[Efthreeoh]

Originally Posted by tekphobius

My boss sold his last business and made out with millions. He still will never buy new. I'll trust his judgement.

Used cars depreciate too. When you buy a used car you are paying for depreciation, don't kid yourself. Yup, you've paid less money for the used version of the car (vs. a new version of it), but it's still depreciated from being new. It's depreciated because you've added risk into the ownership equation.

[AiredaleDad]

Originally Posted by tekphobius

My boss sold his last business and made out with millions. He still will never buy new. I'll trust his judgement.

So, just hypothetically, does that mean if you really want a great, house in a nice, safe neighborhood, and can afford it, but your boss, who sold his last business for millions, says he only buys Mobile homes in a trailer park, that's what you will put your family into? You will buy a Mobile Home in a trailer park based on his personal preferences? That just makes no sense.

I only trust my own judgement. I may take advice from others. I will choose whether or not to follow that advice and make up my own mind. My son-in-law swears by Tesla and Apple. He says all SUV's are dangerous and roll over easily. He refuses to drive one. His father is a millionaire but only buys Toyota Prius', and says travel is a waste of time and money. He stays home all the time and has no life. I have both an SUV and an Android. I live overseas and my wife and I travel all the time. Yet we can all get along without having to blindly follow each other's ideals.

Get what you want. You can follow your Boss' plan, but know it's not your plan.

I have seen how some Lessees abuse their cars. And I have seen how some salesmen treat their cars during test drives. As long as I can afford it, I will custom order so I get a car that has never been abused or mistreated. Especially with a BMW.

[Ugly Kar]

Originally Posted by Efthreeoh

Used cars depreciate too. When you buy a used car you are paying for depreciation, don't kid yourself. Yup, you've paid less money for the used version of the car (vs. a new version of it), but it's still depreciated from being new. It's depreciated because you've added risk into the ownership equation.

Yes, but depreciation is not linear. Depreciation is somewhat logarithmic with most coming the first few years therefore financially it's almost always better to buy used.

That said, once I was able to afford it I've always bought new because I love the new car feel, smell and knowing I'm the only owner.

But I'll also never criticize anyone for buying used if that doesn't matter to them. After all, Warren Buffet has driven a 30 year+ old PU forever and Charlie Munger lived in the same house for 50+ years. Even a brand new $5 million house would be pocket change for either one of those guys. It's all about perspective and what makes you happy and I certainly have no problem with that.

[BMWCCA1]

Originally Posted by Efthreeoh

Used cars depreciate too. When you buy a used car you are paying for depreciation, don't kid yourself. Yup, you've paid less money for the used version of the car (vs. a new version of it), but it's still depreciated from being new. It's depreciated because you've added risk into the ownership equation.

Simple math: Depreciation on a $10,000 vehicle can't cost you as much as depreciation on a $120,000 vehicle. And what's the worst case of risk? $10k?

And then the 2013 BMW 128i M-sport stick I bought over 4-years ago off this group is actually worth several thousand more than I paid for it even 30,000-miles later. Plus, there is nothing made today that will do for me what the last normally-aspirated inline 6-cylinder BMW with hydraulic steering and manual-transmission can do—at any price!

[AiredaleDad]

Originally Posted by Ugly Kar

Yes, but depreciation is not linear. Depreciation is somewhat logarithmic with most coming the first few years therefore financially it's almost always better to buy used.

That said, once I was able to afford it I've always bought new because I love the new car feel, smell and knowing I'm the only owner.

But I'll also never criticize anyone for buying used if that doesn't matter to them. After all, Warren Buffet has driven a 30 year+ old PU forever and Charlie Munger lived in the same house for 50+ years. Even a brand new $5 million house would be pocket change for either one of those guys. It's all about perspective and what makes you happy and I certainly have no problem with that.

There is a flip side to that as well. A new car has a warranty. Anything that goes wrong is taken care of by the service department. A CPO usually has an extended warranty. Most non-CPO have nothing beyond the original warranty. The major depreciation happens for the first 3-5 years. After that depreciation shallows out, but also that's right around when the cost of ownership goes up. More parts wear out that are no longer under warranty and the new (used car) owner has to pay. Normally a new owner will not have to worry a lot about new tires, brakes, extended life service schedule like the 80K or 100K ones that tend to be more expensive as more drive and suspension parts and fluids like the Differential fluids require scheduled replacement. At 10 years the battery in EV's will have to be replaced. That is NOT cheap. The complexity of the High output ICE engines makes changing things like spark plugs a major chore. I had to pay $500 to change the spark plugs in my Range Rover for example.

