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View Poll Results: Will you consider a lease for your next vehicle?

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Thread: Leasing attitudes : with poll

  1. #41
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    Quote Originally Posted by 88CRX View Post
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    I think you're arguing the cost/benefit of new vehicles VS old vehicles. Which is valid 100%.

    This discussion should be financing a new vehicle VS leasing a new vehicle.
    This. Comparing leasing to a used car makes little sense as those are completely different decisions. (new vs used).


    Quote Originally Posted by Thaco View Post
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    I have always considered leasing to be more like renting, its alright if you don't want to have any of the responsibility, but i'd rather finance, that feels more like a mortgage where you're paying to eventually own.

    That said i have never and likely will never buy new so the initial depreciation isn't really something i take in to consideration.
    I've done both and to me lease and finance is exact same with a few more options/benefits during the lease period. I switched to leasing as I find they are easier to get out of, return if they are smashed up, vs financing. You can even sell them with a bit of work. Other than admin fee there are no penalties for getting out early, transferring etc. Out of all the cars we leased we have never returned 1 to dealer and have only bought out 1, the Odyssey.
    Last edited by Aleks; 12-05-2019 at 01:37 PM.

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    Quote Originally Posted by adam c View Post
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    As I get older, I'm not caring about the mods anymore, but more on the quality, comfort, tech and performance, sure you don't get that with an older vehicle however I also don't have a monthly (perpetual) car payment

    Trying to understand if I'm in the right ball park or not
    I agree completely. I'm in my mid 30's now and I have no desire to do anything more than regular routine maintenance.

    It seems like when it comes to new Euro vehicles leasing is always the way to go since depreciation is absolutely brutal after 3-4 years. We have two vehicles in our household, my paid off 2010 TL with almost 200k on it and a leased X1. I do my own maintenance on the TL and the X1 is completely covered for 4 years worry free. Living in the Prairies we do a lot of driving, so it's nice to have a new reliable vehicle to travel in, along with a back-up car if we are getting close to the yearly mileage limit for the X1. I guess we could've always bought something used for $20k that's just as reliable as the X1. But like the poster above said, why bother going to McDonalds when you can afford a steak. We got a good deal on the X1 at .9% and a few thousand off MRSP so I'm not regretting it. Hopefully BMW will offer us something when we go to swap the X1 for an X3 in a few years.

  3. #43
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    I'm mid/late 30's as well... I just drive beaters, but i don't give a shit what other people think about me and don't need status for my own happiness, so i'd rather keep that cash in my pocket and use it for stuff i enjoy.
    User title molested by Rage2.

    Quote Originally Posted by rage2 View Post
    It's not the size that matters, it's the taste it leaves in your mouth.

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    Quote Originally Posted by ExtraSlow View Post
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    I admit I have a very old fashioned attitude in regards to money. Some would say it's a "poor person's attitude". There's a real financial argument to be made for leasing in some situations, I can see the math of it.

    It's funny, leasing seems to appeal to two groups of people. Relatively wealthy people who have much higher than average financial literacy, and lower income people who are financially illiterate. Outside of beyond.ca, I think the second group is much larger than the first.
    End of the day, if you are buying a car that has low depreciation or EVEN appreciation and you want going to keep it way beyond warranty anyway, finance or cash.

    If you never drive any cars beyond warranty or have car ADD, lease.

    Quote Originally Posted by revelations View Post
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    Again, low/middle income mindset. When I was in that class, I was eating bulk rice (or other such things). Fiscal austerity. Buying a 1000-2000$ vehicle vs spending 4300$ a year - after 5 years the numbers look pretty ridiculous.

    Now, I just use the cheap vehicle in the winter when damage is most likely.

    Also, my lowly Civic is certainly not uncomfortable by any means.
    If a $2K Civic makes you happy, may as well keep $ in the bank. New cars are emotional purchases and not logical.

    Quote Originally Posted by Thaco View Post
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    I'm mid/late 30's as well... I just drive beaters, but i don't give a shit what other people think about me and don't need status for my own happiness, so i'd rather keep that cash in my pocket and use it for stuff i enjoy.
    Totally prove my above point.
    Last edited by Xtrema; 12-05-2019 at 03:00 PM.

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    Quote Originally Posted by ExtraSlow View Post
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    I admit I have a very old fashioned attitude in regards to money. Some would say it's a "poor person's attitude". There's a real financial argument to be made for leasing in some situations, I can see the math of it.

    It's funny, leasing seems to appeal to two groups of people. Relatively wealthy people who have much higher than average financial literacy, and lower income people who are financially illiterate. Outside of beyond.ca, I think the second group is much larger than the first.
    Don't sell yourself short re: poor man's mentality. Money problems aren't always mathematical as much as they are behavioural. Anyone can tell you that it makes mathematical sense to pay off items with the highest interest rate but there are psychological reasons why strategies like debt snowballs work.

    I've only ever owned 4 cars and only one of them was brand new which I won't ever do again unless I have enough disposable income set aside for this luxury that the initial depreciation is a non-issue. Overall, my mentality is that it doesn't matter whether you lease or finance as long as you can afford it. I have my own definition of what is "affordable" but that's a story for another time.

