Quote:
Originally posted by Super_Dave_D
If someone wants a new car every 3 years
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That's the key.
If that assumption is made, it doesn't matter what you do, you'll be paying through the nose for your transportation. You are perpetually on the steepest part of a very steep depreciation curve.
It can be financial suicide for a lot of people. They get hooked into it, never build up equity in a car so they never own a car and never have the ability to choose to not have a big payment. It's the same financial suicide as other forms of credit which is used to purchase or rent items which quickly lose their value.
In a world where lots of people have a savings rate of ZERO and lots of even "good" savers save maybe $10K per year, that $500 per month lease payment hurts over time. Anyone with a job can make that payment, but at the end of 3 years, that's over $20,000 gone. And the car is gone, too.
For a biz, yes you can deduct a lease payment in certain circumstances, but you can also deduct purchase payments if you buy. You could even pay cash and deduct the depreciation if used in a business.