**Quickly googles how to open and run a repo company** hehe

 

Once I was watching fake bounty hunters and repo guys on YouTube. It's amazing how staged so much is today and how it's possible, thanks to gimbels, smartphones, etc. And it all leads to free stuff the more subscribers these folks have!

But I did see Parking Wars on Staten Island. The tow took the FWD car right out of it's head in space, when it's wheels were turned completely to one side. Which is why I would never want any of my vehicles towed. Woman ran out and read the driver the riot act. Kid was on his way to a NHS induction and now they would be late! I don't think the driver knew what NHS was, he couldn't spell it...

 

Leasing is still the most expensive way to operate a car.

 

True, but life isn't always about finding the cheapest way to do things. I don't recommend leasing every 2-3 years for the rest of your life but for certain people and under certain circumstances, leasing can make sense. Leasing is somewhere around 40+% of "sales" for a reason.

Like every comfort and convenience in life, it costs money. That means always having a warranty, never needing a repair out of pocket (except for at fault, non-warranty repair), the luxury of the latest features, the latest safety, latest style - and always new condition, piece of mind reliability, and while there's constant payments, the payments are significantly lower than purchase payments.

 

To me, the biggest problem with leasing is that most people who lease don't see it this way. They just see the cheaper payment. There's no one-size-fits-all; but too many people go into this process (and many other things) without having done their homework.

Which just goes to show why auto loan defaults are up.

 

 

Usually, when the lease-contract is up....which, depending on the specifics of the contract, is anywhere from 2-4 years. At the local Lexus dealerships here, for example, it is usually 27 months.

One can, if desired, get out of the contract early, but, in most cases, will take a bath doing so.

 

 

Respectfully, that's sometimes true but it's not universally true.

Perhaps the more accurate way to put it is that if you don't do the homework before you buy and you don't do the legwork as you buy, then it's likely you're going to pay more than you could. That's true no matter whether you are paying in full, financing or leasing.

Some leases, for example, are based on subvented residuals where the manufacturer consciously sets the lease residual at a number that's higher than the actual predicted value at term. Additionally, money factors can be subsidized too. And finally, your actual purchase price should be the same/in the same ballpark regardless of how you choose to finance. My own view is you should always, always negotiate the purchase price and make no mention at all of how you plan to finance until the sale price is agreed. And of course you should never entertain any discussion at all around payment expectations if you are planning on financing or leasing,

There's also the tax aspects to consider. If we're discussing leasing it's more likely than not that we're talking new cars. It varies by state, but in most cases you're on the hook for sales tax on the purchase price (plus rebates in some cases). With a lease, in most states the sales tax is calculated on the payment. Some front load, but most do not.

I'd simply say that there are good deals and bad deals, that good or bad deals are not specific to one financing model, and that a vigilant, prepared customer is more likely to pay less in all cases.

 

So what were you asking, then....when it's time for stop repeat-leasing and start purchasing again? That is a complex question (we could do a whole thread on that issue alone, if desired)...and many different factors and issues are involved. No two person's budgets (and expenses) are exactly alike.

 

 

Agreed that many lessees are just chasing the lower payment. No doubt they enjoy all the benefits I listed but if you lease because you can't afford to pay new car payments to own, then you can't afford to lease (or buy a new car for that matter).

If you compare simply monthly payments, a lease payment is actually less than a payment on a ridiculous 84 month loan. People see that and think, hell, leasing's the better deal.

Like I said, I don't generally recommend leasing, especially long term cycles. But to answer that question, certainly when one retires, I would hope they wouldn't think to continue leasing unless you're retiring with a lot of wealth.

 

 

Not that it's any of my business, but if it is relevant or you want to discuss it, why would she want out of the lease if her company was paying for it as an allowance? Is she getting another job, simply losing the perk, retiring, or moving on to a different company? If she actually uses the vehicle for business-related purposes (and pays taxes as an American citizen), she can also deduct the lease payments from her taxable income. Canada may or may not have a similar law...I don't know.