life..and even if I don’t invest that 40k (which would be utterly dumb), I’d still end up with more than a million dollars in savings in 25 years .. imaging the returns and dividends on 1.2 million dollars in 25 years ! Like I said, people are just bad with money and get stuck in the rat race, that’s all it is
If you own a business, a "lease" is in reality a "rental", which is 100% deductible for business purposes. The "rental", commercial auto policy (auto insurance), repairs/maintenance, and fuel, is 100% deductible... when used primarily for your business.
Willie Bender it is the enemy, all that money for a car that I don’t own?? What’s the benefit?? You could have invested that money. Just buy a used RELIABLE car and make no payments lol. You writing it off will only take away so much on taxes
More than 50% of new car owners are upside down in their car loans. Most people who lease are using it for business reasons only and writing off the the payments as tax deductions.
Almost the same with my lease car but I had electronic parking brake engaged. Dealer repaired gear selector (which was ripped apart), and replaced window. Thief couldn’t roll the car. Every day I always use electronic parking brake.
I realise this is an American example so it may be very different to the British market but I don't think the maths tends to work out like this example. The reason for that is the deposit required on a new car is much higher than the down payment on a lease which is typically 3, 6 or 9 months times the monthly fee and that fee itself is also lower than your monthly payment for a straight loan. For me, switching to leasing meant paying less per month and still being able to get a car I couldn't have afforded to buy new plus at the end of the term, when the warranty is up I can just hand it back and get another nice shiny new vehicle. The longer you own a car, the more things go wrong and I don't want to have to deal with selling at the end of it. The biggest consideration should be mileage. I have a short commute so do less than 10k per year which is perfect for leasing and I can opt for a cheap pre-reg deal because it makes no difference to me how many previous owners it has unlike buyers who may be haggled down more aggressively because they would become the third owner. It's horses for courses and depends whether you see a car as an asset or a liability as it gets older. The worst possible option is pcp and paying the balloon payment to keep the car. If you're leasing, don't keep it. If you're buying, don't buy new unless your planning to keep it until it's time for scrap
I remember doing an assignment on buying vs leasing in my introduction to finance class over a period of 10 years. If you bought a car and kept it for 10 years including maintenance it was more expensive than leasing 3 cars over that period. However, after 10 years the bought car was much more inexpensive to own. People also assume you’re car will be bought at resale value but that isn’t always the case. How Marko said sometimes people don’t take care of the vehicle appropriately and you’re competing against dealerships that’s have more inventory and more margin space than you do. End note: I bought my car and lease cars for my girl who likes nice things lol
Buy a used car (Honda or Toyota - a dependable car with a long life expectancy) with less than 35,000 miles and less than three years old. Pay it off (immediately, if you have the money to pay for it outright) and drive it until it has *at least* 250,000 miles on it. Repeat that throughout your life and you'll be far better off financially than everyone else you know.
True but if you like cars this is the most boring and depressing way to go. Not everyone likes driving the same car for a decade or more, especially if it's a Toyota Corolla. O.o
Pete Smith real talk. I’ve had an old Corolla for 8+ years and even though I’ve saved a lot of money, there’s definitely a social/ego cost to driving an old car for so long, plus it’s boring and I’ve talked myself out of buying a new car many times due to the boredom.
You're missing alot of major points in your comparison which is skewing your recommendation. Sales tax. When you buy a car, you're paying sales tax on the entire price of the car. When you lease, your only paying tax on the payment. Rules might also be different in different states. At the end of three years you're $17, 700 poorer and you've also lost $5700 of the $17, 700. With leasing you're only down 5,700 and you've lost nothing. $5.7k to rent a car for three years is a good deal. With leasing, you can also have an arbitrage opportunity if the residual value and market value are off. Leases also give you a few hundred bucks to 1k as a damages waiver. Anything smaller than a golf ball dent is usually ignored. Have fun trying to sell your car with damage for 12k. Another factor is time. You can return a lease at the end of your contract and walk away, instead of trying to find a private buyer or selling to the dealer where you won't get anything close to 12k. I get the point of your video but the fact that you omit the amount of money you tie up in buying versus leasing over three years is a critical flaw.
Thank you, Marko! That was amazingly insightful. I am on the fence about this. One thing I notice is that over the course of 3 years, the car depreciates in value, depending upon what you have. There is no guarantee that you will get $12K for the three-year-old compact, in fact, you may take a sizable hit on it. You also could look at spending $19K over 3 years (buy) vs. $7K over the same duration (lease). You have more options, being able to walk away and try something new, or having saved $12K over the three years could put you in a position to buy a car outright. I know this isn't a forum, but I would love anyone's thoughts on this, particularly yours Marko! Thanks!
You didn't account for two things that swings the Lease as favorable, even in your "keep" the car scenario: 1.) Deferment of Sales Tax. For a Buy, you have pay/finance all the sales tax into the loan. For a lease, you pay it monthly. Meaning, in a Buy, you are paying interest on 100% of the sales tax, where a lease, you are paying the sales tax monthly, and then bulk at the end. (If you live in a state with no sales tax (there's a handful), then you lose that advantage of course.) 2.) Subvented Rates. In the scenario where 0% financing is offered, you are correct that for a Buy, the low APR is in lieu of rebates, so you're essentially losing the rebate to take advantage of the 0%. In Leases, however, that is not the case, the Rebates on a lease are in conjunction with any low money factor (lease equivalent of an APR). You also put the "Buy" at 36 Months, when anything under 60 months is incredibly rare. A fairer comparison would be to make the buy for 60 Months, and then make the Lease for 36 Months, plus finance the Residual for the last 24 Months (and bump the residual finance rate up a bit since you're financing a used car at that point). I realize that would make for a more complex video, so I can appreciate sticking to the simpler scenario. Good work, and good commentary on the "human nature" aspect.
I think one important aspect of leasing (at least in Germany/Austria) is that the value after the lease is guaranteed. So you don't have to worry if the car will hold its value or not. Say value after the lease was guaranteed 20k but the car ends up being worth only 16k. The leasing company pays that 4k loss. And if the car is worth more you get the difference in the pocket.
Excellent video explaining the nuances. The only issue is the numbers are way off which severely impacts the analysis. In most leases, at least the ones I have had, the buyout is about 10-15% lower than the market price for the same car at 3 years old. Additionally, most, if not all cars, depreciate 45-55% over the first 3 years, so the 17,700 vehicle in question will bring back about $10,000 at sale, not 12K, and the buyout would be about $9,500. Outside of that, a very good explanation of pros and cons.
Nearly 30 years in the business and I can tell you leasing is in some cases better than financing particularly the Toyota brand. That said, leasing is not for everyone and yes you can still make money on leases as long as you trade it in and NOT do a lease return.
Leasing is not for everyone and most definitely not good for long term even if you want to buy it out at the end, so as people have different taste in vehicles in general. But I lease so I get to experience every model as something new comes out all the time and newer features that fit me. I see some of your points and the skills you had as your time spent in car sales honest is the best way to sell cars these days! Thanks for sharing as I have watched a few of your videos nice work.
When I buy and keep a car past three years it enters the unknown cost of maintenance. When I lease a car for three years I know exactly what my costs are. As for selling a used car- Good Luck. I’m not anxious to meet strangers and deal with unknown people and their checks. Lease us for me.
Very interesting! Something to consider though is how much you’re saving on maintenance. According to AAA study, the average cost of maintenance for a new car is $0.09 a mile. I drive 2000 miles a month. So over the life of three years, I’d save $6480 in maintenance by leasing!
My 2 cents I've owned and leased. Both have advantages and disadvantages as you mention. 1- There is nothing like the feeling you get turning in a lease and getting charged for worn tires. 2- I never bought the lease out at the end. 3- A beauty of the 3yr lease is the warranty is in force for the full term of the lease. Then you walk away. 4- I usually got 5-year leases. Year 3 was usually the hump where you were no longer upside down. Many times I called the dealer and simply asked if they could move me to a new car for less/mo and get me out of the lease early. It worked every time. 5- I never took a lease with a down payment, all you are doing is buying down the monthly, in the case mentioned ~$55/mo 6- I always negotiated the price before the lease terms. 7- Only one car did I bail on a lease and pay for 3 months to get rid of the car. Chrysler was offering 39month leases. I had a Jeep Grand Cherokee that was a horror story and I refused to own it without a warranty. They picked it up with one day left on the warranty and the car didn't want to start in the driveway. LOL. Refer back to #3.
Elliot Check Elliot Check Hey, I’m a rising senior in high school, (and yes that’s a relatively young age to be looking at this stuff I suppose) but I pretty much do everything on my own and I recently got a job that pays $8 an hour. I work for 6 hours a day, 5 days a week and make about $960 a month. Not bad right since my parents still pay for housing and food etc. Me being a teenager wanting to look good in a new car, I’m planning on leasing a new 2019 Audi that asks for $574/month. What is the smartest approach to this situation? Or am I just being idiotic in my decision-making? By the way, I have no intention of owning the car in the end and I believe I can get a 3 year leasing.
Marko - WhiteBoard Finance. Maybe you can answer this too: Elliot Check Hey, I’m a rising senior in high school, (and yes that’s a relatively young age to be looking at this stuff I suppose) but I pretty much do everything on my own and I recently got a job that pays $8 an hour. I work for 6 hours a day, 5 days a week and make about $960 a month. Not bad right since my parents still pay for housing and food etc. Me being a teenager wanting to look good in a new car, I’m planning on leasing a new 2019 Audi that asks for $574/month. What is the smartest approach to this situation? Or am I just being idiotic in my decision-making? By the way, I have no intention of owning the car in the end and I believe I can get a 3 year leasing.
@@midknight779 As a father of 2 kids who have been through the high school years (they're now turning 28 & 30) I'll answer in the manner I attacked the situation with my kids. First, sit down and look in the mirror, and have a serious talk with yourself. You can't afford the car. You're a senior in HS, what are you planning on doing after you graduate? College? Trade School? Apprenticeship? continue working for $8 an hour? What if the job disappears? 60% of your income will be committed for 3yrs to this car, that is assuming you qualify for the loan. Add on insurance - another $100+ a month and maintenance ( small on a new car but there will be some). Are you planning on filling your gas tank? another $50/mo. Are you planning on dating? because you'll have no funds for babes. The drive-in (I date myself here-pun intended) is no fun alone. What I did with my kids was we picked up used Hyundai Santa Fe's, with extended warranties (which paid for an ABS system and steering knuckle). The cars served them well through HS and college. They looked good and were dependable and had plenty of room for hauling all their crap. Once they got out of college and had REAL jobs they moved on to some sweet rides they could now afford. One is in a VW Golf R and the other is in a Ford Focus RS (after trying an ST). I needed a beater a year ago and picked up a high miles Lincoln MKX. I was shocked that they were willing to write an extended warranty on a vehicle with 130K mi on the odo. The car looks greats runs well and the warranty has come in handy. I love it. I was out the door for $13K tax, reg, warranty. Before you think I'm a cheap SOB, I have 5 cars in the stable '16 Lexus ES350, '10 Lexus IS-F (now here is a beast), '13 Porsche Boxster, and '16 Mazda MX-5 (all purchased new). I like my cars. Here a couple of ideas. If you want a fun car and if a 2 seater meets your needs you can pick up used Miatas pretty cheap. The original NAs and NBs can be had pretty cheap and are almost bullet-proof. About 6 years ago I picked up a '90 with very low miles that was undrivable for $1800. I put $2500 into it to get it road worthy - tires, timing belt, fluids, hoses... - and another $900 into a stereo - speakers (the original speakers turned to dust on the trip from Boca to Asheville). front-end, amp and for just under $5K I had a sweet ride for 5 years until I traded it in ($7K) for the '16. Finally, if you want some fun. About 10yrs ago when I realized that my older son was playing cowboy behind the wheel too much I took them to the Skip Barber driver school (not racing school). It was a hoot, skid pad work, auto-cross, brake control, emergency maneuvers. We all benefitted from it and it calmed my older son down behind the wheel. Most tracks offer some form of driving school, you probably have one in your area. Money well spent. I hope this helps. Either way, I wish you luck in both your future and cars.
I would recommend buying slightly used so its already taken that initial hit in value and it still should be under factory warranty. I bought my first ever new car last year but it was only because my credit is pretty much 800(almost no interest and I have a really good salary with very little debt) and the dealership I went to offered a huge discount because of my workplace. We work directly with the dealerships service department. If you go used make sure to get the car fax, service history, and stay far away from old rental cars!!!!
