markcincinnati

Somebody got burned once, perhaps?

markcincinnati

Rule of thumb: BUY that which appreciates, RENT that which depreciates (thinking of big ticket items, here, of course.)

Most folks buy cars and rent houses. That's backwards.

Now, if you can get a car for zero percent interest and a 60 or more month term, THAT makes sense to buy.

Or, if you plan to keep the car longer than 3-4 years, THEN it makes sense to buy -- especially if you can pay cash or can get the zero or at least way below market interest deal.

To be clear, if you lease a new Audi A4 with no money down and finance one with no money down for the same term -- the leased car WILL have a lower monthly payment.

It will, however, "cost the same," but it is just a bit easier to keep your cars for a shorter period of time.

With the lease you pay for the use and depreciation (and money factor.) The payment is based on the cost of the car, today and the value of the car say, 36 months from now.

With the purchase you pay for the use and the money factor but on a higher amount -- you pay for the depreciation too, but not until you sell the thing. If you have to sell when you're not ready or NOT at the optimum time, well the issue is just like leasing and getting out of the lease early: time costs money, regardless of whether you lease or buy.

A lease CAN be more flexible, less restrictive based on your goals -- there are no surprises either.

A buy can be full of surprises when your cream puff is worth about 25% (or any amount, really) less than YOU think it is worth.

markcincinnati

The funny thing is, leasing and buying have been shown (tax advantages, etc, notwithstanding) to cost about the same "out of pocket."

With leasing, for example, you pay a monthly payment for 36 months. To buy the same thing, the monthly payment for 60 months is about the same amount (generally and broadly).

The person keeping the purchased car will NOT have a payment from month 61 to month 72, for example. However, it is not unlikely there will be an ever increasing maintance and repair bill, espeicially over a certain mileage and/or months in service.

Keeping the 72 month old, paid for car for yet another 12 months will also likely see additional repair and maintenance costs, too.

Now, during the 72 months in question the leasing customer will never be without a payment -- yet he/she will never have a car more than two MY's old. If you believe that there are incremental and sometimes monumental improvements (features, functions, performance, safety, fun, etc.) every three years, you WILL have made 72 months worth of payments, been in the latest and greatest and had no repair bills and generally speaking no maintenance bills (unless you get something other than an Audi or BMW.)

If your monthly payment = $600 and you put no money down, you will pay $43,200 to "drive your leased cars for 6 years." If you could buy the car for the exact same $600 per month (and I'd bet it would be more than $600), your 72 months of payments would equal $36,000 (since you would have made only 60 payments.)

IF all this would work out and there were zero repairs and zero maintenance costs, the buy beats the lease -- financially. But at the beginning of year 6, the person buying has a 5 year old car and the person leasing has a 2 year old car.

You figure out if it is worthwhile to you.

If the purhcased car costs $630 per month (more likely) the 72 month cost rises to $37,800 (payments only.)

It is likely the purchased car will have needed at least one new set of tires -- the leased cars, all circumstances being the same, will not since you get a new set every 36 months just by re leasing.

You can keep going to a granular level until you get a TCO (total cost of ownership) that indicates it is VERY similar to lease versus buy in terms of the LONG TERM amount out of your pocket.

Leasing provides some tax breaks, some propensity to keep you in a new or much new-er car and, unless that has NO value to you, will mean leasing will "cost less," even if it is a diminimus amount.

To each his own.

For me leasing is less confining, increases choice and allows me to use TIME to my advantage. Insofar as keeping a leased car, I am officially in month 37 of a 36 month lease, whilst I await the delivery of my 2009 A4.

Your mileage may vary.

Bada Bing

I don't know about the rest of the country but even BMW/Audi/VW dealers in SoCal hardly stock any manual cars.

Hokie_Audi

Leasing will never make sense for me. 20,000 miles a year is a "normal" amount of driving for me and I don't operate a business so there's no tax advantages. I do significantly better buying cars outright and then running them into the ground every 8 to 10 years or so. Even with the Audi and it's associated niggles, appetite for window regulators and more expensive parts my monthly repair and replacement costs don't come close to a car payment and I can pile on as many miles as I want/need. This works especially well for me because I'm capable of doing my own maintenance (and I enjoy it, idiotically poor design for maintainability issues aside) and I don't mind not having the newest shiny all the time. In fact that part is kind of fun to see how much auto technology improves when you skip two or three generations.

Though ultimately any kind of fiscal responsibility argument is a wash on an auto enthusiast forum - the truly fiscally responsible play is to get a used three year old Honda or Toyota and add gas, tires and oil as needed and repeat every 10 to 15 years and 300,000 miles.

But then where's the fun in that?

Bada Bing

Audi appears to offer 5% off U.S. MSRP on ED orders which isn't much better than what you can negotiate on your own.

BMWBig6

I went to all 4 dealers in my metro area, and while I could have probably gotten a better deal on a B8 Sedan, initial allocations on Avants were slim to none (most only had 1-2 in the first allocation) making it very difficult to negotiate. I ended up getting a reasonable deal at the same dealer that I purchased my TT from, but everyone else on the list above me is paying MSRP (including APR, who had the #1 spot) and most sales managers were reluctant (or outright refused) to budge off sticker because they knew other people would be coming through the door willing to pay full price on a hot new car. They really have no reason to haggle with me, when I'll walk out the door and the next person will give them several hundred more dollars for the same car.

Of course, YMMV.