Quote:
Originally Posted by Porsche-O-Phile
This.
I don't understand the vitriol towards the anti-payment crowd (including me). I don't like oweing money to people and I like owning it to banks even less. I made my last payment in 2009 or 2010 (whatever it was) and I've been happily living free and clear ever since. ...
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My truck is a 2005. I love it and don't want to get rid of it, so I understand longevity and anti payment, but I was one of the ones to weight in early on the benefits of a lease. There are drawbacks as well, but there is no one best answer.
Keep in mind that you are not payment free as you think.
A person needs to look at total cost of ownership over the period they own the vehicle. That is one aspect.
Then there is risk of breakdown as well as the cost of down time. That is another factor
Still another is the opportunity cost of tying up the capital in the first place versus making payment which leave your other money free to work for you.
The total cost of ownership one is the one most people don't fully appreciate. Take for instance a used jeep that you buy for a low cost. Lets assume under but near $10k and very little maintenance. Your depreciation is slow or the first few years, but the last $5k could suddenly drop all in one year depending on condition.
You need to plot money in (purchase plus expenses) against depreciation. Just because it is paid off doesn't mean that it isn't costing you hidden money to drive it.
A valid point is that leases keep you in the high depreciation years (years 1-3) but any car is typically going to cost you a minimum of $1k per year maintenance plus depreciation. Older cars might cost $2k-$3k in a single year if unlucky.
We had a 2008 mini. Purchased 1 year out of warranty to save money.
In two years it cost $6k in maintenance and it depreciated $9k. Extreme I know but another factor for newer cars with all these gizmos, one sensor can cost you $2k.
In the old days if you lost a $700.00 transmission that might have been enough to retire your old beater, now $2k sensor might do it.
I'm afraid of owning newer cars very long.
If I want new for reducing risk on my business vehicle or my daughter's car away out of town, I'll look close at a lease. For my wife's car that she drives a short distance to work, she has an old vintage hot rod truck. If it breaks she takes my car and I take the 911. Different tactics for different situations.