I have a 03 truck bought itin 2010 still driving it today bought it for 6800, and I do all the work on it myself, and saved every service documentations. Average yearly cost with insurance included is 1257 dollars for the past 11 years
Let me make it even simpler: Someone has to make money. So when you add another "step" (leasing), you'll always pay extra. Otherwise, no company would even offer to lease. Another important thing is to NEVER buy a new car. There are 2 big "drops" for a vehicle value: at the age of 2, and at the age of 5. Buy used at either of those, and you'll save a HUGE amount of money. If you buy a 2-year-old car, make sure you sell it after 2 years (before its next "drop"), and repeat (buy another 2-year-old). If you buy a 5-year-old car, keep it for as long as you can. The longer you'll keep it, the more you save (yes, even after maintenance costs).
@@waynelast1685 It's not an "extra step" since you're not leasing. When you lease, you actually buy+lease+sell (and repeat when you want a new car). The "lease" part of this equation has to generate profit as well, otherwise, they wouldn't offer it.
Shane you are right. And this is why this video doesn’t make sense because in the lease scenario, who is eating the depreciation between 17,700 and 12,000 usd? The 159 usd monthly payment pays only interest and almost no principal. There is no way the leasing company pays the principal. So in the leasing scenario, either the montlhy payment has to be higher or the buy back has to be higher. And the conclusion as you said is simple: there is no magic, if you add an intermediary which is a profit oriented company, they are going to do the same thing as you buying + make a profit so your cost has to be higher because you need to pay them for their services.
I disagree, one thing you get when you buy new is guarantee, not only in a warranty but also that the old owner wasn't a complete lunatic and the vehicle you purchase isn't a financial time bomb waiting to happen, vehicle repair and other costs (like missing work, or in the worst case traffic accident) can easily outstrip depreciation , especially if you have time, inclination or facilities to do your own repairs.
@@edwarddeguzman3258 Good input, I'll answer according to the points you made: 1. Warranty can be added. for around 2K, you can add a warranty that will cover you (bumper to bumper) for longer than your manufacturer one (I have one unlimited in time, and up to 180K KM), mine already paid for one locking mechanism, control arms, alternator and sunroof motor). 2. I wasn't talking about buying a 10-year-old car. Most people (my guess is over 90% of them) take care of their car pretty good on the first few years. 3. When you buy a 2-year-old car, your manufacturer warranty is still intact...So you can be rest assured things will be taken care of.
My dad leases his car and the maintenance has full coverage, so it depends on the deal you make. The cons you said can be avoided by not going to a dealership that will charge those things I personally like leasing because we can have a new car all the time, owning the same car for many years would be very boring, same with living in the same place your whole life...
I think what’s more interesting is having money in my bank account. I bought a 2012 Outback and plan on owning it for seven years till I sell it and buy another five year old used car. The longer you push back that 20-25k purchase, the better off you are. Maintenance is nothing if you buy a reliable Japanese car vs a complicated and expensive European model. I’ve been enjoying living a car payment free life and it’s been great. I don’t have to worry about a ding giving my dealership the excuse to charge me thousands of dollars and I don’t have to worry about going over the mileage limit they set. I can own it and if I do lose my job, I know there won’t be some slimy dealership taking it away if I can’t afford lease payments
I go with the old-school advice: 3 to 5 year old used car with less than 50k miles is the best option! I just bought a 2015 Toyota Camry LE with only 19k miles! Paid $15k cash and I plan on driving it forever!
@@NetomaMusic if he drives it for 15yrs he will spend half as much as your $2k vehicle for 1yr...all he has to do is get 7.5yrs to match your value-no problem in a 4 yr old Camry. You are on the right track...but a $5k car for 5yrs is a better value
Whether you are a car person or not, the vehicle you drive is as much a first impression as the clothes you wear. You (hopefully) wouldn't show up to a job interview in a cheap, second-hand suit, so why would you drive a cheap, second-hand car?
Scrolling through the comments it seems the top answers for leasing is lower payments, new car every 3 years , constant warranty. To counter that buying used answers, no payments after paying off, screw a new car, I have plenty of free money to pay for my own repairs.
Buy a car that is 3 or 4 years old, pay it off asap and enjoy having no payments. People scratch their heads why they can't get out of debt, leasing is one of the main reasons
@@trevorwalker9568 I'm going to buy. I added up what an average lease would cost after a decade to what an average used car would cost even on the high end of maintenance cost and I will never lease. I don't care about having a new car. Looking at a 2015 Honda CRV
@@lucypeterson2753 you will not regret it! You have to ask yourself, If a dealership pushes the lease on you all the time, then its NOT the way to go. They make so many sales off one car and off one person. Keeps you coming back and these fools run back just throwing their money at them.
Buy new (don't have to worry who did what to the car prior), base model (less to go wrong), compact or smaller (enough car for commuting and it's sitting in the garage 95% of the time anyways), pay cash, drive it into the ground. Buy Honda/Toyota and 200k miles is routine. Why is this so hard for so many people?
@@zdwade People are talking about saving money and having a worry-free vehicle here. Buy all the POS German money pits you want, doesn't make S K's advice any worse.
Very nice explanation. Im still amazed how people still argue that leasing is cheaper simply because the monthly payment is lower. Dealers cash in on that ignorance.
leasing can be cheaper if you get a brand like audi, benz, range rover and can have everything covered by warranty before you give it up when the warranty expires. particularly if you get a nice model that can possibly appreciate, as rare as that is.
It can be cheaper if you're crazy enough to keep trading your car in for a new one every couple of years. Not sure how anyone is able to do that without going bankrupt though.
One other consideration: if you finance a car and it gets wrecked, your insurance may not cover the full value, especially if you quickly rack up the miles. Also, if you’re not keen on haggling with mechanics and worrying about maintenance, leasing is a bit less stressful and can be less costly. But you’re right, depends on your situation and lifestyle.
I save a lot of money not paying taxes upfront when leasing a car and i never pay MSRP on leases. Always about 8-10k less. And I never worry about maintenance cost. Service cost is negligible with modern cars now needing an oil change every 10k miles. The peace of mind alone is priceless.
fUjiMaNia you pay the taxes monthly over the course of the lease agreement. So for example you lease for 3 years, and your monthly payment on the vehicle is $300, you will pay taxes on the $300 which in my case would be about $328/-
I like your videos and I think most of them are valuable. One thing I wanted to point out is that a car or truck isn't an asset, it's a depreciative asset meaning your losing money every year. Repair costs alone will take away any value you may have in the car. An asset is something that is valuable item and it makes you money over the long haul.
Or you could pay cash for a slightly used car and drive it until the wheels fall off and pay a ton less. Buying a new car always starts with bad math....
IKR I see it all the time people buying a new car because it uses less fuel or the old one needs some expensive maintenance. What you're paying for that new car covers maintenance and fuel on the old one for years, sometimes decades.
I drove my 1990 Honda Civic until the wheels fell off, then paid to get new wheels and I am still driving it. I just paid $1600 at the beginning of this year to have the motor rebuilt and a new radiator installed. Where can you buy a used car for $1600 that you can count on? With the rebuild, I am getting 35 MPG again, like I was when it was new.
Sounds good on paper until you have a wife and kids driving around in a beater while your at work and no way to retrieve them when they break down and her nagging every morning about the piece of garbage she's driving in and the next new thing that's going wrong. Then you break down and buy a new one just to shut her up for a couple yrs and have piece of mind
@@fathertime5680 or they die because it's a 90s tin can. The one thing you can't put a price on is safety. In the last 20 years cars have gotten much much safer. With even some of the worst modern cars making the safest cars of the late 90s look like children designed them
Came across your video by chance but really enjoyed it. Very informative. You have made me seriously think that buying a car is an overall better option. Thank you.
I always find the saying "leasing is the most expensive way to operate a car" to be interesting. Because of course it's the most expensive, it should be! You're always in a new car with the latest tech, style, and comfort. Weird that a 10 year old car that no one enjoys would be cheaper to own.
The tax deduction you receive on nearly 100% of the lease for self employed people often makes the lease a better option, where the tax deduction is very minimal for a financed to own vehicle.
All I buy is used German. Let the rich original owner take the hit, buy a great car for pennies on the dollar. Watch my video on how I made $4k on my e55 amg
@@WhiteBoardFinance agree and disagree at the same time-I bought a used S4 and was able to sell it and still hit my target number of COA (cost of ownership) less than $1000 per year-with the goal of $500 per year. How do you do that consistently? Buy a $2500 car and drive it for 2.5-5yrs simple. Ppl who buy $50000 cars are STUPID. It would take 50-100yrs to match my model...never gonna happen...they might get 15yrs out of a $30000 car not bad $2k/yr but still 2-4X my target. Put your money into your house and into investments (I own both FYI) Car leases and car loans are like a drug addiction-they will leave you broke (or at least with substantially less) and take you nowhere fast. Buy a used Corolla (manual) if you need a car or a used 4cyl pickup (manual) or both and spend less then $5k and you will be much further ahead with a spare car if one needs repairs...cars as status symbols are all an illusion ppl...a car in our society is important-but not for the reasons most people think.
There are people that need new cars, like realtors and sales agent, where keeping up appearances is a business cost. For most people, you should keep a car 10 years or more.
I’m not going to say anything about the marker everybody else already took care of that 😂 😂 but Great videos, it was a blessing finding your channel my guy. I’m buying a camaro soon and this is amazing information for me.
Thanks, my wife's friend is thinking about leasing car. She asked my opinion and I told her better to buy than to lease, so this explains it very well. We always buy slightly used cars and drive them until the wheels fall off.
Being in the wholesale car business you hit the nail on the head, you make your money when you buy the vehicle - buying it right - not when you sell it. Sounds odd but it's the gospel in the wholesale biz. Nice presentation.
Awesome video Marko, my first car was a honda accord with 246k on it, bought it on the island in Victoria for $2,700, i used it for 2 years and sold it for same amount, same as my Corolla & Toyota Avalon, if you are a middle class your best bet is to stick to a Japanese car, use it diligently, maintain frequently and you are likely gonna break even while selling after two years, if you are a business owner you can go for a lease, while if you plan keeping a car for over 3 years you can go with car finance.
Exactly. If it's a daily driver, look for good build quality, high reliability and a manufacturer/dealer who are known for supporting their customers. Then buy it because you're going to use this car a lot and have it for a long time. If it's exotic or a model that's known for long term reliability issues, lease it if you're going to mess with it at all. Depending on how the tax arrangements work out, leasing a work vehicle can also be a good idea, but you should talk to an accountant who really knows the tax system in your area as to whether that option is right for you.
@@KZ-do6il there are damage fees if the car is returned in bad shape but if there was an accident, insurance takes care of that whether it's minor damage or major then the gap might kick which protects you. Other than that there's a disposition fee which every manufacturer has if you return the vehicle without getting another lease with that brand unless the lease is used as trade then no disposition fee.
@@Princip615 and i just found out there is tax on lease payments? And also a rent charge is that correct? Im just trying to make sense how leasing is smart when you have to basically have full coverage insurance and gap pretty much same thing as buying if not more protection for something you dont even own it seems to me its just a premium to have piece of mind, and a premium to have new car every 3 yrs
@Nguyenxuan Mai i was just reading up on a bmw forum where this guy was paying 145xx tax on his 703xx lease payment.... and the protection plans seems like u either pay now or later Theres nothing smart abt leasing its a trap by car manufacturers to keep you from ever owning a car if anything i rather join one of the car subscription plan where some dont even have mileage limitations and i can switch cars every other day... i dont have maintenance to worry abt ... no insurance no depreciation on my end and its montly service so i can opt out anytime... if we are not talking abt making the best financial choice then thats the way to go drive a benz on monday, lexus on Wednesday and a range rover over the weekend...
What car did you have?? And what was the process to return a lease like fees and inspections? My lease is almost up and I want to be ready when I return it and buy a used car
Good video. I know your intention is to show that buying will always save you money, but the numbers actually confirm my rough calculation that leasing is not such a horrible deal. The difference between buying and leasing, whether you keep it or get a new car, is only about 1K, or roughly 6% over 3 years, or 2% a year of the original price. With that 2% premium you get a brand new car with almost free maintenance cost, and no hassle of selling or trading in at the end of the 3rd year. You know that not too many people have $12K cash to buy a car from a private party. A car is a depreciating asset, unlike property that's (almost always) an appreciating asset. Renting property is not smart, but leasing a car is not the same magnitude of foolishness. In certain circumstances I can justify paying 2-3% a year.
