Author Topic: Would you lease a car for the right price?  (Read 6616 times)

Kroaler

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Would you lease a car for the right price?
« on: August 25, 2015, 10:46:35 PM »
Okay I realize the title is anti mustache but let me explain.

I work in the automotive Industry, one of the company perks is the use of vehicles we handle for a monthly fee. Let me explain the price for 2 vehicles that represent both ends of the vehicle spectrum that we have access to. Also first let me explain the lease rules.

1.) The payment comes directly from your paycheck
2.) You get UNLIMITED MILES. Every time you get to 7,500 miles you get a new car, just like that, no questions ask.
3.) The company pays all taxes and insurance, all you do is put gas in it and drive.
4.) IF you have an accident, the fine is as follow: 150$ first instance, 250 Second time, and 500$ third time. Resets yearly. They   also provide you with a loaner car while yours is in the shop being repaired. ALSO You pay nothing obviously if the accident isn't your fault. This also includes damage from road debris, or if a shopping buggy hits your car, not your problem.
5.) You also get to custom order your vehicle, takes about 4 months to arrive, but they hold it for you till you get your current car to 7500 miles.
6.) Anyone in my household can drive the vehicle alone, and anyone else can drive if myself or my wife is in the car, insurance also covers them as well.


Okay now that you have that let me go over the prices.

2015/2016 Mini Cooper, Hard top 2 door, Auto transmission, semi well equipped. --- 250$ a month 
2015/2016 BMW 328I Well equipped (navigation and those doodads with sport or luxury line) -- 370$ a month

Okay guys, I want you to use your mustachian goggles and provide me with the scoop in this situation. If I did take advantage of the program, I would have my wife drive the car, since I love my Ford ranger. She currently Drives a paid for 2004 Pontiac vibe with 150k miles, no apparent problems.   Her commute is 11 miles one way 5 days a week so 110 Miles a week.

Heres the final question. How would you rate the Above listed company perk?

A.) Good value
B.) Okay Value
C.) No Value
D.) WTF dude, are you really considering it? ... Moron....


Edit: I realize I forgot some information so here it is
1.) It really doesn't matter to me what we drive, I actually prefer my $5000 ford ranger to the bmw, My tool box fits much better. My wife doesn't care either. We kinda feel like people are assholes on purpose when we drive around in a bmws....
2.) I was in the program but I got out because my calculations suggested a person would need to drive *about* 80 miles a day one way to work for this program to beat an 8,000 used car in value.   
3.) Its kinda hard to appear to be the "stealthy wealthy" driving around in a 60k$ car at age 24. I much prefer our current setup
4.) My insurance premiums are 1,600$ a year for both vehicles, I wasn't always the perfect, safe driver I am now..... Thats for liability BTW.....
« Last Edit: August 26, 2015, 09:14:54 PM by Kroaler »

Kaikou

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Re: Would you lease a car for the right price?
« Reply #1 on: August 25, 2015, 11:50:48 PM »
I wouldn't get a mini coop if someone had a gun to my head.

Dicey

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Re: Would you lease a car for the right price?
« Reply #2 on: August 26, 2015, 01:27:30 AM »
Yeah, baby I'm following. Can't wait to see where this conversation goes...Does your wife have any preference?

chesebert

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Re: Would you lease a car for the right price?
« Reply #3 on: August 26, 2015, 06:17:05 AM »
No, unless you can lease 10yr old cars, which you can't. Lease is just another different form of financing.

Argyle

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Re: Would you lease a car for the right price?
« Reply #4 on: August 26, 2015, 06:24:05 AM »
Option D.  Even with the cheaper option, over ten years you've paid $30,000 (assuming the cost stays level will it?) and the instant you change jobs, you have no car to show for it.  Plus you already have a car.  If your wife drives 110 miles a week, in a year that's 5720, so let's say 6000 you can keep that car going for 8-10 more years at a cost of much less than $30,000.  That extra, say, $25,000 you can sock away in your FIRE fund where it will be working for you.

If your goal is not to spend money for silly reasons, this is a no-brainer.  There are almost zero situations where leasing is a better idea than owning. 

Kroaler

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Re: Would you lease a car for the right price?
« Reply #5 on: August 26, 2015, 08:18:34 AM »
Excellent! 

I kind of came to the same conclusion, but I'm glad to see the majority was in agreement. Thanks guys!

