Quote:
Originally Posted by ultra_frs
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.
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I wasn't saying that savings was going to grow exponetially...but cash on hand if you get bullied into a bad position is worth more than the best lease/finance terms any day. In this credit based economy people have forgotten the value of cash. I can get a plumber/electrician/etc. in my home with cash, within hours of calling and get a deal at that. "I pity the fool" who has to use credit in an emergency...a couple years ago in CT we had major widespread power outages, businesses only taking cash b/c they didn't have power...how quickly people realized that "cash is king."
"Leasing helps someone get into a car they otherwise couldn't afford..." if they can't afford it they can't afford it...this is where the "hassle" comes in because these type of people find themselves sunk when they have to settle up at the end of the lease or they have an accident in the car. *2 cents*