When you lease, you are paying a 2-3% premium and when the lease term is up, you have to do it all over again or buy a car which starts your payments all over again. If you were to look at this scenario for a period of 9 years, the person who buys their car can keep that car for 9 years and will most likely only be making payments for 4-6 years of that time frame. Of course there will be more in depth maintenance costs during that 9 year span. The person who leases 3 cars in a period of 9 years is paying triple the amount of the hypothetical scenario in the video. They will (probably) have a down payment each time the lease contract is signed and they will not have any trade in value when they go back to the dealership. When you trade in a car that you have fully paid off, that’s money towards a new car. Even a nine year old car would have trade in value if properly cared for.
logan trentadue you can also sell a 9 year old car for even more money than trading it in. Let’s also not forget about the fees you have to pay when you return a leased car. The value of buying a used car is even greater. I can buy a really nice used car for around $10,000 cash that will last me at least 3 years of use and still be up to date and comfortable. I can then turn around and sell that same car for around $5,000 after three years which means I have really only paid about $5,000 over three years which equals about $140 a month.
i put gas in mine and change the oil thats it, runs great and have no problems at all with it, been 5 years now. you are a sucker if you have car payements. worst investement.
Another good explanation of the math, and if the math were the problem, we’re all done here. Of course, in a financial sense, for most people (not businesses, etc) financial behavior and a repetitive incidence of poor financial decisions based on anything but long term outcomes is the problem and people who continue to use leasing and disposing of vehicles every three years are likely making other choices from the same thought processes that will lock them into a downward financial spiral. The math when the purchased vehicle is kept for just 6 years more than doubles the difference, pointing back to short term turnover being more the real killer than even the lease itself. The dealerships aren’t losing money by leasing you a vehicle, you can count on that. One guess who is... By the way, I have also negotiated price and got the low or no interest deals. I’m sure they still got their desired margin, but I’ve never had to pay sticker prices to get the good rate.
I think that might be true in some situations. But, when he compared the out of pocket costs of buy vs. lease, if the difference between the two is a grand or two over time, that's not a lot of money down the drain, for people making six figures or more. Also, with that lease, you get some maintenance taken care of, free oil changes and no excise tax payments. You get rid of the car entirely before any major maintenance comes up. Plus, you're enjoying a new car every three years. I'm on the fence of lease vs. buy when my lease is up in a few months. I haven't decided yet, and might finance (buy), because I've bought a used car outright many years ago, and leased a few times already. I think it's time to see what a finance is like with about $16k down payment. But, with leasing, I like the idea of not letting go of a huge lump sum of money up front, having relatively low monthly payments, being in a new car every two or three years, no excise tax payments and free oil changes. It has been great, to be honest.
TheBringa TheCuba in the end, it becomes a question of where cars fit in the scheme of a person’s financial future. In my experience, trading off vehicles regularly, whether by renting/leasing or buying too often, locks you into a perpetual drain on your income... a drain that is wicking away wealth that could generate many times the value of the vehicles purchased were a person to decide to hold on to a vehicle for its useful service life and put the expenses saved to work through investing. This car thing is the mortgaging of future possibilities for short term unnecessaries mindset that, in my view, has perpetuated itself into a debt/college loan/retirement crisis. Most of us will never inherit wealth or financial stability. We’ll have to earn it over the long term, and I just can’t see where ensuring a never ending obligation to give my income to car dealers is going to accomplish my family’s long term financial security. I need that money working for me in other ways, and in other places. It’s each person’s choice, and for me paying the car off and then banking the money I’m not sending to someone else is going to pay for my next car, with cash to spare. The cars cost the same, but I get to keep the interest instead of paying it to someone else. I get value, and added dollars, on both ends.
@@Five0Music Good points here. My first few cars, I paid cash for a used vehicle. But, I found that after a few years, up to five years, I started dealing with maintenance issues. I didn't want to continue to hold onto a vehicle that was unreliable, or had me visiting a mechanic too often. To get something dependable for work, that I was going to put a key in and it starts every time, I had to make a quick decision after my car quit on me. The first lease was only a two year lease, but I discovered that I liked the benefits of it. Over time, I acquired a lot more income and didn't need to lease, but continued to, because I got used to it. Now that I can afford to buy, I know that buying and trading over a long term is a much better option. My first lease was $199/month, which was not bad at all for a brand new car. I paid about $2500 down. I gave the car back two years later, with 11k miles on it. It benefited the dealer, but it allowed me to have the "new car" experience, and try leasing for a change. It was a nice break from the used car breaking down. I think I'm in a mood now to buy the next one. I'll have three or four years before any major work needs to be done on it, and it will be mine for the long haul. Wish me luck.
TheBringa TheCuba I love that you know what you’ve done and what you intend to do. You’re aware of what it costs, and that puts you miles ahead of so many. I’m sure you’ll do fine, and I do sincerely wish you the best in your personal and financial future!
There is an $11000 discrepancy you forget to mention. The monthly difference kept in my pocket from the lease. That's significant, and i could do more with that on a monthly basis, vs having the higher payment to save $1200 at the end of my contract. The interest paid on the purchase finance at the end is less than you would have spent on the total cost of a financed vehicle. The cars i choose to purchase have complete dealer coverage. I might only have to worry about a single set of tires over the course of 3 years. That's worth the $1200 purchase difference alone for me. If you plan on keeping the car, just wait and but it certified used. Anything else is just a poor financial decision. Unless you just aren't affected by the overall purchase amount, or the car is something very special to the buyer, and they want very specific options, just get it used. Car buying is such a sham. If you are the smart buyer as well, you can talk the residual lease payment down as well. Tadaaaa! Lol
It makes sense to lease a luxury car such as a Mercedes. These typically run very well the first few years but start to become very expensive to maintain and repair as stuff start to break. So the idea is to enjoy the car while it's brand new and run well, and get rid of it before stuff start to break and get expensive, and then lease a new one.
All these people judging each other for their choices. If you want a new car and can afford it along with your other needs, go for it. If you like seeing your money sit in your account, buy something cheap. Do whatever floats your boat and let others do what they want. Life is short. Enjoy it while you can.
All your information is sound for employees. For self-employed, you can write off vehicle expenses so leasing makes more sense not only from a numbers perspective (ease in calculating tax deduction) but also in terms of reliability if you're extensively on the road. The $/km thing is a grey zone. It's totally negotiable when renewal time comes around and/or if you flip the car earlier in the term. Plus there are lease take-over websites you can sign up for if you feel you'd run over the KM earlier than your term allotment. Two different worlds.
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Buy a used car and marry a mechanic.
Lol smart
Hard to find a nice female mechanic to marry lol
@@9Achaemenid 😂😂😂👍
Lmao
Shady bitches everywhere!
From the number 1 BMW salesman in the country (yes he was awarded that title more than once) he stated "Buy used, lease new"
I've been buying used with cash my whole life
Who is the n1 salesman in question?
Some CPO's you can lease...idk why you would
DoughnationCreative hahahahaha
spoonerdee Hahahaha buy a used bmw? Good luck if you’re not mechanically inclined.
Do you have consistent income? Do you like having a new car every 2-3 years? Do you not mind having a car payment of about $400-500 a month (minus insurance)? Do you not drive much or live close to your job? Do you like the piece of mind that if something weird happens to your car, about 95% of the time, you will not be responsible for it? If yes, then leasing might be for you!
Do you have limited income, are you car savvy or know a mechanic, do not care for a new car all the time, don't mind getting a used car with a payment of about $200-400 a month, and want the peace of mind knowing you can do whatever you want with the car? Then buying is for you!
I agree 100% it’s hard to beat driving a car for 3 years turn it in and get the next new car. I have been leasing for over 12 years and have not been to a mechanic the whole time other than an oil change. I don’t even change the tires in three years. I get a nice dependable car and I don’t have to deal with hassle of selling my car at the end. I love it!
@@victorsr6708 so you are basically renting a car. Is that any different than renting a house? In the long run its money down the drain imo
@@fabiannino4106 but how is it money down the drain to lease when at the end of the lease you would have paid the full price of the car just within an expanded time frame? I don’t understand, is there something more to this?
I believe you should do what works best for you. AND especially what you love because you never know when your time is up. My brother leased every 3 years since he was 18, yes I though it was a waste of money but it made him happy so in his mind it was money well spent. He died of ruptured brain aneurysm at 28 a few months ago. He was literally alive one minute and gone the next, he couldn’t be saved. Plus he had a lot more money in the bank then I do.
@@Anonymous-ji4sb I'm sorry to hear about your brother, I'm a physician and I literally am terrified for my patient's with aneurysms because we usually find them due to other reasons. Most of us are walking around right now not knowing we could have one. Hope you're staying safe out there.
No you're not rambling I appreciate the information you're giving us I wish they taught us this stuff in school along with real law
You and me both bro, you and me both.
They will never teach you these in school, that's how the whole system works. School will help you get basic understanding and education but you have to be the one to utilize them to figure out these loopholes in our system.
He is just like a teacher, completely wrong.
that's why there are certain courses to take like for example busniess
Actually it's called basic maths. He's just using sums and multiplications...
While I completely agree with you in the case of this type of car - a sub-compact at $17,700 - leasing can end up being the better choice for certain situations. Particularly with some luxury cars or high end trucks, where you're going to be hit with much greater depreciation rate and more expensive repairs when it's out of warranty. You also face certain risks in ownership that you don't in leasing, such as the diminished value you'll get from your car if you get in an accident at some point (even if the damage is repaired) or if the car turns out to be a lemon. And depending on your personal cash flow and/or how actively you invest, the value of the lower monthly payments in lease and having more liquid cash on-hand also shouldn't be ignored when considering options.
well, if you lease the car, and have an accident you will be crushed by the company, because you have to send it to a repair shop that the company agreed upon, and that's very expensive, and also while you want to return it you have to pay some money because you damaged the car, my opinion buying that piece of **** , and then you have a total feeling of owning it, and not everyday thinking if something happened to it, how much I have to pay the company.
@@Mr.PM1993 I have to disagree here. I leased 2018 Accord and was involved in an accident in 2020, the accident repair cost around 40% of car value. Later couple of months, the dealership contacted me randomly if I wanted to have a new lease car, I happily returned it and got even a better deal on 2020 model.
If you could afford a high end car, you wouldn't need his advice. Like a person who owns a Cadillac is a person who doesn't care about gas prices/consume.
Now that used cars are going through the roof, does that mean your new car now has a lower residual value and you won’t lose much when you drive off the lot?
Real life scenario, my friend and I got the same truck, same day, same price.
He financed over 7 years with a down payment of $1,500. At a payment of $256 biweekly. For a total price of $48,000 over the 7 year term.
I leased 3 years with a down payment of $2k. At a payment of $141 biweekly. After 7 years I will have paid $31,660 for leasing 3 trucks.
His truck might still be worth around $10k after 7 years that he sells.
So he paid $38,000 + the possible cost of repairs and maintenance. (Excluding oil changes)
Where as I paid $31,660, drove 3 brand new trucks and had $0 in possible repairs and maintenance.
If he pay $48k in 7 years the truck wouldn’t cost only $10k
@@EuSoumMiTo i think it's because of the annual depreciation of his friend's truck
@Don K lmao I found the friend
Excellent video. One other thing to consider is the opportunity cost of the difference in money spent on purchasing vs leasing ($465 - $159 = $306/mo). Provided you return the car after the lease term ends, that’s a difference of $11,016 over 36 mos. True, you are forfeiting any equity in that car and were essentially just “renting” it for 3 years. However, you did likely get a lot of utility out of it, so that saying of flushing money down the drain that a lot of people parrot mindlessly isn’t entirely accurate.
Putting that $11k to use on an investment or side hustle will likely generate far better returns (both monetarily and in terms of educating you), than the relatively nominal difference that would have been saved by purchasing over leasing then buying the car out ($1,184).
Either lease a car to keep your monthly overhead low, return it when the term is over, and reinvest the difference into an asset that kicks off cashflow. OR buy a pre-owned car that’s 2-3 yrs old and has already depreciated substantially at someone else’s expense.
Purchasing a brand new car is one of the worst investments a person can make. You’re buying a depreciating product which consumes a large chunk of your monthly income that you have to pay out of pocket to maintain. Buy used or lease new.
🙌🏻
Finally someone call out his direct bias, which he states multiple times
Better to buy slightly used.
@@redcloud5813 not in this market. Period.
@@fabrice8940 I agree, now is not the time to buy a car, new or used, because of the chip shortage.