LeRainDrop

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Re: Would you lease a car for the right price?
« Reply #6 on: August 26, 2015, 09:12:09 AM »
D!!!

humbleMouse

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Re: Would you lease a car for the right price?
« Reply #7 on: August 26, 2015, 09:45:20 AM »
So... you have two working cars that are cheap and reliable, but you want to spend money for no reason?

beltim

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Re: Would you lease a car for the right price?
« Reply #8 on: August 26, 2015, 09:56:44 AM »
The two options you gave are terrible values.  I would certainly lease a car if the total cost were less than other transportation options.  If the cost for the lease worked out to 10 cents a mile or so, I would be very interested (maybe a bit more, since your company covers insurance as well).  But even the cheaper of the two options you gave works out to 50 cents per mile or so. 

JLee

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Re: Would you lease a car for the right price?
« Reply #9 on: August 26, 2015, 09:58:35 AM »
What are your current insurance/registration costs per month?

Jack

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Re: Would you lease a car for the right price?
« Reply #10 on: August 26, 2015, 10:05:17 AM »
Q: "Would you lease a car for the right price?"

A: Sure! But the "right price" never actually happens, so no.

Paul der Krake

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Re: Would you lease a car for the right price?
« Reply #11 on: August 26, 2015, 10:18:52 AM »
Q: "Would you lease a car for the right price?"

A: Sure! But the "right price" never actually happens, so no.
I would bite for a flat $100/month lease, including taxes and insurance. It costs me less to run my own vehicle, but I would be willing to pay a premium for the convenience.

Yeah, not going to happen.

I'm a red panda

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Re: Would you lease a car for the right price?
« Reply #12 on: August 26, 2015, 10:28:08 AM »
Would I lease a car for the right price: Yes.

Are either of the situations you described the right price? No.

I'm pretty sure my "right price" is signifigantly lower than anything that would be offered by anyone.  I would want everything included for under $100 a month; which is slightly higher than my cost of ownership of my cars.

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Re: Would you lease a car for the right price?
« Reply #13 on: August 26, 2015, 10:44:09 AM »
That Pontiac is probably not long for this world and another decent car is probably 5-7k (lets say 6k) and will last ~8 years. Going from my experience with a low mileage Honda, the car will cost about $800 per year on average to keep it on the road. How much do you all really drive in a year and how much are insurance and taxes?

For my wife and I, insurance is ~500/yr per car, and taxes are $80. 

So break it out:

To drive the equivalent of the Vibe for 10 years its going to cost:
Insurance 500/yr + Tax 80/yr + Maint $800/yr + price $750/yr = $2130/yr

Mini Cooper = 3000/yr
BMW = $4440/yr

Increase in cost
Mini - $870/yr - $72.5/mo
BMW - $2310/yr - $192/mo 

If you drive a lot, it may be worth it. I would add to this if you have one at fault accident, it would be better to lease the car as you would add your deductible and the cost of a new car into the equation (1k deductible + 6k new car once in 8 years = 73/mo). 

I would personally rate this a B. If you could get a 4 door for $250/month I would do it.


Jakejake

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Re: Would you lease a car for the right price?
« Reply #14 on: August 26, 2015, 10:45:51 AM »
What are your current insurance/registration costs per month?
That's my question too. If the lease + insurance is less than you are currently paying for insurance, it's a good deal. If it's more than you are currently paying and you don't need another car right now, I don't see the point.

Jags4186

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Re: Would you lease a car for the right price?
« Reply #15 on: August 26, 2015, 10:55:28 AM »
To me the answer would depend on how much you make and how much you spend (surprise!).

everything in your life does not need to be 100% optimal if you're meeting your personal your savings goals.

If you make 100k a year and are saving $60k a year, I would splurge on the BMW if you enjoy cars. Just make sure you're not the type of person who "always" needs a BMW if you find yourself at a different company one day. You most certainly can't get a new BMW for $370/mo all in.

Jack

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Re: Would you lease a car for the right price?
« Reply #16 on: August 26, 2015, 11:03:06 AM »
That Pontiac is probably not long for this world and another decent car is probably 5-7k (lets say 6k) and will last ~8 years.

LOLWUT? A 2004 Pontiac Vibe is a decent $6K car that will last [another] ~8 years!

ketchup

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Re: Would you lease a car for the right price?
« Reply #17 on: August 26, 2015, 11:22:19 AM »
If you drove a LOT (like 3,000+ miles/month), and the options were more practical (fuel efficient hatchback or large wagon, depending on purpose), then maybe.  The lease payment would have to work out to be less than depreciation + repairs/maintenance on the vehicle you already have.

Yes, I would, but that's not the right price, or the right cars.

