Car Leasing Explained
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The Dave Ramsey Show I'm from Dominican Republic.
This is not necessarily true for 3 simple reasons.
1. The price that you buy a car for will always be higher than what the dealership/manufacturers pay for it. This difference can work to your advantage because depreciation on a higher sum is larger than depreciation on a smaller sum...
2. The interest rates that car manufacturers can get is better than you can get
3. The higher down payment when buying a can can be instead re-invested by you and you will be getting interest on those funds.
For these simple 3 reasons (as well as many others less tangible reasons). Leasing can sometimes be the better option. True, over time leasing will probably be more expensive than buying, assuming that you buy and keep the car for more than 3-4 years. But the loss-benefit is close in many cases.
His simplistic explanation is less than very intelligent...
Iv lived I America my whole life never left . Iv lived in NY and FL . I'm 23 years old and my whole life was around ment 2 time or more my age and never once heard the term fleasing lol
Worse explanation ever!!! This isn't a Dave Ramsey quality video.
New cars are garbage, Dave. Two words: planned Obsolescence. Also, the fuel injection system is infinitely inferior to carburetor in terms of repairability. Everything is over computerized and near impossible for a layman to repair it himself.
"Vee-Hickles"
bludevmike you’re not from the country you’re not cool enough
Sergeant Rizzo approves.
M Detlef what’s that make people watching, like yourself?
Isn't vehicle pronounced vee-hickle?
@M Detlef so how is it pronounced? Voy-hoykle?
where are all these $6,000 cars that are 4 years old?!?!?
RLWSNOOK410 you're a rookie
You can find them in FantasyLand.
See them all the time here in Nevada. They are usually a Honda, Hyundai, or a Mazda. But they are still out there. We buy vehicles like that all the time. Newish car that is 4 or 5 years old with like 60,000 miles on them for less than $8,000.
This guy has no clue what hes talking about... notice the use of the word "Probably"
And when you "Buy" a car... you dont own it... the financing company does. Skip a few payments...see who still "owns" the car.....
Ford, Hyundai, Kia, Nissan, Mitsubishi all sell economy cars with less than stellar reputations. They could easily get that low especially with high mileage or some damage making them lose value. Competitor cars from Toyota, Honda, and Mazda might get a couple thousand more when selling them used.
Hi dave
I'm an immigrant came to US about 1 year ago,i just wanted to say thanks a lot sir your videos helped me to prevent getting into real trouble.Thank You again.keep it up
He forgot to mention that the dealer gets the leased car back and then makes another huge profit once someone buys it certified. So it’s really a 2 for 1 sale for the manufacturer.
AJ Lee not how it works. A third party comes and instructs it then sends it to auction unless the dealership wants to buy the vehicle. And the dealer doesn’t get the car for free. Dealership has to pay a dealer buy out then sell it.
Mar Loz that’s more or less the same thing aj Lee said.
Recertification doesn't restore the vehicle's original value. It gives the buyer a feeling of security.
AJ Lee And the person who leased the car has to return the car and go home empty handed.
This is why I will never lease a car.... they allow you to have the car for an allotted amount of time with loads of restrictions, then you get to the term and they get the car back and try and get you into another lease and unless you wise up, they're making a good chunk of their money off of you
Scottykilmer would disagree with you on quality of new cars lol
ismael Ramirez was gona say the same thing lol
Rev up your engines!
Me thinks scotty and dave would get along quite well
Scotty is gonna tear Dave a new one for saying that Nissan makes quality cars lol
A 2019 Nissan is a great car, for the first 12 to 18 months..Dave said the same thing about BMW, yes for the first 2 years from when the car was made, nice ride....longevity .....nope
I was with you until "Nissans are really good cars."
npxmnpxm they are reliable
@@Convexhull210 Depends on the model year, in my experience. The newer models just aren't as reliable as the older ones over the long term. The 1999 merger was the beginning of the end of Nissan quality, imo.
npxmnpxm I agree. My Nissan is 10 years old.
I had an Infiniti that lasted 350k miles. It still worked but I the power steering started going out
Tacara Jones not bad!
Agreed. Leasing is a huge ripoff. Then the dealer turns around and sells the car and makes out again. I like buying my cars new and keeping them for 10+ years. Basic maintenance will keep most of today's cars running a very long time. I have not had a car note in over 5 years.
Leased a ram 1500 for my business. Payoff is 24k. 10 k in equity. Way different then a car
Nissans are really good cars
-Dave.
Thanks for the laugh.
yep
They're garbage! Used to be OK cars.
Love my Altima!
@@Axl_colts don't forget to come back and let us know when your cvt fails which will probably be pretty soon!
@@nemesis656 If it happens I will!
Thank God I studied and got a degree in FINANCE, you find out how many people try to rip you off.... including dealerships
wreck'em tech I see so many people use poor excuses to go into debt.
You don't need a degree to know this, but you're absolutely right sir
@Eric Sirias its better to buy, ive worked at a dealership and leasing payments are grossed opposed to monthly payments(buying) wether good or bad credit. Dont buy from dealerships, their grosly overpriced. Criaiglsits, auctions or from the manufacture is the best value
@Eric Sirias Obviously you answered that for yourself. Spend the extra $5000 or $6000, its your money. Not everyone selling their car is selling it because theirs something wrong, on average customers sell their current vehicles for an upgrade because of comfort or pure want. You can get a 2015 honda EX or LX accord on craigslist for a great price. 2018 Honda accords are nearly identical in their services and manufacturing. In my experience working at a Honda dealership most people who leased or bought a new car couldn't afford it, so a 100 or 200 more in monthly's to them seemed like a good idea, adding up to 1000s more.
@Eric Sirias A Honda Accord at 200,000 miles will still run. A New car isn't really new, the vehicles you see at dealerships are constantly being test driven and moved. Once a vehicle is on a plan, it drops nearly $10,000 in value because its now "used". If you bought a $30,000 2019 honda accord and tried to sell it the next it the next day, it would quote at almost $21,000. Buying a nice new car don't mean sheet, and I wanted to tell every customer that, save yourself the money. What do you think Dealerships do, new cars still have problems. There their to steal your money, what do I know, go buy a new car you seem dead set on getting a brand new accord.
I think the concept that is lost on most is living small. If you have no payments: house, car, consumer debt etc you don’t need to make much. I just turned 35 and I have been following Dave’s concepts since age 20. I have a brand new $270k home paid for, 2015 F-150 paid for. I don’t need to make a fortune to get ahead. I never stress about money and I have cash in the bank. I travel a lot and get to go to concerts, football games etc. Paying cash freed me from financial worries.
Do you have a family?
@@xq8152 doubt it
what do u do for a living if u dont mind my asking?
Please answer those questions sir
@@charlesben9104 I do have a family. I am a commerical developer. I build storage units, strip centers & large tunnel car washes.
Where the f' does Dave come up with a 20K new car is valued at $6K in 4 years? Look up a 2013 Corolla with 45K miles today. Value? $11-$12K, NOT $6K. I get his point but please use more realistic numbers. Also, perhaps some people like the safey/security of driving a safe, reliable car that's under warranty as opposed to a 8 year old beater with 140K miles with shot brakes, steering, suspension and dated safety features.
