[Whatstreet]

Jay Leno says it's better to buy than lease.

Article at the link

http://www.cnbc.com/2016/12/13/jay-leno-dont-lease-a-car-buy.html

 

[Raymondjram]

He knows well and I agree. I buy my cars because I keep them for over twenty years. For example, my 1984 Olds Ciera LS cost me $9,000 and I had it in use for 26 years. I sold it to a neighbor who is still driving it!

A lease is only good as a "rental" that can be deducted or reimbursed as a business expense. My wife did that for the three Volvos she had, while I was driving my GM cars. Her job gave her a allowance that covered all travel expenses, including the lease, and all gasoline purchases. Pure ownership is better if you pay from your pocket. After the car is paid off, you keep it runnung as long as possible payment free.

Getting a lease on your pocket is like buying a pair a pants then returning it after three years with no money back. Some may prefer to do that but if it isn't a business expense or a deductable, the lease is a waste of money.

 

[firehawk72]

Oddly enough, it simply isn't that easy with tax credits (state and federal in some cases) making some leases crazy cheap on EVs and EREVs. Blanket coverage simply doesn't work here. I am a huge hater of leases, but these types of cars make a lot of sense sometimes for a lease over a buy.

 

[acarney]

Oddly enough, it simply isn't that easy with tax credits (state and federal in some cases) making some leases crazy cheap on EVs and EREVs. Blanket coverage simply doesn't work here. I am a huge hater of leases, but these types of cars make a lot of sense sometimes for a lease over a buy.

This. I'm in a position that the lease tax benefits were just slightly more then what I'm paying in federal taxes now (thanks to a lot of before tax deductions to maximize every penny possible) . So I would have been "leaving money on the table" if I had bought instead of leased. I'm also in a state that exempts up to ~$30k (can't remember the exact number) of sales and motor vehicle use for EV's. If I had bought the Volt outright I would have owed at least SOME tax. I'll owe that if I buy out at the end of my lease, BUT if I end up going for a full EV by the end of the lease, there is a good chance the tax exemption will still be in place and I can "re-use" that on the new car. I turn my lease in, haven't paid any sales tax, and buy the new car (hopefully with the fed credit again) and then only have to pay state sales tax on the (small) portion that isn't exempted. Not a huge deal, but might save me an extra ~$400 or so in the long run if this flow of events takes place.

 

[Charge]

Agreed - there are too many variables to make a blanket statement if buying or leasing is better for someone.

 

[DonC]

One thing we can agree on is that Jay Leno is not debt free because he always buys all the cars he puts in his garage! So funny.

All you can really say about buying versus leasing is: buying is always better unless it's not.

 

[Whatstreet]

Or another way to look at is good for who and why.

 

[llninja]

One thing we can agree on is that Jay Leno is not debt free because he always buys all the cars he puts in his garage! So funny.

All you can really say about buying versus leasing is: buying is always better unless it's not.

I don't see how you can say Jay Leno is not debt free when he is quoted in the article self proclaiming that he bought all his cars and owns all the buildings that he store's them in?

But what Jay says is music to my ears. Too many people are leasing to get more than they can afford. Yes Jay is filthy rich, he can drive whatever he wants. I'm not as filthy rich, but I too can drive whatever I want... as long as I keep it to less than a handful of cars. And I don't plan on ever getting to two handfuls.

 

[Prohidium]

If you are being offered a zero percent lease rate and plan on buying at the end of the lease and any rebates get factored in to your favour, it certainly is fine to lease. You just have to make sure your insurance coverage will always satisfy the lease balance if the car is ever totalled. If it is in a serious accident during the lease you then have the option of walking away at the end of the lease should you have concerns on the repairs.

 

[Joe67]

*snip*
A lease is only good as a "rental" that can be deducted or reimbursed as a business expense. My wife did that for the three Volvos she had, while I was driving my GM cars. Her job gave her a allowance that covered all travel expenses, including the lease, and all gasoline purchases. Pure ownership is better if you pay from your pocket. After the car is paid off, you keep it running as long as possible payment free.

Getting a lease on your pocket is like buying a pair a pants then returning it after three years with no money back. Some may prefer to do that but if it isn't a business expense or a deductible, the lease is a waste of money.

If you look at the real numbers, leasing a vehicle for your business to have a 'write off' isn't better either. If you work for a company who actually reimburses you, that works, but is the rare exception.

 

[Barry]

I agree with Leno's point, with some exceptions, but mainly I am wondering how he is qualified to give financial advice to the masses. I doubt his personal finances remotely resemble 99.9% of other people's, and I don't think he has any training in that area.

 

[Joe67]

I don't see how you can say Jay Leno is not debt free when he is quoted in the article self proclaiming that he bought all his cars and owns all the buildings that he store's them in?

But what Jay says is music to my ears. Too many people are leasing to get more than they can afford. Yes Jay is filthy rich, he can drive whatever he wants. I'm not as filthy rich, but I too can drive whatever I want... as long as I keep it to less than a handful of cars. And I don't plan on ever getting to two handfuls.

Agreed. Too often, people use a lease to drive a vehicle they can't really afford and shouldn't be driving. Of course there are exceptions, but the exceptions are the minority.

 

[bro1999]

If buying is better than leasing 99% of the time, I'm that other 1%! Flipping a 3 month old lease for $4,700 profit was only possible via leasing!

