Leasing vs. Buying a Car - Dave Ramsey Rant
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As the legendary Scotty Kilmer said, always buy a used toyota
True. Scotty is right again
Calvin you can buy a Toyota Suv such as high Lander or Sequia...?
@Calvin rip, I felt this
"REV UP YER ENGINES!!"
Or Mazda
This was the very first Dave Ramsey video I ever saw. Fast forward 7 months later and we are in the best financial shape we have ever been in. This stuff works
I can’t help but comment on car vids. I have a small car lot and my day job is a professional auto mechanic. I tell people all the time to buy a 2-4K car and don’t buy a new one. Many look at me like I’m nuts. What do I know I’ve only been in the business for 15 years. People want to be flashy. If you buy a good 2-4K car and have 2k saved for repairs and get regular maintenance done all your car problems are gone. If your car needs an engine you have the money saved for it. If you need a new car you have the cash. A $400 a month payment is almost 5k per year it is so unnecessary to spend 5k per year on a car. Anyone that tells you to buy a new car because used cars break down are wrong, your talking to the wrong person. Every car I sell is gone threw and you won’t need tons of work in 6 months. There are good car dealers you just have to find the good ones. And have the car checked out by a good shop before you buy it. Stop wasting your money. I could go buy any truck I want because I have no debt other than my house and because I have no other debt I have money saved but I choose to drive a 14 year old truck that I put a couple bucks into every few months. And not to get off the subject I just found out I might need back surgery which means I won’t work for a while but I don’t believe in having debt so I have money saved. I also bought a house that is well under what I can afford I didn’t go and buy the most expensive house I could find so if i indeed will be out of work I am not wondering how I will pay the mortgage. If I had a ton of debt and a huge mortgage I would be in risk of loosing my house and my family would be on the street. Listen to Dave not your broke friends. I hope my story helps someone. Sorry for rambling lol.
peanutbutterisfu Speaking of medical bills, hospitals give you an insane discount if you pay cash. I heard from one guy the hospital took 90% off his bill because he was paying cash.
Matte I guess that is possible to get a discount if you pay cash. I mean If someone has 10k worth of surgery done and pay $50 a week they would definitely rather take less money up front. 90% off is hard to believe but anything is possible
You posted very good points. I bought a Ford Fusion SE in Canada from a Dealer for $22.5K with 8,000 km on it. Original price was $35K so I figured I captured the 35% depreciation on a 5-month old car. I originally planned to stay in Canada for three and a half years but after six months I had to move to another country. So I sold it back to the Dealer for $15K as I couldn't find any takers on AutoTrader. I suffered a $10K loss from the sale (due to the $2.5K purchase tax) and thought about what I could've done better. Then I saw my friend's Mazda which he bought for $4,000. He used it for more than a year and when he had to move to another country, he sold the car for guess what - $4,000. This is what I would've done if I had a time machine.
Good common sense that hardly anybody has or heeds lol.... Most of my life my cars have cost
I agree and this is the SMART thing to do but this is humans we are talking about here. Everyone has vices and some have more than others. For some cars are a huge money pit. My coworker leases $1400 worth of Land Rovers and without a doubt that is just a waste of money (I know what he makes). Cars have so much tech in them now a days they are like phones, two years from now they are out of date*. a course some technology in cars I wouldn't live without now like backup cameras, blind spot monitoring, adaptive cruise control. Are they necessary? nah but as long as you are saving as well leasing, financing, cash it doesn't matter.
My son in law is a Lexus dealer. He said they make the most money on lease deals.
Mark McIntosh they have quotas from Lexus, why end of the month is the best time to get one as they will make deals to cover the bonus from Lexus.
@@philipquaglino Why drive a Lexus when you can drive a Toyota for much less; then with the savings you can put into your children's college/education fund or go buy a small airplane or put it towards a down payment on an income producing rental property.
I guess all people that drive Lexus vehicles are wealthy snd have no financial concerns. That is why they choise to pay $15K to $20K MORE for the same vehicle as Toyota, but just has a little gingerbread and that oh so 'impressive' Lexus badge on it.
As a 6 year veteran of car sales I can tell this is 110% percent true. They hate cash buyers because they can’t sell you stupid warranties or anything they can mark up. Legally they are able to mark up the interest rate by 2% as well
Good Advice. I bought my car 10 years ago brand new (Toyota Yaris) and paid it off in a couple years. No mechanical issues, great on gas. No payments. I think at the end of the day, people need to just live below their means and not buy gimmicks. Just my humble opinion.
Agreed
I'm actually looking at a yaris now because of the total cost of ownership being so low and great fuel economy.
so you don't like driving, otherwise you wouldn't buy a car which brings no joy. It has no power, no safety, weak sound system, doesn't handle well. What's the point?
@@sunshadow9704To get you from point A to point B. You can rent a Lamborghini and take it to the track for a day with all the cash you saved. If you really enjoy driving that much.
@@Theegoaat following your logic why would anyone buy good food or sleep on a good mattress or travel with a comfort?
Thank you for bringing this subject to light! I'm a big fan of purchasing used, upgrading and maintaining so I don't have a vehicle payment. People need to realize the way newer vehicles are built, they have a very limited lifespan due to how complex the convenience and safety features are. A lot of the electronics are very expensive to replace on these newer vehicles. Buy within your means and be greatful for what you have. Thanks for sharing this practical advice!
My wife and I are in our 60's and here is why we lease cars:
1. We have reliable transportation.(peace of mind)
2. No need to spend money on tires, breaks, major repairs, etc.
3. Option to pay one time at the beginning of a lease. Less outlay of cash than a purchase
4. New car every three years
5. Don't have to worry about trade-ins
6. Cars still depreciate whether it's a lease or not.
After my recent post, I saw a car mechanic that sells some used cars. He recommends buying a 2 -4 K used car. What rubbish. The UC dealer is going to make $1,000 profit on that 4k car, so you have a 3k car that has many flaws - or IT WOULD BE WORTH $30,000. Might be OK for a mechanic who can fix problems himself - and drive an unreliable car - but NOT for most people. And when such flaws DO show up, it costs the ordinary buyer a ton to just get him rolling again - not even considering the inconvenience. Bottom line, if one is going to keep a car for 5+ years, it is reasonable to buy a new one with warranty and NO initial flaws. The initial first year depreciation is MINIMAL when spread over 5,6,7,8 years of driving pleasure and convenience.
You could a) Pay cash b) Lease it c) Finance it. At the end of the day, you will receive a depreciating asset who's true value is derived through the means of transportation from point A (home) to point B (work/school/etc.) where you exchange your time for money/education/leisure/etc. If you pay cash, you will save interest expense, if you finance, you will have a method of transportation at the same time as the person with cash purchased it, but with a little extra cost (interest). If you lease it, you are in essence, renting it.. regardless of the payment structure and therefore, should you choose to release the vehicle at the end of the lease, you will have to start from the beginning with a new vehicle. With financing or cash, you will be able to end monthly payments earlier and preserve more capital, unless you decide to upgrade down the line.
A car isn't an asset. It's a huge liability. Don't borrow to buy liabilities.
I just had long convo with my kid about this. but he's dead set on leasing to get the car he wants. *sigh
theAbeElement what car is he trying to lease?
