Why are Lease Deals Frowned Up Particularly on Prestige Cars
Discussion
T1berious said:
unless you're driving an appreciating classic we're all driving dead cash no matter how you finance it.
Totally agree.I've always paid cash for my cars. This is a personal choice that works for me. Mostly I doubt it's even financially sensible, but I've never liked owing money on something with a plummeting asset value. But it's totally a matter of personal choice.
drainbrain said:
I think the cash buyers and the buyers-with-finance etc think about things in quite different ways. Personally I'm in the latter camp. A simplified version of how I think about cars is that I'll spend a certain %age of net income financing them. Works well for me and I doubt it'll ever change. I'd never consider either saving up for a car or spending a lump sum buying one. Explaining the reasoning isn't easy, but, imagine spending the money you would have spent buying the car on something which produces enough money to pay for the finance of that car. At the end of the finance period you've still got the 'something'. So in drainbrain logic the car hasn't really cost you anything at all (apart from the so-called 'opportunity cost' which the cash buyer always loses anyway).
It isn't lease deals themselves that are frowned upon, it's the kind of convoluted reasoning some people use to argue that leasers are always more financially savvy than cash buyers. In any case the whole discussion usually turns into an argument about the cheapest way to run a new car for 2 or 3 years then change for another brand new one. Which is about as sensible as discussing the least fattening way to eat doughnuts or the safest way to play Russian roulette.
The classic exchange goes something like this.
"I finance through a lease rather than buy with cash because the lease deal works out less than the depreciation on a brand new car."
"But if you're that bothered about depreciation why not reduce it by buying the car when it's 2 or 3 years old."
"That's no good, the interest rate is higher on used cars."
"But that's irrelevant if you pay cash"
"Oh no, I always lease because it's cheaper than the depreciation would be on the same car."
Everyone harps on about the cost of the depreciating asset whether purchased outright or leased. We tend to very easily forget the benefits. That bought/leased car will enable most of us to be gainfully employed and have a family/social life.
Leasing is better for some people. Not all of us are mechanics, not all of us have the time to fettle a shed every weekend and the lure of a warranted new car every 3 years beats the hassle and worry of a shed. Most of the uber-reps doing 50k+ a year will do so in new cars.
Leasing is better for some people. Not all of us are mechanics, not all of us have the time to fettle a shed every weekend and the lure of a warranted new car every 3 years beats the hassle and worry of a shed. Most of the uber-reps doing 50k+ a year will do so in new cars.
vikingaero said:
Everyone harps on about the cost of the depreciating asset whether purchased outright or leased. We tend to very easily forget the benefits. That bought/leased car will enable most of us to be gainfully employed and have a family/social life.
Leasing is better for some people. Not all of us are mechanics, not all of us have the time to fettle a shed every weekend and the lure of a warranted new car every 3 years beats the hassle and worry of a shed. Most of the uber-reps doing 50k+ a year will do so in new cars.
I paid less than £5000 to buy my car outright 6 years ago. It had 60,000 miles on it then and I've doubled it since, apart from routine servicing and checking fluids I've fitted one new battery and changed a wheel. Just because a car is already run in doesn't mean you spend every weekend under the bonnet, maybe 2 minutes to check the fluids which you would do on a new car anyway, perhaps 10 minutes to change the battery. No hassle, no worry, no hundreds of pounds flowing out of my bank account every month. Leasing is better for some people. Not all of us are mechanics, not all of us have the time to fettle a shed every weekend and the lure of a warranted new car every 3 years beats the hassle and worry of a shed. Most of the uber-reps doing 50k+ a year will do so in new cars.
Of course I could lease a new one, local dealer advertised a £6000 deposit then £250 a month for two years and 16,000 miles total. But I'd probably keep the old one to drive once the lease one had gone back.
Dr Jekyll said:
I paid less than £5000 to buy my car outright 6 years ago. It had 60,000 miles on it then and I've doubled it since, apart from routine servicing and checking fluids I've fitted one new battery and changed a wheel. Just because a car is already run in doesn't mean you spend every weekend under the bonnet, maybe 2 minutes to check the fluids which you would do on a new car anyway, perhaps 10 minutes to change the battery. No hassle, no worry, no hundreds of pounds flowing out of my bank account every month.
