Quote:
Originally Posted by enigma01
Because you have to look at each person's finances and any given deal individually. That's why I don't believe in one-size-fits-all.
I, like many, have investments tiered from risky to safe and from illiquid to liquid. At the bottom (i.e. highly safe and liquid), I have FDIC-insured CDs across multiple issuers, currently at around 3.35% APY for 5 year-term. You can get slightly better yields in the secondary market, but we are talking about a few bps. Without going into specifics of asset allocation/amount, let's say that my purchase price is a very small fraction of money parked there. After deducting Fed/CA taxes, you'd be lucky to be have 2% net. So, the question for some folks is why pay 4.9% to BMWFS. Yes, you could do better (or worse) with riskier investment instruments, but again, we are talking about a relatively small portion of your net investment $ in the bottom tier for safety.
As for purchase vs lease, it also depends on individual deals at any given point. I don't have any issue or preference for either. I follow wherever almighty $ takes me. E.g. I lease an e93 M3 for around $500+tax for 3 years. I bought an e92 M3 with cash and traded in after 5 years with a net loss of $28k ($470'ish/mo inclusive of sales tax).
I really don't care which means I use to acquire a car as long as it's the best deal I can have at any given point. I do have issues when one camp claims that the other camp is stupid without specific numbers to back up the claim.
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Well said.
I usually get a car that fits my needs, some with high price tags, and finance them as best I can whether lease or purchase/loan. I have not "handed in" a car yet out of 5 leases and admit purchase/finance makes it a little easier over the long run (some cars do have equity that can be used at times), so it all depends on financial and personal circumstances which determines the "best" deal.
I tell my friends leasing allows you to sometimes get a "better" more expensive car without too much pain. The best deals seem to be from manufacturer sponsored lending companies for terms and service. Some of my lease buyouts were way below the current market value of the car.
PL