Did you lease your GT? If so please post details.

[IronG]

I have a 70 month loan and I'm paying $575 per month with zero down on my 17 GT premium, and I own the car when it's over. Sounds like you come out way ahead buying a Mustang rather than leasing. On some other vehicles maybe leasing makes more sense.

You will always come out ahead if take care of the car. It is pure economics as well as common sense.

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[IronG]

Absolutely not the reason we lease, my explanations for our choice of leasing (vs. a traditional finance or outright purchase for that matter) I think we're pretty well articulated (and are supported by a solid understand of TCO)

YMMV.

Not sure you have really crunched the numbers on long term leasing vs purchase. it will work in almost any scenario for any product that has tangible value that would be used often and made to last a long time. Like cars, houses, land etc. I think you are just trying to rationalize it for how you "use" it.

So you are telling me that people do not use leasing to get a more expensive car? Sure there are some that don't do this, but come on it is so easy to do it how can sheeple not fall into that trap?

 

[IronG]

Ok I caught trouble for going Wall Street Journal in a prior thread so I'll only say this. Lease vs Buy should be strictly a numbers calculated decision. Leasing is just another form of financing.

Sometimes manufactures offer lease incentives that makes leasing the better decision, even if you intend to buy out the lease.

Why would a mfr make a lease better for buy out if few people choose that? Most do not choose to pick it up at the end. That would just be a blunder of epic proportions. RacerX is contending that people do it to avoid that for the reasons he choose. Hmmmmm…..seems there is discord in the leasing lot.

Now if you are talking about business leases, there may be some truth to that. some assets may be worth buying at the end if the payments being made are actually against the principle. That I think could be more common with your theory.

 

[sdiver68]

Why would a mfr make a lease better for buy out if few people choose that? Most do not choose to pick it up at the end. That would just be a blunder of epic proportions. RacerX is contending that people do it to avoid that for the reasons he choose. Hmmmmm…..seems there is discord in the leasing lot.

Now if you are talking about business leases, there may be some truth to that. some assets may be worth buying at the end if the payments being made are actually against the principle. That I think could be more common with your theory.

Sometimes short term sales increases are worth the longer term exposure to artificially high residual calculations offered by captive finance companies. Sometimes subsidized money factors are utilized knowing that most people will turn the car in at the end and a 2nd chance at profit can be made on the CPO resale for both the manufacturer and keeps dealers happy. As you mentioned, there may be tax incentives as well. Attractive leases are great for advertising...knowing most people will come in and profit will be made on consumer lease confusion. Even if not, subsidized leases can act as a gateway to the company's products that will pay off as the consumer upgrades down the road.

There are lease vs buy calculators available on the web to more easily break down the numbers to help you decide. Lexus and BMW are examples of companies where many times the lease vs buy calculation comes out in favor of lease, as occurred on my IS350 Fsport. I was also able to buy down the MF with multiple deposit program to almost zero, with a calculated zero risk return of about 11% choosing that option.

The problems occur because most people are not aware of how to properly negotiate a lease, and as mentioned many times before use a lease to pay for something they really cant afford.

 

[IronG]

Sometimes short term sales increases are worth the longer term exposure to artificially high residual calculations offered by captive finance companies. Sometimes subsidized money factors are utilized knowing that most people will turn the car in at the end and a 2nd chance at profit can be made on the CPO resale for both the manufacturer and keeps dealers happy. As you mentioned, there may be tax incentives as well. Finally, attractive leaves are great for advertising...knowing most people will come in and profit will be made on consumer lease confusion.

There are lease vs buy calculators available on the web to more easily break down the numbers to help you decide. Lexus and BMW are examples of companies where many times the lease vs buy calculation comes out in favor of lease, as occurred on my IS350 Fsport. I was also able to buy down the MF with multiple deposit program to almost zero, with a calculated return of about 11% choosing that option.

The problems occur because most people are not aware of how to properly negotiate a lease, and as mentioned many times before use a lease to pay for something they really cant afford.

Not to beat a dead horse, but unless you cannot haggle with the price on purchase, the lease will 99% be more if you lease than buyout. It is just plain economics. Now it is may be possible if you pay cash for the residual, but if you finance it, forget about it. I see it very rare that it would ever be financially sound to lease a car over purchase.

Oh, and car companies want you to lease, they make a huge profit off of them compared to purchases. You pay for the car for 3 years and then they get the car. How is that not a sweet deal for them?

 

[sdiver68]

Not to beat a dead horse, but unless you cannot haggle with the price on purchase, the lease will 99% be more if you lease than buyout. It is just plain economics. Now it is may be possible if you pay cash for the residual, but if you finance it, forget about it. I see it very rare that it would ever be financially sound to lease a car over purchase.

Oh, and car companies want you to lease, they make a huge profit off of them compared to purchases. You pay for the car for 3 years and then they get the car. How is that not a sweet deal for them?

I've told you the reasons. But what do I know, I was only an independent management consultant for the largest purchaser of new vehicles in North America. In my experience when dealing with vehicles in the $40k+ price range that also hold value well, its possible to lease cheaper than buy about 30-40% of the time.

PS You can negotiate price on a lease exactly like a buy. Like I said, consumer lease confusion.

And for the record I purchased my Mustang utilizing a loan at far below market interest rate..choosing to leave my cash in investments.