Of course I could lease a new one, local dealer advertised a £6000 deposit then £250 a month for two years and 16,000 miles total. But I'd probably keep the old one to drive once the lease one had gone back.
I completely agree with you. There is a happy medium between leasing and shedism. I have a leased car for work and rather than buy brand new cars I have 2 used cars for Mrs V. and myself.Of course I could lease a new one, local dealer advertised a £6000 deposit then £250 a month for two years and 16,000 miles total. But I'd probably keep the old one to drive once the lease one had gone back.
Martin_M said:
You could be dead tomorrow, if you can afford to lease/buy it and that's what you want then do it.
You see, this is the exact attitude that I cannot fathom. Statistically, you will not be dead tomorrow. Or the next day or the next. But rather, you will live a very long time and much of that time without any income from working. Living your life as if you'll be dead tomorrow has worse odds than the lottery. If someone spent everyone single penny they had on the lottery one would be fair in thinking they were losers and also mental. It's absolutely fine to think like that if you are a homosexual or a DINKY but statistically most men will have to pay for a couple of kids, a wife, a house, holidays and all the trappings of life and most importantly, save enough to tide them over once they stop working because statistically most of us will firstly stop working before 60 as no one hires old people and secondly live to around 80.
Now, I see a lot of household data on things like debt, expenditure, savings etc and the most common theme in the UK is that the money that should be being saved for old age etc is being spent financing consumables that are not commensurate with the income level. Cars and credit cards being the two most common elements.
Debt is so easy to sell and wrap up to fool people that most don't ever realise that they are spending far more than they should.
Edited by DonkeyApple on Saturday 4th July 10:47
A problem with the discussion is that the observation that leasing can tempt you into polling more cash into a car than you might do otherwise is a point in principle. Typically these discussions end up talking about specific cases were leasing is either working for an individual or is not working for an individual, those discussions will never deal with the original observation and therefore the discussion rolls on.
If you cut out that and look at leasing in principle, then you can have a more general discussion which looks at broader issues around debt. Which might look at how the figures are presented and how the debt is sold.
If you cut out that and look at leasing in principle, then you can have a more general discussion which looks at broader issues around debt. Which might look at how the figures are presented and how the debt is sold.
DonkeyApple said:
You see, this is the exact attitude that I cannot fathom.
It's absolutely fine to think like that if you are a homosexual but statistically most men will have to pay for a couple of kids, a wife, a house, holidays and all the trappings of life and most importantly, save enough to tide them over once they stop working because statistically most of us will firstly stop working before 60 as no one hires old people and secondly live to around 80.
Now, I see a lot of household data on things like debt, expenditure, savings etc and the most common theme in the UK is that the money that should be being saved for old age etc is being spent financing consumables that are not commensurate with the income level. Cars and credit cards being the two most common elements.
Debt is so easy to sell and wrap up to fool people that most don't ever realise that they are spending far more than they should.
Genius post; thread closed.It's absolutely fine to think like that if you are a homosexual but statistically most men will have to pay for a couple of kids, a wife, a house, holidays and all the trappings of life and most importantly, save enough to tide them over once they stop working because statistically most of us will firstly stop working before 60 as no one hires old people and secondly live to around 80.
Now, I see a lot of household data on things like debt, expenditure, savings etc and the most common theme in the UK is that the money that should be being saved for old age etc is being spent financing consumables that are not commensurate with the income level. Cars and credit cards being the two most common elements.
Debt is so easy to sell and wrap up to fool people that most don't ever realise that they are spending far more than they should.
I just think that one day we will all expire, cars are not that important in the scheme of things but in context of the thread, why spend your live in something crap that gives you agro when for a monthly outlay, if you can cover the payments without impacting other areas of your life negatively, then lease a nice new car.
Also, the buying for cash thing, not sure why that demonstrates worthiness, I know people with nice cars who have bought them solely from money earned from inheritances, they can afford it but only because someone expired, my own car was partly financed in that manner, so if someone works hard and earns good money are they not entitled to drive something hard decent just because they have not saved up ?
Sometimes life isn't fair, sometimes people have nice stuff despite having no function in society or redeeming features, Kim Kardashian has no actual point I can see but can afford anything she wants.
