Steve A. • July 24, 2018 • Newsletter
Last modified: April 24, 2019
There are also situations that arise more often than you would think where leasing a car with the intention of buying at end of term is cheaper than buying outright, or even buying a used model. In some markets manufacturer’s get very competitive with lease deals and offer large rebates to make super low payments they can advertise. As an example, a $20,000 compact sedan (which is actually the size of a midsize sedan these days BTW) could have a $2000 retail rebate and a $6000 lease rebate. So, leasing for a 2 or 3 year term and then choosing the purchase option at the end of the lease, also avoiding any mileage or damage issues entirely, would only cost about $14,000. That’s likely cheaper than many of the used models of that car on the lot. This is certainly case by case and you need to do some research, and it can also very by state and market, so results can vary.
Rarely do people lease a car because they worked out the numbers and it’s the right thing to do. The most common reason is to buy more car than they can aford. That is a recipe for disaster.
If you are financially sound, then you can spend your extra money on any luxury you want. Leasing is usually a luxury item.
Dr. Cory S. Fawcett Prescription for Financial Success
In regards to leasing, I put about 22k per year on my car and am able to use it for a business. For tax purposes leasing is beneficial as well as feeling confident about the reliability.
Business owners can write down leased vehicles as a business expense. I overestimated my mileage/year, paid a high 3 year lease rate, wrote that off as a business expense, then privately purchased the vehicle at a low price at the end of the lease period (because of the high mileage that didn’t end up existing….) The business also put new tires on just before the end of the lease….. Just a complicated way to make the tax code work for you….
First off, awesome post. Second off, I would definitely agree with your reasoning behind your second lease.
The cost of reliability and safety for loved ones during critical times is practically priceless. But I’m sure it feels good now to be able to buy a reliable car and have that title under your belt :)
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