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Originally Posted by jmg
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Originally Posted by W///
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Originally Posted by stein_325i
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This is absolutely ridiculous, and a great way for them to be upside down on their loan 84 month loans or whatever they offer these days. I'd get it if it was something rare and collectible, but we're literally talking about mass produced SUV's here. And in no way would I consider a 12% mark up a "modest" premium. |
There is a sucker born every minute. The only way to acquire a vehicle right now without getting hosed other than going the rare limited route is to lease under MSRP for buy rate money factor for 36 months or less and a decent residual. Some are speculating that we will see a new car shortage for the next year or two. That means there is a higher chance that today's lease residual will be lower than the market ie the payout for the lease could be lower than the cars market residual value next year, which means you can sell the car and pocket some money. The reason this is preferable to financing is because you will have less exposure month-to-month, and a locked in residual should the economy tank in 36 months. I would even say that for this reason leasing a car might be more beneficial than buying used since the used market is a sellers market. New cars aren't seeing the steep depreciation that they normally do, while higher mileage cars still do despite the higher initial value. Take a look, 2020 cars are going for almost the same price as new 2021 cars in the secondary market. It's insane.
It will be hard to tell how easy it will be to unload the cars next year for profit, but again, the protective nature of the locked residual is what makes the leases so attractive.
I doubt a lot of people will agree since leases have an unfair stigma of "renting" vs owning. Take the ego out of the equation and do the math. It works. Disclaimer: it's easy to get a bad lease, most people barely understand how it works. Get educated, know what the numbers mean, don't focus on the monthly, and negotiate well. I unloaded my wife's lease a few weeks ago and got $2.5k over the payout. That was 7 months of "free use" of her car, or 20% off our out-of-pocket for the car. |
If you change cars every 3 years, leasing is better. If you keep cars 6-7 years then buying is better. If you change cars every 3 years you have other priorities than financial well being. It's just what one prioritizes in their decision making…IMHO.
I'd personally rather not be in debt for expenses, for others debt is fine…clearly if you're leasing then debt isn't a concern.