So yes, buying a 3-5 YO used Bimmer is cheaper up front. However, keeping it working just as well as the new one will probably cost more than the difference in the long run.

[Efthreeoh]

Originally Posted by BMWCCA1

Simple math: Depreciation on a $10,000 vehicle can't cost you as much as depreciation on a $120,000 vehicle. And what's the worst case of risk? $10k?

And then the 2013 BMW 128i M-sport stick I bought over 4-years ago off this group is actually worth several thousand more than I paid for it even 30,000-miles later. Plus, there is nothing made today that will do for me what the last normally-aspirated inline 6-cylinder BMW with hydraulic steering and manual-transmission can do—at any price!

Exactly why it's value has increased. A rare occurance in the automotive world. I don't worry about depreciation because I keep my cars 15 to 20 years. Much better financially if one is concerned about depreciation.

[Efthreeoh]

Originally Posted by Ugly Kar

Yes, but depreciation is not linear. Depreciation is somewhat logarithmic with most coming the first few years therefore financially it's almost always better to buy used.

That said, once I was able to afford it I've always bought new because I love the new car feel, smell and knowing I'm the only owner.

But I'll also never criticize anyone for buying used if that doesn't matter to them. After all, Warren Buffet has driven a 30 year+ old PU forever and Charlie Munger lived in the same house for 50+ years. Even a brand new $5 million house would be pocket change for either one of those guys. It's all about perspective and what makes you happy and I certainly have no problem with that.

If you buy new and keep the car 15 years and 250,000 miles there is no advantage to buying a slightly used same model (i.e. a lease turn-in). When you buy new, you have a better advantage of keeping the car longer and to higher mileages because you can control the frequency and quality of the maintenance at an overall lower per-mile cost.

[Emily172013]

As I mentioned before, everyone has different circumstances. As far as depreciation goes, I'm in my 70's, have no children, so depreciation isn't even on the radar screen. Don't see how it can be much of an issue for anyone unless you change cars frequently.

[tekphobius]

Originally Posted by Emily172013

As I mentioned before, everyone has different circumstances. As far as depreciation goes, I'm in my 70's, have no children, so depreciation isn't even on the radar screen. Don't see how it can be much of an issue for anyone unless you change cars frequently.

It's not an issue of being able to eat the initial depreciation hit. More of a personal choice to not be the one to eat it.

[Gfit]

I always lease. Transfers the downside risk to the bank but I still retain the upside. Plenty of cash to buy but would never take the downside risk of ownership.

[AiredaleDad]

An upside to buying is that you OWN the car. You can do what you want with it. Live where you want. Modify at will without worrying about having to put it back to rights when you turn it in. You don't have to worry about any little scratch costing you at the turn in, or hoping some inspector doesn't notice something. I work for the Gov't, and can be asked to move overseas (Like I am now). If I was a Lessee I would not be able to take my car with me. And if I had to turn it in early I would likely have some serious penalties to pay.

Yes, I know not everyone is in my circumstances. Lots of people never go anywhere. But just sayin'.

[SW17LS]

Originally Posted by AiredaleDad

An upside to buying is that you OWN the car. You can do what you want with it. Live where you want. Modify at will without worrying about having to put it back to rights when you turn it in. You don't have to worry about any little scratch costing you at the turn in, or hoping some inspector doesn't notice something. I work for the Gov't, and can be asked to move overseas (Like I am now). If I was a Lessee I would not be able to take my car with me. And if I had to turn it in early I would likely have some serious penalties to pay.

Yes, I know not everyone is in my circumstances. Lots of people never go anywhere. But just sayin'.

These concerns are just a state of mind. You can still sell a leased car. I have never turned a leased car in, and I've leased many cars. I always trade them in, when you do that you don't have to worry about modifications of excess mileage or repairs. I keep my cars in perfect condition anyways so thats not an issue for me.

Most leasing companies actually will let you take the car overseas, you just need prior authorization, as you would a financed car. If you had to trade in or sell your leased car early because of a move overseas you will likely have negative equity unless its near the end, but you can accomplish that, you can also have someone else assume the lease, etc.

If you prefer "owning" a car, nothing wrong with that but the difference is really more in your head than anything else. After many years of leasing, I no longer think about mileage or modifications (I don't do many mods anyways, PPF, window tint etc), the experience of having a leased car vs an owned car is exactly the same to me.