 

[MaskedRacerX]

Not sure you have really crunched the numbers on long term leasing vs purchase. it will work in almost any scenario for any product that has tangible value that would be used often and made to last a long time. Like cars, houses, land etc. I think you are just trying to rationalize it for how you "use" it.

I'm a software engineer/architect/writer (for 30+ years), who's specialized in the machine learning and computer vision space for the last couple of years ... so clearly, math isn't my strong suit

Plus, you keep scooching the goal posts around - I described a [specific] ownership scenario, and have analyzed the business/financial case, but sure, of course, if condition X/Y/Z, then a lease _might_ not be a good option, and certainly, I've done my own share of traditional financing (and a few outright purchases). It's not quoted "use", it's use, as in my usage scenario, supported by a lease being the most effective way to purchase.

The math is trivial, my use case is very simple, it works out perfect for me and my family. Not really much else to say

 

[IronG]

I've told you the reasons. But what do I know, I was only an independent management consultant for the largest purchaser of new vehicles in North America. In my experience when dealing with vehicles in the $40k+ price range that also hold value well, its possible to lease cheaper than buy about 30-40% of the time.

PS You can negotiate price on a lease exactly like a buy. Like I said, consumer lease confusion.

And for the record I purchased my Mustang utilizing a loan at far below market interest rate..choosing to leave my cash in investments.

Not sure what you are saying, but yeah for large companies that issue cars, leasing is usually superior, but not always for the vehicle purchase cost. Normally it is for other things that can be more costly during and post end of payments. Can you imagine the cost to recycle thousands of cars a year? Companies get expense write-offs and other incentives to off-set the cost. So yeah as I have mentioned, for business it is a different story.

I agree, you can negotiate the price, but even if you were paying price parity, there is no lease I have ever seen that can beat 0% interest. That and you don't own it at the end is just the tip of the iceberg. Believe what you want though, car companies love you for it.

Smart move getting a low interest loan and use your money to make more money. I 100% agree with that strategy.

 

[IronG]

I'm a software engineer/architect/writer (for 30+ years), who's specialized in the machine learning and computer vision space for the last couple of years ... so clearly, math isn't my strong suit

Plus, you keep scooching the goal posts around - I described a [specific] ownership scenario, and have analyzed the business/financial case, but sure, of course, if condition X/Y/Z, then a lease _might_ not be a good option, and certainly, I've done my own share of traditional financing (and a few outright purchases). It's not quoted "use", it's use, as in my usage scenario, supported by a lease being the most effective way to purchase.

The math is trivial, my use case is very simple, it works out perfect for me and my family. Not really much else to say

X I get why you leased, we agreed on that. Not sure why you brought it back up. Degrees are easy to get, I have an EE with a masters in business planning (I think they call it administration now). Does not make me a financial genius :-), I can use a computer and have common sense. There are many scenarios where a lease makes sense, even if you are losing money, but it does not change the basic cost of doing both when it is apples to apples. One is cheaper (purchase) and one will cost more especially over the long haul. I respect the reasons you choose to lease and would probably do the same in your situation.

 

[G_Money_FL]

Can we all just agree that long term (4+ years), buying makes the most financial sense. However for the person that absolutely will get a new vehicle every 3 years, that leasing will usually work out better.

I've done both many times, and see advantages to both.

 

[sdiver68]

Can we all just agree that long term (4+ years), buying makes the most financial sense. However for the person that absolutely will get a new vehicle every 3 years, that leasing will usually work out better.

I've done both many times, and see advantages to both.

No. Because math.

 

[sdiver68]

X I get why you leased, we agreed on that. Not sure why you brought it back up. Degrees are easy to get, I have an EE with a masters in business planning (I think they call it administration now). Does not make me a financial genius :-) One is cheaper (purchase) and one will cost more especially over the long haul. I respect the reasons you choose to lease and would probably do the same in your situation.

No, because math.

 

[IronG]

Can we all just agree that long term (4+ years), buying makes the most financial sense. However for the person that absolutely will get a new vehicle every 3 years, that leasing will usually work out better.

I've done both many times, and see advantages to both.

I agree it may meet some folks needs. It also may suit someone to have a new car every three years. If you have money to waste like that, I guess it does not matter. I guess where I am coming from is that leasing over and over again just to have a new car every 3 years is not financially sound. To buy a car every 3 years is also not financially sound, but at least you own the car at the end of the 3 years. As I have already mentioned, leasing for me does not make sense, if it does for others great.

 

[docprego]

I was quoted over $1K per month for a GT premium for 24 months with money needed out of pocket, I didn't even bother to ask how much. Absolutely ridiculous.

In contrast today Alfa Romeo gave me a quote of $568/month with nothing out of pocket on a car that is virtually the same price.

 

[MaskedRacerX]

Degrees are easy to get, I have an EE with a masters in business planning [...]

I didn't say anything about "getting degrees" ... hmmm, you posted ~1p, do we need to discuss drinking in the afternoon, schedule an intervention?

Seriously though, I don't completely agree with some of your assertions, however, I think we have some overlap in what we're both saying, so I'm OK leaving it at that

Can we all just agree that long term (4+ years), buying makes the most financial sense. However for the person that absolutely will get a new vehicle every 3 years, that leasing will usually work out better.

I've done both many times, and see advantages to both.

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