Point being, there's an intangible or better said, unquantifiable value to owning a newer car.
tikijojo
They would have to have high miles and problems. I have seen lots of cars in that price range going for about 12k though. That still beats 20k.
He's not being objective in his lease or buy explanation. Everything has pros and cons. He is simply talking about the cons of leasing from a financial aspect.
Isaac Spencer A new Corolla isn't necessary $20,000. After dealer discounts, a base Corolla will sell closer to $16,000 or $17,000, and it comes with maintenance included in a short term lease.
tikijojo Ylif you lease a car you're basically Under-intelligent.
Not too many cars hold there value like a Toyota
Leasing when properly negotiated can be a better financing setup for some people. The problem is no one understands how leases work so they do not know how to negotiate with the dealer correctly.
Nah, its like trying to negotiate at a poker table. The dealer always wins
@@burritobrosvideos8060 yea, i suppose if you can't reach their price point, theres another idiot who will come in and pay it lol
I prefer leasing over buying.
I leased a 2009 VW Wolksburg Jetta for $298 per month no money down (sticker price or $24,500)
I leased the car for 4 years with a optional buyout at the end of the lease for $10,300
I drove the car 78,000 miles in 4 years for a total of $14,304 ($298 included the taxes)
I spent $0 in repairs, all of the oil changes were included except for 2 ($80) and I replaced the tires ($360)
Total $14,744
I choose to buyout the vehicle for $10,300
Total after buyout - $25,044
The reason I choose the buyout was because the car was setting on the lot for between $17-18,500
Within 2 months I sold the car for $16,500
Total out of pocket in 4 years was $8,544 and I drove the car a little more than 80,000 miles
$178 per month- I believe I did I little bit better than the average person buying a new vehicle. Maintaining an older vehicle to be driven 20,000+ plus miles per year would cost far more than that in maintenance/repairs alone (I grew up in a garage and worked as a mechanic in a past life) .
I have had 6 leases in a row through VW, I have a 2012 GLI in my driveway that is at the end of the lease that will end up working out almost identically to the explanation above.
There are exceptions to the rule, a lot of it is choosing the right vehicle & depreciation rate.
wishbone20t so did you think you saved money in the end?
@ $178 per month yes. I also like the flexibility of a lease if worked properly. Though I agree with Dave's opinion in most cases. I would absolutely disagree with anyone that says maintaining an older car with 100K+ miles that will be driven more than 20K miles per year is cost effective. The only way it could possibly be done is luck and to not follow any know maintenance schedule. It is recommended that a car with 100K miles needs new struts, timing belt, (brakes, tires, belts, tuneup, battery, flushes, wipers etc. if they haven't already been replaced) that is just maintenance. Just the cost of proper maintenance of a car over 100K miles would exceed the value of most cars. this dose not include any unscheduled repairs (the average trip to the mechanic for a repair is $1,100+) Two repairs per year average and you will pay nearly what I am paying in payments to drive a brand new car. Proper maintenance is a safety issue for not only the driver and occupants of the car but for the innocent lives they will encounter on the open road. In addition older cars are typically not as safe as newer models or as efficient. If you only drive 5-10K miles per year it may come out differently.
I have not bought out every lease I have had but I have never paid a single cent for over mileage. I have never turned in a lease with less than 75K miles almost double than the lease term allow.
I have a trick and I will use my current GLI as an example. Lets say I wanted to turn in the car and pick up another for $300 per month. I will be @ 75K miles on a 48K mile lease. My buyout is $11,400, the car is a sought after model and would set on the lot at its current mileage for about $17,000. So you see a good chunk of $$ between the buyout and value of the car. I never go to the dealership I call and I tell them here is the deal. I have a 2012 GLI at the end of the lease with 75K miles. I am either coming in to finance the car or if you can allow me to walk away from the car free and clear I will pick up a brand new car today. They only make money on one of those situations. I also tell them i have been in professional sales for many years and I never make a sale unless my prospects have 2-3 bids from my competitors. I will shop your offer, make the first offer your best!
Your repair numbers are way off...I dont spend anywhere near 2k a year in repair cost for my Toyota Rav4. Maybe if you bought a used BMW I guess.
As sure as the fact we will all die someday you will need repairs, as mentioned the average trip to the mechanic is $1,100+. If you drive 20-30k miles or more per year it will happen sooner or later. But that is only repairs lets talk maintenance- you car dose not have special magical "Toyota" struts. Your struts were sourced from the same few companies that all car manufacturers source from, as hundreds of other components on your car. U joints, clutches, tires, brakes the list goes on and on and on. Most strut manufactures recommend replacement around 70-80k miles. This single maintenance can run in the thousands of dollars. It is a safety issue and sadly most people that operate cars with 120K++++ miles never do and endanger not only their own lives but countless others. Guess how many people die in the US every year from improperly maintained cars each year and how many of them were innocent bystanders. Granted most are truly oblivious to what proper maintenance is, what should be replaced and at what time.
If you were to add up the proper maintenance (a lot of it being safety related) of a vehicle from between 80-200K miles, and you drive more than 20K miles per year- you are not going to do it for less than $178 per month.
If the vehicle is financed at that mileage (with interest) and you are paying a car note on top of maintenance you are certainly not going to do it for $178 per month.
"If" the vehicle has one average cost repair per year that is almost $100 per month alone on top of that.
175k miles on my car never had to change struts/shocks...work like a champ still. I work in auto insurance industry most accidents come from distractions not improperly maintained cars...I can recall a few with old tires though but never in 10 years a accident as a result of a bad strut or clutch. Sorry I dont need to be in a car payment all my life...my next car will be around 3 years old and paid for in cash. I am sure there could be a few leases that could be a good deal but majority aren't.
I have leased 2 vehicles. I am a single mom with 2 kids living in Colorado with no family or relatively good friends here. I have a few work friends but no one I can call if my car broke down and needed help with my car or help with my kids. I wanted a RELIABLE car. I didn't want a vehicle that was going to give me even the slightest bit of issues because of my living situation. I make decent money for a single mom (over 100K a year) and have excellent credit so I weighed my options and this was the BEST decision for ME. So I will happily lease if it means having a worry free, very reliable, affordable option. When I stop paying the equivalent of a monthly mortgage payment in daycare fees in 3 1/2 years I will "buy" a car. For now, leasing an SUV in snowy Colorado is the best option for me.
Buy a Honda. they dont fall apart after 5 years
Es Gee what do you do?
John Steele *Toyota
Es Gee You can buy two vehicles that are more affordable and reliable to you. Best option is to buy with cash. There are decent amount of reliable vehicles over long period of time that you may not have to worry about. Google is your friend. Certainly each person has his/her own favorite style and constraint but getting reliable car shouldn't be the motivation of leasing car.
bhbae1 I don't think she meant leasing 2 vehicles simultaneously. Besides owning 2 depreciating assets is not necessarily better than leasing 2 depreciating assets as all you are doing is paying off the depreciation and interest in the form of money factor. The crux of the argument is what makes most financial sense. For automobiles, inventory, model cycle, and timing of the year, all play a huge role in getting the best deal. Buying vs leading new - if ur avg mileage usage is reasonable, I always go leading new. There are deals to be had. People simply don't do enough research to know better.
A huge outlier not discussed is maintenance on an older car.
