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Originally Posted by gily25
I know some people aren't great at budgeting so I totally understand why someone would do this up front, however it seems foolish on the outside.
Devil's advocate tho...if you're not trying to lower the overall debt on the car for future sale options then the money would be more useful in your savings account. For instance savings can pay higher car payments or cover the payments if you're out of work or pay the deficit in the event of a total loss.
The only reasons I can see for leasing a car is if it gets covered by your employer (they lease it for you but you can pick). I've never really believed any of the other reasons (lower payments, service plans, etc.) were worth the hassle.
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This really doesn't make much sense. Your opinion is fine, but what are you talking about in regards to a savings account? You do realize that the average savings account pays 0.05% interest right? And the very best, is generally still under 1% which requires usually around a $100,000+ deposit.
What leasing does is a few things. It allows you to get into a car you normally probably couldn't afford. You're only paying for the diminished value of the car for the number of years you drive it plus fees and interest. Some cars hold their value very well, and it is much cheaper to "rent" it for 3 years instead of buying it. It also eliminates the possibility of negative equity in your car. This is especially important for people that get new cars relatively often. A lot of times, if you finance the car, the amount you still owe by the time you go to trade it in is more than what the car is worth. That's negative equity. Leasing eliminates this risk. If your car is in reality worth less than what the dealer quoted your residual at the end of the lease, the dealer takes the hit. On the flip side, if it's worth more, you walk away with some money in your pocket because you overpaid for your lease. It's a win win situation if you like to change cars every few years and can't afford to finance the car you really want.
It's also not a hassle at all to lease a car. My experience was very pleasant. It all depends on the person. Leasing and financing both have pros and cons. It really just depends on the person and situation as to what is better.