People aren't leasing cars anymore — and it means higher prices and worse choices for used car-buyers
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@e90m3
(Canadian tax law but US works kinda similar so I hear)
Because a lease payment, including the tax portion, is an expense that can be claimed for tax purposes.
OTOH…
When you buy, the value of the vehicle gets capitalized and you can expense the depreciation up to 30% per year…but you can only claim 50% of the 30% in the first year. After 3-4 years, the tax write off basically becomes $0 -
@e90m3 I think you're headed towards buying/financing so this wouldn't apply to your case, but a few general thoughts about leasing -
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paying the average of $661 per month (or almost $800 in the case of the Lexus) on something you don't end up owning sounds absolutely insane to me. I know my brain is stuck in 2010 probably.
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If leasing, limit your down payment to as low a number as you can assuming it doesn't change the rest of the equation significantly (like your rate)...that's money gone forever, even if the vehicle ends up getting totaled the day after you drive it off the lot. Been a few years since I leased a vehicle, but pretty sure that's generally accurate?
11 WRX Hatch
Past: 89 E30, 03 S2000, 05 LGT Wagon, 05 ZHP, Spark+Bolt EVs -
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@KngT
I bought my K900 as a CPO lease return and got a great deal. I’ll probably just go back to buying new though. -
@KngT I'll probably not lease again. The big Germans seem to be not subsidizing them as much. Oh the deals I got back in the day.
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Interesting. I’ve got a Q7 lease that will be up in July. The dealer has already said leasing the same vehicle will be $300 more than what I’m paying now plus considerable down payment.
They’ve been sending me offer letters for a Q5 which is still $100 more than what I pay now with a considerable down payment.
This might be the end of my 14 year run with the brand. I’m not too sad about it either. I’m not really in love with anything they make at the moment.
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@KngT The reports that I've read have been predicting the "big correction" to happen to the auto industry sometime this year.
Rising interest rates have caused a slowdown in demand, and combined with rising inventory levels will push prices down.
Honestly the best thing to do for a consumer is to wait. The dealerships and manufacturers have enjoyed 2 yrs of record margins due to limited supply. Now they will resort to the only thing they know how to do to sell cars, which is discount. Things will be back to $10k discounts on pickups and $400 / month leasemobile Beemers by the 3rd Quarter.
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@KngT when we brought my wife's CX5 the dealer was actively discouraging us from leasing. I suspect they were getting more incentives out of finance sales than lease sales.
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@ZHP-Sparky-the-5th said in People aren't leasing cars anymore — and it means higher prices and worse choices for used car-buyers:
paying the average of $661 per month (or almost $800 in the case of the Lexus) on something you don't end up owning sounds absolutely insane to me.
I never understood this argument. Doesn't matter if you lease, take a loan, or pay cash - Depreciation $$$ hits you regardless.
A new car will depreciate and be worth less in 3 years. It can be advantageous to lease in some scenarios, not in others.
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@Future-Next-Gen-S2000-Owner said in People aren't leasing cars anymore — and it means higher prices and worse choices for used car-buyers:
@KngT said in People aren't leasing cars anymore — and it means higher prices and worse choices for used car-buyers:
Consumers are also willing to invest more money into maintenance as the value of their vehicles have increased and vehicle quality means a longer expected use life.
Never would have guessed that something lasts longer the more you maintain it. Who'd thunk it?
True, but newer cars generally require less maintenance, not more
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@KngT get use to paying more
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@ClassicDatsunDebate nope, tax laws are different. I leased in Canada and took advantage of the write off, doesn’t work in the US
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@dogisbadob -- I think both are true in a virtuous circle: people are willing to put reparative and preventive maintenance into relatively recent cars because (plus or minus some of those Rust Belt JRITS horror shows) they fundamentally have the potential to last longer; and this investment helps them reach this potential.
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@KngT said in People aren't leasing cars anymore — and it means higher prices and worse choices for used car-buyers:
This is not good news for me as I've never bought new, almost exclusively CPO lease-returns
Oh I think anyone that was on the fence on lease vs buy went with buy when interest rates were about 0 and they were cash rich from changed buying habits during covid. Unless incentives to lease go away things should go back to the previous state in due time. Just need to be patient.