Just drive a toyota or honda...the only truly reliable cars out there.
True but even maintenence costs will never approach the expense on a budget relative to a monthly car payment
You can lease a new camero for 370 a month and if the engine blows thatd be 5k outta pocket 5k is like 1.5 years of paymets of the 3 year lease
@@moneygrinds4216
That's assumimg you pay, if an engine goes and it costs 5k to repair you simply get rid of the car. As long as you don't finance a used car that scenario shouldn't happen. You're still better off buying vs leasing as long as buy the right car with adequate research on your end.
@@fkcavs what about the fact your always in the new one when you lease like thats so much value considering thats what everyones payment is all about looking the freshest
LEASING MAKES THE MOST SENSE ON HIGH-TECH, HIGH-MAINTENANCE vehicles with fast depreciation.
Leasing a car has the option of owning the asset with payments counting toward equity of the vehicle at the end of the lease term, which differs from the general concept of renting. If you return the car after leasing, then you have effectively rented the asset. If you buy after leasing, you have effectively purchased an options contract, with no impact to your credit during the lease term with a deferred purchase option (financed or otherwise). Dealerships (not car manufacturers) benefit more from leasing programs, as they can upcharge lease return vehicles typically about $3k to $5k. Used wisely, leasing can be an effective tool, used unwisely and repeatedly, it can be a money pit. With that said, purchasing a certified used cars is usually better in value that provides more quality assurance than purchasing from private party; though if you can put in the effort to find a gem of a reliable used car, that would be provide the best value. However, as car buying is a major financial decision, it should be strategized from your overall financial goal and health.
Perfectly said.
We lease BMW’s…for a reason…not buy. No way I’m paying to repair one. It’s a depreciating asset.
@@Skyking6976 you know better, but my idiot uncle did just that 🙄
Loved his beamers so much he didn't care how much it cost to fix them unless the mechanic told him it wasn't worth putting money into anymore
Prob only cause he got tired of fixing the same old cars...
“They don’t make em like they used to, well thank god!”😂😂😂
Every argument he makes against leasing could be made against buying a new car. Yes its a business they do markup. Yes there is financing interest (money factor). What is his alternative? Becuase it can't be to finance a new car. Buy used and pay cash? There is a huge risk factor in used cars having major issues that only become apparent after purchase. Also, used dealers mark up more and private sellers overvalue their cars that they've grown attached to. Is his problem the interest? Not everyone can/wants to pay lump sums on huge expenses for cash flow reasons but if they want to they can reduce the money factor with single payment leases. Now factor in the protection and piece of mind of always having a warranty and the convenience of not having to resell (and possibly not getting what you hoped for) and its obvious that leasing can make sense for many people. All in all leasing is the less risky option with less hassle of repairing or selling and if you are paying a small premium for that (big IF) its worth it. Buying and owning can save you money or can end up costing you a lot more (time and money) if things don't go as you planned.
Don't forget the common financial rule of thumb: rent depreciating assets buy appreciating assets.
Armen Topchyan Have a mobile mechanic have a look at the car prior to purchase. Best $300 ever spent.
Love this
Man, ive never seen anyone but more thought into being wrong haha
Dave doesnt recommend people to buy new cars either...
Two factors that change the game. First, is that in some cases you get rebates and incentives on leases that you don’t get on a purchase. Also, a lease usually means that the warranty covers you so no out of pocket repairs.
That's why I lease. Cause I have no idea what I am doing, so any repairs the dealership pays for it and I don't have to wait in line at the Dmv for plates or registration. Call it lazy but it is easier for me
@@dorisfashion Worried about no out-of-pocket repairs? That's why you buy a used Japanese car that doesn't break down. So that means buying a used Subaru, Toyota, Acura, Lexus, Honda, Mazda, etc. Then you can save tons of cash by buying one 20-25k purchase and pushing that every 10 years while you work and save money. That's the only real way to save money on a car. You keep maintenance and running costs low, and you just keep trying to push that 20-25k purchase further and further out. All those brands, minus Mazda, will also offer you great resale value. Subaru, Lexus, and Toyota offer the best resale value over any other GM, South Korean, or European brand
@@colechapman6976 what about Nissan/Infiniti ?
@@colechapman6976 still a risk buying used. it may break down; it may not. either way, it's a risk. leasing a new one prevents that risk. I think both buying new and leasing new have their ups and downs, depending on the individual. to be honest, buying new would probably be the best imo.
And you still have Payments to enjoy with your rebates, and still broke.
I think your view on car leases is a very narrow perspective. I will share with you my situation and why I made the choice to lease.
My lifestyle and preference's made me choose a mid duty pickup truck ( Chevrolet Silverado 1500). At the time I started the lease (06/16) I could afford around $300/month payment for the vehicle. GM offered a 39 month lease option at the time and my final payment on my truck is $289/month. Over a 39 month period I will pay about $11,250. A pickup truck in that price range would be from probably 2000-2004 and would have over 130,000 miles on it.
For $289 a month I could have option A or B.
Option A :
NEW 2016 Chevy Silverado 1500
- warranty
- new vehicle reliability
- service covered by lease contract
- new vehicle safety features
- increased fuel economy
- increased comfort and technology
Option B :
2003 Chevy Silverado with 150,000 miles
- No Warranty
- 13 year old vehicle and reliability
- repairs and labor paid by me
- poor fuel economy
- less comfort and technology
Now fast forward 39 months to when I would pay off the old truck or turn in the lease. The new truck I will turn in and have noting to show for the $11,250. The old truck I will have paid $11,250 for and now it will be almost 17 years old and have more than 190,000 miles on it. The approximate value of the truck when I pay it off will be $3,000. With a truck that old I will probably have some repairs over that time that will probably cost $1500. Add another $1000 for regular maintenance (tires, hoses, belts etc..). We also need to account for the old truck averaging about 6 mpg less that my current truck. That's over $2700 ( simple math version) over the life of me paying for the truck extra for the gas guzzler old truck.
The end math is
Option A:
Paid: $11,250
End value: $0
Option B:
Paid: $11,250
End value: -$2200
It would cost me $2200 dollars more to drive a 16 year old truck than to drive a brand new one. In what financial world does that make sense?
Option 3: get 6-12 months of income saved in the bank, then, save the cost of the truck, buy the truck outright, have the power to sell the truck or do what you want, because you own the truck, avoiding any type of risk to your name.
It's all good untill something happens and you can't make the payment.
EDIT: Reread. Trucks never lose value after 10 years old. Their value is all the same be it 150,000 miles or 200,000 miles.
@@w8stral "Trucks never lose value"? Hahahahahaha 😂😂😂😂😂 That is a great one.
Did you hear the one about the Italian chef? He pasta away.
@@chinita1pr Trucks dear friend lose value till a minimum is reached at which point they lose no value until they get scrapped.
Same is true of all heavy machinery/equipment
@@w8stral Agreed. Makes sense now after the edit because the original "trucks never lose value" was laughable.
A car doesn't depreciate any more if you lease it. Dave also forgets about people that write off lease payments against a business. But he said fleece so Bubba's going to stick to it. 🙂
Dave is smart to dumb people
If a lease works for you fine. If it doesn't, fine.
