I wouldn’t make it to retirement driving a Prius day in day out. Ha!
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$180/mo misunderstanding, LOL.
I follow your logic, as I value not having any repair/maintenance concerns at this point in my life and the leisure of not really caring whether or not my car starts, but nearly 200 bucks a month is fairly significant over the long run. Most of us here grind for 1/10th that a month in hacking 
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Ha fair. I’m zonked and need coffee clearly
@overmotion Unfortunately I can not directly respond to your posts since you have deleted it.
A) I don’t have to sell the car and get another $20k ish car to realize the gains. However, you are right, I need to get a new to me car at some point and that will start the cycle of saving 180/month again.
B) you assume that no one will buy an old car, you may not want to do it but there are plenty of ppl that do, average age of cars on the road is just under 12 years. Carvana doesn’t sell cars that are old but they still buy them and sell in auction…much like any other dealer, really not an strange concept. Look up on Craigslist.
C)you assume that my car (Japanese made, Toyota Prius based car) will “croak” tomorrow, maybe it will, maybe it won’t. If that happens in 2 years, I will be still at the same 220/month in depreciation if I decide not to fix it, if it happens tomorrow same story but different math. Just because a car is older it doesn’t mean it will have catastrophic mechanical failure that will total that car. Most car problems these days are fixable, and for cheaper that you think. Unless you are in a German or exotic car.
I was able to plug in 180/month in savings to a compound interest calculator with a conservative 7% gain over 20 years, it will add to $88k, gains will be just under 100k with 8% rate of return. Keep in mind, That Figurestill doesn’t take into account that most ppl here pay for their leases with after tax funds and you can invest the above money before tax, so the real savings is much more than $88k.
My point was buying and keeping a car for an extended period of time is the most economical way, and it seems like you are in agreement with that albeit you may think savings are not worth it.
Best regards
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There’s a great thread somewhere on here where someone compared the actual costs of buying a cpo 3 series and holding it for 8 years vs leasing. It didn’t show a huge cash advantage to buying and holding over leasing new. Now, maintenance costs of a 3 series isn’t indicative of every vehicle, but it’s something to consider.
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U r probably right about 3 series, they are expensive to begin with, CPO prices add another 3k ish to the price for not much more warranty time.
I had a 2008 335i, leased it at the time. Hands down the worst car I ever had. Visited dealership every 2-3 months for various things, too much to list. My understanding is that Mercedes does better with their reliability and Audi is slightly worst. Porsche is probably pretty good overall.
A friend just picked up a 2015 E350 for 19k, it has 35k miles on it. If he is lucky with repairs and maintenance he will be driving a NICE car for less than the cost of the lease for 3 years and can probably sell it for 8-9k in 3 years. Not a unicorn deal btw
Buy it and keep it probably is not best recipe for German cars, it works pretty good for most trucks and Japanese cars however.
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Complexity also a factor. I believe it was a 335i which had the twin turbo. More moving parts, more that can break.
Even if it was reliable though: that awful iDrive!
I have a 07 328i that I kept for 10 years that I have very detailed records of. It would’ve been better off leasing, also it wasn’t car I am comfortable letting my kid drive while in college hundreds of miles away.
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Absolutely. The point though was that even the “buy and hold” argument doesn’t always add up to be a winner.
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One might infer then that leasing is most attractive in the near-mid luxury segment where residuals, rates, incentives and discounts maximize your purchasing power.
Not to say you couldn’t just perpetually lease a shitbox as a commuter. (Not for me: I spend enough time on the road that my vehicle is effectively my second home, so I splurge a little)
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I think your last line sums it up really well - there are definitely some savings in buying used and holding, and for many people (like me) the savings don’t seem to be worth it.
I was able to plug in 180/month in savings to a compound interest calculator with a conservative 7% gain over 20 years, it will add to $88k, gains will be just under 100k with 8% rate of return
This is true, in the same way that “don’t buy Starbucks! If you just save your $5 on Starbucks a day, that’s $1825 a year, and invested that would be a $x return over y years”. Yes it’s technically true, if you are a very disciplined budgeter. It isn’t true for 90% of people; they just end up spending it on some other thing. You could make this argument about any purchase ever, really.
