In addition to the issue between leasing or buying a car, some reports are emerging that a few fortunate people got an incredibly inexpensive Chevy Volt lease, because of a dealer incentive. The incentive led to about $60 per month getting knocked off the lease price, but it's not likely to come around again. Only some dealerships could have participated and it was all down to some special conditions. You could just purchase new automobiles instead of leasing.

 

I have leased or purchased nearly 30 cars in the last 20 years. There have been a few cars that I have kept for the full length that I was financing/leasing the car. For someone who doesnt put >15K miles a year on a car, leasing is often a "smarter" way of acquiring a vehicle. Bluntly, for any reason other than "high mileage", a general dismissing of leasing as a smart way of acquiring a vehicle is simply ignorant. UNless you plan on keeping your car cars for years upon years its simply non-sensical to arbitrarily dismiss leasing as an option. Why do some imply that people are living beyond their means? If they are making the payment, quite honestly, they are living within their means. Why should ANYONE senselessly have a higher payment to say that they "own" the car vs "lease" the car?!? Take the current offers on Jaguars. $6K cash back for owner loyalty. $799/mo lease on a base XJ with ~$4-6K cap cost reduction. Factor in the owner loyalty (if you owned a land rover or jag before) and its ZERO down and $799/mo (limited to 10K miles a year). Thats the same payment as a $40K car. WIth an MSRP of ~$75K, 60 mo financing would be approximately $1,400 a month! Lets face it, these big-body luxury cars depreciate FAST. You drive the car for 36 months and give it back. Whats wrong with that? Who's the smarter guy? The guy who leased it or the guy who purchased it? the guy who leased it owes ZERO at the end of the lease. Who knows what the jag will be worth in 36 months, but I would think its a fair bet to say that the guy who purchased and paid $1400 a month has little to no equity. Leasing for high end luxury cars is often the smartest way to acquire such a vehicle. The other way is to finance/cash purchase a slightly used model. For me, in 2-3 years (or less) I will have likely developed "ADD" with the vehicle and have moved on to the next lease/purchase.

 

Yes. If am already paying for it, i want to be able to drive how much i want to drive. You like paying for a service/product and still being told what to do?
From what i have garnered, seems like you do.

Leasing is like renting. If it was any good for the rentee, it wouldn't be so lucrative for the homeowner.

 

"You drive the car for 36 months and give it back."

Who can really justify this for states like CA where your average yearly driving is over 10k?
Here is $$$ down. Here is monthly payments. Full insurance(no choice here either). Now, GIVE IT BACK to them to resell again.

Leasing is NOT a deal. Its like the rent to own scams, pay 5 grand for a $700 TV or sofa over time.

Sorry but no sale here. There is a pride in ownership and you take care of what you own and have control of that property.
Nothing nicer than to hand your wife or son the keys to a Jaguar. Here you go, enjoy!

 

Leases are rents. It's a horrible deal for those on W2 incomes. Leases were made for those who own companies. If you own an INC or LLC, you pay the car lease with pre-tax dollars, and it's a 100% write off.

If I am to use after-tax dollars on a car, I go with purchasing, fully knowing it's a loss, not just in 'equity' but any way you slice it. It's a luxury, it's a want, not a need.

If I am to just use car but not own it, I'd go lease through my company, for the reasons mentioned above. It's an easy decision, depending on the situation.

 

I'll start off by saying, I used to hate leases. But....

For these high dollar cars, I am beginning to think that leases make more sense (assuming that you've got significant financial means). Here are some of the points that have swayed me to leasing in the last few years:

1) You only pay sales tax (at least in FL) on the lease payment, not on the entire car purchase. The Jag cost about 75K, sales tax in my area would be ~5K. My lease payment is about 1K/mo, or 36K over the term. Assuming I only want the car for 36 months (either lease or buy) that's a 2-3K savings by leasing.

2) A lease has a built in "put" option. What if (heaven's no) Jag goes out of business tomorrow. What do you think will happen to the value of these lovely XJs? That's right, it will fall through the floor. If you leased, the leasing company eats that loss, not you. What if we have massive inflation and a used XJ is suddenly worth 100K (because a new one is 250K)? You sell the car and keep the gain. Think this isn't valuable? Ask someone who bought an H2 Hummer 6 months before they went under how much he wishes he leased!

3) Leases often have lower interest (money factor) than I could borrow the money myself, the dealer is offering, and my portfolio is producing.

4) Kind of a side note, but, when you lease, NEVER put anything down if you can avoid it. If the car is stolen the day after you buy it, you pay your deductible and walk away. If you put 5K down and the car is stolen tomorrow, you're out 5K. This is "kind of" a lease advantage because people often have low/no down leases. But, IMHO, no luxury car should be "bought for cash" right off the lot. If you wreck an 80K Jag on the way home from the dealer and you gave them 80K in cash, you'll be lucky to get 70K back from the insurance company. If you financed the whole thing, you'll walk away only paying your deductible.

I've got 2 leased cars now (my last 2 were leased as well, everything before that was purchased) and I'll probably lease again moving forward. It all depends on you situation (financial means, how often you like new cars, etc) and on the lease deals offered on whatever car you're looking at. Some cars are really bad leases, some are very good leases. The XJ was an "OK" lease, MF was very low, but residual is also low. In contrast, my wife's old truck, Lexus RX, was a wonderful lease (nosebleed residual, low MF).

 

Here are the the used prices in L.A. area from cars.com and craigslist --

2011 XJ $42k (Original MSRP 72k)
2011 XJL $45k (MSRP 77k)
2011 XJ SC $54-60k (MSRP 90k)
2011 XJ Supersport - N/A

Given the numbers, it makes more sense to lease new cars and buy used.


Cheers,
Wolfy