Some people appreciate the fact that their sloppy jalopy is not in the shop every other week, costing 9,000 in repairs, when it's a 72 Pinto that's worth 100.
But good deal eh, it's paid for.
So what is the value in time lost, aggravation, lack of safety, frustration, etc etc. So no, one size does not fit all.
It may surprise you that not all people are 6'3 and weigh 185. Hard fast rules may be guidelines for some, but certainly not for all. God did give us brains to use.
My dads a car salesman and we lease our cars. If you know how to negotiate deals and understand the lease, sometimes it could be better financially.
no one ever said leasing a car is cheaper or less expensive. Some people like owning a new car every 3 years. Some people have tax advantages with leasing. Some people just want a lower monthly payment... It's an option... Good or bad, it depends on you and your situation. Long story short..... this is 8:42 seconds I will never get back.
Agree. I think there's been a twisting of words in taht leasing is cheaper. it's pretty much always been leasing you can drive more for less but I've not seen it discussed as being cheaper. It's actually slightly more expensive to do but you reap a lot for that extra costs in terms of options, time frame to exercise those options and risk that is mitigated. Not to mention all that comes with getting new cars all the time.
Hmm. As a contractor i have always purchased vs leasing because of mileage. Leasing seemed like a rip off to me because you pay the same or more and have less to show for it. Leasing as a business write off would only really work if yoir cost to get places was more than actalully leasing
Matt Bond cash is always better
I need a lower monthly payment now, and I plan on buying out the car in the future. When the value you goes down after I lease it, I can afford those new parents to "buy" the vehicle. I may spend a little more over all yes. But every month I will be paying much less, and get exactly the vehicle I want. I don't see much loss bere
@@joshuamclean4588 no, its definitely not with rates this low and tax incentives for business deductions.. learn how to play the game better
Excellent presentation as usual Dave and thank you for taking the time to share your knowledge. The prices you pay for leasing or buying are based on what others are willing to pay. Also, in the Northeast, they rot out unless you perform rust control maintenance. I'am retired with a large family and well off, because I always bought used and did all my own work. In general, cars are expenses not investments!
I like Dave's explanation. It's living within your salary. I make decent money, but my parents taught me to live below my means. I buy used clothes on eBay since it's often times hundreds of dollars less expensive and clothing on there is generally like new. I don't buy into fast fashion, and prefer to buy a used pair of good jeans or a good sweater used and keep it for three or four years. I chose to buy a 2012 Subaru Outback since the car was at my price point and I could afford it without having a down payment plus car payments thereafter. I also make most of my meals at home and only go out 2-3 times a month. I also grind my own coffee since it's cheaper than Starbucks and the coffee I buy tastes fathoms better than theirs anyways. These little lifestyle habits can mean thousands in savings and fewer headaches
I'm currently leasing and coming up on the end of it next month. I planned to buy out the car at the end of the lease. It was about 24k the buy out is 16k. I saved up about 5k so I don't have a take out as much. I also only drove 18k miles in the 3 years I had it. Sure, I'm paying more then just out right purchasing the vehicle but, it allowed me to get a car where I am the only driver and the payments per month were manageable ($300). When I buy out the car with my estimates I should have monthly payments that are a little less than $300 a month. Lucky my credit union does work with the dealership so I can finance through them easily.
It depends on the car! DO NOT LEASE A CAR THAT DOESNT HOLD ITS VALUE! Jeep, Subaru and Toyota Tacomas are average consumer vehicles that hold value. Why? Brand loyalty.
It really is about what you pick. Then you buy out at the end of the lease and resell for a small profit and roll that into a new vehicle or into your saving. Dave can be very old school with some of his teaching.
Dave is not entirely correct. Manufacturers make money on the resale of your lease. 🤷♀️
Some interesting comments. I have both bought and leased a number of cars in my 50 years of driving. There are trade offs to each and it really depends on your needs and finances. I currently own my car which is 3 years old and great for hauling the kayak and for all around use. I plan to keep it until the end...of my kayaking days. My wife's car we lease because I want her in a new, safe and dependable car. We are leasing a Honda Accord for 3 years and 12K miles for $265/month which includes the sales tax. One of the benefits of leasing is you only pay sales tax on the monthly lease and not the total purchase price. For me that is a savings of around $1,100. Factor in no service except for oil changes and tire rotation and it makes financial sense. Maybe it costs me a few hundred more over the lease but the benefits for me outweigh thextra cost if any.
Exactly. But some people just don't get it. They get too hung up on the fact that they're renting the car, instead of owning it.
And you don't own the car until you pay off your loan. Until that happens, the bank owns the car.
And??
Red Apple Wellness yea if u are buying the car for 5 years both ways if buy or lease u owe money but on buying if u want to trade your car within 2 years u cant
ksmithdc same for buying houses except you never own the house even after mortgage is paid. The government owns it forever. Default on taxes after buying a house with cash its taken away!
I absolutely love leasing.
Leasing vs Buying has always been the great debate in basic economics.
Here's my take:
Finance if you want to own the car for 8-10 years. The point of financing is to make the money you spent on it back by not having a monthly payment for a few years.
Lease if you don't put too many Miles on the car, and want a refresh every 3-4 years and have no commitments.
So excited, 25 in a current lease and idk what i have. Here’s to being an adult and fixing my mistake 😂😂
My Nissan Sentra was $185 a month tax included. The buyout at the end is half of the MSRP. You do have to pay higher insurance on a lease. I didn't have to pay anything down or out-of-pocket. It was a drive-in sign. Also owning a business you can do a straight line deduction for it or weigh the mileage.
I know a financial analyst for a huge corporation who found a "mistake" lease. The cost benefit analysis was in the leasers favor. And so he leased a car for that reason.
The ONLY time when the car lease makes sense is if you works for the car company and the lease is an employee only package.
MattV2099: Guns & Food matt v woah
BREAK YOURSELF FOOL
Operate
BigFire not only that, my parents finance for tax write offs
I've always put 250k miles on junk cars and made the repairs. Much cheaper than payments
Its not a junk car if it went 250 miles. plenty of "nice" cars out there with low miles that are in the shop all the time.
Lease typically means lower payments, always driving a new car so no major service, and next to no risk as long as you make sure it includes GAP (mine does).
Since a vehicle is a depreciating asset anyways why spend more than you have to? Like any other aspect of car buying you can usually negotiate a better rate if you qualify for one.
$229 /month for a brand new Camry, nothing down, don't pay for maintenance, peace of mind with brand new car, and have option to just give back at the end for no cost. I'll take it.
sounds good, but you're not factoring in a) losing your ability to make money and maintaining a payment, b), the cost of doing that time over time decade after decade in relation to your net worth. It might be convenient when everything is going well, but it isn't the full story.
I leased a car because I couldn’t afford to finance it at that time cause they asked me more for the financing and I needed a car I was to scared to buy $4000 car so that was my choice and I don’t regret I did it. Now that I’m finally in better place I can afford to finance one when I return it in a few weeks.
Leasing new Camry is like 20 cents per mile. Financing and driving till the wheels fall off a new Toyota Camry is 10 cents per mule. Buying a slightly used Camry after leasing is 7 cents per mile.
how do you get a camry for nothing down? It's usually 2-3k down.
You don't "have the option of giving it back at the end for no cost."
