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Leasing is the most costly way to obtain a vehicle.

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While true, people that are considering leases aren't trying to be a vehicle. They are buying a vehicle AND options on what to do with that vehicle. that's why its' more expensive that just buying a vehicle. It's silly to compare them.

Now, we can debate all day long on whether those options are worth it, but that's a different discussion.

edit: I think 62strats post on the other page is a good illustration. He's buying a vehicle, AND the option to not put money down AND the option to return it if he doesn't want to buy it. For sure, it would be cheaper for him to buy the car at on a loan, but he's willing to pay for those options. (or she)

752bro4 said:

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The Wonderer said:

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blindey said:

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If the lion's share of your income is from a salary, then I would generally say that buying is the correct option. If your income is from draws, distributions, etc., the tax implications of a lease may make it the more attractive option.

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ding ding ding.


Leases work great for a certain sector of people and the vast majority of Americans do not fall into that category.

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Ding ding ding *

* kind of

Unless you and your vehicle can qualify for Section 179, and bonus depreciate the f out of that bad boy.

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But what if it's an SUV weighing less than 6000 pounds?

Consult with your CPA and decide if the stair-stepped depreciation outweighs the benefits of a lease for your personal situation.

752bro4 said:

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Consult with your CPA and decide if the stair-stepped depreciation outweighs the benefits of a lease for your personal situation.

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Not what I was referencing, but I agree.

Don't lease an Escalade and look like a deal-dough.

Dave Ramsey on car fleecing

I have bought 3 trucks new. I drive them for 200-300K. My first truck I had to borrow money. After it was paid off, I made what I thought would be a basic car payment to an investment account. When I finally decided I needed the second and third trucks, I paid cash. If your job doesn't require a flashy car, financially it's better to buy what you can afford and get to a point you can pay cash. Automobiles can be a huge waste of money, plan wisely. having a car payment forever whether lease or buy is not a fact of life and can be avoided

34blast said:

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Dave Ramsey on car fleecing

I have bought 3 trucks new. I drive them for 200-300K. My first truck I had to borrow money. After it was paid off, I made what I thought would be a basic car payment to an investment account. When I finally decided I needed the second and third trucks, I paid cash. If your job doesn't require a flashy car, financially it's better to buy what you can afford and get to a point you can pay cash. Automobiles can be a huge waste of money, plan wisely. having a car payment forever whether lease or buy is not a fact of life and can be avoided

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Keep in mind that Dave's entire teaching premise is that his audience is stupid. He intentionally chooses a hardline because his goal isn't so much to stop you from being "fleeced". It's so that you don't buy the 60k car to begin with and you aren't tantalized by the low payment.

People aren't actually getting fleeced by a lease unless they fail to negotiate...which would be the same problem if they didn't negotiate for paying a car with cash.

What car would y'all want if you had $60k to throw around?

34blast said:

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Dave Ramsey on car fleecing

I have bought 3 trucks new. I drive them for 200-300K. My first truck I had to borrow money. After it was paid off, I made what I thought would be a basic car payment to an investment account. When I finally decided I needed the second and third trucks, I paid cash. If your job doesn't require a flashy car, financially it's better to buy what you can afford and get to a point you can pay cash. Automobiles can be a huge waste of money, plan wisely. having a car payment forever whether lease or buy is not a fact of life and can be avoided

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When rates are <2% for good+ credit, I'm borrowing money and sticking my stack of cash somewhere where it makes more than two percent. Hell, online savings accounts are 2.20%+ nowadays.

Borrowing money is a great financial tool if you're not an idiot.

But there are so, so, so many idiots.

752bro4 said:

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But there are so, so, so many idiots.

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Which is why Dave Ramsey is viewed as some financial god.

752bro4 said:

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But there are so, so, so many idiots.

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https://www.daveramsey.com/store?snid=store.classesheader

34blast said:

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Dave Ramsey on car fleecing
I have bought 3 trucks new. I drive them for 200-300K. My first truck I had to borrow money. After it was paid off, I made what I thought would be a basic car payment to an investment account. When I finally decided I needed the second and third trucks, I paid cash. If your job doesn't require a flashy car, financially it's better to buy what you can afford and get to a point you can pay cash. Automobiles can be a huge waste of money, plan wisely. having a car payment forever whether lease or buy is not a fact of life and can be avoided

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How is that any different than a car payment? Only difference i see is you pay twice for the first car (pay off, then keep making payments even though don't have a new car). Then perpetually make payments on the next car before you actually get the car.

