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Discussion Starter #1
I've spent a lot of time looking at both leasing and buying a Volt. Leasing was attractive to me for a while since the technology is moving so fast, but I've never leased because I hate the idea that at the end of the lease you have no equity. It's just a long term rental.

With that said, tell me if this makes sense. I've found a left over new 2017 Volt Premiere with both Driver Confidence Packages for an agreed upon price of $29,000. Factor in the federal and MA state incentives, I'll get $10,000 off of that price. I have a $3000 trade. Net out the door after taxes and everything will be about an $18,000 loan. That payment over a 5 year term is about $300. My thought is after three years (the typical leasing duration) that if I want to trade or sell the car, I would think I could get more than $10,000 for it. At that point I would have paid roughly $10,000 off of the $18,000 loan resulting in driving the car for free for the three year period with unlimited miles. Does that make sense? I would be able to trade the car for something newer or "better" at that time if I wanted out. What would the depreciation be at that point anyway? It would be 2021 in a 2017. Four year old car. I know the value of these drop rather quickly.

Also, what do you think about that price? I think it's a steal! My only issue is the car is silver with black interior. I was hoping for a different color, but silver isn't bad. Just a very basic color.
 

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Well, all I can tell you, is that I leased a 2013 in December of 2012. That was the first year that the Volt was available in my area. I leased it because I was still unsure about the workmanship of the car and didn't want to get stuck with an experiment. Well, when my lease ran out 3 years later I purchased a brand new 2017 Premier Volt. I have never been happier. I believe the Volt is the best car ever made and I am glad that I now own one.
 

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No. You are not looking at the numbers correctly. You are trying to convince yourself of a purchase at the emotional level and avoiding reality.

First the purchase price is $29k. Your monthly payment will be based on this amount.

The tax rebates don’t come your way till next year when you do your taxes. Not when you buy your car.

So consider $29k with tax title and license and your monthly will be around $575. Total loan is about $33k.

Next. You think that in 3 years the car will be worth more than you owe. Not sure how. If you are getting a steal on a 2017 when 2019s are coming out—then how many people are going to be lining up in 3 years to buy you car used if no one wants it new?

The minute you drive off the lot, your 2017 is worth $20k. Why? Because a dealer couldn’t sell your used car for more than $25k.

In 3 years it will be worth about $10k to 12k. You will be lucky to keep up with depreciation. Free market system is cruel. At a $33k total loan cost— say you put your $10k tax rebates towards loan and paid monthly for three years, then you would owe at least 8k.

At best you are upside by $4k though something tells me you will be at break even or worse because none of that tax rebate pile is going the car.

Never go into a car purchase thinking that a car will magically be an asset. Cars are liabilities. All cars.
 

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Discussion Starter #4
A couple things that maybe I didn't mention.

I plan to front the $10,000 incentives to keep my payments low. MA will send a rebate check in a month for $2500. I'll need to wait to the spring for the federal, but that's fine.

I have my $3,000 trade. So sales tax will be 6.25% of $29,000 sale price - $3000 trade + $299 doc fees. That comes to about $1600 or so. My loan will be based on roughly $17500 - $18000.

If I leased I would easily be making $10,000 or more in lease payments and have nothing to show at the end. At least if in three years I sell the car for even 8k, it would be much cheaper than leasing.
 

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A couple things that maybe I didn't mention.

I plan to front the $10,000 incentives to keep my payments low. MA will send a rebate check in a month for $2500. I'll need to wait to the spring for the federal, but that's fine.

I have my $3,000 trade. So sales tax will be 6.25% of $29,000 sale price - $3000 trade + $299 doc fees. That comes to about $1600 or so. My loan will be based on roughly $17500 - $18000.

If I leased I would easily be making $10,000 or more in lease payments and have nothing to show at the end. At least if in three years I sell the car for even 8k, it would be much cheaper than leasing.
So many things wrong here and in your first post.

1. Lease or loan, both payments are bad because you are borrowing against future earnings to get something now. If you don’t have the cash to buy the car outright, you can’t afford it. All it takes is a job scare, medical scare, or some other life event and you’re in a heap of trouble.