Just based on what you claim, you will have paid at least $8200 over the lease term (likely much higher), and have nothing to show for it when you're done.
go to craigslist a guy sold me a car with 30k miles for 6.5k i had it for 167k miles now thank god. he needed the money for a emergency. theres some treasures in Craigslist.
Anddres Torres Absolutely. You just have to be picky, do your homework on the make/model and the car itself, and have the car checked by a mechanic if you don't have the knowhow.
bought my car in 2013 for 1200 it's still running strong
True, but treasures are rarely there when you actually need them to be.
Most Craigslisters think rust is gold plate though.
The lies your telling
I’m currently driving a $300 Toyota Camry. It needed about $800(paying a mechanic) + tires in repair to be long distance road trip ready. I did the repairs myself and it took about 3 weeks. At that time I did additional work to make it nearly perfect. I spent $375 on parts and 400 on tires. It has 255k miles and runs great. I could have done much less repair but I did a bunch of preventive maintenance.
The three cars we own (wife, daughter and myself - are all Hondas - all run wonderfully (2 still look brand new). The lowest mileage vehicle is 151K, and they are all 10 years old. Or more. We keep them maintained. And they are solid vehicles. Oh, and we aren't leasing them. 2 paid off. One to go
and not everyone wants to keep a car 10+ years and have to deal with maintenance or issues.
I have leased two cars in the last four years. The monthly payment seemed a little high, but I am always driving a new car, with nothing down. Other than standard maintenance, there are no surprises. But, I always have a payment - so what, as mentioned, I drive a new car, and no surprises and no regrets. See, after one buys a car, it is loosing value, regardless of what you do. Now my oldest son would adamantly disagree. He bought a Honda civic, and over maintains it. The car is 8 years old and has been paid off 5 years ago. Looks and runs great, with excellent fuel economy. Last year, he bought a 4 door corolla that he uses for Lyft / Uber. He does kill me. He was a well paid Dental Assistant, but he gave this up to drive.He says dad, my house is paid for and my cars are paid for - so I work as much or as little as I want. Plus his wife has a part time job. BUt his skill sets are under used.
Bottom line for me: $1500. Down total. Lease a car for $200. A month for two years, with no repair costs to deal with, etc...Why would I want to buy a new car , paying $300.+ per month for up to six years, and probably have to pay for repairs and upkeep along the way, as the car wears down? Makes no sense to me!!!No car is worth shelling out over$20,000 for it!
I've always bought however the last car I got I leased because it had such a high depreciation. One of the highest. Its a Jaguar and they tend to depreciate around 40% within the first year. Seeing as I wasn't sure I would still want the car after 3 years, I wanted a way out and didn't want to get stuck with a car that was now worth almost nothing. After taking that into consideration, calculating my lease payments, no money down, the value of the car after 3 years, I made out. If I financed I would have been upside down on my loan
Lease makes sense if there is enough lease incentive. You pay for depreciation, interest either buying or leasing.
Not interest
Love the accent. Love how he says "a veee-hickle' (vehicle) - Also, we use that term fleecing in Ireland too for being ripped off
There are a lot of sheep in Ireland.
@@buckbuchhagen726 😂
My question is about the cost of Maintenance. I own a car and it seems like I would have been getting the better deal but now I am paying for all the maintenance out of pocket and when I add up all the different issues I've had to pay for, leasing would have been the better option. How do you factor in the cost of service and maintenance on a car purchase vs lease?
I think the point is that Leasing must be more expensive otherwise the company offering the lease would not make a profit and would quickly go out of business.
I'm happy with leasing (renting). A car is NOT an investment. Leased all of my past 8 trucks. I like getting a new car every 3-4 years and having a monthly payment I can afford. Also, I've leased all Toyota Tacomas; one of the highest resale values on the road. My residual is ALWAYS less than the blue book value. I either sell them privately or trade in in early.....always over the mileage I'm allotted. I have always gotten into my new lease with ZERO money down and at a payment comparable to the current increase in inflation etc. I don't mind having a car payment...I add it to my monthly budget and I'm fine with it. Ramsey, I usually agree with your financial advise, but here we differ.
Dave Ramsey only cares about the financial details of a leased car. Your buying preference he couldn't care less about. If you want to lease, go ahead.
I knew a guy who lease a jaguar for $1600 a month. Everyone thought he made it in life until he went home to his section 8 apartment.
@DJ Ness you hate blacks, just say it outright
I love making money and I love saving it ... but sometimes I just want to splurge, even if it means losing a few bucks. Dave is right. Once you drive one of these new cars, you never want an older model again.
Dave is right this is expensive. If you lease a car you will get payments. Under a lease agreement you don't own the car The Bank does and if you don't pay them in 90 days they will repo your car. Scrappy will show up at your house with a wrecker and your car lands up at a parts auction TRY GETTING IT BACK! because 90% of all cars that get repoed never return to their owner because when a car land up on the auction block the only thing they want is the parts the car itself will end up as scrap. Don't lease your car! or you will get repoed if you don't pay for it.
He said cars not trucks right? I have seen tundras that are 10 years old and they “want” almost 20K for them....
I don’t agree with this leasing always makes sense I think. I lease all my cars. First of lease is cheaper then finance. But also during your lease all you maintenance and warranty is included anything that breaks on the car is not your responsibility. Plus if you want to buy the lease after the term you can and the car is a lot cheaper then buying it out right. I don’t understand why Dave things there a bad idea
A lease is a car rental. Period.
100 percent correct...been there done that and sold them myself. This is so true...there is "no interest rate", only tiers based on credit. Leasing is a scam regardless of what it is. Ownership is what you should always go for...if you cant pay cash FINANCE NEVER LEASE.
Guess I won't be leasing that Audi I've had my eyes on for the past few months. Glad I found this channel.
LiftOrGTFO if you plan on keeping your Audi less than 5 years you should absolutely lease it. Dave is a jack of all trades, master of none. Get someone who knows leasing to explain it to you and you will understand.
Audi's don't typically lease well as they don't subsidize or incentivize them much. They don't want to nor have to. Look at a $65 Audi vs say an $65k Infiniti and there will be upwards of a $200-250mo difference in lease payments.
ms3er it’s true.
Leasing luxury cars is more sensible than leasing normal cheaper cars. Luxury brands are hit even harder by depreciation. 2 years ago, I bought a 2014 Lincoln MKS Ecoboost AWD, fully loaded, for $19,800. 60k miles on it, when it was new the sticker price was 63k. Whoever bought that car probably took a huge hit when they traded it in to the Audi Denver dealership, and I got a loaded luxury sedan in great shape for the price of a new Kia.
@@robertboehme4375 I wonder of the "experts on leasing" are worth 20M or more....
Dave is just wrong for anybody who stays in or keeps their spouse in newer cars. No debt? Fine. One pay leases are even SMARTER for a depreciating asset. If I can plan my depreciation and take no risk of market fluctuations, accident depreciation, or unforeseeable, why wouldn't I? More so, when the residual rates are artificially high and I KNOW it won't be worth that in three years I'm going to pay significantly less than buying. There is a reason so many companies lease equipment and vehicles. This is a snobbish, know-it-all rant. Dave knows just enough about a leasing to be dangerous to his listeners.
