Why are we comparing buying a car to a magical guaranteed 5% compounded interest investment? I do love the argument of opportunity cost from a false equivalence though 
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I supposed we could have invested the money and commuted by pogo stick.
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Donāt you have a high horse to commute on? sorry I had to 
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YRMV, My lease payments are paid with dividends. 
The 1% rule
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sarsasm on
My lease payments are paid with my gardenerās pocket change. 
sarcasm off
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We arenāt retired, so we keep nearly all of our dividend-paying securities in our retirement accounts for tax efficiency.
I wish I could say that everything is optimized for where we are in life, but Iām still learning and working on it.
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You could have taken these lease payments and invest in more div stocksā¦shhhā¦rookie! You just ride the Dow to workā¦
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Misconceptions
- itās any of their business
- they actually understand a utility contract where 100% of the risk is on the lender and 0% is on me
- they are Suze Orman or my financial planner. See 1 & 2
In my experience, atleast with cars that donāt see common typical major repairs, 2-6 years is the sweet spot for owning. Depreciation isnāt too bad and no major repairs or maintenance needed, except for the usual brakes + tires. Its typically at the 6-7+ year mark where you see some level of problems show up.
I have a 7.5 years Sonata, which isnāt a Toyata or Honda but still. First 5 year repair cost: $0. Last 2.5 years repair cost: $ 320. Total non-oil-change maintenance (60k and 90k): ~500
$21k-9k= $12k over 10 years. Thatās a cost of $100 per month. Find me a lease for that price.
The point is, sometimes buying is better. Sometimes not.
If It Appreciates, Buy It. If It Depreciates, Lease It. -Paul Getty
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Yeah. It only took me a few times getting bit by heavy maintenance or resale value drop from a new model coming out to get on board with leasing. Donāt get me wrong though, Iāve made money on lightly and heavily used cars as well but overall iād have to say iām even steven.
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All kittens become cats. As an experiment, perhaps you want to buy it out and report back with the total cost of ownership after 10 years?
If the OP is buying out, I would feel much better if they bought a CPO warranty, and that is just going to add to the cost. Feels like a good time to dust-off this gem: My Range Roverās CarMax Warranty Is Now Half Over And It's Saved Me More Than $6000
$12k over 36 months is $333.33 - thatās a pretty decent lease payment.
I assumed you rolled the dice and said no repairs were needed during these 10 yearsā¦otherwise your $100 may increase a bit.
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Those were trismās numbers not mine. Ask him about repairs. Iām just doing the math for you
Aside from oil changes/maintenance, we put one set of tires on it (and there may have been some wiper blades in there somewhere).
I donāt remember the exact cost, but remember these are Prius tires. Maybe $400 max, all-in, but I donāt think it was even that much.
Plus this car has another 10+ years of frugal vitality left (we sold it at 75k miles). We only got rid of it because I got a new car in June and my spouse wanted to keep our other ancient Toyota product (2008 RX350) instead of the prissy Prius.
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MotomanTV is one of my favorite enthusiast youtubers and recently posted this comparison of leasing vs buying over 20 year time frame. https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwit_dH07-nkAhWTHDQIHXEKBEoQwqsBMAB6BAgJEAQ&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3D8hBy-PhvJSI&usg=AOvVaw3jI26DizudE4Xksc5HY-qi
Makes a convincing caseā¦assuming everyone wants a Pilot, Camry, etcā¦However, Iām still leasing my next one.
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Heās not comparing the costs of leasing vs buying. Heās comparing the costs of acquiring a vehicle every 3 years vs every 5 and heās using a brand that notoriously leases poorly.
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I think the 2 year ādrivershipā gap, repairs in years 3/4, and variation in incentives across makes/models are definitely missing.
Still love watching him, even though Iāll be ignoring this advice.
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