Thanks, that was my suspicion. I was reading an article today about the migration from owning to leasing and that question popped into my mind. Even though I can afford to buy cars, at my age the next scheduled purchase would be in my late ā80s and it might be wiser to just lease for a couple of years at a time. Weāll see. My early 20s granddaughter has already put dibs on my Bullitt... Bruce
Hi - Thanks for replying. My original question was strictly a curiosity question. Iāve never leased a car and happen to agree with you from a financial perspective as I generally keep a car for at least 10 years and 100,000 miles. If you can write off the lease as an expense in your business, that might make it more cost effective. If you read my #3 reply I was speculating about the end of my car driving years when Iām down to maybe < 5 years left. Why lay all that money out for a car that will depreciate so much in the first couple of years and then the estate has to sell the car at a big discount. There are so many factors involved with making a choice to lease or buy. Sometimes the lease payments are lower than purchase payments and thatās all one can afford. I was once young and struggling so I understand. We all know paying interest is generally a loser since interest is no longer tax deductible. If youāve got the money to pay cash for a new car, you could choose to lease and then invest the cash you didnāt lay out for the car. That investment, say Apple, Google, Amazon stock or a rental property might produce a far better return on that money. I guess you would call that leveraging your cash. Stocks are more of a gamble, but hey, life is full of gambles. Home equity loans can be cheaper, but if it means putting the family home at undue risk, itās not a wise idea. Having a certain amount of cash for emergencies is important and that is another reason not to tie too much up in a purchase. Cash of course sitting idle doesnāt earn squat nowadays. Also, we all know that buying a car, with few exceptions, is not an investment. It can be a necessary expense or in my case strictly for having fun. Itās my reward for being financially responsible during my working years, so why not have some fun. Coffins donāt have pockets and hearses donāt have luggage racks so you canāt take it with you, right? I apologize if this sounds like a lecture on a Finance 101, but there are so many variables and choices when it comes to making large purchase decisions. Perhaps these types of discussions would be a valuable topic for high school students before they head out into the real world that can eat you alive if youāre naive... Bruce