1. I lease at $40k car for 3 years, that the dealership beleives will be worth $20k at the end of years.
2. To make the lease profitable, the dealersip leases it to me at a monthly payment that adds up to $25k at the end of the 3 years (thus having $5k more than what it should be valued then).
3. 3 years have passed. I have paid to the dealership $25k on a car that was orginally worth $40k, which is now worth $20k
4. Instead of giving the car back, I buy it outright. I owe the dealership $15k ($25k already paid during lease + $15k = $40k full price)
5. Then I immediately resell the car at current market price of $20k. Netting this all out, and without accounting for inflation, I've now spent roughly $20k depening on fees and other variables to the resell, to drive a $40k car for 3 years.
6. I begin a new lease with a new car and start the process over
or I could buy a $40k car to own and keep. Doesn't matter if I buy in full upfront or take out a loan. I'll have a $40k asset that will eventually depreciate to $0 or too a much lower resell price, that as it gets older, will cost more and more for maitanence and upkeep.
If you can afford the monthly lease, and have the adequate cash on hand to buy car at end of lease, then leasing makes soooooo much more sense than buying.
Another fact to consider when purchasing or leasing a brand new car is full coverage insurance. Unless you fork up the full amount you'll be required to purchase full coverage insurance, which can be hefty. I know people paying around $600/month total between note and insurance and prob only bring in $2k a month, which is insanity to me. Around last year(nov. 2016) I bought a 2002 honda civic ex with 110,000 miles for $2100. The owner was very meticulous with maintenance and all it needed was was a lower control arm costing $220 total at my trusted mechanic. So far the car runs like a clock with zero problems (just hit 128,000 mi. yesterday.) I know I can get another 100k out of it as long as I maintain it. Me and my gf pay $175/month in insurance and share the car. We have been truly blessed so far with our lil red Honda. Oh and btw, it gets like 37 mpg highway.
I don’t disagree that buying a car 2yrs old is a smarter option than leasing.......however, your argument concentrates on the cons and none of the pros of leasing. And your numbers are no where close to accurate.
Never replacing tires
Never replacing brakes
Never replacing a dead battery/alternator
Your car is always under warranty
Free oil changes and tire rotations for a lot of places so the dealerships know the cars have been properly maintained if given back.
Some people with young children prefer to have the piece of mind that their children are in a newer (safer) reliable vehicle.
Rideshare Consultant - All the parts you mentioned not needing to buy is simply due the limited miles you’re allowed to drive when leasing. Or, yes, you do in fact pay for all those things if you exceed your mileage allotted and begin getting charged per mile.
Oil change, do that yourself for $20-$30 and you can use top of the line filter and oil at that price. Tire rotation? At most, $30.
A lease if basically for your work commute, if you do any drivings on the weekend you’ll be playing the mileage game.
So, you are lazy and want someone else to do the work? Ok. You are paying for it buddy! Big TIME!
@K S Psst. I think Dave's anti leasing/financing message is meant for those that truly shouldn't be doing it and can't afford it as some of these callers show eg. "I make $25,000 and have a $45,000 car loan". If you make good money and have no debt I see nothing wrong with financing a new vehicle as a treat to yourself. I drove paid for junk for years, I deserve my new cars now, that I can afford.
@@JohnSmith-gs2rv That is how you remain POOR by being lazy and egotistical as you think it is "beneath you" to do menial work.
@@w8stral ure so arrogantly sure of urself....its pathetic..pitiful
100% right about leasing Dave. We liked the one-pay lease option (less cost of capital) for my wife's car until we found out half way through the lease that if the car was totaled, we would lose the payments made in advance. Right then and there, we bought it out of the lease with cash and haven't looked back.
What he negates is when you buy a car you are stuck dealing with repairs. Plus you have a car under warranty for about 5 years. With leasing you never have to worry about repairs. It's a little more expensive than buying, but maybe by 20 to 30 dollars a month. It's the hassle factor you pay for.
I bought a three-year-old former lease vehicle from a new car dealer with a cashier's cheque. The finance guy seemed really angry when he was doing the paperwork.
Love love love this series, I'm currently on the road to financial security, just 8 more months and no more debt!!! Thank you, its been a blessing finding this as a "Recommend watch" on you tube. Sometimes Bit data can indeed be a great thing. or I would of never found this. XD
I lease my business vehicles. It makes the most sense to me. I probably should mention that I own the leasing company too.
I like to lease a car because if I decide that I don't like the car I can give it back after 3 years. If I like the car then I buy it out with cash, keep it for two more years and sell it myself. I then lease another car. I only drive 10K Mi/Yr.
$150 a month to lease the newest car for near 100% reliability and the newest safety technology and features is worth the cost(to me). I'll practice frugality elsewhere that doesn't sacrifice safety and peace of mind. Similarly to buying whole, organic foods. I want to be alive and healthy when I retire and life is fragile.
I like listening to Ramsey but not so much when giving his opinion on cars. He says he's a car guy - well maybe, but he's a personal finance guy first so he's not a car lover like some of us are. Everyone has their passion, for people with a passion for cars, the money factor doesn't always have to be the financially wise move. It's a hobby. Just as someone might spend money to use a golf course which is a poor investment, some spend a lot on cars.
I always get aggravated when he says only those with a net worth of $1 million should buy a new car. That's the single most ridiculous advice he gives. Imagine if all of the public followed this rule, there wouldn't be any used cars to buy because very few new cars would sell!
Point is, just about ALL things are depreciating assets. All activities are just memories shortly after. Money is meant to be spent. Not too interested in living poor (with money) so that I can die rich.
While leasing means a constant car payment, it doesn't mean it's a scam or that it's always a bad idea. Everyone's situation is different and it works for some. Most of what you spend on a lease is the actual depreciation of the vehicle, not a whole lot more.
- JPL -
I bet you’re a person living paycheck to paycheck.
But what if the cost of the vee hickle is 100% tax deductible? Then maybe it matters less?
@@natas0733 If the lease payment is 100% deductible (as a business expense) then so is the depreciation of an outright purchase and all of the maintenance over the life of the vehicle.
@jpl i just stopped to say thank you to suckers for a new car smell like you that allow me to buy it 2 years later for 60% of the original price.
@@rusfit4106 no thanks I'm keeping mine
Dave, cars do not start to lose significant value until the car is out of warranty period. That could be anywhere from 3-5 years depending upon manufacturer. Also Lease cars are generally sold as CPO that come with warranty typically 7 years or 100k (whichever comes first) from original in service data. IMHO it is best to buy outright and keep it for as long as possible... This is generally 10 years for me
Bought 2005 Honda dc5 back in japan for 5k, lasted 5 years never had any issue. Still work like a charm still
I leased the car I couldnt afford and when I really really couldnt afford it my lease was up. Not all leases are stupid as he thinks. Got out of my convertible bumblebee without being penalized.
That's the definition of stupid and something too many people do-leasing a vehicle they can't afford. Without penalty? You paid the penalty in higher costs.
Depends on the consumer and the lease rate. For Ford it's usually 2.5% (interest). want new stuff every few years? Lease
Counterpoint...
Buy a BMW, it breaks down in 4-5 yrs and you're hit w a $15k repair bill vs lease a BMW and turn it back in after the 3 yr lease is up and save yourself the upcoming $15k repair bill.