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Re: Would you lease a car for the right price?
« Reply #18 on: August 26, 2015, 12:02:03 PM »
That Pontiac is probably not long for this world and another decent car is probably 5-7k (lets say 6k) and will last ~8 years.

LOLWUT? A 2004 Pontiac Vibe is a decent $6K car that will last [another] ~8 years!

An 04 Vibe is worth about 3k. Which brings up a good point. Sell it for 3k which is worth ~$30/mo which makes the cost of driving the brand new car roughly 40/month more than driving the Vibe.

This is all predicated on how much you actually drive. If they only drive 10k miles between the two of them its not worth it. If they drive 30k between the two of them and they can put 2/3rds of it on the new car is absolutely makes financial sense to do the lease. Not to mention someone who drives 20k miles per year is spends the equivalent of 11 work weeks in their car every year. Call me crazy for saying it may be a good return on investment to even drive the BMW in that scenario at the cost of $1 per hour.   

There are too many people on here that cannot think critically about this.  "yeah for $100 a month all in id do it". What is that supposed to mean?

It seems that many haven't considered what their cheap car is actually costing them. Even a 6k car every 8 years which would be unheard of for most spendy people, still costs you ~$180/mo. There is a reason MMM advocates bicycles so much!

Gone Fishing

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Re: Would you lease a car for the right price?
« Reply #19 on: August 26, 2015, 12:15:58 PM »
What is the minimum lease term?  Could you lease one only for the month when you take that huge road trip out west? 

As it is, I figure my Corolla costs me around $125/mo or so including taxes and insurance.
« Last Edit: August 26, 2015, 12:18:17 PM by So Close »

Ipodius

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Re: Would you lease a car for the right price?
« Reply #20 on: August 26, 2015, 12:41:26 PM »
If you are a car enthusiast, and in the financial situation to indulge that hobby, then the calculation changes. Would the subsidised lease work out cheaper than buying and running a 5 year old car you would enjoy as much as the 328i? If so, then I would go for it

Guses

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Re: Would you lease a car for the right price?
« Reply #21 on: August 26, 2015, 03:28:21 PM »
2.) You get UNLIMITED MILES. Every time you get to 7,500 miles you get a new car, just like that, no questions ask.

So I am curious, what do they do with the cars once they hit that mileage?

They burn the car when it is oil change time? Classic!

Jack

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Re: Would you lease a car for the right price?
« Reply #22 on: August 26, 2015, 03:43:10 PM »
That Pontiac is probably not long for this world and another decent car is probably 5-7k (lets say 6k) and will last ~8 years.

LOLWUT? A 2004 Pontiac Vibe is a decent $6K car that will last [another] ~8 years!

An 04 Vibe is worth about 3k.

That's what KBB says, but try actually finding one to buy at that price.

(On that note, I don't know what the hell the KBB people are smoking; they've been way low on the value of every car I've tried to look up in the last several years.)

Jags4186

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Re: Would you lease a car for the right price?
« Reply #23 on: August 26, 2015, 05:23:29 PM »
2.) You get UNLIMITED MILES. Every time you get to 7,500 miles you get a new car, just like that, no questions ask.

So I am curious, what do they do with the cars once they hit that mileage?

They burn the car when it is oil change time? Classic!

Usually they sell them as "program cars" which is slightly cheaper than new but more expensive than CPO.

Exflyboy

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Re: Would you lease a car for the right price?
« Reply #24 on: August 26, 2015, 06:07:03 PM »
The car I drive now cost me $350 and I have a liquid NW of about $2 million.. Just a data point for you..:)

Kroaler

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Re: Would you lease a car for the right price?
« Reply #25 on: August 26, 2015, 09:21:21 PM »
Thanks for all the replies everyone.   We were in the program and it was nice having a brand new care free car. But I sure do like  having that extra money on my paycheck.    Glad I got some good perspectives.    Originally it was nice knowing we had a car that could drive to california or somewhere crazy, but me and my wife have since decided that if we need to go somewhere we don't want to drive our older cars ( nothing wrong with them but you never know)   we have decided to take a Bus, plane, or train to further away places the few times we go, no sense in driving, also no reason to pay a premium for a car capable of something we never do...      gotta get a car for what it does 99.9% of the time...... 


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Re: Would you lease a car for the right price?
« Reply #26 on: August 26, 2015, 09:30:30 PM »
We always rent when we have a long trip. You can get a Cruz getting 42 mpg for $65 for 4 days. Costs about $30 more than driving our car 1000 miles once you figure in gas.