I've done both. Basically, if you like to drive a new car every 3-5 years, go with the lease. If you keep your car until the wheels fall off, then buy. Leasing does offer some advantages over financing..... 1) You can transfer the contract to anyone else. 2) You can drive a luxury car at an economy car payment. 3) You pay sales tax on the payment and not the entire vehicle. 4) You don't have to worry about trade-in value, just turn in the keys. Of course there's also downsides such as needing to carrying higher insurance limits, mileage limits, GAP insurance and fees like bank & disposition fees.
Seems like leasing is a no brainer then
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Managing money is different from accumulating wealth, and the lack of investment education in schools may explain why people struggle to maintain their financial gains. The examples you provided are relevant, and I personally benefited from the market crisis, as I embrace challenging times while others tend to avoid them. Well, at least my advisor does too, jokingly
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They have more important things to teach kids, like systemic racism, and how to be gender fluid
Things were missed which are pros to leasing and extra cost to owners:
- paying insurance
- paying we call casco(insurance in case you caused trouble)
- changing tires
- providing spare cars in case there is problem with the car.
- in case of accident, they will take care of the lawful actions
- paying mandatory service session are included
You don't have to pay insurance for car?
@@Dabal_R You have to but it is included in leasing.
@@dnielrable included in the total price of a car?
@@Dabal_R my comment is not related to buying a care, but unlisted pros of leasing...
If you lease an electric car all you need to maintain for the duration is wiper blades, washer fluid, tire rotation, and cabin air filter. That's it. You won't need new tires or brakes in 36 months. Easier to budget with a lease, no surprises.
Now it made me think to lease instead of buy. I want to change my car every 3 years and I want to get rid of those costly maintenance fees when the car reached at least 5 years. Watching in 2020. Thanks for this very informative topic. Your voice sounds very pleasant to listen to.
Well, since we are all going to die anyway, it really doesn't matter.
@@crazyoldbiker938 are you going to post this at every comment 0?
@@arhanjamesdulger904 lmao
I like to lease my car because I like luxury cars with the latest technology, body style, and very little maintenance. I also enjoy the way new cars drives versus broken in used cars. I negotiate the extra warranty and gap coverage. I factor in the amount of road trips I take a year into my mielage allowance. In three years I look forward to experiencing my next new car.
Nothing wrong with that. I prefer owning cars outright.
Well, since we are all going to die anyway, it really doesn't matter.
Remember , you are going to pay for the rest of your life . I don’t want to be a slave .If , I was a car dealer , I will love to have a costumers like you !
Better buy and keep it for a long time !
@@Chris-yp1cd You're going to spend your money on something weather it's a car or something else in life. I can't take the money with me when I die so I'm going to enjoy my life. My ride is a important part of my life that I enjoy.
WhoDatizz602 , nope , I am investing my savings. Have my own apartment/house or in the stock market instead of paying/renting eternally and leave nothing for my children when I die . I want to have good money when I retire and even leave a legacy for my children. That is why , I am spending my money wisely and making good financial decisions. Why should I spent hundreds of thousands of $ in the long term to upgrade a car that will never belong to me .
I lease as often as I can. I always trade them in for a different car, always have a positive equity when I trade in. I like most people always have car payments. Mileage is never an issue since I always trade them in before the lease term ends. So, it's the benefit of low monthly payments, positive equity during the trade in. No maintenance cost, and new car every 3 years!
Agree I prefer leasing. I’m only 7 min away from work and if we need to travel long distance we use another vehicle. I also take care of my cars that I lease. If I’m making payments I consider Myself the owner. I prefer updates every 3 years.
How many miles can you drive on average ? Looking to either buy or lease just have questions
James Hall you can drive what ever miles you want to drive as long as you trade it in like any used car or buy it at the end of your lease
Well, since we are all going to die anyway, it really doesn't matter.
@@crazyoldbiker938 best answer ever
Leasing is an incredibly viable option. Cars are an expense, and when you lease you don’t have to worry about the inevitable repairs and maintenance your car will need. And you get to always drive the newest cars with the best safety features. Selling a used car when you’re done with it is a huge pain as well. Leasing is much better for anyone with a decent influx of money.
Exactly - it comes down to consistent cash flow
How about financing then trading the car in?
I guess Dave Ramsey is wrong.🤔
@@redcloud5813 Dave Ramsey is wrong a lot
why do i keep hearing you dont have to worry about maintenance and repairs. who pays for the repairs?
As someone in the retail automotive industry. I wish I could show every customer this video. Too many times I've come across customers who have no idea what situation their in. Great video!
I am interested in purchaseing a new car. I am researching brands and have settled on two but Don't necessarily want to get locked in to one over the other. Is leasing a good option to see how each brand fits in my lifestyle?
Sadly you can watch how ever many videos you want on this topic but it still doesn't change the fact that it boils down to preference. For the person that wants the latest technology, safety features and new designs leasing is always a better option; but for those that like the ownership aspect as well as the hands on approach, purchasing is the better option. The only part that I would like to add is to the terminology, in my opinion you're "renting" both. You don't own either car through either method unless YOU complete paying through whatever method whether leasing, leasing to own, or purchasing.
People preach ownership, ownership, but "lease" the latest iPhone...
Remember to DO what FITS YOUR lifestyle.
Agreed
💯💯💯
Everyone’s preference is to have the latest and greatest. The safest shiniest most up to date. With a limited budget, I think it about choices. Where I live many families live together with several generations together. I see new Mercedes Lexus and Tesla’s. It’s all about choices imho
I think your comment makes the most sense. It is really about preference. I can own my home and lease my car. OR I can own both. It really boils down to what you want and what works for you. Of course, be wise in all your choices but the end all it is up to you.
I replied a whole year later to this comment.
@@adryonna1 Still appreciated!
Interesting , the stock market is currently experiencing a decline while bond yields are on the rise. However, there seems to be skepticism amongst investors regarding the Federal Reserve's plan to continue increasing interest rates until inflation is stabilized. As for myself, I find myself at a crossroads, uncertain whether to liquidate my $250,000 stock portfolio. I'm seeking advice on the best strategy to capitalize on this current bear market.
Not sure how this scam works but I've seen it all over finance TH-cam channels
Buy what appreciates.
Lease what depreciates.
The math doesn't support that. Depreciation is factored in to the lease price and then some.
@@travis1240 apparently this is the reason why people like you don't have a chance to be wealthy. We all heard of the term " time is money" but nobody really understands what it means because you guys are financially illiterate. Doing math on a value that depreciates over time is utterly useless .
@@travis1240 The math certainly _can_ support it.
@@hojaeyun6747 time value of money ftw
Travis Nelson false their is no depreciation hit via lease that’s why most people do it. It’s a money factor
Never buy new (let someone else eat the depreciation. Always lease a high end vehicle like a Benz Audi or BMW. Another thing I've come to learn is having one leased vehicle and one bought vehicle helps with payments and also helps with maintenance cost. What you save on the lease payments can go towards the bought vehicle. Plus that lease vehicle will always be under a bumper to bumper warranty so in theory you will never be down two vehicles at the same time if something were to happen. Which if you have my luck... it does
That's a whole other topic and irrelevant to this discussion. Obviously if you buy a older car you may save money but if something fails it could end up costing you more
That's your argument for being irrelevant to the discussion? Lease vs buy. Never buy new, If you want a high end vehicle lease it due to depreciation. But what do I and Dave Ramsey know...
Ive only spend $10,000 on a very good used Corolla and Rav4. Feels good, dept free.. cheap gas, cheap maintenance, cheap on insurance too.
@193001 kiplssd I cant speak for all dealerships but I know of some that are sticklers on scratches and dings,(Kia) but my experience is that if you have a good relationship with your dealer most of the dealers will be more generous on door dings. Also I have learned that a dealer that has its own body shop is not so fast to nickle and dime a dime size ding. Maybe I'm lucky but I've never been charged for anything. I also take very good care of my cars.
Lease those because after the lease period, they become money pits per Scotty Kilmer lol.
I've owned and leased cars and it is a no brainer to me that leasing is better.
+ Car insurance costs are the same whether you are leasing or owning the same vehicle (unless of course the vehicle is paid off).
+ I've leased mini coopers, bmw's, mercedes and I've spent $0 on maintenance costs. I do not have to pay for tires, brakes,
oil changes, etc. So that is ALOT of money you are saving by leasing.
+ A car is not an investment, a house is. A car depreciates the moment you drive it off the lot and you will
be ripped off when it comes time to sell it. You will be ripped off when buying it as well for that matter.
+ I do agree that the best car payment is no payment but I treat cars the same way I treat iphones. Better ones come out
every year but that doesn't mean I want to get a new one every year. Every 3 years...yes. Which is why I lease.
+ Most people don't do 36 month ownership terms, especially families since its too expensive for multiple cars. They will pick anywhere from 60 to 72 months, which means you are stuck with that car payment. Where as leases give you the opportunity to reset and adjust after 36 months (24 months and 42 months are available as well.) So for someone that wants to save money,
leasing is better cause it gives you lower car payments, $0 maintenance costs and the opportunity to adjust after 3 years.
+ The downside of leasing is you have to pay for new registration every 3 years for each new vehicle.
+ Leases are awesome in that it can put you in your dream car. A $40,000+ bmw would be a very expensive car payment. However when you lease you can make a much more manageable monthly payment ($399 a month) and then when it comes time to buy it, if you want you can for a much lower price ($22,000) than if you bought it brand new.
In the end there is no right or wrong answer as this video fails to see. Whether it is better to lease or to buy is
an "opinion." My opinion is leasing is better. Stay safe!
I needed to see this, thank you my friend
Yes I agree. I leased a Ram 1500 4x4 bighorn. To buy, the payments would be outrageous me. I was able to lease 0 down $400 a month and 15K miles a year for 36 months. No brainer. To afford the truck to buy, ide have to make payments for 8 years. After I pay off the truck, it’s mow a junker and now need to trade it in and get another outrageous payment. To each their own but for me I can’t afford to drive new trucks and actually buy them.
Pay cash for a used car
I've run this scenario on a few different cars. I've found that it's a hit or miss, depending on the terms they give you for the lease. The muscle cars always worked out to heavily benefit the buyer, whereas brands like Mercedes Benz nearly always benefit the leaser, assuming the buyer also sells after 36 months and buys a new luxury car. You can keep it longer and it begins to balance out, but if you're the type of person who's already sold on buying luxury, you probably always want the newest one, so the lease will be your best option.
A closed end lease gives you the ability to purchase the vehicle at a prearranged price at lease end. If the vehicle value exceeds that number, you can purchase and resell, or use the equity as trade value. I’ve done both.
I think it all depends on what works best for you, which is why it's nice to have videos show you both options like this! My very first car I ever had was gifted from my parents, but it was a beat up used car for $2,000. It lasted me 3 years and I loved it. When that broke down I ended up financing a new Nissan with my dad as a co-signer because I drove a lot of miles to and from school, so I needed something reliable. What did I find out? Just because a car is new, does not mean it won't have issues. Now I'm negative in my car and can't wait to pay it off to get something different. Whether you decide to lease or finance, just do your research on the vehicle beforehand and make sure you really like it!
This
Argued with my ex about this. Well theres a reason shes an ex, and a reason shes always broke.
well we all know that some women think they know everything..it's hard to debate with someone devoid of logic and mentally all over the place..
A bit misogynistic, no?
@@HM-dw4bp he did say some. I would agree both are very capable of being know it alls.
@@HM-dw4bp .did you read the word SOME before you responded???So i guess if someone said SOME guys are aggressive or liked casual sex,you would have something to say as well????So in response to your question,NO,you dont have a logical position to even ASSUME anyone is a misogynist...next!
@@madjackgamingandfitness498 ..yeah,i love when someone chimes in directing their two cents to anything except the subject..that should have been obvious that i did say some,yet because some folks have nothing to do but be petty,that's what makes the world what it is..
I’m trying to scroll down through comments for opinions on which one is better to lease or to buy. It makes it hard to find one cos everyone is talking about the green marker 😩
Like he said, it depends on you or your situation. He seems to lean toward buying (used), as most people will from a financial standpoint. Maybe you just gotta ask yourself some things or make a pros/cons list. Are you a car person? (yes-buy, no-lease) Do you develop emotional attachment to your cars or other things? (yes-buy, no-lease) Do you prefer to have "newer" things? (yes to both...) Don't take this as professional advice as it's just supposed to help you think.
Leasing is MUCH MUCH easier and you end up in the exact same place overall. His 12,200 sale price is approximate (good luck selling your car privately) and in the lease if you want to keep your car you know that is the right price to buy it for.
See my comment I made.