[Efthreeoh]

Originally Posted by Gfit

I always lease. Transfers the downside risk to the bank but I still retain the upside. Plenty of cash to buy but would never take the downside risk of ownership.

What is the definition of downside?

[Littlecoupe]

I was always against leases for many years, but seeing that I have never kept a vehicle over 3-1/2 years (from new), leases started to make some sense. I ran the math and figured I'd be paying about 3K more for a lease versus payments for the convenience of just giving it back when I am done with it, which is usually the case for me as I tend to start disliking a vehicle after a couple years.

With that said, I've reflected on the fact I have had car payments for more than 15 years at this point, and now I'm just tired of paying monthly for a car. I am currently trying to keep saving here and there so by lease-end I can either buy the car outright and sell it (I'll be low on mileage, so I should have equity), or keep it if I actually like it. As of today, I don't think I'm keeping it.

Considering I like variety and would love the idea of a different car every few months if possible, used is just better for me. Considering I pay a LOT of depreciation payments per year, I'm certain I can still come out ahead with used cars further down their depreciation curve, pay for repairs, and registration/insurance changes when I want to sell and get something else in the used market. I've fallen out of love with new cars, I don't like "new car smell," and I'm tired of seeing my car come from factory "near perfect" and then the rattles crop up, scratches, dings, rock chips, etc. The joy of new is lost to me now.

[carseatsm5]

Originally Posted by Littlecoupe

I was always against leases for many years, but seeing that I have never kept a vehicle over 3-1/2 years (from new), leases started to make some sense. I ran the math and figured I'd be paying about 3K more for a lease versus payments for the convenience of just giving it back when I am done with it, which is usually the case for me as I tend to start disliking a vehicle after a couple years.

With that said, I've reflected on the fact I have had car payments for more than 15 years at this point, and now I'm just tired of paying monthly for a car. I am currently trying to keep saving here and there so by lease-end I can either buy the car outright and sell it (I'll be low on mileage, so I should have equity), or keep it if I actually like it. As of today, I don't think I'm keeping it.

Considering I like variety and would love the idea of a different car every few months if possible, used is just better for me. Considering I pay a LOT of depreciation payments per year, I'm certain I can still come out ahead with used cars further down their depreciation curve, pay for repairs, and registration/insurance changes when I want to sell and get something else in the used market. I've fallen out of love with new cars, I don't like "new car smell," and I'm tired of seeing my car come from factory "near perfect" and then the rattles crop up, scratches, dings, rock chips, etc. The joy of new is lost to me now.

If you really like new cars you might consider lease takeovers like from swapalease.com. Get into a lease with all the advantages but someone else has eaten the initial down on it.

Otherwise yes you’re seeing the big picture. Once you zoom out to consider what a lifetime of leasing costs you then you really see it’s rather brutal financially. Of course you are getting something for that money but should be clear-eyed about just how much it costs and if it’s worth it to you.

[SW17LS]

Originally Posted by Efthreeoh

What is the definition of downside?

Risk of resale value, loss of value due to accidents etc.

Originally Posted by carseatsm5

Otherwise yes you’re seeing the big picture. Once you zoom out to consider what a lifetime of leasing costs you then you really see it’s rather brutal financially. Of course you are getting something for that money but should be clear-eyed about just how much it costs and if it’s worth it to you.

Yes its very expensive but so are many other enjoyable things. Its all about what is of value to you.

Lots of people own boats, I don't want a boat. Lots of people belong to Country Clubs, I don't. Lots of people have huge houses or second and third homes, my mortgage is less than 10% of my monthly income. Lots of people take lavish multi 5 figure trips, we go to the beach and Disney World...what I enjoy are high end new cars. So...thats what I choose to spend money on.

[ShocknAwe]

Lots of justification happening in this thread.



It's your money. Do what you want. Theres an example of any of the car acquisition methods they make sense for someone out there, down to even 100% financing a brand new car, even if its not financially recommended.

I don't have any "car payments" but I've spent probably the same amount I would have otherwise on maintenance and modifications. Why? Because I wanted to so I did. Some folks like selling cars they bought, some folks like swapping cars on forever lease trade ins, some people like to own to drive the wheels off. Etc.

You're not gonna convince people to magically see the light.

Here's some judgement: a picture of your fictional cat would be a better use of your time than discussing this around in a circle again.