Or... don't buy liabilities at all. Don't own car, lease car. When the car gets old, throw it away as the lease expires.
Wow, thanks. 😊 I'm car jacking people, your advice rocks.
@@filaybull4138 Prob a Hellcat
Own it so it doesn't own you.
so that's where I.O.U came from! ha!
Chris Hansen Lease so that YOU don’t own t.
No because me at least I'll get bored with The same car , and have to pay repairs and the car breaking down later in life . I rather have a new car with a lower payment ever 3 yrs and put my money into real estate
@@culio544 if that's your style then own a cheap car for your daily life and when you want to drive something new or for a special occasion you can rent one for the week.
New cars to satisfy your need without the commitment of paying down massive loans or upkeep. Saves your wallet and will impress everyone because very few get to drive more than 1 car a month.
@@culio544 well said
$220 a month lease. 3 years. Always drive new and always have warranty. I love leases. My costs are fixed.
Leases also mitigate risks as life throws change at you. They also allow for you to keep your money liquid and invested elsewhere. Sinking money into a depreciating asset that doesn't allow access to said equity isn't the best move. That is also more impactful the more the vehicle costs.
THANK YOU! He’s totally wrong on leases based on my research
@@ms3er396 As long as said life isn't losing a job where you can't afford to make payments. Personally I haven't ever done a lease as the inability to modify the car and mileage restriction is, uh, restrictive for me. I personally just make sure the car is paid off before the factory warranty runs out.
Michael Cookielover Yes / No on the losing of a job. AGain, if you lease you should be INVESTING and SAVING the difference in payments so even if you do lose a job, it won’t matter. In fact it would be better for you as that savings is accessible vs someone who owns a car and has that money tied up in the said car.
In terms of modifiying, you can still mod leased cars, you just have to return them to stock IF you turn it in. Unless you back-door yourself into a super high residual lease you won’t be turning it in, you’ll likely and SHOULD exit it 1-2 months early via a trade in/pull-ahead on the next one.
Mileage is also not a restrictive item, it’s simply a factor you need to decide ahead of time and pay for up-front vs waiting. You can drive upwards of 30-35k per year and still come out ahead on a lease while mitigating lots of risk. Cars depreciate the same regardless of how you aquire them.
$220 saved a month for the rest of your life, you would retire a multimillionaire
I'm not sure if leasing is really that bad.
I bought a brand new Honda Accord in 2005. I paid $29,997 cash, drive out. Couple days ago (13 years later), I hit 200,000 miles. I don't remember exactly how much I spent in maintenance, but I went thru lots of tires, tranny oil changes, all kinds of flushes and etc. It now needs new shocks, brake job, tires which will cost well over $2000. Vehicle is worth around $3000 now. If I sell this car now, the total cost of ownership over 13 years would be like $220 per month.
I could have leased something similar for $220 per month for the last 13 years continuously.
You financed a new auto, that's were the financial sink hole began. I buy used autos when my old one is too expensive; and when I say buy, I mean with cash. Yes I may spend $1.5k per year on maintenance, but I will keep the car for another 10 years. Plus I save up for another car. I earn interest from my savings, then pay cash again. Plus I'm spared all the recalls and failed technology.
st Chambers a new car is also an experience though, everything is new and that new car smell, if its new model year also the feeling of being that only car on the road for a good year or two. Those are intangibles but they do have emotional value
@@KevBoy3D I've purchased a new car outright with cash, and I've purchased used ones as well. So I know the feeling you are talking about. I would still rather live my debt free life with money in the bank than drive to work in a new car. But at the end of the day, to each their own. :)
Try working on your own car... A $2,000 maintenancd or repair bill quickly plummets to a few hundred. Brake jobs are easy and can save yourself quite a bit of money!
JWC Loved reading this comment.
263 month to lease a Camry, 0 down. Every 3 years a new car. No extra costs on the car ever, no headaches, not going beyond the 12 000 mile year. Not a bad deal. Spent a lot of money on my last car. After paying off, many trips to the mechanic. Lots of money, a little here and there over 3 years. Sold for very little of what I bought
guscaldas3 fool
@@ps3Rambo21 you are the fool bro.
I understand this concept well... and have followed it. But I have to say that it is not always as presented for some people. My hubby and I both had older cars for the first 12 years of our marriage. We had paid cash for both and they were decent cars. However... once we saw what we paid on repairs in that 12 years, we vowed to never do that again. We basically had paid for the cars twice and really did not save a penny. We decided to lease a car to see how we liked it, got a low interest rate, and paid a small payment by turning in our trashed cars. When the 3 years were up, we purchased the car at a discount. Now we are running the wheels off it and it is great... but we will never by used cars again. It just is not worth the repair bills. We are now 6 years in on the current car and have never had one repair bill. We are either lucky or this just worked well for us. Also... this car is astounding on gas and our older cars were gas hogs... so the amount of money we wasted on gas in that 12 years was also extreme. When you add it all up, it is now ALWAYS wise to buy and not lease and it is not ALWAYS wise to buy an older car. JMHO (and experience).
Whatever interest rates you got is a pipe dream now, and will never exist again in the US.
maybe u need a more reliable car
I’m surprised that Dave has no idea what the question meant !
When you lease a car under a company , you can claim the lease payment as an expense and get tax credit !
And in my state, Maryland, if a company buys a car, it would need to pay business personal property every year, at a significant cost. So leasing makes more financial sense from a tax perspective
And it cost you commercial insurence which is higher and more then double in majority cases.
he's just an ignorant and uninformed boomer
clycoo5276 with a net worth of over 100 million dollars? Ok buddy
@@andresa6049
So!? Doesn't negate the fact that this guy's a total tool. There are tons of idiot millionaires.
I also thought the same way and bought a 2 year old Certified Audi for $28,000 and after owning for 5 years the transmission failed at 84,000 miles. Needless to say, to repair it would have cost 8,000$+ and I am not counting the thousands extra I had to pay throughout the years just to keep the car running. I calculated how much the car cost me to own and came over 550$ monthly with repairs and everything vs I could have leased a brand new one for 350$ and not have to deal with any hassles. Unless you get lucky and buy a very reliable car leasing makes more sense as nowadays cars just like telephones have planned obsolesce built into them.
Joe Black it’s because you got an Audi lol. It’s common knowledge they are unreliable in the long run. Stick with Toyota/Honda
Agree 💯💯💯
nope, you bought a crap car that was your mistake. You losing out in less via leasing due to a bad purchase does not somehow justify leasing lmfao. You lost the moment you bought the audi, buying vs leasing just decided how much you would've lossed.
Had you bought a resonable and more reilable car and took car of it, the likelyhood of the finiacial burden decreases.
Buy a 2-3 yr old used car and pay cash. Done.
Can you lend me some money
Dr Chapi get a job
@@iheartlreoy8134 can you get me a job?
5000 to 10000 thrown away and too risky it’s stupid. Lol c’mon buyer beware of a expensive lemon
@Raiel Rswarmz Baby steps 1-3
Buying a car in 2018 is idiotic. Look at how insanely fast the new technology in cars is changing. Every year we get closer to having fully autonomous, self-driving cars that don’t depend on gas. In 5 years automobiles may be completely different. So while you’re sitting there patting yourself on the back for saving $8000, people who decided to lease will have endless options to buy revolutionary vehicles because they won’t be committed to a car payment for an obsolete 2017 car.