If you consider a high end car I’d lease . If you want just a nice car like Chevy ford consider buying a 1-2 year old one with factory watery left on it and extend the warranty too. Also stay away from 6-7 year car loans. They’re designed to put you in a car you’re not ready for same as a 30 year mortgage
Not sure what you ended up doing, but if you are looking at a quality vehicle that lasts, I’d say buy instead of lease. I was one of those people that constantly bought and traded in after like a year, and then leased a car for 3 years. I purchased an ‘11 Lexus suv with 32k back in like 2014, then traded it in a year and a half later for an Audi 2 dr then traded my Audi for a lease on a brand new civic touring. I liked the option of the civic. Anyway, now I’m looking for another car and I wish I had just kept my Lexus because it would’ve been paid off by now and I’d have a relatively nice quality vehicle with less than 100k miles on it. But if I want that same vehicle now, I’d have to find one with low miles and I’m looking at spending another $15k on top of all the money I’ve already spend to end up with no vehicle.
A car is a lifestyle decision. I don't care if my clients buy, rent, lease, take the bus, I don't care. The most financially efficient thing to do is take the bus with a free pass or steal a bike. Some want fancy cars, some want roller blades. I don't give a damn. The car they drive is a personal choice. But if you pay 17,700 for a car and sell it for 12,000 you did not purchase an asset. You purchased a liability. All cars are liabilities unless you are using it to make money. It is purely a lifestyle choice.
The only thing that matters is that they are saving enough money and getting a high enough rate of return to live in the future the same way they are living today adjusted for inflation without their money running out before life expectancy. So if leasing a car, like in your example, allows them to save $300/mo that gets a person to save the required amount to live in the future the way they are now, when they cant't work anymore. Then saving the $300 is worth leasing
Very intelligent way of looking at this scenario. Thanks for your comment.
In Australia, the minimum interest rate for a financed car is about 7.8% so definitely buying and keeping the car makes a lot of sense
Awesome explanation. I leased a 2018 Honda Accord and don’t regret it at all. I’m not a car guy and don’t care to own a depreciating asset. I also would like to have the latest technology and safety features in my vehicle. I think the only negative part to leasing is worrying about miles. Very nice video!
but you do pay for the depreciation of the vehicle...you just don't own it ^^ For each its own of course - makes sense, especially for people who can write it off as a deductible for business.
@@MrDzala You’re only paying to use it.
The keep scenario changes everything...in my opinion it makes more sense to operate the car in a long term lease (rental scenario). You are never the owner of the car, but you don’t have the worries about carownership either. You pay a monthly fee and have no more worries about the car and after 5 years you get a new one!
Edit: Also, cost of ownership includes maintnance and registration fees, as well as insurance which aren’t high in the us, but can cost a considirable amount in countries of Europe.
Purchasing is definitely the way to go.. With leasing you will NEVER stop paying monthly for your car. With each lease renewal and car swap, you will walk out with another 36 month payment plan. Then it's rinse, repeat. The dealers love that deal because you keep coming back to rent more cars. By the time you renew your lease to start another one, I have already finished paying my purchase and will end up with no more monthly payments. I will also have collateral/equity for a nice down payment should I wish to purchase another vehicle at a later time. No more money out of my pocket. the equity trade in alone drastically lowers your monthly should you want to trade for a newer model. And I won't have mileage limitations. With a purchase you can always sell the car if you find yourself in a financial pinch. Instant money in your pocket once the car is paid in full. And there are no prepayment penalties. Double up your monthly payments when things are good so you can get out sooner. Don't forget with leases you have the return fees, wear and tear item costs, mileage overages, etc. and God forbid you get into an accident with a leased vehicle. You will pay dearly when you return it. They will hit you with enough fees when you're up but the scam is they will waive those fees if you lease another vehicle from them. A Sucker's deal! But honestly, there really is no need to change your car every 3 years. Sound advise....Buy a good reliable car and keep it for awhile.. Stop throwing money out the window. Use it for smart investments. Or stay broke.
Such a wise advice. It was very very educative😍 Thanks for sharing your knowledge 👏🏾
Couldn’t agree more. I bought my first car when I was a senior in highschool. I didn’t really have a need for a car so I decided to work and save for when I go to college. Now I’m in college and I still own the car and it’s still working. I bought a 2012 Outback and it’s been great. I don’t need a new car every three years and I think the whole enterprise of lease and dump is incredibly wasteful. Paying that much for a A to B transportation seems wrong to me.
I know people complain about maintenance, but if you buy a good reliable car like mine, your golden. I let the other suckers deal with depreciation and now I can probably sell it for just as much as I paid for it given how crazy car prices are. That’s instant cash in my account if I need the money. Not a bad deal. My parents have always been stressing buying instead of leasing. If only more people would listen to them we wouldn’t have 1.5 trillion dollars in auto loan debt
Thank you! I am one of those people that keep my cars for as long as I can. (10 years) To me a car is just a way to get from point A to point B.
Same here, I buy them reasonably cheap and keep them until they die or become too expensive to repair. It's just a workhorse to get me about.
Well, since we are all going to die anyway, it really doesn't matter.
CrazyOldBiker it’s getting old. Stop copy pasting at the end of each comment.!
@@jordanvarnim947 Lmao I know! He must have a lot of time on his hands.
My dad was the same way. He was frugal, saved all his money. I loved him dearly. He died and didn't really spend any of it.
I work hard and love cars. I became a mechanic and worked on cars, trucks and boats till I got sick of it and did something else.
I now lease new fancy cars and buy used fast cars. I budget for fun. If you just want to save your money and die with it, what is the point. I'm going to have lots of fun and I am. I still budget for a rainy day, but I know that its a balancing act and people should still have fun.
Car Leasing is the most economical if the car will be used SOLELY for business for tax offset benefits. While Car Purchase is the most economical if the car will be used for personal use. And car Leasing for personal use is the most expensive option. Never lease for personal use as he explained. Number does not lie!
Appreciate the video, thanks. Glad you mentioned it’s vehicle specific. I’ve leased many times where it ended up being cheaper over 3 years to lease vs buy and sell because the finance arms had inflated residuals that gave a good lease rate, but 3 yrs later the vehicles didn’t hold value as expected so selling it wouldn’t have netted the proper amount.
I’d like to see a video explaining MF, converting to a APR, and the intricacies of lease payments with regards to all of the initials fees so one can easily see how most dealers rip you off on the lease rates. So many times the lease rates equate to a vehicle sale price significantly higher than sticker because the math for leases remains a mystery for many. Dealers perpetuate this myth by stating lease calculators aren’t always accurate, and ultimately that’s a bunch of bull.
I’ve explained leases to friends many times, and I’ve negotiated many leases with proper math and end up with favorable rates, but 99% of the country simply doesn’t do the math on them.
Obviously you prefer to buy, but with how many people out there ending up leasing it would be nice for them to go in more educated.
Thanks again!
Hey man, that was an insightful comment you put there, can you please just expand a bit more on the maths you do on the lease rates and how you negotiate a better rate? I bought my first car (Ford focus 2005) and am looking to get into leasing a car with positive equity every 3 ish years.
I feel like there is one aspect missing: when buying for $459 vs. leasing at $159 for 3 years, what if you took the $300 you saved by leasing and invested it for the same 36 month period?
Also. Maintenance is free for lease and sales tax only for 36months
Mind... Blown!
Most people won't do that, either because they don't have the discipline or the reason why they are leasing is because they can only afford $160 a month. Though I dig the idea.
Tried this in 2006 right after i got out of high school! I was one smart frootloop and could do math, of course you would want to invest it! Then the economy went bust in 2008, lost 50% of it investing and i learned that risk should be involved in the equation. On top of that, carrying dept is just plain stupid(even in the form of a lease).
@@jonwojcik4494 You only loose if you sell, the dow jones peaked at about 14k in '07, dropped to ~7k in '09. If you sold you lost 50 percent. If you rode it out the Dow is now up to 28.5k. You would have doubled what you had in by 07' plus all the gains of buying in from '09 to present.
You've made this so clear. I don't need to watch another video. I definitely want to buy my car. Renting just isn't my thing anymore.
You deserve 5 Stars for this presentation! Thank you for being very clear, considerate, and concise as well. You should teach elementary students because they tend to get distracted. I believe your teaching style will help them stay focused over a period of time.👍🏾👏
Buy used, no car payments is the way to go. I leased 2 cars for 3 yrs, over 20k later and I had nothing to show for my hard earned money. Such a waste. Live and learn
I'd say it definitely depends on your tax situation and whether or not you own a business. If if it's for personal use only and you don't have to drive for work then I'd agree completely.
@@self.improved I'm definitely talking about for personal use.
You might have something to show.. but when you sell it with the fall in price you will have lost about the same..
@@gabrieleward why would you sell? Buy used and drive that baby till it doesn't drive no more. I'm not fascinated with new cars, I'm fascinated with not wasting money.
Step One Finance that’s your choice. Other people prefer to drive a new car and not have to worry about when they’re going to break down
For anyone having trouble with the green marker: turn on the blue light filter. It helps a bit.
Informative, and I can appreciate and thank you for making these videos. Maybe think about the fact that your leasing or buying guide doesn't take into account that today's cars are so advanced that it's more cost effective to get a new car every 3 years. I say this because the cost of upkeep will be crazy if you plan to hold onto these advanced cars, especially electric cars. When they develop faults, the cost of repairs will be crazy and you won't have the option of doing it yourself like older model cars. You'll be stuck into going to the dealership for repairs. Getting rid of these advanced cars after 3 years by leasing makes more sense to me. The technology for vehicles changes too quickly. Buying outright used to be the better option, until the vehicles became too advanced to repair yourself.
Thanks for your feedback. This is why I buy older used cars with cash. I drive a mint 2011 BMW with literally 0 problems in 2 years of ownership.
Its really simple:
you LEASE a car that will be expensive for you to maintain after 3 years. You BUY a car if its going to be cheap for you to maintain. On a 100k income, you can buy a Toyota or Honda, but I'd suggest leasing a BMW or Audi. On a 300k+ income, that concern fades away, of course.
Igor L on a 100k/year I’d be rolling in a Ferrari .. people are really bad with money, 100k/year is a LOT OF MONEY man, you could be saving 60k/year while living large and traveling the world ..I’m living off 35k/year (willingly) and still manage to save around 15/year XD .. btw I’m all for car ownership, there’s no point in switching cars every 3 years unless you’re trying to show off
Clarity with Teekay On 100k/year while owning a Ferrari you would be living in a cardboard box and eating ramen noodles for breakfast, lunch, and dinner.
benjamin reynolds oh absolutely not. A Ferrari costs what, 250? That’s less than 5 years of savings on a 100k/year (living very comfortably of course). People are just bad with money ;)
Clarity with Teekay Not possible. To save $250,000 in five years you would need to put away $50,000 per year. If you’re earning $100,000 per year, after you factor in taxes, retirement savings, and healthcare you would be LUCKY to see $60,000 in net income each year that actually hits your bank account. Now lets figure some real basic necessities, like a mortgage payment, property taxes, food, and utilities. For a modest house including the tax and insurance payments you might be looking at $1,500 per month, utilities are going to cost maybe $300 per month if you skip things like cable, and food you might be able to get by on $400 per month. So we’re talking at the very least $2,200 in expense each month (and this is assuming you’re single and have no kids, you better expect all of those bills to go up with more mouths to feed and electricity to waste). So now we’re already down to somewhere around $34,000 remaining for the year... which seems like a lot but let’s not forget there’s a ton of other expenses like car insurance, gas, home repairs, childcare, vacations, clothing, etc.
benjamin reynolds bro, don’t tell me what’s possible ans what’s not. I’ve lived off less than 20k/year for almost 11 years. In the same time period, I’ve visited around 30 countries, lived in 5 different ones all while being a student (for most part, which explains why I made less than 35 a year)
I only eat organic (which is always more expensive than regular food), I don’t dress in Gucci nor do I waste money on fast fashion, but I definitely own some nice Patagonia jackets, Nike’s and all the basics. I have a MacBook Pro for work, an iPhone, AirPods, PS4 like everyone else, and a nice bike that cost roughly 2K. I don’t drive a Ferrari cause I don’t want to, nor do I need to, but I’ve owned a nice little Jeep that I bought after a couple of years of saving (second hand of course). I was 20, started with 2000$ to my name at 18 :).
My expenses, rent included, food, gas, clothes, insurance, travel, electronics never exceeded 2k, and that’s the upper bar. Right now I’m at around 1.5k/month.