Also, to note, in my original response I was comparing your 220/mo payment to a ‘regular’ volvo/lexus sedan 400/mo payment; it’s worth pointing out that so many people are getting great cars at a payment very close to yours. Just two months ago, people were picking up spanking new Volvo XC40’s at 250/mo.
My larger point is that referring to cars as an “asset” in which you have acquired “equity” is something a car salesman must have come up with, way back when. Cars aren’t an asset. They are a burning dumpster fire. They depreciate every month, and if you actually use them (and add miles to the odometer), they depreciate even more. They aren’t similar to a real asset, like stocks, bonds, or real estate. If cars are an asset with equity, I guess so are iPhones and college textbooks, because they can also be sold for something when you’re done with them. You can refer to them as an asset if you really want to, but they’re a pretty weak asset. I just think it’s a misleading term. Car salespeople sell families on the idea that once they’ve added a car payment to their monthly mortgage and stocks, they’ve finally achieved the holy trifecta of the American Dream Portfolio. Owning a car in any form isn’t a great financial move and the choice of buy new / buy used / lease should be viewed as “which poison would you prefer” rather than “lease bad; buy used good.”
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Yep, I don’t buy Starbucks either.
Just bc most ppl are not disciplined with their finances we can not rewrite the entire question, is it more economical to own an already depreciated car or lease a new one every 3 years?
Let’s have a car payment in form of a lease in perpetuity bc owning is not the way to go And I’m misinformed by some car salesman, to each their own buddy.
A car is an asset, a depreciating asset, you either pay for it as depreciation when you buy or in form of a lease payment forever…you know forever is a long time.
I am always amused by individuals complaining about rent and student loans and cost of living and not being able to save but they have the money to get $10 drinks in bars and $5 coffee, latest and greatest gadgets in form of iPhones and such…leasing shiny cars to make themselves happy for 3 weeks at a time.
This is a good video:
https://m.youtube.com/watch?v=t1NaDucAXIg&t=54s
Let’s agree to disagree and call it a night.
Best regards.
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You seem way too invested in this.
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If you have a recovering alcoholic as a bartender, you’re only going to be served water.
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As a serial starbucks overspender, I can agree to disagree.
No really: there are people with lower lease payments here than my starbucks tab.
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Even a broken watch is right twice a day…unless it’s a digital watch haha
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One could probably argue that a stopped watch is the only watch that’s ever actually right.
Dave Ramsey is an interesting one. There is a segment of the population with no financial knowledge that his advice is fantastic for. The problem is that it completely lacks nuance and applicability beyond that.
I also think that someone that made their money by horribly misusing debt and then suddenly took a near evangelical turn and now capitalizes on preaching finances inconsistent with his own approaches questionable. There are lots of things that he gets right, but his absolutist approach has some flaws when you have your finances under control.
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I could not agree more w your statement.
His teachings, regardless of how he came up with them, is targeted to the population that is financially illiterate. Or just illiterate.
Some ppl need to learn how to crawl at a later stage bc they were never thought to do so as a young adult or teenager, they can’t miraculously start sprinting when they have had bad financial habits for years.
I for one, never understood his “pay off debt before investing” preaching, he explains in details why he recommends that but also he is not open at all to any alternative route.
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I think this thread started out as lease vs buy for a specific car. If we are talking about how to save money on our transportation then one should just buy the most reliable car and keep it for as long as you can then leasing almost never make sense.
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Sometimes we lease because we only have a limited amount of time to live and its nice to splurge once in a while on a car. I am a person who personally likes driving so its not a matter of savings over time, but enjoyment in the ride and realizing that in the end we cant take anything with us when we die. Even if you save all that money, your assuming you will live long enough to enjoy it. I have both owned and leased cars and in the end, it depends on what you like.