[John 070]

Originally Posted by beefybmer

Being in the car business...
Why "own" a depreciating asset. Buy real estate-lease cars.

Imagine following this advice say over the last 14-18 mos. in FLA, CA, LV, GA, even DC/VA or Boston for that matter, very costly. Poor advice is always free.

[John 070]

Originally Posted by 0utlier

Suze Orman is far from a "financial guru". My wife, with an MBA (emphasis Finance), Masters degree in Finance, and a Ph.d in Finance is a Finance guru. She thinks Suze Orman is an idiot. Same for that Dave Ramsey guy. Both give extremely simple minded advice. That should ruffle a few feathers.

Suze's premise in the article is people lease to get more car for less payment than they otherwise could if they were to buy. I'm sure that may be true for some, but that is foolish blanket statement to make. I (and I'm sure most here) can easily afford to buy a $50K dollar car. However, I like to drive a brand new car every couple of years, I don't rack up the miles, and I don't modify my car very much. Why would I buy a car if I'm just going to sell it in 24 months? I can keep my money and do other things with it than have it "invested" in a depreciating asset. If you are leasing because you want an expensive car, but you can't afford it otherwise, you're probably already in over your head in other aspects of your life too. It will all come crashing down eventually anyway for those people.

Buying a 50k car means buying a 1,100,000 house instead of 1,350,000 house in reality, because home ownership is a leveraged position. That's why even though people in my neighborhood own the latter, they drive minivans and Honda Accords, etc., for the most part. They also have kids and usually park at the train station, so the car sits 10-12 hours per day in a commuter lot. I dunno what easily afford means to you, because a conscious decision is made that when buying a 335, and financing it, many times an Accord could have been purchased outright with cash. Saying that most here can easily afford a 50k car has got to be the most naive statement I've seen in a long time. Did your wife get her degree at a top-tier b school? If so, be proud of her and mention her alma mater. Just wanted to clarify that it wasn't obtained online or something crazy like that.

[John 070]

Originally Posted by AndrewAZ

And in some places in and some cases its better to rent than to own.

In some cases there isn't any choice. I have some officemates that pay over 10k/mo. for their apartments. They cannot afford to buy the apartments that they are occupying, it's simply too expensive. They may not even have the downpay required to buy a house in the suburbs, because 10k/mo. can definitely buy a house in the suburbs. Maybe not quite with the property tax included, but close. The thing is, they're open about it, they have the cash flow but not a lot of cash for the downpay. Many with leases on cars are not open about it, they simply make blanket statements that they could easily afford this and that and the other thing, yet they still choose to lease.

All a person has to say is that they require a new car every 2-3 years, and wouldn't be caught dead in a car 37 mos. old. Or, that their employer pays for their car lease as a perk. That's the end of story. No need to analyze lease v. buy, because for the above two scenarios, leasing is a great thing.

[jwed335i]

Originally Posted by John 070

Imagine following this advice say over the last 14-18 mos. in FLA, CA, LV, GA, even DC/VA or Boston for that matter, very costly. Poor advice is always free.

Uh oh! Another real estate guru who bought high and sold low! You need to listen to Susie and get some advice. Here I'll help, wait another 6 mo. then buy.

[0utlier]

Originally Posted by John 070

Saying that most here can easily afford a 50k car has got to be the most naive statement I've seen in a long time. Did your wife get her degree at a top-tier b school? If so, be proud of her and mention her alma mater. Just wanted to clarify that it wasn't obtained online or something crazy like that.

I am called many things. Naive never seems to be one of them (until now of course). The vitriol, in general, I see directed at other forum members is unlike anything I've seen on any other enthusiast/hobby forums.

You may be right. The majority here may well not be able to afford their car. Sad indeed if true. I also have my MBA emphasis Finance so I'm not completely inadequate myself. My wife received her MS in Finance at George Washington and Ph.d at The University of Alabama. Hardly "obtained online or something crazy like that". Good try with the backhanded personal attack on my wife. You must be a quite the ray of sunshine in real life.

[beefybmer]

Originally Posted by 0utlier

I am called many things. Naive never seems to be one of them (until now of course). The vitriol, in general, I see directed at other forum members is unlike anything I've seen on any other enthusiast/hobby forums.

You may be right. The majority here may well not be able to afford their car. Sad indeed if true. I also have my MBA emphasis Finance so I'm not completely inadequate myself. My wife received her MS in Finance at George Washington and Ph.d at The University of Alabama. Hardly "obtained online or something crazy like that". Good try with the backhanded personal attack on my wife. You must be a quite the ray of sunshine in real life.

I think our BUDDY John woke up with a mouth full of something this morning. Go back to bed or make an appointment with your shrink!

[John 070]

Originally Posted by 0utlier

My wife received her MS in Finance at George Washington and Ph.d at The University of Alabama. Hardly "obtained online or something crazy like that". Good try with the backhanded personal attack on my wife. You must be a quite the ray of sunshine in real life.

You state your wife called Suze Orman an idiot. That's someone who has 4 NYT bestsellers, and came up the school of hard knocks and tries to help people with personal finances, as well as hob-nobbing with Oprah and Dr. Phil. Backhanded personal attack on your wife? She sounds like a big, big, girl who can sleep in the bed she made. You're very nearly correct. Just watch the Jimmy Dean sausage commercial on how the sun starts his day, and you'll see me, only without the costume.

[T-MC-G]

Here is my buying versus leasing story.

Back in 2002 I bought my first car (on my own that is) a used E46 2000 323i with an extended 100k mile CPO protection. Drove the car around for 3 years with no issues what so ever. Then, with a little less then 2 years left on my loan the rear differential snapped off the frame and the car instantly became worthless. Dealer quoted a $7,000 fix, and I still had ~$7500 left to pay off on the car. That was a crappy situation, dead 5 year old car sitting in the driveway I'm still paying for. I swore I would never be in this situation again. So now I lease cars that are going to be under warranty the entire time I drive them, and get rid of them after 2-3 years.

[BrianUNC]

It all boils down to if you trade every 2-3 years, a lease makes more sense. It becomes even better if it's a car with a high residual and good money factors. Now if you don't understand the lease process, keep cars forever, or don't understand much about finance, it's probably more straightforward to finance.

For some of us it's more a matter of practicality (low payments and no resale hassle) vs being able to "afford" purchase payments. I could have purchased my 335, no problem, however since I'll be wanting to trade up in 2-3 years, I chose to lease it.

[Lassaxi]

Originally Posted by John 070

You state your wife called Suze Orman an idiot. That's someone who has 4 NYT bestsellers, and came up the school of hard knocks and tries to help people with personal finances, as well as hob-nobbing with Oprah and Dr. Phil. Backhanded personal attack on your wife? She sounds like a big, big, girl who can sleep in the bed she made. You're very nearly correct. Just watch the Jimmy Dean sausage commercial on how the sun starts his day, and you'll see me, only without the costume.

Hob-nobing with Oprah and Dr. Phil? Dude, I think you just proved his point.