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    Quote Originally Posted by rx7boi View Post
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    Don't sell yourself short re: poor man's mentality.
    I actually hope to never lose that mentality. It works good for me.

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    Quote Originally Posted by pheoxs View Post
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    Lease per month will always be less than finance per month so if you save/invest the difference you can come out again. But it does depend on the interest rate and terms.

    Let's say for example both are 3.25% because thats whats on Mazda's lease rate now. A top of the line loaded CX5 will be around 45k out the door so I'll use that because I kind of want one. (Obviously cheaper vehicles out there but also people sometimes go for fancier than that).

    Lease 48 months @ 3.25% = 562$/month with a residual of 20k$
    Finance 48 months @ 3.25% = 990$/month and you own it outright (I adjusted the % because their current finance promos are less, but trying to compare apples to apples)

    Difference of 428$ per month. 428$ / month invested in a index fund which nets 6% return (Which is historically close to average, but significantly less than the past decade actually) would give you a final value of 23,154$ (with 2,610 taxable as capital gains at 50% of your tax rate so lets say 20% net is 522$.

    So 23154 - 522 = 22.6k left over and you pay off the residual as soon as your lease is done and you have 2.6k$ left over in cash at the end.

    Now thats with a 6% return, historically the S&P500 has increased 9.4% year over year across the last 5 years which would've netted closer to 4k in profit. Obviously at some point markets do drop and such so it is a riskier option. But if you can get finance/lease rates of 0-2% then you could even beat them just getting a basic 3% GIC
    Did some playing around... if I look at a Mazda CX5

    With a base CX5, using 60 month terms
    Finance
    Cost - 534.32/month
    Total cost - 32,059.20

    Lease
    Cost - 410.50/month
    Residual - 9,940
    Total cost with residual - 34,570

    So $2,500 difference between finance and leasing
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    Quote Originally Posted by adam c View Post
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    Did some playing around... if I look at a Mazda CX5

    With a base CX5, using 60 month terms
    Finance
    Cost - 534.32/month
    Total cost - 32,059.20

    Lease
    Cost - 410.50/month
    Residual - 9,940
    Total cost with residual - 34,570

    So $2,500 difference between finance and leasing
    Yeah the current finance promo rates are lower. So I ran it through a interest calc to use the same % rates. I did that since the rates constantly change and sometimes you can nab lower lease rates or lower finance rates. Always best to shop for whats best for your situation
    Nolan

  9. #49
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    So from my perspective, there's no real savings of leasing, you're more contractually tied, have km requirements, but can give the vehicle back at the end, so that's $24,630 at the end of the lease with the potential to have nothing to show for it
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    Quote Originally Posted by adam c View Post
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    So from my perspective, there's no real savings of leasing, you're more contractually tied, have km requirements, but can give the vehicle back at the end, so that's $24,630 at the end of the lease with the potential to have nothing to show for it
    It's easy to get out of a lease, and if you bought the right car, the dealer will pay you to leave after the first 2 years or so (that is the case with mine). You can also get someone to take over your lease on the private market or whatever. You also need to account for the fact that you are completely protected against depreciation from accidents, hail, etc. for the duration of your lease, and there is a value attached to that but it's going to be different person-to-person. Same deal with any money you might spend for car washes, car care products, PPF, ceramic coatings, etc. - you have the option to not spend a dime beyond the required maintenance with a lease with no financial disadvantage down the road. All that needs to be factored in based on the individual's expected habits, so IMO it's not as simple as just looking at purchase dollars. If you have an expensive car and you end up in a serious accident that doesn't trigger a write-off, you will be out thousands of dollars right there if you financed or bought with cash unless you drive the car to the end of it's life.

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    Quote Originally Posted by Xtrema View Post
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    If a $2K Civic makes you happy, may as well keep $ in the bank. New cars are emotional purchases and not logical.
    Once again, this was intended for low/middle income earners. Im no longer in that bracket but I still use the cheap (but good) vehicle in the winter. In that bracket though, vehicles are often, wrongly bought based on emotion, rather than logic.

    With upper income - and available disposable income - I definitely see the rationale for leasing if you are going to have a vehicle used year round here for commuting on the Deerfoot for eg.

    Having said that - I definitely have cars bought purely for emotional value. But they are strictly summer only (and the convertible, sunny days only).
    Last edited by revelations; 12-05-2019 at 05:13 PM.

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    Quote Originally Posted by adam c View Post
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    So from my perspective, there's no real savings of leasing, you're more contractually tied, have km requirements, but can give the vehicle back at the end, so that's $24,630 at the end of the lease with the potential to have nothing to show for it
    What your math didn't show that is finance is 2% cheaper than leasing which exactly the difference.

    You also have access to the same car for $120 less per month. If you put that into RRSP and say get 36% tax refund, you would have extra $2600 in 5 years. If you put that against mortgage , it could save you around $1K during the 1st 5 year interest term of a 25yr amortization.