2. You don’t have to wait until April 2019 to get the fed tax credit. If you are certain you are getting a volt (despite #1) and certain that you qualify for the full tax credit, you can turn off any withholdings at work now, then turn them back on after you have an extra $7500 in your pocket. Just make sure that extra cash doesn’t end up becoming a bass boat or dining room set, as that will set you back a bit. There is no reason to give Uncle Sam an interest free $7500 loan for almost a year.

3. Trading cars every few years is nearly always a money losing proposition. With an onslaught of EV’s coming in 2019 thru 2022, I believe the demand for a used Volt will pummel the used prices.

4. If you don’t like the color, find one the color you want. There are always more, that’s what more means.

So a different way to look at this is:

(a) get the car you want - color and style
(b) when you can pay cash for it (and if you can’t afford new, consider used, or waiting longer to save the cash)
(c) drive it into the ground, or when you have more cash to replace it

Don’t worry about resale, depreciation, interest rates, etc. Cars are an expense, and just how much you spend throughout your lifetime will affect whether you’re on the alpo diet or sitting on a huge nestegg or anywhere in between upon retirement. I gave away my BMW last year. I’m getting ready to give away a CTS and Suburban if and when when my wife and I purchase our next vehicle.
 

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In general it is a lot more economical to buy and hold long term rather than to lease and trade every 3 years, so IMO, it is a no-brainer to choose that. But if your intention is to buy, then still trade in 3 years, the choice is less clear to me. You would be taking a risk on resale value.

If you are likely to buy and hold, then you have a good purchase deal. Your purchase price less tax incentives is $19K and you are getting a new car with low operating cost That is a good value, even if you are comparing to benchmark economy cars like a new Honda Fit or Toyota Corolla.

And while there will be longer range BEVs in the future, your Volt will still never give you range anxiety.
 

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I buy all my vehicles because I keep them for over twenty years. Lease if you want to change rides and accept a loss. Buying saves money for long term ownership. My Equinox is Gen 1, yet I see Gen 3 around and like it, but I am realistic and will not trade in yet.
 

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Discussion Starter #8
I purchased an Accord back in 2008 brand new and I'm still driving it today. So generally I keep my cars for a good 5-10 years which makes a lot of sense. I guess I'm wondering if I dislike the Volt or Chevy in general, whats my out game? It would be to trade it in 3-4 years and based on my thinking, my losses really wouldn't be all that much since I'm getting the federal and state incentives and would have some equity for the next vehicle when I trade in the Volt.
 

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It is a complicated (and risky) proposition to try to plan for buying new cars and trading them every 3 years in so you can buy another new car. Much, much simpler if you buy what you really want and then keep it for 6 or 8 or 10 years - That's how you lose the least while driving what you love

A new car every 3 years is still 'renting what you drive' no matter whether you bought it outright or leased it - Your payment book will still have 2 or 3 years worth of tickets in it when the 3 year mark arrives and you try to trade it for another new car with a 5 or 6 year payment plan - Payments, payments, payments for as long as you live, if that's your plan

Find something you really like and make longer term plans. My 1994 Mazda Miata is still in my garage. I bought it used in 1999 for $11K and I could probably sell it next year for half that . . . . after owning and driving it for 20 years, with no payments at all because I bought something I loved and could afford to pay cash for when I bought it. It shares the garage with 4 other cars, including my 2017 Volt Premiere, all of which I paid cash for - I don't like to 'rent' anything

Don
 

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It depends on your situation and also what the exact lease numbers are. It's hard to compare when you are speculating what the lease would be for 3 years without actual numbers. GM is giving away very good leases on the Volts, especially on a 2018 and even better if you are lucky to find a 2017 since they are getting ready for the 2019's hitting the showrooms soon. I recently leased a 2018 LT because I wasn't ready to commit to the whole plug in thing yet, so I wanted a 3 year lease to see how it fits my lifestyle. When I compared buying vs. leasing, the leasing made more sense to me because of several reasons:

1. I got a really good 3 yr lease on the 2018 LT. I did One Pay, so my effective cost after I receive my CA rebate is $7100 including all taxes and fees with 12k miles/year. This translates to little less than $200/month over 36 months.
2. If I purchased the car, I would have to either make a higher monthly payment, or front the tax credit like what you are doing, and bring the payment down to what the effective purchase price is after rebate and tax credits. Money today is worth more than money tomorrow, so I didn't want to put $10k down on a purchase when I am not sure if I want to keep the car after 3 yrs.
3. I didn't want to gamble on what the 2018 Volt LT will be worth in 3 or 4 yrs and hope that I break even when I try to sell it. Especially when I know the used car market on EVs and the rate of advancement on EVs. In addition, with the 2019 Volt being available with the 7.2kw charger, I suspect the 2018 or earlier Volts will be worth even less in the used market. This is something that might effect you more since you are looking specifically at a Premier, which is standard with the 7.2kw charger for 2019.

My Volt is a 3rd car used solely for commuting. I still have a 2013 VW GTI and a 2013 Audi A3 in the garage that are both paid in full. I will be keeping these forever since I love both these cars.
 

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... I've never leased because I hate the idea that at the end of the lease you have no equity. It's just a long term rental.....
This totally sums it up for me.

But some will talk about the taxy tax benefits of leasing it for business reasons,, but these are Mary Kay, Herbalife, Amsaway Oil, etc, peddlers saying this, correct?
 

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I purchased an Accord back in 2008 brand new and I'm still driving it today. So generally I keep my cars for a good 5-10 years which makes a lot of sense. I guess I'm wondering if I dislike the Volt or Chevy in general, whats my out game? It would be to trade it in 3-4 years and based on my thinking, my losses really wouldn't be all that much since I'm getting the federal and state incentives and would have some equity for the next vehicle when I trade in the Volt.
So drive the Accord until it's deader than dead, then poke your head up to see what's around at that time. You should be back into the car market in 2028 or so. If you squirrel away $300 per month into good investments, in 10 years you'll have $50-60K to plunk down on a new car. You should see pay raises between now and then so that $300 per month can be increased as you go. Then get yourself a 6 figure car.
 

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So drive the Accord until it's deader than dead, then poke your head up to see what's around at that time. You should be back into the car market in 2028 or so. If you squirrel away $300 per month into good investments, in 10 years you'll have $50-60K to plunk down on a new car. You should see pay raises between now and then so that $300 per month can be increased as you go. Then get yourself a 6 figure car.
From a purely financial aspect, this is correct. Drive the Accord into the ground while saving to pay cash for the next car.

There can be other considerations though. It could be having the cash but it's tied up in investments that earn more than a low interest car loan.

It could be wanting to buy a new EV to support the move to vehicles that help mitigate global warming, and the sooner the better.

And we all do things from time to time that are not purely in our financial best interest. Some of us take vacations, go out to dinner, go to Starbucks etc.

Nothing wrong with a low interest car loan if it's easily affordable and it won't sink you if there is an unexpected job loss etc.

We could have saved money by purchasing a used Civic, Cruze etc. with an automatic to get my wife out of driving her stick shift Mazda with her bad left knee. We are both glad we bought a new 2018 Volt instead, low interest loan and all, and we will keep it a long time.

I would say make sure you like the Volt though before you buy, so it will be a keeper. It sounds like a great deal and what I would do rather than lease.

Sent from my SM-G930V using Tapatalk
 

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From a purely financial aspect, this is correct. Drive the Accord into the ground while saving to pay cash for the next car.

There can be other considerations though. It could be having the cash but it's tied up in investments that earn more than a low interest car loan.

It could be wanting to buy a new EV to support the move to vehicles that help mitigate global warming, and the sooner the better.

And we all do things from time to time that are not purely in our financial best interest. Some of us take vacations, go out to dinner, go to Starbucks etc.

Nothing wrong with a low interest car loan if it's easily affordable and it won't sink you if there is an unexpected job loss etc.

We could have saved money by purchasing a used Civic, Cruze etc. with an automatic to get my wife out of driving her stick shift Mazda with her bad left knee. We are both glad we bought a new 2018 Volt instead, low interest loan and all, and we will keep it a long time.

I would say make sure you like the Volt though before you buy, so it will be a keeper. It sounds like a great deal and what I would do rather than lease.

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Agreed. While it makes financial sense to keep your car until it's dead, while saving as much as you can and then buy a new car when you NEED one, sometimes people spend money just to enjoy life a little.
 