I don’t own a house and probably never will (i don’t believe in owning a home that u live in) although I technically could buy one in cash in two years tops (given I don’t lose my job tmrw lol).
I don’t want kids cause I’m not crazy so that’s one less massive expense.
If I made 60k today after taxes, I’d be saving 40k a year, probably for the rest of my life..and even if I don’t invest that 40k (which would be utterly dumb), I’d still end up with more than a million dollars in savings in 25 years .. imaging the returns and dividends on 1.2 million dollars in 25 years !
Like I said, people are just bad with money and get stuck in the rat race, that’s all it is
If you own a business, a "lease" is in reality a "rental", which is 100% deductible for business purposes.
The "rental", commercial auto policy (auto insurance), repairs/maintenance, and fuel, is 100% deductible... when used primarily for your business.
KnowledgeApplied not only a business but jobs that have a 1099 or self employed
@@williebender1895 Exactly.
KnowledgeApplied it really bothers me that society has made nice cars the enemy. People need to do what’s best for their situation
So I’m self employed, you think it’s worth to lease the car than finance?
Willie Bender it is the enemy, all that money for a car that I don’t own?? What’s the benefit?? You could have invested that money. Just buy a used RELIABLE car and make no payments lol. You writing it off will only take away so much on taxes
More than 50% of new car owners are upside down in their car loans. Most people who lease are using it for business reasons only and writing off the the payments as tax deductions.
Thats nice to know.
It'd be great if you could include the consequences of buying vs leasing when an accident occurs (when insurance kicks in and when it doesn't)
Almost the same with my lease car but I had electronic parking brake engaged. Dealer repaired gear selector (which was ripped apart), and replaced window. Thief couldn’t roll the car. Every day I always use electronic parking brake.
@DJ Ness Thanks for thinking about us future readers!
@DJ Ness thanks for the wisdom DJ
Absolutely no one in the recent history of whiteboards.
Marko: *uses a light colour pencil in a whiteboard*
Tf
Best choice, buy slightly used. Cars depreciate most in first 3 years. Capitalize on other peoples financial mistakes.
I realise this is an American example so it may be very different to the British market but I don't think the maths tends to work out like this example.
The reason for that is the deposit required on a new car is much higher than the down payment on a lease which is typically 3, 6 or 9 months times the monthly fee and that fee itself is also lower than your monthly payment for a straight loan.
For me, switching to leasing meant paying less per month and still being able to get a car I couldn't have afforded to buy new plus at the end of the term, when the warranty is up I can just hand it back and get another nice shiny new vehicle.
The longer you own a car, the more things go wrong and I don't want to have to deal with selling at the end of it.
The biggest consideration should be mileage. I have a short commute so do less than 10k per year which is perfect for leasing and I can opt for a cheap pre-reg deal because it makes no difference to me how many previous owners it has unlike buyers who may be haggled down more aggressively because they would become the third owner.
It's horses for courses and depends whether you see a car as an asset or a liability as it gets older.
The worst possible option is pcp and paying the balloon payment to keep the car. If you're leasing, don't keep it. If you're buying, don't buy new unless your planning to keep it until it's time for scrap
I think life situations play the largest role in buying vs leasing
I remember doing an assignment on buying vs leasing in my introduction to finance class over a period of 10 years. If you bought a car and kept it for 10 years including maintenance it was more expensive than leasing 3 cars over that period. However, after 10 years the bought car was much more inexpensive to own. People also assume you’re car will be bought at resale value but that isn’t always the case. How Marko said sometimes people don’t take care of the vehicle appropriately and you’re competing against dealerships that’s have more inventory and more margin space than you do. End note: I bought my car and lease cars for my girl who likes nice things lol
Same.. I drive the owned and she drive the payments.Why? Cuz women drive snd thats it.We drive listen and feel our cars .
Buy a used car (Honda or Toyota - a dependable car with a long life expectancy) with less than 35,000 miles and less than three years old. Pay it off (immediately, if you have the money to pay for it outright) and drive it until it has *at least* 250,000 miles on it. Repeat that throughout your life and you'll be far better off financially than everyone else you know.
True but if you like cars this is the most boring and depressing way to go. Not everyone likes driving the same car for a decade or more, especially if it's a Toyota Corolla. O.o
Pete Smith real talk. I’ve had an old Corolla for 8+ years and even though I’ve saved a lot of money, there’s definitely a social/ego cost to driving an old car for so long, plus it’s boring and I’ve talked myself out of buying a new car many times due to the boredom.
It only makes more sense to buy if you can actually afford the higher monthly payments.
Well, since we are all going to die anyway, it really doesn't matter.
@@crazyoldbiker938 🤣💀
What if u buy outright like a real cripppp
You're missing alot of major points in your comparison which is skewing your recommendation. Sales tax. When you buy a car, you're paying sales tax on the entire price of the car. When you lease, your only paying tax on the payment. Rules might also be different in different states. At the end of three years you're $17, 700 poorer and you've also lost $5700 of the $17, 700. With leasing you're only down 5,700 and you've lost nothing. $5.7k to rent a car for three years is a good deal. With leasing, you can also have an arbitrage opportunity if the residual value and market value are off. Leases also give you a few hundred bucks to 1k as a damages waiver. Anything smaller than a golf ball dent is usually ignored. Have fun trying to sell your car with damage for 12k. Another factor is time. You can return a lease at the end of your contract and walk away, instead of trying to find a private buyer or selling to the dealer where you won't get anything close to 12k. I get the point of your video but the fact that you omit the amount of money you tie up in buying versus leasing over three years is a critical flaw.
With lease you are down $7724 ($2,000 down + $159x36)
Well said and explained better, why Leasing is more practical overall.
Right on 👍
Well, since we are all going to die anyway, it really doesn't matter.
My kia loans is now over.. So basically i pay nothing for atleast 3~5 years to come.
did no one catch he said its "situational for everyones situation"
That was the only reason I looked in the comments.
So, whats the beef?????
I caught that too. He does a great job.
Well, since we are all going to die anyway, it really doesn't matter.
Thank you, Marko! That was amazingly insightful. I am on the fence about this. One thing I notice is that over the course of 3 years, the car depreciates in value, depending upon what you have. There is no guarantee that you will get $12K for the three-year-old compact, in fact, you may take a sizable hit on it. You also could look at spending $19K over 3 years (buy) vs. $7K over the same duration (lease). You have more options, being able to walk away and try something new, or having saved $12K over the three years could put you in a position to buy a car outright. I know this isn't a forum, but I would love anyone's thoughts on this, particularly yours Marko! Thanks!
I agree.
I agree
You didn't account for two things that swings the Lease as favorable, even in your "keep" the car scenario:
1.) Deferment of Sales Tax. For a Buy, you have pay/finance all the sales tax into the loan. For a lease, you pay it monthly. Meaning, in a Buy, you are paying interest on 100% of the sales tax, where a lease, you are paying the sales tax monthly, and then bulk at the end. (If you live in a state with no sales tax (there's a handful), then you lose that advantage of course.)
2.) Subvented Rates. In the scenario where 0% financing is offered, you are correct that for a Buy, the low APR is in lieu of rebates, so you're essentially losing the rebate to take advantage of the 0%. In Leases, however, that is not the case, the Rebates on a lease are in conjunction with any low money factor (lease equivalent of an APR).
You also put the "Buy" at 36 Months, when anything under 60 months is incredibly rare. A fairer comparison would be to make the buy for 60 Months, and then make the Lease for 36 Months, plus finance the Residual for the last 24 Months (and bump the residual finance rate up a bit since you're financing a used car at that point). I realize that would make for a more complex video, so I can appreciate sticking to the simpler scenario.
Good work, and good commentary on the "human nature" aspect.
I think one important aspect of leasing (at least in Germany/Austria) is that the value after the lease is guaranteed. So you don't have to worry if the car will hold its value or not. Say value after the lease was guaranteed 20k but the car ends up being worth only 16k. The leasing company pays that 4k loss. And if the car is worth more you get the difference in the pocket.
Excellent video explaining the nuances. The only issue is the numbers are way off which severely impacts the analysis. In most leases, at least the ones I have had, the buyout is about 10-15% lower than the market price for the same car at 3 years old. Additionally, most, if not all cars, depreciate 45-55% over the first 3 years, so the 17,700 vehicle in question will bring back about $10,000 at sale, not 12K, and the buyout would be about $9,500. Outside of that, a very good explanation of pros and cons.
Nearly 30 years in the business and I can tell you leasing is in some cases better than financing particularly the Toyota brand. That said, leasing is not for everyone and yes you can still make money on leases as long as you trade it in and NOT do a lease return.
Informative but that marker color was a poor choice.
Agreed! I didn't realize the green was so light. I won't be using it in the future! Thanks for the compliment and for watching
Yeah that was a very bad choice 🤪
Lol
lakertime987 I could see it just fine
@@WhiteBoardFinance a white marker would have been brighter, just sayin
Leasing is not for everyone and most definitely not good for long term even if you want to buy it out at the end, so as people have different taste in vehicles in general. But I lease so I get to experience every model as something new comes out all the time and newer features that fit me. I see some of your points and the skills you had as your time spent in car sales honest is the best way to sell cars these days! Thanks for sharing as I have watched a few of your videos nice work.
Thanks William
When I buy and keep a car past three years it enters the unknown cost of maintenance. When I lease a car for three years I know exactly what my costs are. As for selling a used car- Good Luck. I’m not anxious to meet strangers and deal with unknown people and their checks. Lease us for me.
Very interesting! Something to consider though is how much you’re saving on maintenance. According to AAA study, the average cost of maintenance for a new car is $0.09 a mile. I drive 2000 miles a month. So over the life of three years, I’d save $6480 in maintenance by leasing!
My 2 cents
I've owned and leased. Both have advantages and disadvantages as you mention.
1- There is nothing like the feeling you get turning in a lease and getting charged for worn tires.
2- I never bought the lease out at the end.
3- A beauty of the 3yr lease is the warranty is in force for the full term of the lease. Then you walk away.
4- I usually got 5-year leases. Year 3 was usually the hump where you were no longer upside down. Many times I called the dealer and simply asked if they could move me to a new car for less/mo and get me out of the lease early. It worked every time.
5- I never took a lease with a down payment, all you are doing is buying down the monthly, in the case mentioned ~$55/mo
6- I always negotiated the price before the lease terms.
7- Only one car did I bail on a lease and pay for 3 months to get rid of the car. Chrysler was offering 39month leases. I had a Jeep Grand Cherokee that was a horror story and I refused to own it without a warranty. They picked it up with one day left on the warranty and the car didn't want to start in the driveway. LOL. Refer back to #3.
Thanks for your input!
Elliot Check Elliot Check Hey, I’m a rising senior in high school, (and yes that’s a relatively young age to be looking at this stuff I suppose) but I pretty much do everything on my own and I recently got a job that pays $8 an hour. I work for 6 hours a day, 5 days a week and make about $960 a month. Not bad right since my parents still pay for housing and food etc. Me being a teenager wanting to look good in a new car, I’m planning on leasing a new 2019 Audi that asks for $574/month. What is the smartest approach to this situation? Or am I just being idiotic in my decision-making? By the way, I have no intention of owning the car in the end and I believe I can get a 3 year leasing.
Marko - WhiteBoard Finance. Maybe you can answer this too:
Elliot Check Hey, I’m a rising senior in high school, (and yes that’s a relatively young age to be looking at this stuff I suppose) but I pretty much do everything on my own and I recently got a job that pays $8 an hour. I work for 6 hours a day, 5 days a week and make about $960 a month. Not bad right since my parents still pay for housing and food etc. Me being a teenager wanting to look good in a new car, I’m planning on leasing a new 2019 Audi that asks for $574/month. What is the smartest approach to this situation? Or am I just being idiotic in my decision-making? By the way, I have no intention of owning the car in the end and I believe I can get a 3 year leasing.
@@midknight779 As a father of 2 kids who have been through the high school years (they're now turning 28 & 30) I'll answer in the manner I attacked the situation with my kids.
First, sit down and look in the mirror, and have a serious talk with yourself. You can't afford the car.
You're a senior in HS, what are you planning on doing after you graduate? College? Trade School? Apprenticeship? continue working for $8 an hour? What if the job disappears?
60% of your income will be committed for 3yrs to this car, that is assuming you qualify for the loan.
Add on insurance - another $100+ a month and maintenance ( small on a new car but there will be some).
Are you planning on filling your gas tank? another $50/mo.
Are you planning on dating? because you'll have no funds for babes. The drive-in (I date myself here-pun intended) is no fun alone.