I swear, people who follow Dave Ramsey thrive on depriving themselves of spending money on enjoyable things.
Broke people and frugal people are essentially the exact same. Broke don’t spend money because they don’t have it. Frugal people don’t spend money because they do have it.
Life is to be enjoyed. You could die tomorrow.
amen, brotha
So you spend 10 years leasing and loose let's say $30k and have no car in the end of it all and have lost the $30k ... but the one who spent $30k cash buying outright and still has his car functioning and working for him and has at least $5k value remaining is the stupid one ??
Benjamin some people are willing to spend an extra 5k to always have warranty and drive a new car. People act like after the warranty is up there isn’t expenses on the car you paid cash for.. there goes you 5k you think your saving.. Different strokes for different folks
Mac. your statement makes no sense. Every car will soon be obsolete with the tech that's being built into them. Tech is ever evolving, so they're not point in holding out. It's not about being frugal, or even being broke. It's about being smart. Leasing makes absolutely no sense. No matter how you look at it, money is going to be spent. Whether it's on maintenance, a car payment, or leasing (renting). I myself would much rather own my car outright. I don't need the newest car. In theory, the only thing a new car will give you is peace of mind. But even then, things can still go wrong. they're machines, and machines break.
"Life is to be enjoyed. You could die tomorrow" is absolutely true, However you can't argue that leasing makes financial sense. 90% of people I have come across who are leasing are doing so simply to drive a car they could never qualify on a loan to own. If that is ones choice fine but it's the road to being forever in debt.
Most of my life I have purchased used vehicles and run them until they go to the junk yard. In many cases this has proved to be the most cost effective plan, but it has not always worked out that way and as labor costs have risen, maintenance costs have chipped away at the used-car-only model of car ownership. As cars age, more and more of their functionality tends to be lost as they become less practical to repair. That power door lock or power window or in the final years the air conditioner for example just go without repair. Unfortunately, that leaky radiator or failed head gasket or or broken timing belt can't be skipped over. My last used car ended up costing me $280 a month when I added the purchase price and repairs up and divided them by months of ownership. I replaced it with a leased vehicle that I paid $211 per month to drive for 24 months. For that relatively high cost (still better than the bad used vehicle experience I had) I enjoyed being freed up from all the headaches of older used vehicles. I didn't get stranded and have to figure out alternative transportation for a couple of days during repairs or come out in the morning in ten below zero weather to find a flat tire due to air leakage because the oxidizing wheel rim made for a leaky seal or had a two-dollar plastic connector in the coolant system fail, leaking out the coolant and overheating the engine catastrophically resulting in a broken rocker tower that terminated the life of the vehicle. Yes, a well-cared-for several year old car is almost always the most cost effective solution, but paying the lease premium to be trouble free and to have full functionality for the duration of the use of the vehicle has its merits.
You definitely know what you are talking about. I like to buy new cars, then hold on to them if they're trouble free. People talk about a new vehicle's depreciation. However, look at value of a new car warranty and that piece of mind.
Leased two different brand new SUV’s worth $28,000 for $280/month. They came with free maintenance. = $20,160.
If I bought the first one for $28k and financed it, I’d pay $427/month for 72 months totaling $30,730 in payments.
Car maintenance is roughly $1000/year for a 6 year old car, and increases in subsequent years.
Say I buy that car, drive it for 10 years. I pay roughly $35,000 and have a 3+ old year car for 7 of those years.
Or lease for 10 years at $280 pay no maintenance, and get new car every 3 years = $33,600
Truth is, you won’t drive the car for 10 years, you’ll drive it for 6, maybe 8, then dump it and get into another $427 payment for another 5 years.
Further: if I take the difference in monthly payments (427-280 = $147/month) and put them towards my 30 year mortgage on a $200,000k home, I’ll save $35k over the life of my mortgage and pay it off 5 years sooner. That’s the entire value of an additional, nicer car.
Check your math DR
I think Dave missed the point of the question. This isn't simply about a person leasing or buying.
I think the question was regarding taxes. A business can sometimes write off 100% of a lease as a business expense.
If the business purchased the car, they'd have an asset and the depreciation to calculate. A lease means you own no asset. It's pure expense.
Some businesses require vehicles and the deprecation is a cost of doing business.
The question is "Is it better to lease and take the tax advantages or buy outright? What if you'd have to finance? Does that change the answer?"
That is exactly what I was thinking.
E missed the mark. Also, some people prefer the reliability of a lease and loaners. When you commute to work you want reliability not a trash can.
Don't forget about the tax shelter created by the depreciation
I smell millionaires in these comments 🤣🤣🤣
@@TheDboy82 Depreciation isn't a tax shelter.
I leased a new 2017 Toyota Corrola in Feb of 2017 for $999 down and $164/mo (total payment). After 3 years, I will have paid about $7,000 with a buy-out option of about $14,000. I haven't paid a dime in maintenance and they even replaced the windshield (which cracked halfway through the first year). My credit score went from a 701 to a 751 since then, so if I do decide to finance the remaining $14,000, my interest rate will be lower than had I not leased first. In addition, the total out of pocket cost to me, will be the same or less than had I bought originally (especially considering the lower APR due to a higher credit score).
As for it being a waste, due to a lack of equity, I disagree. Transportation is a requirement where I live, not an investment. Could I have possibly paid less for a vehicle over those 3 years? Absolutely, but the associated risk would have been much higher... like for instance, buying a used car that needs major work and/or lots of minor work. In 2006, I bought a 1997 Audi at auction for $3,500 with fees, it lasted me 10 years with minor maintenance costs... I was lucky to find a good vehicle for such a low price. That said, my brother was a used car dealer and he had a number of nightmare buys, where he lost significant money. Used vehicles are not always a safe investment. Neither is financing a new vehicle with poor credit.
At the end of the day, circumstances somewhat dictated my decision to lease, but overall I negociated well and got a decent deal ($3,000 under MSRP). If my credit was better at the time and I was making as much as I am now, I might have bought instead... but I couldn't afford the extra $120/mo at the time. If I end up buying it in 20 months, but pay the same total amount, did I really lose? Especially if during the next 20 months I can save up a big chunk of the remaining $14,000 owed (to avoid interest).
Claiming that it's always a poor decision to lease, is a bit disingenious imho, just like buying a home vs renting... if you're smart and save up while renting, every dollar saved for a down payment is a dollar or two earned in avoiding interest.
Live as below your means as possible, avoid paying interest on pretty much anything and make your money work for you... that's how you start winning in finances.
Darkzen24 I agree .. risk vs reward
In 2017 I bought a 2015 corolla for 13,500 with 37k miles on it I’m not advocating financing vehicles but the 1k you put down would of been a good down payment and you’d have it paid off by now
Buy a good old Honda or Toyota with a full prepurchase inspection! VERY reliable vehicles, even used! Works for me!
What is a prepurchase inspection?