And those Spark EV leases that could be had earlier this year for essentially free after the Cali EV rebate also fall into that 1%.
People who know the numbers in and out can come out MUCH further ahead leasing versus buying. Of course, most people don't have the skills/knowledge to do that.

 

[llninja]

If you look at the real numbers, leasing a vehicle for your business to have a 'write off' isn't better either. If you work for a company who actually reimburses you, that works, but is the rare exception.

As an owner of a small business I reached out to a tax advisor to get the real skinny, and just like Joe says, it's a writeoff that is an employee perk. If your business is very profitBle and you want to retain employees with this perk, then go for it an lease as it makes everything an expense and you don't have to mess with capital depreciation, but there's no doubt I'm better off owning my car and reimbursing myself for mileage than leasing a car for business.

Some tax people also mistakenly think you need the mortgage interest writeoff, but assuming you are in the 25% tax bracket why would you pay the bank 3% or so in interest to avoid paying Uncle Sam 25% of 3% (or 0.75%)? It's better to not have a mortgage at all and owe Uncle Sam that 0.75% YMMV

 

[llninja]

If buying is better than leasing 99% of the time, I'm that other 1%! Flipping a 3 month old lease for $4,700 profit was only possible via leasing!

And those Spark EV leases that could be had earlier this year for essentially free after the Cali EV rebate also fall into that 1%.
People who know the numbers in and out can come out MUCH further ahead leasing versus buying. Of course, most people don't have the skills/knowledge to do that.

And as you've posted, was only possible once. Since then Beepi changed their numbers where you couldn't flip again, and now they are no longer operating as Beepi

Similarly, I was only able to buy my $44k MSRP gen1 volt new at $21k, once. Since then GM hasn't discounted the MSRP by $5k (yet) and my state got rid of their wonderful 10% base MSRP EV rebate. The moons only aligned for me once, from here on out, I doubt I will ever be able to repeat it again. At the buy, I could have traded the car in for more equity (as soon as the rebates arrived), but then I'd be in a position where I had to buy another car and pay too much for it. And if I didn't time it right, I would have been royally pissed if I was one of the EV owners who submitted my state rebate form and was told that the program was suspended and I would get zero.

Flipping cars is usually never a good thing as most new vehicles lose $5-10k as soon as you drive it off the sales lot. Bro got lucky once, just as I got lucky once.

 

[bro1999]

And as you've posted, was only possible once. Since then Beepi changed their numbers where you couldn't flip again, and now they are no longer operating as Beepi

Similarly, I was only able to buy my $44k MSRP gen1 volt new at $21k, once. Since then GM hasn't discounted the MSRP by $5k (yet) and my state got rid of their wonderful 10% base MSRP EV rebate. The moons only aligned for me once, from here on out, I doubt I will ever be able to repeat it again. At the buy, I could have traded the car in for more equity (as soon as the rebates arrived), but then I'd be in a position where I had to buy another car and pay too much for it. And if I didn't time it right, I would have been royally pissed if I was one of the EV owners who submitted my state rebate form and was told that the program was suspended and I would get zero.

Flipping cars is usually never a good thing as most new vehicles lose $5-10k as soon as you drive it off the sales lot. Bro got lucky once, just as I got lucky once.

Yeah, the $4,700 deal was more or less a fluke, but I also leased and flipped 3 other vehicles this year, and I basically broke even on those deals. Let's see someone purchase and flip 3 new cars within 3 months of buying them and come out even. $0 down Cruze lease flipped into a $0 down Spark EV lease flipped for ANOTHER $0 down Spark EV lease that was eventually sold privately....net result was around $600 to drive a Cruze + 2 Spark EVs around for 7 months? Or less than $100/month leasing a total of 3 cars over that time period. I'm not even counting the 2 free $500 Bosch L2 EVSE units I received for leasing the Sparks.
Plus like you said, your $44k Volt for $21k purchase was a 1 shot deal. That is definitely NOT repeatable.

My 5th lease (2017 Volt), I will come out ahead once I transfer it to someone else next month. $0 down, with a monthly payment of $261, so my total out of pocket will be $261 x 6 = $1,566.
However, I banked a $2,300 MD EV rebate for leasing the Volt, so my actual out of pocket will be 2,300 - 1,566 = $734. As in a $734 PROFIT leasing my Volt for 6 months.

My BOLT, I will be purchasing, however.

 

[SSonnentag]

Leasing will always cost you more money, it is just spread out over more time. It appeals to many people because we are into instant gratification rather than self-denial and logical planning. Cash is always cheapest when all is said and done.

 

[Joe67]

If buying is better than leasing 99% of the time, I'm that other 1%! Flipping a 3 month old lease for $4,700 profit was only possible via leasing!

And those Spark EV leases that could be had earlier this year for essentially free after the Cali EV rebate also fall into that 1%.
People who know the numbers in and out can come out MUCH further ahead leasing versus buying. Of course, most people don't have the skills/knowledge to do that.

That is a very rare exception.

 

[SSonnentag]

At the end of a lease, you are left with nothing. You spent money to borrow someone else's car.

 

[bro1999]

At the end of a lease, you are left with nothing. You spent money to borrow someone else's car.

At the end of my Cruze lease, I was left with nothing....but $4,700 in cold, hard cash.
At the end of my Volt lease, I will be left with nothing....but $734 in profit.

For the 3 leases in between, I was left with nothing. But in that case, that was a good thing. Lol

Freakin' leases!