One thought experiment worth conducting these days is to assume this is the new normal. Banks are fully aware of just how much consumers are willing to pay to lease cars. Now that that cat is out of the bag, it’s not going back any time soon.
So compare the total cost of:
(A) doing 2 of these leases over the next 6 years.
Versus
(B) buying the car and extending the warranty to 6 years. You’d own all the equity. Your depreciation would be (purchase price + TTL - the value of the vehicle).
At point, we might as well as shut down leasehackr and make another website called finance-hackr.
Anyways, althu the depreciation curve flattens out year 3-6, the other maintenance costs go up.I made the spreadsheet myself to compare purchase vs lease.For many cars, purchase is definitely better and Im leaning that way myself. But as someone who likes to swap out cars more frequently, thanks to CA’s stupid tax rules, its a toss-up at best.
I think now the question isn’t so much if purchase is better, it is a lot of time but the question is by how much. I don’t mind spending an extra XX per year to be able to swap cars every 2-3 years. Everyone needs to determine what that XX is for them. Finding the cheapest option isn’t always the best.
Competition will surely bat this down, unless mass collusion takes place.
At some point Volvo will tempt a BMW customer, BMW have to react …Toyota will tempt a Volvo customer…etc…etc…till we’re back to where we were
There will always be those who are happy to spend to get what they want… there will be many more though, who will take the step down to get what they perceive as value and as long as there is profit in providing that value, people will flock to it, leaving the overpriced crap scrambling to catch up
Right now purchase makes way more sense. At least it seems for almost everywhere but California. I just had someone here ask me for 4% off plus buy rate on an X7 and it’s almost an auto ignore aside from a courteous email. We’re selling all our cars at MSRP without issue as builds or before they arrive.
I’ve leased for basically all of my adult life and I’m trying to sober with the fact that I might have to actually purchase one of these things which terrifies me. Going for a trade-in and needing to put down $7,000 to break even or roll that into a new lease as a cap increase or something. I got bait and switched on my very first lease back in 2005 when I was ignorant and I had to roll forward a $5,000 into the trunk of the next lease. Never again.
