Buy or Lease - what say you?

I'm not sure what dealership you worked at but every lease deal I've ever seen has surcharges if you go over X miles per year. The surcharge adds up when OP is driving 20k miles a year...

Sure leasing is better than renting (duh) but it's much less flexible and much less options than owning flat out. That's fact

 

So the fundamental people have is that they dont factor in the tacoma resale value. A tacoma with 36k miles is roughly as valuable as the exact same tacoma but with 60k miles. Now, because of that fact, you can go over miles, and then trade the truck in (or sell otherwise) at the end of your lease for your residual payment, and skip out on the turn in fees and over mileage fees.

 

84 months???? 6.39%??? I got 60 months at 2.89%. I’ve never even heard of a auto loan for 7 years.

 

Pretty common anymore. That’s what happens when people drive vehicles they probably shouldn’t. That’s why I’m leasing. Way less per month and realistically may not keep it 10-15 years like some. I’m 34 and have had about 35 vehicles, motorcycles, campers and off road toys. As long as my house is paid off by retirement, which it will be by age 50, I’m personally good to go. Motorized vehicles are a hobby to some. Not financially wise, but could be worse.

 

This is a quote from an article on NerdWallet...

"Auto loans over 60 months are not the best way to finance a car. And yet, 43.5% of new-car buyers in the third quarter of 2015 took out loans of 61 to 72 months, according to Experian. More alarmingly, Experian data show 27.5% of car shoppers are signing loans for between 73 and 84 months — that’s from six to seven years, folks, and that category grew 17.1% from the previous year."

So they are obviously a thing, 27.5% of new car buyers are getting long term loans.

 

People keep talking about resale value making a lease better. Fact is the resale value is the same if you buy or lease. The only thing that matters is how much you pay total to own the truck. Of course this is speaking about the people who lease and then buy.

 

dealerships here offer 10 year loans when I went to buy my truck lmfao

I'm fairly certain cars drive many people into huge financial debt just based on all the different ways they convince you that you can afford it

 

I can't imagine the interest one might pay on a 10 year loan. Unreal

 

Holy shit that's crazy. With loans that long I bet a lot of people are upside down when they go to sell/trade the next time. F that

 

just read through this thread for a bit - people make terrible financial decisions on the regular its crazy.

 

I did a 72, but am paying extra. I make over twice a year of what my truck cost. Could have paid cash. It was really a psychological adjustment to have a car payment in the monthly expenses since I didn't have one for over 10 years. I was buying $4,000 vehicles and keeping them running myself until my financial house was in order. But through doing that, I made myself a sort of miser that is insistent on having as much positive cash flow as possible each month, all while paying for a house and 401k, HSA, etc. So I knew having a larger payment take a chunk out of my monthly savings was going to suck so I made it smaller.

Interest gained on cash on hand will outpace the interest paid on the loan at 1.9%, and I'm paying extra so the interest paid will be even less.

The lease option when I was negotiating was about $150 less per month than my payment, but I believe if I bought the truck after I leased, I was looking at about an additional $5,000 paid over 8 years. No thanks.

I put $3,000 down and a trade of $2,500 (these were included in the lease quote too). Basically never upside down according to KBB.

 

Well, you see posts throughout TW where people say "oh my 2106 tacoma was white, but my 2018 is silver." WTF why have you had 2 3rd gens already? I know residuals are high, but you had to have taken a loss somehow.

 

You're right, but its important to point out. A lease is a rental. Thats the whole point. The resale value makes the rental better than the face of the deal suggests because you are not paying the overage and end of lease fees. Thats why it is pointed out. Like I said earlier in this thread, if you want to keep your truck 15 years, it is undoubtedly better to buy it. Leasing makes no sense in that regard.

 

If you're paying surcharges on miles you're doing it wrong. Like I said Leasing can be a fantastic option but you still have to know what you're doing.

If you know you're going to be driving 20k miles per year you'd just get a 20k per year lease that adjusts the residual % down thats the only difference between a 10k and 20k per year lease, even if you don't surcharges only come into play if you return the lease, and again if you're returning the lease YOU'RE DOING IT WRONG.

Thats why not every car leases well, its a terrible idea to lease a Nissan/Kia/Hyundai etc because they have terrible resale value.... then again its a terrible idea to buy any of those as well because they suck (which is why they have terrible resale value)

If you think that then you just don't know how it works.

I have every option available to me on a lease as I do on a purchase... but with a lease I have the additional protection of a guaranteed residual value, plus limit my commitment to a depreciating asset, PLUS shield myself from $THOUSANDS$ in taxes (in most states) if I don't keep it long term.

This is to say nothing of stacking incentives on certain models at certain times that results in incredible lease only deals as found on forums like lease hacker. There was a time when you get a spark EV literally for free... IF you know what you're doing. Just to throw one example if you financed a 2017 Accord hybrid last year you're a moron as you missed out on $2k in lease incentives plus a near 0% money factor, smart move was to lease THEN buy it even if you planned on paying cash in the first place.

 

Buy - always
Unless you're a salesman and you need a 'new' car for your image
edit: do your future self a favor and skip on a 45k vehicle
put that money into real equity like realestate

 

I'm talking about modifications and risky trips. Say you are not sure if you are keeping the truck after the lease but you would like to go on that trail ride with your buddies. If you damage the undercarriage (because who would buy skids for a truck they don't know they are keeping) then go to turn it back to the dealer after the lease - that damage won't be free. It's not a rental car, they will inspect it upon taking delivery after the 3 years. You also lose options on modifications to the truck UNLESS you are 100% set on buying it after the lease is up. That's what im talking about.

 

OR if you don't go over on miles you can still sell the lease and keep the equity and you avoided paying taxes on the residual value.

The residual value on my tacoma is like $28k and by the end of the lease it should still be worth $32-$33k. When I sell it I keep the difference and I never had to pay any taxes on that $28k which in my area saves me $2,310.

 

I leased my last truck. I put $1k down and the payments were in mid $500's. I kept it for almost 2 years and got up to just under 50k miles on it, It was a 3 year lease. I wanted an offroad instead and my dealership worked it out so my lease broke even if i bought a new truck. In my opinion id say it was a good option if you are unsure if you would keep this truck for long or not and just wanted to try it out for a while. But as others have said it makes more sense to buy it and sell after a few years because of the awesome resale value these trucks get. The only reason I agreed to trading it in and buying a new one was because I realized I would end up losing a bunch of money on the mileage overages.

 

When you lease to buy, in the contract you get the estimated price it will be after the lease, which you can buy the truck without negotiating.

 

As I already stated if you're returning a Tacoma at the end of a lease you're doing it wrong, no one does lease returns on a Tacoma. You sell it, buy it or trade it in at the end.