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You are not thinking about this correctly. First of all you are making valuation assessments that are unlikely to be true. Whereas if you lease a car, you know exactly what the valuation is in 3 years. If the car is worth more than that after 3 years, you can parlay that equity into a new lease/purchase. If the car is worth less, that's the leasing companies problem and you just walk away. Also, you are forgetting that if you lease the new car, the equity in your old car is yours to keep. There is no requirement to put additional money down on the lease, unless it's critical to lower your payments (in which case you probably shouldn't be buying/leasing a new car).

The other benefit people don't fully appreciate from leasing is the new sense of freedom you will feel. Knowing this car will never be out of warranty, and knowing that whatever goes wrong will never have any real impact on your equity position. For example, if you buy the car and it's half totaled in an accident, that repaired car is what you have to drive forever, or try to sell. If the car is leased, you turn the repaired vehicle in at the end of the lease and are done. I used to know, and want a relationship with all the best mechanics in town. Now I have no contact at all with that part of the economy. The reduced headache is worth a lot.
 

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This totally sums it up for me.

But some will talk about the taxy tax benefits of leasing it for business reasons,, but these are Mary Kay, Herbalife, Amsaway Oil, etc, peddlers saying this, correct?
Almost every consultant out there in just about any field benefits from writing off their house and car. Also think about top athletes (e.g. golfers) who travel around a lot. Many doctors write-off their cars. Do you think Trump ever paid for his plane? It was just another write-off.
 

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Knowing this car will never be out of warranty, and knowing that whatever goes wrong will never have any real impact on your equity position. For example, if you buy the car and it's half totaled in an accident, that repaired car is what you have to drive forever, or try to sell. If the car is leased, you turn the repaired vehicle in at the end of the lease and are done. I used to know, and want a relationship with all the best mechanics in town. Now I have no contact at all with that part of the economy. The reduced headache is worth a lot.
True for sure. That's the biggest benefit to renting over buying. The only other one I can think of is you're always driving a newish car. The huge downside is you have monthly payments for the rest of your life, if this is your 'solution' to the necessity of having a way to get around. When you're 75 or 80 and look back, the percentage of your lifetime income spent on cars may be even larger than what you paid to keep a roof over your head . . . . unless of course you've been renting that too

Don
 

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True for sure. That's the biggest benefit to renting over buying. The only other one I can think of is you're always driving a newish car. The huge downside is you have monthly payments for the rest of your life, if this is your 'solution' to the necessity of having a way to get around. When you're 75 or 80 and look back, the percentage of your lifetime income spent on cars may be even larger than what you paid to keep a roof over your head . . . . unless of course you've been renting that too

Don
The other thought that comes to mind is that I'm old enough, and like cars enough, that I don't want to only drive 2 or 3 more cars the rest of my life. With leasing I get to drive a lot more different cars.

And with cars being very expensive, rather than tie up equity in paying cash for a depreciating asset, a loan is almost a certainty. And with that expensive car the loan could be 6, 7, or more years. At that point you are definitely ready to sell. And so you might always have a car payment anyway.
 

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So drive the Accord until it's deader than dead, then poke your head up to see what's around at that time. You should be back into the car market in 2028 or so. If you squirrel away $300 per month into good investments, in 10 years you'll have $50-60K to plunk down on a new car. You should see pay raises between now and then so that $300 per month can be increased as you go. Then get yourself a 6 figure car.
I do agree to keep a car for a long time, but you also need to consider the maintenance cost of the car. Even japanese cars will need to fix up here and there. Some will be small jobs, but there will be times when you need to spend 1K+.
 

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Not all purchase decisions are based purely on economics ("just because" is an OK reason....) and the variables can favor both, depending upon your situation. I second TSquare's post above verbatim, plus an additional two factors: lease mileage restrictions were always a problem because I drove my new toy so much more than the old ICE. It was another form of range anxiety and I hated it in the last year or two. Also, there are horror stories on this forum about shabby treatment by the lessor at turn-in time: nit-picking or real flaws that cost you a balloon expense and other sneaky lessor tricks. I swore off both Ally Leasing and leasing in general after that experience. Leasee beware.....
 
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