DavidZ

These are excellent points. In addition to the simple arithmetic issue that I've been raising, you add to that the fact that you're essentially subscribing to purchase a new car every 3 year or so (very expensive). Also, leasing arrangements are so complicated that the details (including, of course, how to calculate the opportunity cost of money) blow right passed the average buyer, while the leasing company understands the game very well. Just like buying a car from a dealer you're at a tremendous knowledge disadvantage from the outset. You're playing a game once every few years, while these folks play it every day.

I know some people who work at car dealerships. They tell me that the people who sell you financing make more money than the car salespeople. Think about that!

LexFinally

This was the Sears business model selling major appliances and furniture for decades.

mikemu30

Well I guess that model didn't work

E46CT

Here's an example showing it was cheaper to lease 3 cars than buy 1 over the same period of time:

https://leasehackr.com/blog/2021/6/2...rcedes-e-class

Keep in mind this example also assumes no maintenance, no unexpected out of warranty repairs. Absolute best case scenario for buying in this example.

Leasing varies from manufacturer and model. An Audi for example would lease poorly while a Lexus or BMW would lease extremely excellently!

Leasing gives an easy/convenient way of returning the car after the contract, no haggling, take an uber home. Or alternatively you just exercise the option to purchase. But I like the idea of getting something brand new tight and fresh every 3 years. For example the axle on my CT200h with 56k miles started clunking and leaking and the shock mount driver's side started knocking. Also at 60k most lexus shocks start leaking fluid. there's also the set of tires you'd need to inevitably purchase, trans service etc. As for my 2016 IS I leased, guess what happened as soon as I returned it and the new owner bought it? Water pump leaked. $2500 repair. I know cause Lexusdrivers left the car on my account and i logged in and saw the record. On the IS forums, many of the stock amps and/or headunit gives out, the DRLs too. not cheap.

i just skip ahead rinse and repeat. But I understand people like to keep their cars 15+ years.

E46CT

Also keep in mind Lexuses today don't age like your grandfather's 500,000 mile 1998 ES300. Today they have to compete with BMW, Mercedes etc, so they are loaded with options and modules that all have their own computers. LEDs, multiple amps, computer networks etc. So don't assume you'll be smooth sailing on a 2020 era model Lexus. just something to think about! Visit the forums and see how the new LS guys are doing........

LS500Fan

You got that right. I've had my LS500 for two years and I'm replacing it with a ES300h. Less things to go wrong in the long run. I had my seat massager fail twice, for starters... I don't trust turbos in the very long term either.

mikemu30

This debate will go on forever. Do what works best for you. You're not returning a leased car with bald tires though after 45K miles and not getting dinged for it..

E46CT

A shame too cause I've always been a fan of the LS. They have always been known for being absolute tanks in terms of reliability. But truth is that era where you can still offer something that simple and barebones is gone for all makes. Consumers today demand too much stuff in most cars, but especially the higher end stuff. We're getting to the point now where high end BMWs/mercedes are just as, if not more bulletproof reliable/durable than high end Lexuses because Lexus is just entering that world where cars have 50 computers/modules that are all networked, turbo powertrains etc while BMW/Mercedes has had a lot of practice.

The saving grace of the ES350/300h is that it's still relatively simple and built on the bread and butter high volume Camry architecture. so Camry reliability will naturally extend to us.

Then Toyota/Lexus has to go back to the drawing board with EVs now and how they can make a profit AND have them be reliable. Not to mention competitive.

glamglam

I agree with you. Leasing is better if you can avoid these expensive repairs that you mention here in your post.

UltraLux22

The debate will go on for certain. As long as unreasonable people want to continue defending their side, especially without having practical real world experience with respect to the side they are vehemently ridiculing, you are right about that! You are much less likely to read someone that leases making such bold absolute claims as others because they realize that for them, it works best and that for others buying is the sound choice. The bottom line is that a person needs to assess their needs and wants and make sound choices that fit them. Whether that be paying $50k in cash outright or getting a great APR on a loan or a fantastic lease deal. It all comes down to preference. The individual that paid 50 K out right is going to probably feel they got a better deal than someone who had to pay interest on a loan. You take 3 customers each using a different method for the same vehicle. 1 pays 50k. 1 negotiates the same car down several thousands but with financing will come out to around the same 50k and a lease customer that over let’s say a 5 year timeframe could likely have had 2 models but for argument’s sake say they likely wouldn’t have paid as much as the other 2 but they also don’t own the vehicles. So there is no equity but in reality many people are not keeping cars as long as their parents did. Needs and wants change as does everything. How many of us have purchased or leased and still wondered if that was the best we could do. That decision isn’t going to look and feel the same for everybody. It balances out to a decision between the brain the heart and the wallet and throw in a multitude of variables and you get a spirited debate about who did it best or cheapest. Let’s be real, we all understand what’s being implied.
But that wasn’t the original debate in this hijacked thread, again sorry OP! It was about which option was cheapest. Well the obvious answer is it depends. Depends on who is setting the metrics of the challenge and whether or not any of the hundreds of variables are factored and will come into play. Is it the 50k buyer who paid no interest or is it the person who finances but still had to pay interest or is it the one that leased? It depends. No matter which side of the fence you are on, any one that claims their way is best or cheapest there will be someone that will say their way was best. But saying it’s best for you is one thing, but making a proclamation that it’s the best for everyone is arrogant and self-righteous. And in my opinion, only further serves to expose the credibility of the one making the claim whether favorable or not! At the end of the day. I’m satisfied!

LexFinally

Cute, but false. It worked fantastically. Sears was the Amazon of its era into the '50s and '60s, the nation's #1 retailer by miles and a monstrous corporation with a presence in nearly every town and the power to abuse its third-party merchandise vendors much as Amazon reportedly does now. It was complacency and inefficiency that sank them, with the crowning blow applied by profit-taking sabotage from its own CEO Eddie Lampert. It wasn't the business model of profiting off installment financing.

LexFinally

History says they'll do it the same way they did it in the '80s when the market moved to FWD, and with other technologies: They'll let others do it first and debug it, and then they'll adopt it. Toyota is a very conservative and risk-averse organization, always has been, and after this much success they're not going to get a culture transplant now.

dklanecky1

Here's an example of how dominant Sears was in the 60's, the Newspaper ad shows my Dad, when he worked for Sears.

My point was to show the payment schedules were all financed by Sears, and they were making way more money on financing than on product.

glamglam

Those were definitely the good old days. The era of free love.

LexFinally

And if I remember correctly, like most retail store financing, those easy payments carried an interest rate over 20% APR. (Except then, there weren't even the financial disclosure laws yet in place to make them clearly disclose what the APR was.)