[tranquility]

Originally Posted by Alfisti

It's really not complicated at all, i don't understand your reluctance. I am not saying to always makes sense but if buying new you'd be mad not to cross shop against a lease to buy agreement.

You're only renting if you don't buy the vehicle at lease end.

I'm against the concept of renting if it's avoidable. I'm not saying it's 'complicated' as in it's all Greek to me, just that vs buying outright ofc it is, otherwise why are we having this many posts about your OP?

Originally Posted by wtwo3

What's so complicated about it?

Which method of purchasing a vehicle is best really depends on multiple factors - your own situation, your goals, and market conditions.

If interest rates are very low, why not use their money to purchase (lease or finance) rather than pay cash? If residual rates are artificially high (a classic BMW move), why not lease and enjoy the lower cost of ownership if you're planning to get a new car in 3-4 years time anyway? Or perhaps you want to mitigate your risk of ownership and decide to lease in the beginning, then buy it out at lease end. What if incentives offered by the manufacturer heavily influence leasing? On the other end of the spectrum, if interest rates are high, residual values are low, then sure it may make sense to pay cash for the car. It all really depends.

On top of that there's risk tolerance. Leasing places all of the risk of ownership on the financing arm. If you get into an accident, the hit to resale value is the financing company's problem. If you had purchased the car, that hit becomes your problem. And beyond just getting in accidents, leasing removes the speculation of future value of the car. The residual value is set in stone within the contract at time of signing. If for whatever reason the car's future value drops like a rock, you're protected and it's the financing company's problem to deal with a severely depreciated car. On the other hand, if you're leasing and the market is insane (as it is now), and the resale value is significantly higher than the predetermined residual value, you can simply buy out the car and sell it with equity.

There is no single argument for or against any method of ownership. It all depends, and each method has its pros and cons which are highlighted in different situations.

All I know is like the other guy said, if one is financially astute, then they shouldn't be changing cars like changing underwear cuz they're gonna take the hit every time they get into a new car; so I guess if we already start w a financially non-astute person who insists upon doing that, sure, I guess that leasing may be a viable option for lessening the gouging. All this other stuff about low rates, possible accidents?!, etc, is just distracting from the fact that for whatever reason the buyer doesn't have the cash upfront or that they have it tied up or 'think' they can make better use of it...which leads to the question, why the heck is the lender lending $ when they could supposedly easily make much more in the stock mkt or whatever the borrower thinks is so awesome? In any event, by lending the dealer is gonna make additional profit off of that, so unless there's a freak deal going on, it will always be way more expensive than buying outright and usually worse than financing I would venture.