Lease v. Buy - Rapidly Changing Technology

There was an exchange of comments in another thread repeating the old saw about buying and keeping a car for 10 years in order to get your money's worth out of it, versus the desire to keep getting the latest and greatest car. That prompted me to want to discuss a thought I've had for a while now about whether leasing makes more sense than buying right now, due to what appears to be an extremely rapidly evolving period of EV and hybrid development, and new cars coning to market from many different sources over the next few years.

In the past, Toyota has not made lease deals on hybrids very attractive, presumably because they were in short supply and/or Toyota was trying to make back research and development expenses from the early adopters (kind of like the computer world). However, we now live in a time where a new lithium battery plug-in Prius is just a couple of years away (not counting the limited fleet testing models coming late 2009), and there are suddenly lots of other hybrids and electric vehicles coming to market soon, from a variety of traditional and non-traditional manufacturers. On top of that, the other electronics in the cars are also just now really starting to take off, evolve and make full use of the computerized possibilities. The cars coming to market are going to bring a lot of new tech, and that tech is going to rapidly evolve and improve, akin to the go-go pc years, when you had to keep getting the latest thing every year to keep pushing the hardware and software harder and faster.

So, based on those assertions and premises, shouldn't we consumers be more interested than usual in leasing our cars? In order to take advantage of these trends and circumstances, and create a stream of income for rapid new development, shouldn't Toyota and other car manufacturers heavily promote leasing and make much more attractive 1 to 3 year lease options available for these new cars? Lease cars taken back could be pushed to other markets like Mexico, and cause rapid uptake of hybrid and EV technologies in those other markets.

As a personal example, I've been waiting for 2 years to replace my '97 CRV with an acceptable hybrid option. Sorry, neither the trucky Escape or the Highlander low mileage, expensive V6 meet my criteria. In that time, Toyota has come out with new non-hybrid models of the RAV4, the unsatisfactory highlander and now their new Venza (basically, a Camry wagon, oops, "cross-over sedan"). Since the auto press is convinced a hybrid Venza is in the works, I'd rather find a good lease than buy. Since I'm also interested in having a Prius again, I'd be trading in my 2007 HyCam, which by traditional economic and/or environmental standards is not a good plan.

Anyone here have other thoughts, comments or opinions on leasing and marketing in this hybrid/EV/techno age?

 

Somehow, I don't seem to have made myself clear. I'm not asking the simple question of whether leasing is better than buying. I understand it doesn't make sense unless you can write it off as a business expense or you really really like to have a new car every couple of years and are willing to pay out the nose for it. Nobody makes money on their cars (normally) - they just pay less in the long run if they buy and hold them a long time. It has especially not made sense to lease hybrids from Toyota because they seem to always set the depreciation factor too high. Also, I would have exceeded the mileage limits on any lease I would have entered into.

My point is that with rapidly changing technology, it gives a greater incentive, need or desire to have the next new thing every 1 to 3 years. Maybe more people would like to lease under these circumstances, and maybe it would be in the car manufacturers' best interest, and in consumers' best interest, to encourage that higher rate of turnover by making more attractive lease programs for individuals, or in computer software parlance, moving to a subscription fee basis.

The movement to more and more sophisticated electronics and safety features, and to EVs and more and better hybrids, seems like real change to me, even if the internal combustion engine is still in the mix. It feels and looks like we are in a period of rapid changes to car tech, and the market structures need to adapt to that change. It is remarkable that a company that pioneered just in time inventory management for production is still using such a patchwork, antiquated system for wholesale and retail distribution, and the inefficient warehousing of cars and trucks.

In my personal experience, there are cars like the 2010 Prius and the Hycam I already own that I am dead certain I will not want to hold for 12 years like I've held my '97 CRV, because there are more and better options and choices coming that will meet my needs better (like a hybrid Venza and/or an plugin EV small commuter car).

What I'm really asking is whether other people are feeling the same quandry and whether anyone else thinks shifts in market structure to accommodate and accelerate change are appropriate. If so, what else might work besides making better lease deals?

For example, going to mostly internet based sales systems perhaps? Why the heck do we need car salesmen for anyway. Just pay someone an hourly wage to babysit test drives and handhold the computer phobes, and let the rest of us order over the internet, fill out our car loans over the internet, and pick up the car on a Saturday.

I assume a lot of people would argue this is all a terrible idea and would lead to unnecessary waste of resources and overproduction. On the other hand, maybe we need this rapid development right now and are in a period when less developed counties can absorb such overproduction, if it is priced right.

 

Yep, I want to be able to flip cars more rapidly if things like an EV SUV with a 600 mile range and base cost of $15,000 come on the market, without feeling like I'm destroying my pocketbook or the planet.

Yep, thoughtful responses like Daniel's are what I was looking for.

Still wondering if there isn't room for some marketing innovation in the auto industry, and more room for moving hybrids to less developed markets. For example, there are people experimenting with going carless or just with 1 car, by doing a monthly lease fee arrangement, where cars are made available for short or long trips on an as needed basis. One simple thing Congress could do is take the manufacturer volume restriction off the hybrid credit, so we could get credits on Toyotas again.