What I did with my kids was we picked up used Hyundai Santa Fe's, with extended warranties (which paid for an ABS system and steering knuckle). The cars served them well through HS and college. They looked good and were dependable and had plenty of room for hauling all their crap. Once they got out of college and had REAL jobs they moved on to some sweet rides they could now afford. One is in a VW Golf R and the other is in a Ford Focus RS (after trying an ST).
I needed a beater a year ago and picked up a high miles Lincoln MKX. I was shocked that they were willing to write an extended warranty on a vehicle with 130K mi on the odo. The car looks greats runs well and the warranty has come in handy. I love it. I was out the door for $13K tax, reg, warranty. Before you think I'm a cheap SOB, I have 5 cars in the stable '16 Lexus ES350, '10 Lexus IS-F (now here is a beast), '13 Porsche Boxster, and '16 Mazda MX-5 (all purchased new). I like my cars.
Here a couple of ideas. If you want a fun car and if a 2 seater meets your needs you can pick up used Miatas pretty cheap. The original NAs and NBs can be had pretty cheap and are almost bullet-proof. About 6 years ago I picked up a '90 with very low miles that was undrivable for $1800. I put $2500 into it to get it road worthy - tires, timing belt, fluids, hoses... - and another $900 into a stereo - speakers (the original speakers turned to dust on the trip from Boca to Asheville). front-end, amp and for just under $5K I had a sweet ride for 5 years until I traded it in ($7K) for the '16.
Finally, if you want some fun. About 10yrs ago when I realized that my older son was playing cowboy behind the wheel too much I took them to the Skip Barber driver school (not racing school). It was a hoot, skid pad work, auto-cross, brake control, emergency maneuvers. We all benefitted from it and it calmed my older son down behind the wheel. Most tracks offer some form of driving school, you probably have one in your area. Money well spent.
I hope this helps. Either way, I wish you luck in both your future and cars.
Nice
I would recommend buying slightly used so its already taken that initial hit in value and it still should be under factory warranty. I bought my first ever new car last year but it was only because my credit is pretty much 800(almost no interest and I have a really good salary with very little debt) and the dealership I went to offered a huge discount because of my workplace. We work directly with the dealerships service department. If you go used make sure to get the car fax, service history, and stay far away from old rental cars!!!!
Where do you work?
Right now slightly used are more expensive than new.
I have a 03 truck bought itin 2010 still driving it today bought it for 6800, and I do all the work on it myself, and saved every service documentations. Average yearly cost with insurance included is 1257 dollars for the past 11 years
Let me make it even simpler:
Someone has to make money. So when you add another "step" (leasing), you'll always pay extra. Otherwise, no company would even offer to lease.
Another important thing is to NEVER buy a new car. There are 2 big "drops" for a vehicle value: at the age of 2, and at the age of 5. Buy used at either of those, and you'll save a HUGE amount of money. If you buy a 2-year-old car, make sure you sell it after 2 years (before its next "drop"), and repeat (buy another 2-year-old). If you buy a 5-year-old car, keep it for as long as you can. The longer you'll keep it, the more you save (yes, even after maintenance costs).
Isnt the extra step of selling and buying add expense?
@@waynelast1685
It's not an "extra step" since you're not leasing.
When you lease, you actually buy+lease+sell (and repeat when you want a new car). The "lease" part of this equation has to generate profit as well, otherwise, they wouldn't offer it.
Shane you are right. And this is why this video doesn’t make sense because in the lease scenario, who is eating the depreciation between 17,700 and 12,000 usd? The 159 usd monthly payment pays only interest and almost no principal. There is no way the leasing company pays the principal. So in the leasing scenario, either the montlhy payment has to be higher or the buy back has to be higher.
And the conclusion as you said is simple: there is no magic, if you add an intermediary which is a profit oriented company, they are going to do the same thing as you buying + make a profit so your cost has to be higher because you need to pay them for their services.
I disagree, one thing you get when you buy new is guarantee, not only in a warranty but also that the old owner wasn't a complete lunatic and the vehicle you purchase isn't a financial time bomb waiting to happen, vehicle repair and other costs (like missing work, or in the worst case traffic accident) can easily outstrip depreciation , especially if you have time, inclination or facilities to do your own repairs.
@@edwarddeguzman3258
Good input, I'll answer according to the points you made:
1. Warranty can be added. for around 2K, you can add a warranty that will cover you (bumper to bumper) for longer than your manufacturer one (I have one unlimited in time, and up to 180K KM), mine already paid for one locking mechanism, control arms, alternator and sunroof motor).
2. I wasn't talking about buying a 10-year-old car. Most people (my guess is over 90% of them) take care of their car pretty good on the first few years.
3. When you buy a 2-year-old car, your manufacturer warranty is still intact...So you can be rest assured things will be taken care of.
Not always true about getting a bad deal with promo interest rates. I bought a new Honda SUV at 0.9% and paid $6k below MSRP.
Great video. Subscribed.
How u did that i mean got that much less price than msrp?
My dad leases his car and the maintenance has full coverage, so it depends on the deal you make. The cons you said can be avoided by not going to a dealership that will charge those things
I personally like leasing because we can have a new car all the time, owning the same car for many years would be very boring, same with living in the same place your whole life...
I think what’s more interesting is having money in my bank account. I bought a 2012 Outback and plan on owning it for seven years till I sell it and buy another five year old used car. The longer you push back that 20-25k purchase, the better off you are. Maintenance is nothing if you buy a reliable Japanese car vs a complicated and expensive European model. I’ve been enjoying living a car payment free life and it’s been great. I don’t have to worry about a ding giving my dealership the excuse to charge me thousands of dollars and I don’t have to worry about going over the mileage limit they set. I can own it and if I do lose my job, I know there won’t be some slimy dealership taking it away if I can’t afford lease payments
This assumes you could sell it for that price. Doesn’t count the time it would take to sell it or headaches involved.
max19116 he did mention that he followed the typical depreciation rate, but ultimately it’s vehicle specific
It depends on the car and the miles
Not always I like the hassle of selling
Well, since we are all going to die anyway, it really doesn't matter.
Yup
I go with the old-school advice: 3 to 5 year old used car with less than 50k miles is the best option! I just bought a 2015 Toyota Camry LE with only 19k miles! Paid $15k cash and I plan on driving it forever!
Yeah and you’re driving a Toyota.....
Same but I do get new car for a my own company car.
@@NetomaMusic if he drives it for 15yrs he will spend half as much as your $2k vehicle for 1yr...all he has to do is get 7.5yrs to match your value-no problem in a 4 yr old Camry. You are on the right track...but a $5k car for 5yrs is a better value
Whether you are a car person or not, the vehicle you drive is as much a first impression as the clothes you wear. You (hopefully) wouldn't show up to a job interview in a cheap, second-hand suit, so why would you drive a cheap, second-hand car?
SO BASICALLY 1 TO 2 K A YEAR IS GOOD? SOUNDS LIKE I MADE A GOOD CHOICE. I ALSO BOUGHT USED FOR CHEAP , NO MAJOR REPAIRS AT ALL.
Scrolling through the comments it seems the top answers for leasing is lower payments, new car every 3 years , constant warranty. To counter that buying used answers, no payments after paying off, screw a new car, I have plenty of free money to pay for my own repairs.
Buy a car that is 3 or 4 years old, pay it off asap and enjoy having no payments. People scratch their heads why they can't get out of debt, leasing is one of the main reasons
My head hurts reading all these comments. Everyone has been brainwashed by car stealerships
@@trevorwalker9568 I'm going to buy. I added up what an average lease would cost after a decade to what an average used car would cost even on the high end of maintenance cost and I will never lease. I don't care about having a new car. Looking at a 2015 Honda CRV
@@lucypeterson2753 you will not regret it! You have to ask yourself, If a dealership pushes the lease on you all the time, then its NOT the way to go. They make so many sales off one car and off one person. Keeps you coming back and these fools run back just throwing their money at them.
@@lucypeterson2753 I noticed we follow the same person Step One F
Buy new (don't have to worry who did what to the car prior), base model (less to go wrong), compact or smaller (enough car for commuting and it's sitting in the garage 95% of the time anyways), pay cash, drive it into the ground. Buy Honda/Toyota and 200k miles is routine.
Why is this so hard for so many people?
Because who wants to drive a turd like Honda or Toyota. Buy German.
Because some people enjoy their lives
@@zdwade People are talking about saving money and having a worry-free vehicle here. Buy all the POS German money pits you want, doesn't make S K's advice any worse.
Very nice explanation. Im still amazed how people still argue that leasing is cheaper simply because the monthly payment is lower. Dealers cash in on that ignorance.
leasing can be cheaper if you get a brand like audi, benz, range rover and can have everything covered by warranty before you give it up when the warranty expires. particularly if you get a nice model that can possibly appreciate, as rare as that is.
Also when you lease all of the vehicle maintenance is taken care of
It can be cheaper if you're crazy enough to keep trading your car in for a new one every couple of years. Not sure how anyone is able to do that without going bankrupt though.
One other consideration: if you finance a car and it gets wrecked, your insurance may not cover the full value, especially if you quickly rack up the miles. Also, if you’re not keen on haggling with mechanics and worrying about maintenance, leasing is a bit less stressful and can be less costly. But you’re right, depends on your situation and lifestyle.
That’s why you get GAP insurance
I save a lot of money not paying taxes upfront when leasing a car and i never pay MSRP on leases. Always about 8-10k less. And I never worry about maintenance cost. Service cost is negligible with modern cars now needing an oil change every 10k miles.
The peace of mind alone is priceless.
not paying taxes upfront! so when do you pay the sales tax then?
fUjiMaNia you pay the taxes monthly over the course of the lease agreement. So for example you lease for 3 years, and your monthly payment on the vehicle is $300, you will pay taxes on the $300 which in my case would be about $328/-
@@romavictor1811 oh I see what you meant. thanks!
I know all this stuff but I subbed to watch your videos with my son. You educate better than I do. Thank you.
I like your videos and I think most of them are valuable. One thing I wanted to point out is that a car or truck isn't an asset, it's a depreciative asset meaning your losing money every year. Repair costs alone will take away any value you may have in the car. An asset is something that is valuable item and it makes you money over the long haul.
agreed. check out my good debt bad debt video.
Or you could pay cash for a slightly used car and drive it until the wheels fall off and pay a ton less. Buying a new car always starts with bad math....
100% agree. bought a car for $3000 3 years ago and did some basic maintenance and upkeep. how can you go wrong for 1000/yr
IKR I see it all the time people buying a new car because it uses less fuel or the old one needs some expensive maintenance. What you're paying for that new car covers maintenance and fuel on the old one for years, sometimes decades.
I drove my 1990 Honda Civic until the wheels fell off, then paid to get new wheels and I am still driving it. I just paid $1600 at the beginning of this year to have the motor rebuilt and a new radiator installed. Where can you buy a used car for $1600 that you can count on? With the rebuild, I am getting 35 MPG again, like I was when it was new.
Sounds good on paper until you have a wife and kids driving around in a beater while your at work and no way to retrieve them when they break down and her nagging every morning about the piece of garbage she's driving in and the next new thing that's going wrong. Then you break down and buy a new one just to shut her up for a couple yrs and have piece of mind
@@fathertime5680 or they die because it's a 90s tin can. The one thing you can't put a price on is safety. In the last 20 years cars have gotten much much safer. With even some of the worst modern cars making the safest cars of the late 90s look like children designed them
Came across your video by chance but really enjoyed it. Very informative. You have made me seriously think that buying a car is an overall better option. Thank you.
Thanks for watching!
I always find the saying "leasing is the most expensive way to operate a car" to be interesting. Because of course it's the most expensive, it should be! You're always in a new car with the latest tech, style, and comfort. Weird that a 10 year old car that no one enjoys would be cheaper to own.
Clearly you don’t get it. Even if you buy a brand new car vs lease a brand new car it’s still cheaper to buy it, as this video proved.
The tax deduction you receive on nearly 100% of the lease for self employed people often makes the lease a better option, where the tax deduction is very minimal for a financed to own vehicle.
Oh wow good info
This shows how important it is to do some research into the cars that hold there value well, this way you can get the best return possible!
Absolutely! I buy used cars and have no regrets. The goal is to buy right
@@WhiteBoardFinance So true as I always hear in Real Estate "you make money when you buy"!
@@calvinraab8798 That's right!
