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Originally Posted by Sub
Uhm, seriously? Welp, the main reason is that for someone who does not keep cars long, it makes financial sense because after 3 years you still typically have little or no equity (especially in this economy - take a guess what your pricey '06 is worth now  ).
The second reason is that a person who could not otherwise afford the monthly payment can get into a better car for the same money as a purchase.
Honestly, the only negative is that if you wanted to get out early, you cant. |
Uhm, are you serious? Where is the "financial sense" in buying a new (or leasing) car every 3 years? There are more important things than cars; like education (yours or your children's), retirement savings, a debt-free lifestyle (pay off your mortgage if you own a home)...just to name a few.
Your second point is what I have always suspected of people who leased cars. I say if you can't afford it, don't buy/lease it.
I also don't subscribe to this whole notion that cars "depreciate". I think more in terms that I "consume" the car vs it depreciates. The car provides a value; enjoyment, transportation, therapy, exhilaration, status...whatever is of value to you. So, therefore the car will become worth less, because I have consumed part of the value. Not that it depreciated. Depreciation sounds like a loss in value without benefit. Consuming implies a receipt of some benefit and value. But this is really semantics.
I paid cash for my car 3 years ago. Would have never bought it if I needed a loan. It is a toy. Don't need it. Nobody really needs a Porsche. I just wanted it. I don't care what it's worth, I am not selling, and may never sell it. Sure, it's worth less than I paid for it, but I have consumed a ton of fun & enjoyment from it. So we are even.