"You are driving your college fund" That should be a meme
Eh. We lease my wife’s car, and its a factor of convenience for us. We spend 3% of our take home income on her lease payments, all repairs are included within warranty, and I don’t have to worry about owning a deteriorating and depreciating “asset.” Also, she gets to drive a brand new car, which we would never purchase. Also, the rent payment on this car would be the equivalent of a debt payment for a car worth about half what her car is priced at. The convenience and the relatively insignificant expense is well worth the benefits.
Very true I rather lease and upgrade ever 3 yrs than to own a car I have to worry about breaking down later in life
Real Talk with Tristan Thomas who cares? Owning a car sucks. They depreciate faster than almost anything we buy and they’re a constant hassle. Owning things is only advantageous when what you own appreciates.
@@kevinrushing5667 The difference comes when, in 3-6 years, somebody who purchases and finances a car is done paying for it and now has zero car payment, putting all that money back in their pocket, while you're stuck continuing to lease the next car, and the next car for 6-9 more years while the buyer drives keeps all that money in their pocket. Add this up over the course of your lifetime, and those 6-9 extra years of car payments to drive a nice new car all the time adds up to a ton of money.
If you can afford it and choose to spend your discretionary money on that, that's all well and good, but let's not pretend it isn't an expensive choice, and one that most people aren't mathematically literate enough to understand the costs well enough to evaluate.
@@adamseidel9780 : The variables you're not including are: 1 How well the car is designed and built, 2 How often do you operate the car. If you're buying a known problematic car i.e. Volkswagen, you're going to be getting rid of it after 4-5 years because the cost of repairs will outweigh any potential savings of long term ownership. If you put 20,000mi annually on a car, by 6 years it'll have 120,000mi on it without any warranty left. Once again the cost of repairs will outweigh any potential savings of long term ownership.
Finally something I can agree with Dave on again...
I’ve seen Dealers that will actually charge a higher sticker price if you don’t lease... cause they don’t make enough money on the car itself
The point of leasing is to keep your monthly payment as low as possible, while getting the best car possible. Lease payments will always be cheaper than finance payments unless you’re stupid enough to pay all cash for a car. 3 Simple tips to wealth building: 1.) keep your monthly expenses low 2.) invest your money. 3.) don’t invest in depreciating assets, i.e. cars.
The only reason I can think of to lease is to avoid getting stuck when all the new high tech things start breaking, that's going to be a nightmare. No one will be able to afford to repair these modern day monsters.
26 INDIVIDUAL computers in the new ford mondeo....
The money you don't have to pay for the lease can be used to pay for preventative maintenance.
Amen! I was waiting for someone to explain this straightforward. Never made sense why people lease a car.
The advantage of leasing a car is when you intend to only have it short term. The payments on a lease are also generally a little less than the payments on financing a purchase of an otherwise identical car, but having it on a lease comes with strings attached. Such as miles per year you can drive, applications of what you can do with the car, and having to return it in good condition at the end of the lease term.
Either way, financing or leasing, you are paying interest and profit to the dealer, which you wouldn't need to pay if you buy it outright.
I bought a 3 year old car. Paid half cash and financed half with my credit union only paying 2% interest. Best way to own a fairly new car!
no. the best way is to buy cash. dont try to justify ur mistake and impatience.
Shahzain Raza inpatient would be he buying the whole car in cash
Gentlemen of FC; this makes no sense, a cash sale is a one time expense, as opposed to a recurring expense plus interest over multiple years
Spending 5,000-10,000 as a one time payment on a reliable used car is only painful *ONCE*, as opposed to the monthly pain of car payments
MacTechG4 i know that I’m talking about what he said” impatient”impatient would mean they can’t wait for anything he wanted.
@@evrythngfinance997 learn English
Buy a car outright if you want to drive it into the ground. Lease it if you want a new car and don't want to pay the maintenance yourself if you get the benefits in the deal.
His numbers are off. A 30k car can be leased for a total of about 10k or 300 a month.
Kim Wallace no, leasing is usually $1,000 down. Buying would be what you said
Or just wait for the zero down leases that come every year
Donster 3,000 due at signing
Matthew McCarthy i just leased a 31k suv. 1k down. 299 a month payments. I never have to pay for an oil change or any maintenance while I have it
@@CJLopez21 which one?
You know. I’ve been watching your videos for the first time in the past few days and I’ve been following your math on a lot of your scenarios you’ve been describing and I gotta say it, I can’t help it anymore. You got yourself a new subscriber. I take these videos very seriously. Subscribed.
We buy used cars that are lease returns. They are usually in near perfect condition, low miles and thousands off their price when new. Then we keep them until paid off and a few extra years.
But what happens when your car breaks? Mechanics charge $150 per hour plus parts. What happens if your car has some weird electrical problem for example? Could cost thousands to fix. People are attracted to payments because they can depend on a set amount each month on a warranteed vehicle. But totally agree; people are ridiculous with their cars.
But if you live in a state with state taxes you can avoid state taxes by Leasing which is money saved.
Dave not everyone want to drive 10 year year old used Buick
Since when does a used car mean the same thing as beat up...when he specifically said he's not referring to a beat up car?
blackericdenice then you shouldn’t be surprised or complain that you’re broke.
Life's about choices. You can have a nice car and less money in your bank account, or have a clunker with more money in the bank. I went 4 years without a car payment, then finally bought a 10k base model car and financed it. My monthly payment is under 200, so I kinda took the middle ground. Either choice is legal, but a car that costs more per month than my house makes me queezy.
@@africarib exactly, i know so many people who do ZERO research and hear used car and instantly picture some kind of beat up minivan or something, not realizing whats on the market and what kind of money you'd be saving with a good deal on a used car
Yeah. Everyone wants a new car just like everyone wants their girl to have 44JJ cups.... but then there's reality.
leases are good if you want you get a particular car out of your system , also covered under warranty
Me and my wife just bought an 07 Toyota 4 runner with 325,000 miles on the motor. Bought it at a car auction for cheap. Runs and dives better than a brand new car. I’ve seen these 4 runners go over 600,000 miles.
I just made a video on this lol. I have saved $10,000 over the life of owning my car. I own a 20 year old car and it's still running. You look at people with older used cars... look at their life... they are probably the ones that are more apt to be debt free... like myself...
AutOdometer Yep!! I am 26, debt free and paid off all my debts including my huge student loan. I drive a 2001 Toyota 4Runner which I paid cash for that has been bulletproof and starts every morning. I refuse to buy a new vehicle and take on debt when my old truck has been extremely reliable and I can keep banking more money for retirement etc.
DeathMammoth
You're doing the right thing especially if you are the point A to point B type.
In my lifetime so far I've had a new used 3 year old car every 10-12 years. My current is a 2012 Chevy Sonic LTZ I bought used rental car for $15k in early 2014 and most I've ever paid for a car.
I wanted heated seats and remote start from cell phone. Preowned so I had 2 year full warranty so after expiration other than annual oil change I paid about $600 for new tires and alignment three months ago.
There was also a problem and the engine light came on at that time but they replaced something and apparently there are things that's still under warranty because it was no charge.
Compared to the 10k or more I work with and the cars I've seen in the parking lot in the past 32 years I've saved at least $220k in interest,insurance,depreciation,etc..
pretty much all of it went into my Roth IRA,401k,savings,and investments instead through the years.
And I'm retiring early.