Also, the buying for cash thing, not sure why that demonstrates worthiness, I know people with nice cars who have bought them solely from money earned from inheritances, they can afford it but only because someone expired, my own car was partly financed in that manner, so if someone works hard and earns good money are they not entitled to drive something hard decent just because they have not saved up ?
Sometimes life isn't fair, sometimes people have nice stuff despite having no function in society or redeeming features, Kim Kardashian has no actual point I can see but can afford anything she wants.
Edited by J4CKO on Saturday 4th July 11:18
Dr Jekyll said:
It isn't lease deals themselves that are frowned upon, it's the kind of convoluted reasoning some people use to argue that leasers are always more financially savvy than cash buyers.
In any case the whole discussion usually turns into an argument about the cheapest way to run a new car for 2 or 3 years then change for another brand new one. Which is about as sensible as discussing the least fattening way to eat doughnuts or the safest way to play Russian roulette.
The classic exchange goes something like this.
"I finance through a lease rather than buy with cash because the lease deal works out less than the depreciation on a brand new car."
"But if you're that bothered about depreciation why not reduce it by buying the car when it's 2 or 3 years old."
"That's no good, the interest rate is higher on used cars."
"But that's irrelevant if you pay cash"
"Oh no, I always lease because it's cheaper than the depreciation would be on the same car."
Bad argument. The correct argument to "But that's irrelevant if you pay cash" is. If I have cash to buy the car then I can invest that as a lump sum and defray the costs of the lease.In any case the whole discussion usually turns into an argument about the cheapest way to run a new car for 2 or 3 years then change for another brand new one. Which is about as sensible as discussing the least fattening way to eat doughnuts or the safest way to play Russian roulette.
The classic exchange goes something like this.
"I finance through a lease rather than buy with cash because the lease deal works out less than the depreciation on a brand new car."
"But if you're that bothered about depreciation why not reduce it by buying the car when it's 2 or 3 years old."
"That's no good, the interest rate is higher on used cars."
"But that's irrelevant if you pay cash"
"Oh no, I always lease because it's cheaper than the depreciation would be on the same car."
Tractor lad said:
I always find the "I can invest elsewhere" argument amusing.
Can the financial geniuses suggest place to invest our healthy pot currently mostly in ISAs earning sweet FA? Many thanks.
+1Can the financial geniuses suggest place to invest our healthy pot currently mostly in ISAs earning sweet FA? Many thanks.
If that argument is correct, why bother with the car at all? Why not just borrow to invest?
Dr Jekyll said:
Tractor lad said:
I always find the "I can invest elsewhere" argument amusing.
Can the financial geniuses suggest place to invest our healthy pot currently mostly in ISAs earning sweet FA? Many thanks.
+1Can the financial geniuses suggest place to invest our healthy pot currently mostly in ISAs earning sweet FA? Many thanks.
If that argument is correct, why bother with the car at all? Why not just borrow to invest?
swerni said:
You're quite happy to rent a house but not rent a car ?
I'm not particularly happy to rent a house or pay for a mortgage. But I simply couldn't afford to pay cash when I needed the house so the choice didn't arise, it wasn't a question of having cash in the bank but believing that paying interest was somehow a shrewd move. I will certainly pay off the mortgage as soon as I can though.I love these threads. Each to their own, but I'm regularly amazed how people are happy to spend thousands to 'rent' a car. I suppose this is a car forum though and it's a free country 
People always used to talk of renting a house as 'dead money' (paying someone elses mortgage for them to eventually own the house) - I see lease deals in a similar way way, I can't see how leasing is the most economic way to run a car.
The trouble is though these threads usually degenerate into "why do you care how I buy a car", "I can afford £250 per month", "why don't you just buy a 3 year old car with a bank loan" , "you've got a mortgage haven't you it's the same thing" etc,etc and stray from the economics of the different approaches. Can someone good at maths knock-up a spreadsheet or something to answer this question once and for all?
People always used to talk of renting a house as 'dead money' (paying someone elses mortgage for them to eventually own the house) - I see lease deals in a similar way way, I can't see how leasing is the most economic way to run a car.
The trouble is though these threads usually degenerate into "why do you care how I buy a car", "I can afford £250 per month", "why don't you just buy a 3 year old car with a bank loan" , "you've got a mortgage haven't you it's the same thing" etc,etc and stray from the economics of the different approaches. Can someone good at maths knock-up a spreadsheet or something to answer this question once and for all?
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