34blast said:

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Dave Ramsey on car fleecing

I have bought 3 trucks new. I drive them for 200-300K. My first truck I had to borrow money. After it was paid off, I made what I thought would be a basic car payment to an investment account. When I finally decided I needed the second and third trucks, I paid cash. If your job doesn't require a flashy car, financially it's better to buy what you can afford and get to a point you can pay cash. Automobiles can be a huge waste of money, plan wisely. having a car payment forever whether lease or buy is not a fact of life and can be avoided

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How much was that investment account earning for you before you cleared it out to save yourself a couple percentage points of interest on the truck payment?

cjsag94 said:

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34blast said:

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Dave Ramsey on car fleecing
I have bought 3 trucks new. I drive them for 200-300K. My first truck I had to borrow money. After it was paid off, I made what I thought would be a basic car payment to an investment account. When I finally decided I needed the second and third trucks, I paid cash. If your job doesn't require a flashy car, financially it's better to buy what you can afford and get to a point you can pay cash. Automobiles can be a huge waste of money, plan wisely. having a car payment forever whether lease or buy is not a fact of life and can be avoided

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How is that any different than a car payment? Only difference i see is you pay twice for the first car (pay off, then keep making payments even though don't have a new car). Then perpetually make payments on the next car before you actually get the car.

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In this case you are making payments to yourself. This is where the debt snowball comes into play. After you pay off the car you can either use those same payments to pay off credit card or other debt, or you can invest it to build up the emergency fund.

DaveRamsey said:

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cjsag94 said:

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34blast said:

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Dave Ramsey on car fleecing
I have bought 3 trucks new. I drive them for 200-300K. My first truck I had to borrow money. After it was paid off, I made what I thought would be a basic car payment to an investment account. When I finally decided I needed the second and third trucks, I paid cash. If your job doesn't require a flashy car, financially it's better to buy what you can afford and get to a point you can pay cash. Automobiles can be a huge waste of money, plan wisely. having a car payment forever whether lease or buy is not a fact of life and can be avoided

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How is that any different than a car payment? Only difference i see is you pay twice for the first car (pay off, then keep making payments even though don't have a new car). Then perpetually make payments on the next car before you actually get the car.

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In this case you are making payments to yourself. This is where the debt snowball comes into play. After you pay off the car you can either use those same payments to pay off credit card or other debt, or you can invest it to build up the emergency fund.

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You're not paying yourself, you're pre-paying for a car you don't yet have. This makes sense when saving for a TV rather than paying 18% interest on a credit card, but when I'm paying .9% on my car, I'd rather get the car first and pay later.

DaveRamsey said:

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cjsag94 said:

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34blast said:

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Dave Ramsey on car fleecing
I have bought 3 trucks new. I drive them for 200-300K. My first truck I had to borrow money. After it was paid off, I made what I thought would be a basic car payment to an investment account. When I finally decided I needed the second and third trucks, I paid cash. If your job doesn't require a flashy car, financially it's better to buy what you can afford and get to a point you can pay cash. Automobiles can be a huge waste of money, plan wisely. having a car payment forever whether lease or buy is not a fact of life and can be avoided

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How is that any different than a car payment? Only difference i see is you pay twice for the first car (pay off, then keep making payments even though don't have a new car). Then perpetually make payments on the next car before you actually get the car.

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In this case you are making payments to yourself. This is where the debt snowball comes into play. After you pay off the car you can either use those same payments to pay off credit card or other debt, or you can invest it to build up the emergency fund.

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Ramseyfail.

If you were making car payments while having CC debt, you already made ol Dave cry.

Well then, you aren't saving for a car, and you'll have no money to pay cash for the car when inevitably needed.

Dave's message is needed for people who have cash flow problems, but leasing or buying a new car is really a luxury item. If a few thousand dollars here or there over 3-5+ years is a problem, you shouldn't be buying a new car under any structure.

You should always pay off higher interest debt first, but you can't skip existing car payments.