All I buy is used German. Let the rich original owner take the hit, buy a great car for pennies on the dollar. Watch my video on how I made $4k on my e55 amg
@@WhiteBoardFinance agree and disagree at the same time-I bought a used S4 and was able to sell it and still hit my target number of COA (cost of ownership) less than $1000 per year-with the goal of $500 per year. How do you do that consistently? Buy a $2500 car and drive it for 2.5-5yrs simple. Ppl who buy $50000 cars are STUPID. It would take 50-100yrs to match my model...never gonna happen...they might get 15yrs out of a $30000 car not bad $2k/yr but still 2-4X my target. Put your money into your house and into investments (I own both FYI) Car leases and car loans are like a drug addiction-they will leave you broke (or at least with substantially less) and take you nowhere fast. Buy a used Corolla (manual) if you need a car or a used 4cyl pickup (manual) or both and spend less then $5k and you will be much further ahead with a spare car if one needs repairs...cars as status symbols are all an illusion ppl...a car in our society is important-but not for the reasons most people think.
A car isn’t an asset unless it’s putting money in your pocket. But I agree with him buying is better and less expensive than leasing for sure.
Nobody ever NEEDS to have a new car every 3 years. They WANT a new car every 3 years. Big difference between needing something and wanting something.
There are people that need new cars, like realtors and sales agent, where keeping up appearances is a business cost. For most people, you should keep a car 10 years or more.
I’m not going to say anything about the marker everybody else already took care of that 😂 😂 but Great videos, it was a blessing finding your channel my guy. I’m buying a camaro soon and this is amazing information for me.
Thank you Darius!
You end up getting that Camaro?
@@bobsagit10 not yet
@@thelifeofaking376 how bout now?
Thanks, my wife's friend is thinking about leasing car. She asked my opinion and I told her better to buy than to lease, so this explains it very well. We always buy slightly used cars and drive them until the wheels fall off.
Thank you for the clarification! I'm done "renting" cars.
Well, since we are all going to die anyway, it really doesn't matter.
Being in the wholesale car business you hit the nail on the head, you make your money when you buy the vehicle - buying it right - not when you sell it.
Sounds odd but it's the gospel in the wholesale biz.
Nice presentation.
Awesome video Marko, my first car was a honda accord with 246k on it, bought it on the island in Victoria for $2,700, i used it for 2 years and sold it for same amount, same as my Corolla & Toyota Avalon, if you are a middle class your best bet is to stick to a Japanese car, use it diligently, maintain frequently and you are likely gonna break even while selling after two years, if you are a business owner you can go for a lease, while if you plan keeping a car for over 3 years you can go with car finance.
BUY an old good bulletproof car and LEASE a new super high tech one..
Exactly. If it's a daily driver, look for good build quality, high reliability and a manufacturer/dealer who are known for supporting their customers. Then buy it because you're going to use this car a lot and have it for a long time.
If it's exotic or a model that's known for long term reliability issues, lease it if you're going to mess with it at all. Depending on how the tax arrangements work out, leasing a work vehicle can also be a good idea, but you should talk to an accountant who really knows the tax system in your area as to whether that option is right for you.
When you get into an accident, your resale value crashes.
Not when you lease
What abt the fees on lease when u return a car and they charge you for any lil damage or scratch
@Nguyenxuan Mai what are all these perks everyone is talking abt ?
And these warranties or extra coverage you bought how much was it
@@KZ-do6il there are damage fees if the car is returned in bad shape but if there was an accident, insurance takes care of that whether it's minor damage or major then the gap might kick which protects you. Other than that there's a disposition fee which every manufacturer has if you return the vehicle without getting another lease with that brand unless the lease is used as trade then no disposition fee.
@@Princip615 and i just found out there is tax on lease payments? And also a rent charge is that correct?
Im just trying to make sense how leasing is smart when you have to basically have full coverage insurance and gap pretty much same thing as buying if not more protection for something you dont even own it seems to me its just a premium to have piece of mind, and a premium to have new car every 3 yrs
@Nguyenxuan Mai i was just reading up on a bmw forum where this guy was paying 145xx tax on his 703xx lease payment.... and the protection plans seems like u either pay now or later
Theres nothing smart abt leasing its a trap by car manufacturers to keep you from ever owning a car if anything i rather join one of the car subscription plan where some dont even have mileage limitations and i can switch cars every other day... i dont have maintenance to worry abt ... no insurance no depreciation on my end and its montly service so i can opt out anytime... if we are not talking abt making the best financial choice then thats the way to go drive a benz on monday, lexus on Wednesday and a range rover over the weekend...
I ended my 3 year lease after a year and bought a used car instead. I learned cars depreciate and it was a better option for me to buy a car
What car did you have?? And what was the process to return a lease like fees and inspections? My lease is almost up and I want to be ready when I return it and buy a used car
Ack I used to have a 2019 Honda Civic Sport on a 3 year lease. I didn’t pay any fees when I returned it. They just inspected it
Rosie oh wow ok that’s great! I read on the contract that there is a turn in fee of 400$ but they will waive it off if you purchase another Honda
How do you end a car lease early? Kia contract says i have to pay all payments left
Good video.
I know your intention is to show that buying will always save you money, but the numbers actually confirm my rough calculation that leasing is not such a horrible deal. The difference between buying and leasing, whether you keep it or get a new car, is only about 1K, or roughly 6% over 3 years, or 2% a year of the original price.
With that 2% premium you get a brand new car with almost free maintenance cost, and no hassle of selling or trading in at the end of the 3rd year. You know that not too many people have $12K cash to buy a car from a private party.
A car is a depreciating asset, unlike property that's (almost always) an appreciating asset. Renting property is not smart, but leasing a car is not the same magnitude of foolishness. In certain circumstances I can justify paying 2-3% a year.
When you lease, you are paying a 2-3% premium and when the lease term is up, you have to do it all over again or buy a car which starts your payments all over again. If you were to look at this scenario for a period of 9 years, the person who buys their car can keep that car for 9 years and will most likely only be making payments for 4-6 years of that time frame. Of course there will be more in depth maintenance costs during that 9 year span.
The person who leases 3 cars in a period of 9 years is paying triple the amount of the hypothetical scenario in the video. They will (probably) have a down payment each time the lease contract is signed and they will not have any trade in value when they go back to the dealership.
When you trade in a car that you have fully paid off, that’s money towards a new car. Even a nine year old car would have trade in value if properly cared for.
logan trentadue you can also sell a 9 year old car for even more money than trading it in. Let’s also not forget about the fees you have to pay when you return a leased car.
The value of buying a used car is even greater. I can buy a really nice used car for around $10,000 cash that will last me at least 3 years of use and still be up to date and comfortable. I can then turn around and sell that same car for around $5,000 after three years which means I have really only paid about $5,000 over three years which equals about $140 a month.
i put gas in mine and change the oil thats it, runs great and have no problems at all with it, been 5 years now. you are a sucker if you have car payements. worst investement.
Leasing usually only makes sense for expensive luxury cars
Misty people who have a brain and know cars never ever ever spend 12k for a used car. Unless u love the style that much. Get a 10yr old for 3k
Another good explanation of the math, and if the math were the problem, we’re all done here. Of course, in a financial sense, for most people (not businesses, etc) financial behavior and a repetitive incidence of poor financial decisions based on anything but long term outcomes is the problem and people who continue to use leasing and disposing of vehicles every three years are likely making other choices from the same thought processes that will lock them into a downward financial spiral. The math when the purchased vehicle is kept for just 6 years more than doubles the difference, pointing back to short term turnover being more the real killer than even the lease itself. The dealerships aren’t losing money by leasing you a vehicle, you can count on that. One guess who is...
By the way, I have also negotiated price and got the low or no interest deals. I’m sure they still got their desired margin, but I’ve never had to pay sticker prices to get the good rate.
I think that might be true in some situations. But, when he compared the out of pocket costs of buy vs. lease, if the difference between the two is a grand or two over time, that's not a lot of money down the drain, for people making six figures or more. Also, with that lease, you get some maintenance taken care of, free oil changes and no excise tax payments. You get rid of the car entirely before any major maintenance comes up. Plus, you're enjoying a new car every three years. I'm on the fence of lease vs. buy when my lease is up in a few months. I haven't decided yet, and might finance (buy), because I've bought a used car outright many years ago, and leased a few times already. I think it's time to see what a finance is like with about $16k down payment. But, with leasing, I like the idea of not letting go of a huge lump sum of money up front, having relatively low monthly payments, being in a new car every two or three years, no excise tax payments and free oil changes. It has been great, to be honest.
TheBringa TheCuba in the end, it becomes a question of where cars fit in the scheme of a person’s financial future. In my experience, trading off vehicles regularly, whether by renting/leasing or buying too often, locks you into a perpetual drain on your income... a drain that is wicking away wealth that could generate many times the value of the vehicles purchased were a person to decide to hold on to a vehicle for its useful service life and put the expenses saved to work through investing. This car thing is the mortgaging of future possibilities for short term unnecessaries mindset that, in my view, has perpetuated itself into a debt/college loan/retirement crisis. Most of us will never inherit wealth or financial stability. We’ll have to earn it over the long term, and I just can’t see where ensuring a never ending obligation to give my income to car dealers is going to accomplish my family’s long term financial security. I need that money working for me in other ways, and in other places. It’s each person’s choice, and for me paying the car off and then banking the money I’m not sending to someone else is going to pay for my next car, with cash to spare. The cars cost the same, but I get to keep the interest instead of paying it to someone else. I get value, and added dollars, on both ends.
@@Five0Music Good points here. My first few cars, I paid cash for a used vehicle. But, I found that after a few years, up to five years, I started dealing with maintenance issues. I didn't want to continue to hold onto a vehicle that was unreliable, or had me visiting a mechanic too often. To get something dependable for work, that I was going to put a key in and it starts every time, I had to make a quick decision after my car quit on me. The first lease was only a two year lease, but I discovered that I liked the benefits of it. Over time, I acquired a lot more income and didn't need to lease, but continued to, because I got used to it. Now that I can afford to buy, I know that buying and trading over a long term is a much better option. My first lease was $199/month, which was not bad at all for a brand new car. I paid about $2500 down. I gave the car back two years later, with 11k miles on it. It benefited the dealer, but it allowed me to have the "new car" experience, and try leasing for a change. It was a nice break from the used car breaking down. I think I'm in a mood now to buy the next one. I'll have three or four years before any major work needs to be done on it, and it will be mine for the long haul. Wish me luck.
TheBringa TheCuba I love that you know what you’ve done and what you intend to do. You’re aware of what it costs, and that puts you miles ahead of so many. I’m sure you’ll do fine, and I do sincerely wish you the best in your personal and financial future!
It all depends on every individuals situation. Glad to have both options that applies to every single one of us.
Thank you again for another great video explaining car lease and ownership difference, you are really good presentation skill and great confidence
There is an $11000 discrepancy you forget to mention. The monthly difference kept in my pocket from the lease. That's significant, and i could do more with that on a monthly basis, vs having the higher payment to save $1200 at the end of my contract.
The interest paid on the purchase finance at the end is less than you would have spent on the total cost of a financed vehicle.
The cars i choose to purchase have complete dealer coverage. I might only have to worry about a single set of tires over the course of 3 years. That's worth the $1200 purchase difference alone for me.
If you plan on keeping the car, just wait and but it certified used. Anything else is just a poor financial decision. Unless you just aren't affected by the overall purchase amount, or the car is something very special to the buyer, and they want very specific options, just get it used. Car buying is such a sham.
If you are the smart buyer as well, you can talk the residual lease payment down as well. Tadaaaa! Lol
It makes sense to lease a luxury car such as a Mercedes. These typically run very well the first few years but start to become very expensive to maintain and repair as stuff start to break. So the idea is to enjoy the car while it's brand new and run well, and get rid of it before stuff start to break and get expensive, and then lease a new one.
No, we can’t see green marker!
Good video. But as a car guy the Honda Civic and Toyota Corolla are Compacts, not subcompacts. The Honda Fit and Toyota Yaris are the subcompacts.
All these people judging each other for their choices. If you want a new car and can afford it along with your other needs, go for it. If you like seeing your money sit in your account, buy something cheap. Do whatever floats your boat and let others do what they want. Life is short. Enjoy it while you can.
Agreed
All your information is sound for employees. For self-employed, you can write off vehicle expenses so leasing makes more sense not only from a numbers perspective (ease in calculating tax deduction) but also in terms of reliability if you're extensively on the road. The $/km thing is a grey zone. It's totally negotiable when renewal time comes around and/or if you flip the car earlier in the term. Plus there are lease take-over websites you can sign up for if you feel you'd run over the KM earlier than your term allotment. Two different worlds.