Lease or buy?

I just got out of my first ever lease, and it was okay, but I'm not sure I'd do it again. I'm sure my reasons are more psychological than anything else. I just felt like I was renting the car instead of owning it. I didn't go over the mileage cap, but always thought about it.

If you have the cash, the best value is buying a car outright now. With lease and loan rates above 3-4% and bank interest rates under 1%, you'll be losing money every month for the financing.

As for EV, I really think it is going to be a niche market for a long time. Until you can drive an electric car on a long trip and "refuel" it in the same amount of time that it takes to fill a gas tank, it won't be convenient for most people. Gas will be the dominant fuel for years to come, but you can save money by getting a hybrid and using less of it.

 

Here's my perspective.

I have never leased a car before my 2010 Prius, and for the last 20 years paid cash.

So why did I lease my Prius?

As you stated, the automotive industry landscape is changing--at an accelerated pace, and I decided to let somebody else (TFS) assume the residual risk at this dynamic time in the industry.

Regarding your second question, there will always be new stuff out there, so my advice is buy a car (or anything else) when you feel you need a new one.

 

I posted the reasons why I decided to lease the Prius on this post: http://priuschat.com/forums/gen-iii...rius-lease-special-good-deal.html#post1060512

 

Hasn't it been changing at an accelerated pace for the last 20 years, particularly when it comes to safety features (front/side air bags, ABS, etc.)?

 

Nothing like in the last few years.

What's your point?

 

I guess my point is, my 2007 RX350 is already outdated as it has no side airbags. Before the Prius, I had a car with no ABS. Prior to that, people were driving cars with no airbags at all. But nobody has really made the argument that we should be leasing all this time to take advantage of the ever-changing safety technology.

 

I suppse if you always want a "new" car, then leasing makes sense, however, it ends up in general costing more money in the long run, if you buyout the lease, or tend to keep your cars a long time, or drive a lot of miles/year... I was happy with the 2004 Prius, and would have kept it until it was a rust pile... I just decided I wanted a new toy, and wanted to update it before it was worth almost nothing, as it is I only recovered about 1/3 of its original cost, which I guess is not too bad for an almost 7 year old car with 80K miles on it.

 

Remember Enron? The electricity guys are no better than the oil guys. And someday, when all cars run on rainbows, someone will find a way to corrupt that as well!

 

Who do you think supply Toyota with all the raw materials for plastic parts, etc? Yup, oil companies. Who do you think supplies all the plastic for the battery enclosures, if not the battery itself? Yup, oil companies.

 

There's no doubt that the safety technology is ever-changing, but I don't think we've seen the auto industry landscape changing at an accelerated pace like we have regarding drive train technology. I doubt the introduction of ABS or airbags impacted the residual values of autos like the upcoming drive train technologies will. As I said I'll let somebody else assume that risk.

 

From my research, it doesn't look like Priuses really depreciate very quickly. I was considering buying a used Prius, but at the prices available, it just seemed to make more sense to go ahead and get a new one, with a known (non-existent) history, longer remaining lifetime, and newer features.

If you decide you want something new in just a few years, I would expect that you could get a large chunk of your $30,000 back, especially if you managed to find a private buyer.

Rough math: Over 24 months, a $333 monthly lease would add up to $8,000. If you expect to be able to sell/trade-in a car originally purchased for $30,000 for more than $22,000 after two years (which seems reasonable to me), a cash purchase would be better than a lease.

 

Here's one thing that hasn't been brought up, but then again it's a hypothetical situation that I really (and hopefully) don't see happening in the future.

Let's say there's some type of fallout, and gas prices skyrocket up like they did a couple of years ago (or go even higher). Then let's say in 3 years, the price and demand for a Prius or any other hybrid car also skyrockets. If you lease a Prius now, you don't have to turn it back in at the end of your term. You can simply pay the payoff amount and keep it (or finance that amount), and not have to worry about any economical crunches that "could" happen.

Again, this is a hypothetical situation, but the point being if you really like the car at the end of your lease and don't see anything else that you want (or if technology hasn't really advanced), then you can always buy the car and keep it.

 

Exactly--when I said I'll let somebody else assume the residual risk, the good news is the lessee gets to assume the residual upside--if any.

 

Real world: a new generation Prius comes out, the value of previous generations drops like a stone. Case in point: 2004 Prius, purchase price $25K, resale @ 80 months and 80K miles later: $8200 [this is an actual situation, mine]

Priii depreciate as much if not more than any other car, don't count on getting much back. Just keep on keepin on with it...

However, don't worry too much about EV's and PVEV's, they will not be cost competitive for many years, and there will be many "issues" with them in their infancy. By 2014/2015 they will start becomng more competitive and popular, that is still 4 or 5 years out.

 

Your 2007 RX350 has side airbags and side curtain airbags as well as a knee airbag for the driver