Bro... I drive a 1999 Toyota 4Runner. Also a 97 E36 and a 97 Lumina. The belts have been squeaking in the 4Runner and I think I need to tighten them up. Driving used cars is definitely the way to go. I put together a calculator that shows you how much you can actually save driving an older used car.
That is an amazing story. I put together a calculator that showed me the monetary benefit of owning a used car. I compared if I were have bought an expensive used car or a new car if I were to have changed my purchse back when I bought my 1997 Lumina.
Same here bro. 1990 4Runner and it still runs great lol
Paying cash for a car is usually unrealistic for most people. My rule: Buy 2-3 years used, finance at a payment I can pay off in 4 years, keep for 5-6 years (I do get bored with my cars), and buy something that's not expensive to fix. DO NOT keep up with the Jones'.
the reason it is unrealistic is because everyone wants that 'upgrade' the next vehicle. If you got a base truck, get another base truck, don't use the equity to cover the cost of 'upgrade' and finance the same amount you did last time. That's the problem...oh, and every young person wants now what mommy and daddy worked for 25 years to get.
That's my philosophy for 20 plus years
Yean hardly anyone has 10k or 5k laying about to buy a car upright its unrealistic which Dave thinks everyone has
I disagree. When buying 2-3 years used, a general rule is you'll save 50% off the MSRP. Yes you can pay with cash. I repeat yes you can. Once upon a time, I bought a $14K camry thinking to myself let me finance it. So I financed it. I went through AAA who turned around ripped me off by lending me through a credit union. I have no idea, I could've went straight to any credit union and saved. I was never educated. Guess what? I paid off the entire balance in 6 months. Here is a fup part, my final payment was $16K. AAA and the finance company took a huge bite out of that cut - their profit margin: $2K in 6months!!!. Don't buy any of the stupid BS they tell you, learn from my mistake dude. NEVER EVER f'kn finance anything again. Pay with cash. Get another job if you have too. They're sharks out there, everywhere. And never EVER buy status symbol, and never EVER buy TRUCK or SUV or VAN. The bigger the vehicle the higher the cost of ownership.
I totally agree. No body is going to wait 5 years or more to save for a car, when you need one right away to produce income, specially in places where public transportation is not as developed. If you live in New York, where you can get almost anywhere using transportation yes. Otherwise you can't wait to save money for a car to go to work. A car is need in some places not a luxury.
Well, I did all the cost math, if you plan to drive 7+ years then it is worth buying. You always pay a car, always. Even if you buy used for 10000$ and drive it for 10 years, divide 10k in 120months + repairs + maintenance and then you get the real price. If you were not lucky, something major will break in the year 8 or 9 and then you pay extra 2000 - 5000$ for repairs. So you don't pay upfront but on the exit door. If you lease you pay much less but you always have to lease. So all in all, you cannot get away from a loss on the car.
The way I see it, you’re always gonna lose money on a car. And it’s gonna be about the same amount no matter how you do it. I pay $220/mo for my $12K 2012 Civic with a warranty to cover major repairs If I had saved up for five years and bought it with cash, I would need to save up at least $200/mo for the inevitable repairs coming up in the next couple years. Transmission, engine, cooling, electrical, etc. Not to mention preventative maintenance. I’m really only saving the interest on the loan by buying cash which is significant, but you’re losing money no matter what. Cars are expensive.
But you’re not taking risk into account.
Leasing is like renting a home. You don't have to pay for any home improvements, leaks, etc. There's peace of mind and it's also cheaper. Owning isn't always the best solution.
Pay cash for vehicles. Once you start understanding how to build proper wealth you will never lease or finance again.
Devonte Moore How do you pay cash for a car that’s over 25k?
Disney Fan SAVE and BUDGET. Plus if the car is valued at 25k and you make 30k a year, ideally that is too much car to buy anyway. I believe a vehicle should be 15% or 20% of your income, I'll have to double check that. Dave touched on that in another video.
Devonte Moore Yeah but for me that makes $55,000 a year. To save up for a new car every 2-4 years is a lot of money to save each year. I would have to save up about $10,000 a year
why would you possibly need a new car every 2-4 years.....?
Disney Fan "How do you pay cash for a car that’s over 25k?"
Save up the cash to do so, or pay cash for a car that is cheaper.
It feels good to hear someone talk truth about car buying, refreshing.
Whenever I catch myself whopping for cars through web distraction, i come back and watch this, then do the sums.
The urge goes away quite quickly.
Leasing absolutely makes sense if you lease a vehicle with high incentives. Take today's deal: I can get a 2018 Dodge Challenger RT, msrp around $37,000, for approximately $200 a month for 24 months, with $700 total down (includes first month's payment) and a $395 turn in fee at the end of the lease term. Total cost to lease (including turn in): $5900 over 2 years. Take almost ANY new vehicle (even that one) with a similar msrp and buy it, instead of leasing. I am pretty certain that if you tried to sell that vehicle in two years--even within two years--you'd lose more than $5900 in depreciation. Plus, with leasing you never have to be out on your own as far as repairs, since the manufacturers' warranties generally apply to most--if not all--of the time that you are leasing. Finally, there's the obvious benefit of driving a brand new vehicle every few years.
Yeah it's surprising this guy gives advise like this. He did not mention once where leasing makes sense and it does for some people. Also leasing has a bad misconception from the 1980s. Sure you have to pay for it to drive the latest vehicle but a car is never a good investment no matter how you finance it. Even buying it cash you'll never resell it for what you paid. You're also payimg up front for depreciation if you pay cash.
You forgot that you can negotiate new car price under MSRP. I could buy a 2018 Dodge Challenger RT $33,000 OTD.
Whether you lease or purchase either can make great sense if you 1. Take you time and do your homework on ALL numbers involved (price, trade-in, interest, residual). and 2. Don't get emotionally attached until the deal is done so you can WALK AWAY if the numbers are not coming together in a way that corresponds to the homework you did in step 1. I buy LOTS of cars at good prices because I'm not afraid to walk away from a bad deal. Take no offense, just say 'thank you for your time' and walk. Interesting things SOME TIMES happen at that point. Be patient.
Thanks for the reassurance. Spot on. My car is 11 yrs old and over 200k miles. Still nice and running. Who cares about what people think about ur ride when they dont pay the bill?
The bill you pay is for the daily repairs
I’m considering leasing because I am worried about auto repairs. I am considering buying because I can keep the car as long as I want. I am having trouble deciding what to do.
Leasing by itself is not inherently a bad thing. It’s just a different form of acquiring a product. Every case is different. You need to do the math. I have gained on some leases and loss on others. It all depends on your own situation, and sometimes the make and model of the vehicle. In general, leases come out ahead in the short term, and financing and cash purchases come out ahead in the long term. An accountant can crunch the numbers and see if a lease makes sense in a particular situation. If you lease, you’re effectively paying rent. If you buy, you’re incurring depreciation and cost of interest. Whichever number is smaller the better. 10 years ago if you had a lease you most likely won as leasing companies and auto manufacturers suffered great losses because they under-estimated the used car market and lease returns were worth much less than they had anticipated.
To qualify for a lease typically requires a 680 or better credit score which translates into a money factor equal to a 1 to 3 percent interest rate not 14%
My dealer said 710 or higher.
