Richard Solomon

gatorguy7

The magic 8ball can be finicky at times. I prefer:

keithl

Not sure about NY, but 2 things, most states will deduct the trade value from the new car purchase and thus you get credit for the initial sales tax, so if you trade you car in 2 years and buy a new car that is worth $50K and say they give you $25K for the trade then you only pay takes on $25K for second car. In GA they changed the way they do the taxes, they are now ad valorem not sales taxes. And with a lease you owe the full ad valorem up front so that is amortized over the lease period, so if I lease a car that is worth say $100K and the taxes are 7% then the $7K in taxes will be spread out over the term of the lease. Now in theory since I do not own the lease then when I go for the next car at the end of the lease then there is no trade in credit for the taxes since it was not my vehicle. GA was way above average in number of leases until this change then the bottom fell out of the market, particularly in more expensive cars where the numbers of leases is usually higher.

Now the dealers here have been "working" the system and processing lease trades as owner trades to help with the tax, but in the end if the state were to audit the transaction you would be responsible for the missing taxes.

feralc

I am so sorry my comment started a war between lease vs buy.
Let me explain.

If you read my post I said I don't even finance cars I just pay cash for them AND (just like Mike posted) I buy used cars so the first hit of depreciation is on the first owner not on me.

I even got my 2012 A7 used in 2012

With that being said, yes for some is easier to not deal with selling a car or fixing this or that, or even not paying state tax in the whole value of the car.

All those arguments are valid, but going back to ME I don't like to have limits like the mileage limit per year (main reason I tuned my car was the speed limiter at 130 mph)

Now regarding if I feel it is not financially smart, it is because the lease rates are higher than finance rates, that was my whole point, if i pay cash for cars is because I HATE to pay interest in something is not going to be an asset like an investment good.
Cars are depreciating assets and financing/leasing them is (in my personal point of view) not smart at all, because the car depreciates every day and every day you owe more because of the interest

I am an economist and a financial advisor so I am biased to make decisions based on numbers vs emotions (well sometimes I do haha, we only live once right?)


People have different views about that, and I respect them, I have always think that the only way I would finance something is because that thing might appreciate in value and end up as an investment, otherwise the interest rate is not worth it, and cars (unless is 1 out of 10 classic car) are consumer goods not investment goods.

If you need to finance __________ because you cannot pay the full amount, then you should rethink what kind of __________you really need, maybe there is a cheaper version you can afford.

Again this is only about interest rates, not about write offs etc

Paying interest only makes financial sense if you are making more money with the remaining funds you are not using, or if the rates are extremely low, otherwise it is a very dangerous debt tool.

Ego is the worst of the reasons for financing.

James517

There is little question that, under normal circumstances, buying is better than leasing. But there are a few instances where leasing may make sense:

- Suppose this was the last year of a beloved car model and you weren't financially up for the purchase right now, but expected your fortunes to be better in a couple of years. For example, the last year of the air cooled Porsche 911 has held up extremely well in its value. It might be argued that getting it on lease, then buying it out later could be justified. Still a gamble, though. (I get angry when any new car salesperson talks about a car as an investment.)

- The more compelling situation would be the opposite: it you really like a car, but think it may be hard to sell later on.

Some new models can be hard to sell due to new-model-reliability issues. Some high-end cars depreciate quickly and can be hard to sell. You might be worried about the auto manufacturer or local dealership. You may think some new technology used in the car is cool, but are not sure if people will find problems with it once it has had some time in the real world.

But for any typical situation, leasing can cost 7-20% more for the ownership period than a purchase & resell.