this is the original post by you!

So my response was in reference to your statement. Buying is NOT always cheaper than leasing. That’s it. Any reasonable person would agree that statement isn’t true. It may be true some of the time. For arguments sake let’s say it’s true most of the time. Just not every time. So I stand by my previous assertion.

 

Leasing is a service provided by a third party. Instead of you buying the car, they buy it and rent it to you. They get paid for their service. Your cost is the price of the car plus the fee for their service.

It's a fairly simple concept. I don't know why you're struggling with it so much.

 

Leasing is ALWAYS more expensive compared to keeping a car longer than the typical three year term. As a lessee, you are eating the most expensive portion of a new car depreciation and after three years, you start all over again. The auto industry loves you!

 

I have a pretty good career and earn a very good salary but I could not imagine paying $50k in cash for a vehicle. To many investment opportunities out to blow that lump sum on a vehicle. I applaud your bravery!

 

First, to the OP, I apologize for the hijacking of this thread! It’s actually becoming humorous reading these responses and how it’s evolved into this diatribe. You can’t see the forest for the trees. You have partitioned the topic so far from where it needed to go and it’s pointless to continue.
You are trying to educate me about the leasing process and so on. You have no clue of my knowledge and acumen of the industry and that includes the lending aspects.
As substantive as this rant has been, I have no more tolerance for how far this side-track has diverged from the very simple topic. Nothing beneficial will come from continuing so I’m gonna unsubscribe. So I’ll let you have the last word because I’m sure you will take it anyway. With any luck, the moderators will close this thread too! Can’t squeeze any more blood from this turnip!!

 

I personally prefer buying over leasing, but I don't think one can make such a blanket statement as this. In theory, if the carmaker subsidized the lease more generously than the deal they were giving to cash customers (the Germans do this often), a lease customer in some circumstances could come out ahead.

And if you're saying that you bought your cars with cash, you forfeited the cash up front. In doing so, you forfeited the opportunity to invest that money or earn interest on it. If your lease rate was lower than what you could earn on that money, that's a profit opportunity lost.

Again, as a practical matter, I agree with buying. Just saying one can't generalize about everyone's individual situation.

 

As is often the case, very well said!

Your last sentence perfectly summarizes the primary point of my argument! It would have made the perfect TLDR intro.

I’m hard pressed to think of any situation where “always” is irrefutable. The only one that comes to mind is death. When you are dead, you will always be dead!

 

I can see situations where there are advantages to leasing. For example, you don't have to deal with the hassle of a trade in. But you have to pay the lease fee for that privilege. Also, that logic backfired with the increase in used car values. Leaseholders are being presented with the opportunity to buyout the lease at the end at a profit. If they either are unaware the underlying math or can't come up with the cash, they forfeit a huge profit to the leasing company. Keep in mind that the potential profit is not due to the lease. If your owned the car that profit would have been there as well.

Note that I didn't say buying is always better than leasing. I said buying is always cheaper than leasing. That's by definition, because when you lease, you pay a fee for the lease.

 

Not sure why you decided to take this discussion personally and then make it personal. That's unfortunate.

I made a statement. You attacked it. I defended it. And now you're saying that I "partitioned the topic, etc." Whatever.

 

I personally don't have a horse in this race. But in essence, you're arguing that some costs count under the word "cheaper" while other costs, such as opportunity costs, don't. That's splitting the hair pret-ty fine, IMO.

 

Thank you for the compliment. As for the statement, I just followed the old rule about true-false tests: If the question contains the word "always" or "never," the correct answer is "False."

 

Opportunity costs are way too complicated a topic to sufficiently address on a discussion board. Nonetheless, think about it this way. The leasing company is forfeiting the same opportunity, are they? Even so, they think it's a very good deal to fork out all that cash in order to provide you the lease. And they make enough money doing it to pay their overhead and pocket a nice profit. Nobody is in business to lose money.

 

The leasing company/bank also gets the benefit of the lease deals where the dopey lessee blindly agrees to the $499/mo payment with a hidden interest rate/money factor/whatever they call it exceeding 10%. Plenty of those I assure you.

 

I didn't try to "sufficiently address" them, and it's entirely unnecessary for purposes of my simple point. I simply said they existed. Are we agreed on that or not?

 

Of course. But I never even hinted that "some costs count under the word "cheaper" while other costs, such as opportunity costs, don't." as you stated. No meaningful analysis of leasing vs. buying would ignore the elephant in the room.

Granted, I did not address it the first time you brought it up due to the complexity. But when you brought it up again, I think I "sufficiently addressed" the topic within the context of a discussion forum like this.