@@TeeroyHammermill Yeah, 720 or above is always the best but anything over that doesn't matter.
I never understood Leasing but a lot do people love it for some reason
He's absolutely correct. I work for a "Japanese" Auto Finance company and the company is raking in the cash from leasing and other deals. Just buy the 2-10 year old Lexus or Infiniti (in pristine condition with low miles) and be satisfied.
I drive a 2003 mercury sable, gotta make 1 repair for a few hundred bucks a year, still beats a car payment every month
Why is his life sad
The problem is you’re seeing cars as INVESTMENTS...... that’s the problem. Cars are NOT INVESTMENTS. You’re buying something that has value and that value will decline just like your TV, furniture, carpets etc. that’s why I can’t take him seriously because he sees cars as investment. No matter how he words it.
I agree Joey, do we want to take fashion advice from Dave as well?
Plus at the end you don't have a car at the end of a lease! From a business perspective, where you are going to use the heck out of the vehicle long term renting is definitely the way to go (especially work trucks). Rent them, its a fixed cost, you don't have to dedicate staff time to take them to the shop, the rental company takes care of the maintenance, and usually at a certain threshold the truck gets replaced with a new one as part of the rental. Its a huge time saver - I've dealt with owned work trucks vs long term rentals...I'll long term rent every time.
Businesses lease cars because it's a tax deductible expense and because dealing with a 2 or 3 year lease is much simpler than dealing with buying, maintaining, and eventually selling a car.
I rather buy my car than leasing . Keep it until it stops running. Stop given your self more debt than you need.
Agreed, I fianaced my car for one year and then paid off the loan, I'm keeping it till it dies
Leasing a car and giving it back after making all those payments...may as well buy it. Leasing is not wise in any scenario.
But by the time you pay off the principle and interest on your used car and do the regular maintenance work, isn't the car already old and outdated and has bad resell value? Plus, there's all this $ tied up in a depreciating 'asset' (more like liability). :/
You are so wrong. Leasing is the best way to go unless you’re going to keep your car 12 years or longer if not leasing is a no brainer
If you can't pay cash. Just finance, pay off in 4 or 5 years and keep it for 10,12 yrs or more. Replace engine, transmission , etc if needed .not hard. Then after that if you need to replace it you should have enough to pay cash for another used vehicle. My wife has a 16 Malibu and I drive a Silverado. No more payments after they're paid for.
Lease is the most expensive but your never paying for even a tire and your driving your vehicle during the best years of its life and always have something new. Of coarse its the most expensive.
The Nitruc actually, lease payments are significantly less than finance
Lease is less per month I agree. Still more expensive in the long run.
It's like renting an apartment or buying a house. You don't have to worry about repairs or upkeep.
I'll be 48 in April. I've never had a car payment in my life. To me, a car just can't be worth more than 5 or 6 thousand dollars.
I'm sorry M.C.
Since i started to watch him he did opened my eyes to the real world
it's not always about the money. there is no maintenance required on a leased vehicle, and no tires. that saves time and stress. also, if you enjoy driving new cars, the huge loss you will take trading a purchased vehicle in for a new vehicle every 3 years was not considered. i have an older car that i do most of the work on myself and that sucks. fine for a 2nd car but not so fun for your primary car. plus i don't trust it the way i would trust a newer car so i find myself staying home when i would rather go somewhere. yeah my car will probably make the trip but there is an element of stress in every trip
Buy a Toyota/Lexus, new or used, keep it until 250,000m, then repeat.
dalton knox you must be a fan of Scot Kilmer
50/50 your airbags work though. 3 out of 3 people i know who have crashed their lexuses, none of their airbags went off (post takata)
@japanwatchconnection
Me, and I have owned most every brand at one point. I bet you drive an unreliable car that is not even that great.
Makes sense.
@Joe Doherty they just did another massive recall in 2019 for almost 2M vehicles.
I was an impulsive buy away from getting myself caught up in an expensive situation.
Time to re-evaluate what I’m getting
We have a lease but my husband’s company pays for it. They give us the money and then after taxes we end up paying $87 a month. Could be worse. He gets a hefty discount on maintenance too.
Honestly, that's not too bad of a deal. Cycling through beaters can easily eat up $1,044/year, so you're getting a great deal. That's about the same price as a bus pass, truth be told.
gee that's super
that's very different; and super nice for y'all!
Yea this definitely falls in to don't be stupid territory. If somebody is offering you a good deal on transportation don't turn it down just cause you wouldn't personally lease a vehicle.
Stephanie Bogart Thats what I think he’s not taking into account, especially for a high end foreign car. You save a lot on maintenance. If you deduct that from your monthly payment you’re actually saving money vs owning.
I have never understood why this is a question. There's only one question you need to ask yourself to get the right answer. Do you drive a lot? If you love to drive buy. A leased vehicle does not give you the luxury to go on long road trips, drive aimlessly around town to calm your nerves, or go out of town for the weekend. A lease only gives you 12,000 miles a year/1,000 miles a month and if you go over your mileage at the end of your lease you face some heavy fees. Even if you opt for the 15,000 miles package, that's only 250 extra miles a month. If you live in a state with great getaway spots like Cali or Florida, you will be on the road a lot more going to amusement parks, beaches, etc. All of those treks add up. I speak from experience.
Now I see why all commercials advertising cars always say “Lease now for just $399/month”.
I think Dave Ramsey is looking at the lease car in the wrong way. If you are comparing leasing vs buy then yes leasing will be more expensive. But people who lease a car don't want to keep it after 3 years. So you need to compare trading your bought car every 3 years verse leasing a car every 3 years.
I know a ton on people who have leased and not one purchased it at the end.
Leasing a car is similar to renting a lawnmower from Home Depot.
Yahoo ad popped up on my screen: Top SUV Lease Deals This Year!
Tons of millionaires on CZcams leasing exotics & turning it into profit. A car can be used as a tool to create income no different than a computer or phone or hammer.
In my opinion Dave Ramsey is very outdated with his advice when leasing a vehicle. A leased vehicle can actually be a smarter idea and here is why. I will go into detail for you.
Let's use the example of buying vs leasing on a very popular vehicle, a 2018 Mazda CX5.
MSRP: $28,490
Negotiated Sales Price (Rebates, Dealer Discount, Tags etc) $26,200
Pennsylvania Sales Tax: 6%: $1572
New Car Loan Rate: 3.39%
Total Price “Out the door”: $27,772
3 Year Loan: $812 - ($771 Principal) + ($41 Interest)
Total Interest Paid 36 Months: $1476
Total with interest paid: $29,248
5 Year Loan: $504 - ($463 Principal) + ($41 Interest)
Total Interest Paid 60 Months: $2460
Total with interest paid: $30,240
Actual trade in value after 3 years with 36,000 miles on the car. $16200 (verified by 3 sources)
Actual trade in value after 5 years with 60,000 miles on the car. $10600 (verified by 3 sources)
Total Loss of $ 13,048 in 3 years or $362 a month in loss. (Mint condition car, no damage)
Equity of $16,200 in your pocket at end.
Total Loss of $ $19,640 in 5 years or $327 a month in loss. (Mint condition car, no damage)
Equity of $10,600 in your pocket at end.
