I watched a guy finance a $180K Bentley for 15 years at 16%. I was shocked. He was proud of himself for being "able to afford it".

I think he was trying to fit into the crowd that his apparent NBA buddies run in. I really felt bad for him. He was so happy, but I knew he probably just wrecked is financial life for at least the next decade or two.

As for the original post or question... there is so much generalization and apparent lack of knowledge about why someone would choose to lease/purchase/finance that it's almost not worth addressing, and I'm kind of amazed that it went on for 3 pages! haha.

Now that I've posted, I'll go back and read this entertaining thread.

 

+1!!!!!

without leasing or financing most bigger car brands would not exist the way we see it today

 

I agree with you Mark. I HIGHLY doubt that 70% of the people that polled pay cash for their cars. I could have paid for mine in full, but my bank gave me a 1.99% loan, so I put some $$ down and left happy.

70% paid cash! GTFO!!

 

I had the money to buy my car in full but I've been saving it for a down payment on a house. So I financed the rex.

 

This is very true but it's more a negative then a positive in the longterm. All cheap financing has done is create an artificial bid for cars, and in return increased the price of vehicles(requiring even more borrowing to buy them). Vehicle price + operating costs have risen much faster then people's paychecks.
Car manufacturers have also massively over expanded their production + facilities due to customers being able to walk into dealerships sign a few papers and walk out with a car on payments(artificial demand). Look what happend in 08 when financing quickly dried up, entire US auto industry went bust. If credit contracts again, most of these automakers will be forced into bankruptcy or dramatic cutbacks. This includes the German makers which are all heavily indebted from massive overexpansion of their facilities to meet borrowed demand. Even Lamborghini and Ferrari cannot protect resale values of their products.

That being said, leasing makes sense for business use and day to day vehicles that are being used for utalitarian purposes. Fun cars like all things being used for consumption should be cash bought, unless the lender is offering the vehicle for such low rates, where the cash can be parked elsewhere to generate a return. Financing and leasing are just alternative options that can be very beneficial if used correctly.

 

I pay for my cars in cash as well but I can see why people would take a low apr like 1.9% and put some money down and finance the rest on a car.

The majority of the customers that we deal with finance their cars, very few people can pay for their cars in cash upfront as not many people are liquid these days.

 

Well except here on TS where 70% pay cash

Large purchases like a car which really has turned into a necessity over the years here in the US I still feel are ok to finance if it is your CAR to get around with.

I only shake my head in disbelief to the guy rocking $5k car payment to drive a car to show off. I mean seriously isn't that like double a house payment or more? That would scare the crap out of me if I had a monthly debt that size.

 

Maybe TS is just the exception!

I agree with you on the fact that there are a lot of people who have 3-5k payments per month on a car just to show off or "fit in" with some image they have in their head and it is something I do not understand as well. Unfortunately a lot of people do not seem to think so especially those that are young

 

You'd be surprised (well, maybe not) how many people I knew of in OC, CA that literally lived check to check, were completely MAXED on at least 10 credit cards, and were constantly buying the newest things just to show off... Needless to say, it caught up with them big-time in 2007.

 

I sometimes lease, sometimes buy.

I am glad I leased that depreciation disaster known as the 996 GT2.

I bought the E39 M5 and made money after driving it for almost two years and 20K miles.

I bought the S4 Avant and drove it for nearly free.

The E90 M3 is leased, and might be swapped soon.

The V wagon is also leased, it was leased as a hedge against something catastrophic happening a la GM style.