Can pretty much guarantee leasing a luxury suv (bmw, Mercedes, Porsche) is cheaper in the long run than buying one of those great looking, great diving, money pits.
Not if you buy the 6 year 100,000 mile warranty--only $3,000 and will save you a lot
@@chadhaire1711 Try a $8000 or more warranty that is limited and only for certain models
@@stuna101a Try proving it.......you number is bogus
If you are rich and can swap luxury cars every 2-3 years while not being burdened and still prioritizing saving/investing for your future then yeah, go nuts on a luxury lease. The problem is thats not the case for the majority of leases. The exception doesnt define the trend.
@@codyh9155 you don't have to be rich. If you can afford a constant lease payment of a few hundred dollars your set. If you can't budget $300 a month for a car payment and insurance you've got bigger things to worry about.
Dave, you left out something very important. Dealers base the lease payment on the capitalized cost (cap cost) of the vehicle. They use MSRP or MSRP with an addendum sticker to driver maximum profit. If you buy a car at invoice, you can lease a car at invoice. If you absolutely have to lease a car (I never would), have them set the cap cost at invoice. Dave's right, you need to be a calculator wiz to make sure they are using your numbers, not their numbers. I'm with you, leasing is stupid.
I understand what fleasing is, and i dont lease, but what about if you look at it from a different perspective...what if it's not about impressing a stranger at a stop light, and it's all about safety? People who may not be able to afford to buy a car, but are able to lease a car...they may know that leasing is not the smarter thing to do, but for the sake of safety they get themselves into leases because a lease is still better than possibly losing a life. What about this perspective?? Would leasing then be okay??? Not everything should be about money, and wealthy people shouldn't be the only ones who reap the benefits of safety...something we should all be entitled to.
Your response is unbelievably convoluted. I can tell you in two sentences, why it is better to lease: The loss of value in the vehicle exceeds the total capitalized cost of the lease. There you go...Leasing is less costly than owning.
Im driving a 2017 Honda Accord. My lease is $98 a month, $0 down. It was a steal. I'm 20 years old, and I'm spending less on a brand new car, than what my last car was costing me. 3 year lease.
The Siege Cinema hoow ?
Johnny Bravo hamilton Honda in NJ. Their strategy is pretty cool. They lose money on me... but do you know how many people they've gotten in free advertisement? I've come alllll the way to UA-cam comments to tell you im in love with a car dealership. Isn't that nuts?
The Siege Cinema lx , sport or ex ?
definitely lx.. which is a POS
The Siege Cinema
I’m contemplating leasing me a Honda Accord.
Bottom line. Your always going to be paying for a car, anyway you want to spin it. If it’s payments or repairs it will always be there. Vehicles are a necessity. I would rather lease for 3 years and knowing that I have reliable transportation vs saving money to pay for one in cash and will have to deal with $500-$1000 in repairs per clip every few months.
I agree. Now a days it’s more costly to maintain the vehicle, and I don’t know anything about fixing a car either.
Car accident on a lease = early lease turn in
Car accident on a bought car = huge loss
Have you heard about things like Insurance?
Car accident on a bought car = $500 deductible. It's only a huge loss if you're broke.
@@anthonya606 insurance pays the estimated value, which decreases drastically once off the lot. That's how you get the huge loss...
News flash ‘’ Gap Insurance’’
That's why he calls it a fleece! I've been confused for so long 😆
The nicest hick "vee-hickle" is at 6:59
Leasing a car is great when you have the money to pay. Life is too short not to enjoy it. People focus on money too much, focus on how to be happy and economically stable. Everyone trying to die millionaire, that's dumb and this is my humble opinion.
yeah let me waste thousands and thousands of dollars for a car to drive for a few years then give it back, real smart. You gotta live life but leasing and car payments are for suckers.
I like leasing one vehicle that my wife and kids use and owning the other. It may be more expensive but with a lease I can get more safety features at a cheaper monthly cost than if I were buying outright. No savings are worth peace of mind with the family.
Brandon Dennis: Do you consider the surveillance on the newer cars?
@@williamroberts1693 huh?
@@williamroberts1693 ok boomer
I cant get over how ridiculous this comment is. But let's say you're right...someone at Mazda cares enough to freaking bug my car...if my other option is some mid 2000's junker with barely an airbag...yeah I make that deal in a heartbeat. I would trade every secret in my body if it gives my babies auto stop detection, lane swerve notification, curtain airbags, etc. Every. Single. Day. No questions. Nothing in my soul is worth risking them... Besides I have an Alexa within earshot of every room all Mazda has to do is ask Amazon what I want for Christmas...man this post took a turn, I didnt realize skynet is in my car...
@@brandondennis6433 Keep on sleeping sheep. What you think is safety is actually deadly. We are in this situation because of people that are too easy to manipulate with big words and empty promises.
Unless someone is offering you 0.0% financing they are just trying to, as Dave said, fleece you. Earlier this month I bought a used car from a dealership. Taxes in, it came to $11,500. The financing department was trying to convince me "not to spend all your money at once", to put a $7,000 down payment and pay the rest (interest included, of course) in $88 increments every 2 weeks. No, thank you! I paid it in full. No debt = more money in my pocket + less worries.
You think they aren't fleecing you with "0%" financing? I bought a new car 3 years ago and made it clear I wanted their best price because I was paying cash. And they gave me a very good price. Before I picked the car up I saw they were offering "0%" financing. I asked my salesman if I could get it instead, thinking I would invest my own money and use theirs. He checked with the finance guy who told him I would have to pay $1,000 more if I wanted their "0%" financing. Buyer beware whether buying or leasing. There is some misinformation about leasing and buyouts here. I lease my wife's car, I put nothing down because I have excellent credit and it keeps her in a safe, new car. But you have to do your homework either way or you can/will be fleeced.
$1,000 more for their 0% financing? Doesn't surprise me. All their taxes are factored in for their "special deals". I laugh when stores advertise that "they" pay the taxes. I'm happy, Ken, that you're one of those individuals that does his homework and doesn't get swindled.
Completely false... If you can keep your money, you do it every time. Especially when the stock market can give you better than the rate of borrowing. If you can get a 0% interest. You're the biggest idiot in the world if you paid for it cash.
Ken Speicher they weren't "fleecing" you. Go to any manufacturers website and you'll see an offer for %0 apr or X amount of rebates. It's very very rare a manufacturer will give you zero percent apr and a very large rebate... The selling price never changed.. You just lost the rebate.
@@TheDuclaw if you're buying something like 10k+ yeah but if you can pay cash and don't want full coverage it's better to not finance and save money in* the long run. Recently bought a 2007 Audi A4 2.0T Quattro for 6500 and didn't finance. This helped out in the long run since full coverage is ridiculous on these cars and one year of that would cost almost as much as the car itself did.
When vehicles are around 4 years old that is when I buy that used lease for 50-60% less.
Mark G Yeap, leases are generally a good buy, most of the time they're well taken care of because the persons who lease them know that they can end up paying a lot of money for cosmetic damages and mileage. So, for the rest of us who wait a little, we can get really good low mileage vehicles for a fraction of a new car
triky5384 Yeah, and if you stick with the more reliable brands your really getting a great used deal.