--------------------------------------------------------------------------------------------
Lease the vehicle
MSRP: $28,490
Negotiated Sales Price (Rebates, Dealer Discount, Lease incentives, etc) $26,200
Residual Value: $17,394 (Cost to buy vehicle after 36 months if you option that)
Mazda CX5 Money Factor: .00001 (“Rent fee”) $.45 cents per day or $16.22 for 36 months
Final agreed to Lease deal: $0 due at signing, with first month payment included.
Total Monthly payment $312.27 with 35 total payments
Total Loss after 3 years: $10,929 or $303.58 per month
In today’s world, car manufactures are competitive and offer attractive deals. Dave Ramsey often talks about how the manufacturer rips you off with huge rent fees. As you can see in the above actual negotiated deal, rent fee is only $16.22.
If your vehicle is in an accident it can also drastically lower the value of your trade in vehicle. With leasing the car manufacturer takes the hit of the decreased value from an accident.
If your car is a lemon or has issue, you can turn the vehicle in hassle free.
Leasing also has a significantly lower monthly payment then purchasing.
If you like the vehicle, you can simply purchase it at the end of the lease. The rent fee you paid at $16.22 over 36 months is nearly a 0% loan on half the value of the vehicle.
Buying a new car and leasing are both dumb. Buying a reliable used car with cash is the smartest option. If money is no issue then leasing or getting a new car is fine but if your worried about losing money and depreciation then it's very stupid to lease or finance.
I gathered that your 3.39% interest is on the total cost of the car PLUS the expected depreciation ADDED TOGETHER and THEN charged 3.39%.
you are correct DAVE is an idiot
He's not an idiot but this is old now. I'm thinking about leasing an EV. Adding in the fact that you spend no money on gas can almost cover the lease amount!? Anyone have thoughts on leasing an EV?
@@jarrendell31 Hi, I'm on the same boat. What have you decided?
Thank you!!!! I was trying to convince my husband for 2 yrs that we shouldn't lease and couldn't convince him and you did in 15 seconds 4:40-4:55. Thank you thank you
This. I struggle with this all the time. Lease v Buy v Finance. Actually I think it's only Lease v Buy, finance is a no no.
I think people should stop talking about cars like they are investments, they are not. They are a tax on existence (in America for sure). If you live outside the pitifully inadequate public transport system, you HAVE to own some kind of vehicle. There is no investment, it's just a cost of living, like food.
I have always saved and bought 2 year old vehicles, mostly with some remaining warranty. But I still have to save the money. I'm trying to figure out if total cost of ownership over 8 years of leasing vehicles is any better or worse than owning outright (and paying the yearly maintenance).
Anyone got any real numbers on that?
The point of a car is to get you from point A to B. Anything other than that is just luxury to impress people. I still drive my 90 toyota pickup i DGAF what others think about my vehicle
if you like it enjoy that 30 year old car. Nothing wrong with that.
I wish more people understood this. Our economic outlook would be so much better as a society. I make.....let's just say plenty of money - yet my daily driver is a 2003 BMW sport wagon that I paid $4500 for with 155k miles on it. Put a couple thousand into it to refresh everything that needed doing, and away I go. Meanwhile, my toy car is an "old" 2011 BMW M3 (that I bought used last year). But I own it with no payments. People make fun of me on social media when I try to call out when I see sales guys trying to get people into new BMW M4/M3 leases for $1000/mo and I say how bad of an idea that is. I just get trounced by chumps who say I'm just jealous, or it's that person's money so they can do what they want.
That attitude is killing people's futures. Most people are completely incapable of managing their own money and they've been conned into creating the illusion of a glamorous life. Making payments isn't glamorous. It isn't wealth. People always assume their job will be there. They always assume their cash flow will always be there. Or their income won't drop. Payments are always a risk. They encourage people to not save money.
Yep see most people would say a $500 car that requires $1300 in fixing is ridiculous. But in an age where a brand new, loaded/optioned out Honda Civic touring costs $30,000, I don't see how that argument could ever hold. In 99% of cases (commuter cars/daily drivers), it is more cost effective by a landslide to just fix it and keep driving. The only time that isn't true is if the car rusts the frame rails and it is literally no longer structurally safe in a collision.
very smart
Another bimmer fanatic paying respects to your cars
Very well said.
JordanTWard Very good word Jordan.
Okay but you get to drive a brand new car with low monthly payments for 3 years, and then when those 3 years are up you do it again. What’s the point of owning a car that is getting older by the day, giving you problems and breaking down
correct.
Least payments are calculated on depreciation plus interest. The vehicle isn’t going to depreciate 20k in 3 years with the average mileage of 12k/yr. it’s not that anything is being hid. That’s the purpose of the lease. Then you have options after your term is up. Also, front end wise across the nation the average new car sales loses a dealership about 200 dollars.. so it’s not necessarily always profit in the front end.
When you keep your car over 10 years, less you know have an experienced cheap side mechanic, be ready to spend thousands to fix it, financing vs leasing, a double edged sword, by the time you own the car, its going to be old and out dated also
I love Dave Ramsey but what does he want people to do? Drive cheap old used cars and spend half their time in the shop breaking down and paying for continuous repairs and maintenance, towing, while living in fear that a modern car will hit you and you’ll end up dead or paralyzed because the safety ratings are so old that the car really shouldn’t be on the road? If you need transportation then you need a car and are going to pay for car payments or repairs. With repairs you’re going to risk paying for towing, being stuck on the side of the road in dangerous situations, and overall less safe. While he’s brilliant with finances, he cannot dispute the safety of a car like a bmw or Mercedes vs many other cheap cars either. We leased a small new BMW 4 series for $550 month with zero down for 3 years. All maintenance as well brakes and all services and even the windshield wipers are covered. All we have to pay for is tires which we will likely only need one set for about $800-1200. This means all in we’ll spend about $20k or less than $7k per year. We get to write off a chunk of this on our taxes for business as well so the effective payment is even less. I sleep well at night knowing that we can push a button on the headliner to get roadside assistance there quickly. And the car even will call 911 automatically in a collision. We know exactly how much that car will cost us. No surprises at all and in the end you cannot pay enough for peace of mind. But then I have to say that I see nothing wrong with paying for something that you like and enjoy as long as your kids college or your own retirement isn’t sacrificed. The ridiculous assumption is that we would buy or lease a car with our kids college fund or our retirement money. Not the case. Enjoy your life people. Make smart decisions. And when our lease is up we will drop that thing off at the dealer and get another one. And once we’re done working and retired and not on the road then maybe we’ll go buy an old Buick for $1500 and take it out every Sunday for the early bird dinner at Denny’s. But in reality we won’t need to do that because again we didn’t sacrifice our retirement for our car. We did both because we frigging need a reliable safe car to exist in this world.
Agreed. The value of a car that I don’t have to worry about it breaking down is so important to me. Not to mention I wanna drive what I like!
OCMotivator my Man U wrong on that one no education I have wats so ever in mechanics ok bought a book a bout Accord s ok I buy a 2005 Honda for 1,000$ ok yes it need some miner fix Bc of learning a bout cars the way I rebuild it is worth more then a 2012 bMW or Mercedes that has las miles then my point is like Dave say think in a long run then a short run my 1000 investment that became almost 10,000$ profit while every one still paying of there cars an in debt
Money isn't everything. I enjoy new cars and warranty. I love leasing.