[328dabi]

Because it costs less to lease than to finance. You are always in a new car with the latest safety features and technology, the bank takes the risk on depreciation.

Most buyers get a new car every 4 years or less. When you finance you are typically upside down on your loan for that entire period and are paying more monthly then if you were to lease that same vehicle.

Majority of wealthy people lease as it’s more cost efficient. Car is always under warranty during your stewardship as well.

I currently own both cars outright, but majority of my daily drivers have always been leases. My track cars and toys are a different story for obvious reasons.

[AiredaleDad]

Keep in mind not everyone finances 100%. I usually put 40-50% down. That way I avoid GAP insurance. AND i avoid being upside down in a depreciating asset. SO I can always sell and recoup some of my money.

The real reason wealthy people lease is because they don't mind the higher payments, and want a new car every couple of years. They could buy it if they wanted to. But they just don't care to.

The real reason poor people lease is because they can get into a car they otherwise can't afford to buy. So they can pretend they are wealthy people. A retail Cellphone store manager can't really afford an M3. HE wants chicks.

Exceptions: Corporate Executives. They lease because the company pays for it, as a perk. And the company wants to control what image they are projecting to other companies of the type of people they hire.

[Efthreeoh]

Originally Posted by SW17LS

Risk of resale value, loss of value due to accidents etc.



Yes its very expensive but so are many other enjoyable things. Its all about what is of value to you.

Lots of people own boats, I don't want a boat. Lots of people belong to Country Clubs, I don't. Lots of people have huge houses or second and third homes, my mortgage is less than 10% of my monthly income. Lots of people take lavish multi 5 figure trips, we go to the beach and Disney World...what I enjoy are high end new cars. So...thats what I choose to spend money on.

Is not the impact of vehicle damage (or excess miles) at the risk of the lessee at the end of the lease upon vehicle turn in? Essentially the resale value of the vehicle is diminished if during the lease the vehicle is in an accident and the lessee pays the difference between the vehicle real value (from damage) vs. the residual value determined at lease initiation.

Banks are about the most risk-adverse institutions there are.

Your 2nd paragraph is well said.

[pdxgardener]

I leased my last car, Mercedes GLA 45, the 382hp 2L AMG chunky hatchback. It was a pretty sweet car but it didn't feel like a 'forever' car, so it felt less risky to lease it. It was like dating the car.

During the lease, the car had two small city accidents. I could just walk away from the lease without any consequences or hit to resale value (ex was rear-ended by a box truck, and I rear-ended someone who braked hard unexpectedly while I had fresh, not-yet-bedded-in pads with shitty cold bite, rookie mistake). I drove it like I stole it and tracked it hard knowing long-term wear wasn't my problem. I also returned it with a bent rim ($1k OEM) and nobody even noticed. They did a 2 minute walk around at lease return, checked mileage, then we signed papers and I shed that responsibility forever. They never asked about diminished value; I could have pocketed that money if I'd filed for it.

Leasing was an annoying choice for the consumables because it didn't feel like my car. I went through 3 sets of tires between track days + winter tires, 2 sets of brake pads and one set of rotors all around. Timing didn't line up well for final-year track days so the tires and brake pads were fresh. I paid for the lease protection anticipating that I'd return it with bald tires. I also left behind a small amount of positive equity, but it would have been too much work and Carfax risk for just $2-3k in private sale capital gain or near-flat trade-in value.

Now I'm waiting for a G80 custom order. I plan to buy it because I hope it's a forever-ish car (5-8y). Plus I want to make small changes and buy a dedicated set of wheels for seasonal tires (winter/track).

[UPSROD]

Originally Posted by AiredaleDad

Keep in mind not everyone finances 100%. I usually put 40-50% down. That way I avoid GAP insurance. AND i avoid being upside down in a depreciating asset. SO I can always sell and recoup some of my money.

The real reason wealthy people lease is because they don't mind the higher payments, and want a new car every couple of years. They could buy it if they wanted to. But they just don't care to.

The real reason poor people lease is because they can get into a car they otherwise can't afford to buy. So they can pretend they are wealthy people. A retail Cellphone store manager can't really afford an M3. HE wants chicks.

Exceptions: Corporate Executives. They lease because the company pays for it, as a perk. And the company wants to control what image they are projecting to other companies of the type of people they hire.

Another reason that rich people lease is when they get sued they don't own anything that can be attached!