    Again, leasing is about opportunity cost and not tying $ into depreciating asset. How you capture that opportunity is all up to you.

    Of course, if you don't have to drive the latest CX-5, just buy a 4 year old one and just pay cash and hope you don't have high repair bills. My buddy got a 1999 4 runner in 2009 and to this day, it's still rock solid. Even if his car is worth nothing today, it still cost him no more than $100/mth to run that thing and he probably help the environment more than anyone driving Teslas.
    Last edited by Xtrema; 12-05-2019 at 05:35 PM.

  13. #53
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    Quote Originally Posted by adam c View Post
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    So from my perspective, there's no real savings of leasing, you're more contractually tied, have km requirements, but can give the vehicle back at the end, so that's $24,630 at the end of the lease with the potential to have nothing to show for it
    But if you finance, and sell the car for $7-10K at the end, you're in almost exactly the same spot. The vehicle cost you $24,000 +/- over the 60 months. Just with the finance, you paid extra money up front to get it back later.

    Though if you plan on keeping the vehicle longer than that, then definitely finance, as has been mentioned by others.

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    Quote Originally Posted by adam c View Post
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    so that's $24,630 at the end of the lease with the potential to have nothing to show for it
    Even if you finance, the vehicle is only worth +/- $9k at the end of the 60 month. The residuals are usually close to the market value of that vehicle at the end of the lease. Not always but this is a factor to consider when comparing the lease terms to financing.

    So the lease cost you $24k and you have no vehicle after 60 months.
    Or financing costs you $32k and you own a vehicle thats worth +/- $9k. (You just spent $23k to drive that car for the previous 60 months)

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    Quote Originally Posted by 88CRX View Post
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    Even if you finance the vehicle is only worth +/- $9k at the end of the 60 month. The residuals are usually close to the market value of that vehicle at the end of the lease. Not always and this is a factor to consider when comparing the lease terms to financing.

    So the lease cost you $24k and you have no vehicle.
    Or financing cost you $32k and you own a vehicle thats worth +/- $9k.
    I find many vehicles are actually worth more than the residual after the lease is done (most of the ones I've looked at anyway), so again it's hard to just do straight math. For example if the buyout is around $12K, but the car is worth $16K on the used market given condition, mileage, etc., then for anyone doing a total cost of ownership calculation, you need to consider the few grand or whatever you may potentially be able to recoup by buying out the lease and selling it yourself. I honestly struggle to find any good reason to finance, even if your goal it to keep it forever - you can still enjoy ~4 years of lower payments (put your money to work elsewhere), more flexibility, and zero stress or chance of depreciation due to damage. Pretty much the only scenario I would ever finance would be out of necessity due to KM requirements.

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    If your options are either lease or finance. Then leasing is a no brainer once you understand it. I was always a die hard finance and pay it off guy. And I got fucked on every car I ever owned, because I ate the depreciation hard when I sold the vehicle. A lease has this all worked in. I don't have to deal with tire kicking losers from Kijiji when I want to change vehicles, I already know the depreciation number and just give it back to the dealer and get a new one. And if I plan to buy something on finance and keep it forever, then I'd still lease it because it costs zero dollars more than financing, and I am insulated from getting screwed on a vehicle if it is a lemon or it gets ran into by someone, etc. If the value is shit at the end of the lease, instead of paying out the balloon payment I can just give it back and get a new one.

  17. #57
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    Quote Originally Posted by Mitsu3000gt View Post
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    It's easy to get out of a lease, and if you bought the right car, the dealer will pay you to leave after the first 2 years or so (that is the case with mine).
    Who lets you do that? Say half way into your term you just want to give the car back and get something else from the same dealer penalty free.

  18. #58
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    Quote Originally Posted by jutes View Post
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    Who lets you do that? Say half way into your term you just want to give the car back and get something else from the same dealer penalty free.
    MB will take your car back a few months early. VW was doing it for Golf R's. Definitely dealers out there who will, but it also might take some sort of relationship with the dealership to make it happen.

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    I've only leased a car once, and I got spoiled with it so much I can't do it again (because the deals are nearly as good).

    30 month lease on a Civic 2-door for $190 a month. Bought it out at the end for $12g, and sold it 6 months later for $14g.

    Cost of ownership for those 3 years was $100 a month, lol.

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    Quote Originally Posted by jutes View Post
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    Who lets you do that? Say half way into your term you just want to give the car back and get something else from the same dealer penalty free.
    Potentially anyone will. Has nothing to do with anything other than what the car is worth on trade in vs current buyout amount. In reality on a few vehicles will have a market value so high that after 2 years even a dealer trade in value will be higher than total buyout at that time.

    My example was a 2014 Tundra I leased for 60 months. After about 28 months I sold it for $7500 over my buyout making the equivalent payment something like $230 per month. But that's rare and it was during the time when a lot of CND trucks were going to USA so our used truck values were artificially high. I did the same with a 2017 Tacoma, but only got about $2000 back over my buyout.
    Last edited by Aleks; 12-06-2019 at 08:16 AM.

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