Example:
17% - Credit Card - $100/ month
6% - Car Payment - $500/ month

Pay the minimum on all payments each month for $600. If you have $700 to contribute the extra $100 would go to the credit card and not the car.

Once you pay off the car the entire $600/ month will go to credit card. #debtsnowball

Why are you explaining the debt snowball? The question was lease or buy...and someone brought Dave Ramsey up and said you shouldn't lease, but save up and pay cash.

All of a sudden, you start chiming in about paying off a mountain of debt?

DaveRamsey said:

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You should always pay off higher interest debt first, but you can't skip existing car payments.

Example:
17% - Credit Card - $100/ month
6% - Car Payment - $500/ month

Pay the minimum on all payments each month for $600. If you have $700 to contribute the extra $100 would go to the credit card and not the car.

Once you pay off the car the entire $600/ month will go to credit card. #debtsnowball

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And yet another RamseyFail...ol Dave would have you sell the car, pay off all debt, and drive a "Beater" that you paid $1000 cash for, and then save up to slowly upgrade cars you pay cash for.

cjsag94 said:

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Why are you explaining the debt snowball? The question was lease or buy...and someone brought Dave Ramsey up and said you shouldn't lease, but save up and pay cash.

All of a sudden, you start chiming in about paying off a mountain of debt?

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Its the only financial knowledge Ramsey adherents have. They have to try to fit everything into their one little box of knowledge.

I actually dont dislike Ramsey, he provides a great foundation for people who have no financial acumen to help them avoid living beyond their means.

What I dont like about him is that he's fostered such a cult-like following that he is preventing his followers from continuing to learn personal finance beyond his system.

His system is like Chapters 1 & 2 of a personal finance textbook. It can undo damage and get you to a solid starting point. But if you never advance your learning past his system. You're going to leave a lot of wealth creation opportunity on the table over the course of your lifetime.

Started leasing a 2017 Honda Civic for my daughter when she was 16, and included door ding, windshield and tire/rim protection. We've used all three and the first four oil changes were free.

She'll get a new leased car next year in college. I want her to have a new, reliable, maintenance-free vehicle while away at school. When she turns 22 we'll do it one more time then cut the strings and she'll be on her own. AND my wife will buy the Civic for $12,000 with about 28,000 miles on it to drive as her own.

I don't care about the reasons whether or not to buy/lease a car, to be honest. Our scenario works great for us.

Leasing is good for those that want a new car often and don't car about always having another payment

It is financially not a good idea

DaveRamsey said:

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You should always pay off higher interest debt first, but you can't skip existing car payments.

Example:
17% - Credit Card - $100/ month
6% - Car Payment - $500/ month

Pay the minimum on all payments each month for $600. If you have $700 to contribute the extra $100 would go to the credit card and not the car.

Once you pay off the car the entire $600/ month will go to credit card. #debtsnowball

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That's not how the debt snowball works. You ignore interest rates and use extra money to pay off the loans starting with the one with the smallest balance. You work your way up from the smallest loan to the largest loan, ignoring the rates of interest on each debt instrument. The snowball comes by motivating you to eliminate each debt one at a time, gaining momentum as you go.

Do you even listen to your own show? What a dumbasss.

Bayside Tiger Ag said:

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I think I'm done buying vehicles. They are to get me from point A to B. Completely a utility thing for me.

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Then pay cash for a used one.


I'm 57 - and have had ONE vehicle I've had to make payments on. And I regretted that one.

Hello there said:

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On my second lease and planning on it being my last.

Cons:

• Over the long term, you'll pay more than if you'd bought a car HOUSE

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The arguments against buying a new car every 3 years and leasing a new car every 3 years are almost exactly the same. Leasing a car is essentially just buying the car with a pre-negotiated resale price at the end of the term.

Buying a used car or buying a new car and driving it for 6+ years are different arguments that are obviously almost always going to be smarter financially.

Quote:

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Leasing a car is essentially just buying the car with a pre-negotiated resale price at the end of the term.

Buying a used car or buying a new car and driving it for 6+ years are different arguments that are obviously almost always going to be smarter financially.

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Exactly.

Smarter people will know, but I imagine the value of pre-negotiation to the dealer is setting on a price that's higher than actual resale in the end. I know everyone thinks they can haggle with the dealership over the residual value, but I don't know if it really works.