So it's a win-win for both the lessee and the buyers.
triky5384 just to off a different perspective... Well taken care of? Sure it may look like its in good condition. But do you realize how many people don't change their oil over the course of an entire lease? This is why I wont buy any lightly used cars anymore... So many people lease, and they have the mentality that they don't have to maintain it because its not their problem.
During my life I have bought 6 cars and leased 4 cars. One thing not mentioned in this video is the purchase tax. When you buy; you pay tax on the full purchase price and you pay it all upfront. When you lease; you pay a small amount of tax each month over the period of the lease and you don't pay as much tax. You only pay tax based on your lease payments..
I used to tell my ex-husband that he's basically renting a car when he came home one day with a new car that he insisted was better to lease.
Try carnivore diet and omad.
@@aliendroneservices6621HAHAHAHA!!
There is no car on the market that will have 70% depreciation after 3 years or 4 years lol what are you talking about.
10 fastest-depreciating cars, and what percentage of their value they lose after 3 years:
BMW 5 Series - 52.6 percent
Volkswagen Passat - 50.7 percent
Mercedes-Benz E-Clas - 49.9 percent
BMW 3 Series - 49.8 percent
Ford Taurus - 49.7 percent
Chrysler 200O - 48.4 percent
Volkswagen Jetta - 48.1 percent
Audi A3 - 47.9 percent
Cadillac SRX - 47.2 percent
Buick Enclave - 46.8 percent
Is it so hard to google that? That video is useless and doesn't explain anything about the lease.
It’s intended to appease his listeners that drive trash vehicles and make them feel good about it.
So basically you’re losing 50% of its value in the first 3 years itself.
@@allenpaul102 This is the most accurate comment I've seen on a DR comment thread...
The problem with your argument is that I can lease a car for a fraction of the purchase car payment. Example: current model Grand Cherokee, Lease $289 a month,24 month, purchase $460 a month 72 months. I accept I'm renting the GC but it fits my budget and I need a new car for my commute in the nation's worst traffic and our family outings.
Excellent advice...one that helps me as well. It's amazing how quickly we can put ourselves in unnecessary debt.
Meh - leasing isn't for everyone but it's worked out terrifically for me - never pay for repairs, always have something under warranty. Plus, you're not paying for profit - he's wrong about that.
And, always driving the latest tech and safety.
you joking right 🤔🤔🤔🤔. If you don't think you are making the bank and car manufacturers rich then you are really stupid. They won't be pushing leases if it wasn't making them rich and they wouldn't even be in business.
Just because you're making the manufacturer rich doesn't mean it has a negative impact on your finances. It all depends on your situation.
Caleb Pendergast in this case it does not matter the situation. Car leases are designed to take way more money from you instead of paying the car with cash up front. You end up spending thousands of $ more just use your calculator and do the math.
koolyo2foots all these youtubers be ripping off banks and stealing thei money!!! us people buying cars with cash have been doing it wrong!!!
Cars are a waste of money. Give me a new Civic every 12-15 years and Im done. Depreciation breaks down to like $1200/yr since a Civic that old still goes for about $3-4k. No used car worries and I know the car's complete history. Unless you have a major life changing event getting rid of a car that runs prefectly is just financially stupid.
Daniel B this was definatly my logic. I'm 26 bought my first new car 6 months ago. I will just keep the car for about 12 years then sell it. I was tired of fixing my old car being a 03 Jetta high milage yes wrong car choice and spending that money when I could just pay one payment and not have to worry about fixing it for another 160k like my old car other than routine maintenance
Oh man, I drove a Civic for 15 years. Never again. Not even for 3 years. I'm not committing to another long term ownership of not just a Civic, but ANY car.
Daniel B a civic fd '07-11 make is still relevant in todays market..reliable parts n handsome looks
TrollBuster why?
Explore with Rick Because:
1.- Repairs inevitably come up and they can run into hundreds of $
2.- I'm getting too old to do the repairs myself.
3.- I'll be driving on outdated tech and safety.
4.- The long term cost of ownership (10+ yrs) is close to the cost of leasing every 3 yrs.
5.- Leasing every 3 yrs is peace of mind - minimal maintenance, bumper to bumper warranty
6.- Leasing every 3 yrs puts you in the latest safety and technology
7.- You can still take the buyout at lease end if you really like the car
Sometimes they have ridiculous lease deals. Still worse than buying used cheap car, but if you want to have a new car lease might not be a bad idea.
Dave has never heard of the TILA, reg M, and reg Z regulations. All the costs of leasing are disclosed on the contract
The ad on this video is for a Chevy lease 😂😂😂
Posters have no control of the ads that associate worth their post. It ironic though.
Have bought and leased but prefer to lease (ok, 'rent'). I always lease a brand new car with zero down with zero interest (or close to it when possible), $250 - 300 per month for 3.5 years and only pay tax on the lease amount. If I buy a car outright I have to pay the full amount of tax and keep that car for at least 10 years to get my money's worth which will no doubt cost more in numerous repairs (no matter the brand) and now I 'own' an old car that is worth 'zip' in 10 years. Now I have to fork out even more in 10 years to replace it. It's all a matter of choice to either 'use' a car and keep more money in the bank...or 'buy' a car and have less money in the bank. If buying a car outright you need to sell your old car privately or you lose everytime.
Leasing is suitable for mostly people in the business world. If they own a business and lease a car, they get deducted taxes, and if you are hired by a company, the company can "lease" a car and provide it to you for you so you don't need to pay for your own car.
The Future you can write off way more if you buy a car . Can add up to a lot if you drive say 4000 miles a month like some uber drivers. you can write of 56 cents per mile us depreciation etc. If you lease i think all you can write off is lease payments and gas. plus a lot of leases you can only drive 10-12k miles a year which is nothing.
It depends on the business but in certain cases yes it makes more financial sense to lease
+J J In a business you can write off 100% of legitimate expenses, and that includes all expenses involved in a lease. In many cases, a business that uses vehicles will be buying a fleet, which would put them in a negotiation stance to get a deal on the batch, minimizing the "profit" exposure Dave speaks of. Furthermore, built into that "profit" is a warranty, which you can't always get on a used vehicle. Lack of a warranty exposes your business to additional repair costs and lost profit from a vehicle being out of service. Lastly, the tax code puts limitations on what is allowable depreciation on a vehicle. Topic 510 discusses that you should calculate both the actual expense deduction(which is depreciation, gas, tolls, registration, tires, oil, any expenses used against the vehicle) and the standard mileage deduction to see which one gives you the most. These days it's a rare exception that standard mileage doesn't come out on top. Like Sukun Paul mentioned, it's definitely not cut and dry and should be considered in context.
Having said that, if you're an individual, buying a new car(leasing or not) is stupid in itself unless you're filthy rich. The depreciation would kill your net worth even if you paid cash for it, and you're purchasing it with post-tax dollars. Corporate finance and personal finance are not even close to the same thing.
djd829 explain more of what you mean.
heya... Nissan Altima CVT transmission...complete garbage, as well as everything Chrysler. The cars today may be great superficially, but not for long when it comes to doing its main job
Vex the Altima is trash? I thought nissans were good?
You have to know residual values for your area & mileage driven. You also have to know what the dealer paid for the car also. With a lot of research you can get a good deal leasing, but all your numbers have to be good!!!