I also own a successful business and my wife has a excellent career. We love new vehicles.
Dave Ramsey is a salesman, nothing more.
learn how to pick a car...buy a truck as they meet that safety you idolize and fuel really isn't a huge cost in the reality of overall cost to own.
Michael Johnson. Dave Ramsey is a salesman? He's a used car salesman because he tell us to buy used car?
One thing you missed the point about the guy wanting to lease in a company name. This makes a huge difference. If a company leases a car it is not considered an asset it is considered an operating expense and the lease payments can be written off when they do their taxes.
Dealers made it sound so good when i decided to lease. THE WORST DECISION EVER! Basically bought my car twice.
Most expensive way to own a vehicle month over month? Doubt it. What about people who are just going to buy a new care every five years anyway? Paying cash every time for everything is not good advice for people who are willing to accept much of your advice but not all of it. If I want a new car because I have a change in family size and 9 months is not enough time for me to save up for what I feel is a safer vehicle, financing or leasing are the only options. Making your points in over inflated terms like, "If you lease a vehicle, you will never be wealthy," is not only pure nonsense, but it's also fearmongering to people who trust you.
Car isn't an investment, it's a purchase. You didn't lose anything but value. You still have the car, it was either worth the purchase price or it wasn't.
Thanks to your inspiration, I just bought a one owner, 12-year-old Ford SUV in mint condition for $3000, $1500 less than book value...185,000 mostly highway miles... replacing my 25-yr-old Camry which still runs pretty well, but needed something to use for my new rideshare business... God Bless!
Good luck with reliability of that thing. Hopefully you have a mechanic in the family.
My old truck was 19 years old. My new truck is 12 years old. Best feature it offers me, is no payment at the end of each month and cheap insurance.
and repair bills
chad haire okay what does that mean? I get leasing means you get free maintenance, oil changes etc. but with a business or even with a home or anything, there are “repairs” that need to be made. I’m not getting what you’re saying..
Ill keep it short and simple:
Lease if you like to have a brand new car every 3-4 years ( good news is you have the option of buying at the end)
Finance if you absolutely can't live with not owning a depreciating asset.
Buy used and cheap if you don't care about having the latest tech, safety features, reliability, and warranty.
You're welcome.
Big Papa Parker buy used and cheap if you don’t care about reliability? Safety features? 😂 ok Big Papa. A used Toyota 4-Runner? Well if you don’t care about reliability 😂
@@MikeSmith-te7yp Well, he also mentioned latest tech and warranty. If you buy >3 years used, you typically are out of warranty.
The information in this video is so inaccurate, it’s laughable. I am a General Sales Manager of a Toyota dealership, and I can promise you 1) Lease rates are no where near 13 or 14%; they are within 1% of the finance rate, in either direction; could be higher or lower. 2) I can promise you, (at least in Canada) that the dealership makes exactly $0 from “selling” a lease contract to the manufacturer. That statement is 100% false. 3) Only sales managers and general managers get a “demo” vehicle; other staff own their own. One of my sales people drives a used car, five drive new ones. All five of my sales staff driving new cars, AND my two finance managers ALL lease their cars. We do this every single day for a living. Not one of them owns their new car outright, every single one is in a lease. Like I said, we’re the professionals in this business. We don’t buy the cars the most expensive way, we buy them the cheapest, and most flexible way, which is a lease.
Do yourself a favour and check out some other videos before you write off the thought of leasing. You don’t have to take it from me, but you owe it to yourself, and your wallet to get information and advice that is actually true and accurate to make your decision.
It has absolutely nothing to do with working at the dealership... The discounts are the same if we pay cash, lease, or finance. 90% of the people who "buy" a car (finance it) finance the loan over a 6-7 year periods and trade it after 3-4 years... The never actually own it either... (For that matter, you can sell a lease outright at anytime as well, this is no different than a loan) Furthermore, when these people decide to trade in 3-4 years, almost none of them have their loan paid down to a point where the car is worth what they owe on it, and they are rolling NEGATIVE EQUITY into a lease, NOT positive equity. Leasing a car, IS a way to get a new car every 2-4 years, without the higher payments of a loan, and the risk of negative equity in a finance contract.
Jamie McNutt... same here over 25 years at Honda. some of the stuff he says so far fetch but he's like a god to a lot of poor people out there ( that's who listens to him) it's like a heavy-set person listen to a dietitian lol.
Thx
I think I'd rather pay for a car in cash, better yet a pre-certified car and walk away without paying additional interest.
Haa ok “Mr MCNUTT”
lease and the purchase is practically the same because you do not own the vehicle until you pay it off completely in a period of 5 and 6 years, or 7 in some case. So Do Not say OWNING or RENT. please. Say FINANCING or LEASE... .. *Also when most the people turn 6 years with the same vehicle, if they are still alive or the car has not been totalized, I do not think they are going to keep this vehicle, taking into account how automotive technology is developing these days
You're also paying for depreciation upfront when paying cash because you'll never sell the vehicle for what you paid. A vehicle was never called an investment. I'd rather return what is not my repairs headache after the lease is over and get that odometer in the single numbers on a new vehicle. Also I have never had to pay for a repair since leasing over the last 16 years. So if you say it's bad, well then the payments are part of piece of mind that the car is under warranty for the majority of the lease period.
When you buy a car in cash and drive it into the ground, there's a lot of time & money spent on repairs - and there is a rip off factor there too. You have to be educated on car maintenance and you have to carry the concern of repairs with you constantly. I've done all methods of car purchases and think there are drawbacks with all of them - even buying in cash.
Exactly, but I think Dave's point is there are draw backs on all of them l but easing is the most expensive.
My thing is 80% if not more can not afford a cash purchase
They can, just not for the same value of car they rent. If you buy a cheap car, within a year the lack of monthly payments will mean you can get a significantly nicer car.
@@kateg9437 i agree but as for me the cars i bought always had something to be fixed on it
I own my car and I don't see what's the debate about, It'll never get repossessed, never make payments and can sell it anytime I feel the need.. Leasing are for people showing off a new ride that's not theirs it's a rental..
I couldn't have said it better myself!! Thanks!!👍👍👍
To begin with: A car is not an asset. It's loses value over time. It doesn't generate revenue
That makes no sense
Ramsey has some good advice, but I think his greatest skill is making money for himself. He says, "If you buy a $30,000 car you turn it into a $10,000 car" and thus you somehow wasted $20,000.
Hmmmm..... so, If I spend $20 on a good meal and eat it, and then it turns to poop, did I waste $20 ?? Of course not.....The cost of your meal served it's purpose and thus had value.
The vehicle does not sit in the garage.... you pay a price to use it for transportation which has value. The same goes with any purchase you make be it food, clothes, entertainment or whatnot. Ramsey acts like people should live in a cave which is unrealistic.
Sure, you may be smart to purchase a $30k car versus a $70k car based upon your financial situation.... but you are not 'wasting' money buying a car.... or even leasing a car if it serves your personal situation.
But kudos to him for making millions on giving advice that is mostly common sense, but some of which is ridiculous and unrealistic.