MovieChat Forums > Ballers (2015) Discussion > Wouldn't buying be better than leasing?

Wouldn't buying be better than leasing?


Wouldn't buying be better than leasing?From what I've been told,leasing means having to make many payments over a long period of time.Buying makes more sense to me because you only have to pay once.

Am I right?



I should have known those alien maggots booby trapped this sub

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No you are not right. LEasing means that you do not own it. You are basically renting it and if it becomes too much to handle, you can return it. Buying also requires monthly payments, just like leasing, but you own it and have to finish out the terms of the agreement.

GO SIXERS!!!
Phillies
Fly Eagles Fly

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Oh,I didn't know that.Hey,what's the name of the actress who played the woman who took off her dress and was naked at the yacht party?


I should have known those alien maggots booby trapped this sub

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I have no idea honestly.

GO SIXERS!!!
Phillies
Fly Eagles Fly

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"Hey,what's the name of the actress who played the woman who took off her dress and was naked at the yacht party? "



That's my sister.

And no, you can't have her phone number.

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buy the car brand new and keep it for 12+ years IMO. the problem with leasing cars is you are paying the biggest cost of a new car - Years 1-3 depreciation every 3 years - and repeating that huge cost every 3 years in perpetuity. the depreciation cost is built into your lease payment! depreciation cost is biggest in the first 3 years of a vehicle's life (30%). so when you buy you take that 30% hit once and then it's amortized over how long you own it. if you own the car for 12+ years you only take the hit once in 12 years. if you are leasing cars every 3 years you take that big depreciation hit every 3 years so in 12 years you take that huge hit 4X.

i buy brand new, i pay cash, i buy exactly every option/color/feature (fully loaded) i want and i keep my cars for 12+ years. and i only buy Lexus. and i'm a self-made multimillionaire.

OPTION 1 - BUY NEW Once every 12 years
MSRP - $50,000
First-3-Years-Depreciation Cost over 12 years (30% = $15,000)
$15,000 is your "Big Hit" after 12 years

OPTION 2 - LEASE NEW every 3 years
MSRP - $50,000
First-3-Years-Depreciation Cost over 12 years (30% = $15,000 x 4 = $60,000)
$60,000 is your "Big HitS" after 12 years

so that's a $45,000 difference every 12 years. and this will repeat every 12 years so do that 4 times over a lifetime (4 x 12 years = 48 years of driving) and you will pay $180,000 more buy leasing every 3 years vs. buying new every 12 years.

is the extra cost worth it to you? can you afford it? is driving a new leased car every 3 years more important than your financial independence? only you can answer that.

IMO call Vanguard if you want to get rich.

good luck to all.

The Millionaire Next Door

1. They live well below their means.
2. They allocate their time, energy, and money efficiently, in ways conducive to building wealth.
3. They believe that financial independence is much more important than displaying high social status.
4. They do not chase status symbols.
5. They minimize their realized (taxable) income and short-term capital gains and investment costs and they maximize their unrealized income and long-term capital gains. (Tax-Free Money Market Funds, Tax-Free Bond Funds, Tax-Efficient, Low Cost, Diversified Stock Index Mutual Funds, and Retirement Accounts).
6. They systematically “pay themselves first”.
7. They chose the right occupation.
8. Their parents do/did not provide economic outpatient care.
9. Their adult children are economically self-sufficient.
10. They are proficient in targeting marketing opportunities.
11. They buy their cars and drive them for a long time. They believe that you AREN’T what you drive.
12. They never purchase a home that requires a mortgage that is more than twice their household’s total annual realized income.
13. They are their own favorite charity.
14. They pay cash and avoid debt.

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WOW.So Spencer is giving them BAD advice?That's a career killer.

Oh,and I found the name of that actress I was asking about.Her name is Taylor Rhodenbaugh.

I should have known those alien maggots booby trapped this sub

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It really depends on what you need. Typically, leasing a brand new car gives you much cheaper monthly payments than buying. Also, you do not have to worry about anything. Most of the oil changes are free, the tuneups are free, and if anything goes wrong they just give you a new car. Also, when you want a new car every four years or so, you can just switch. I like it.

GO SIXERS!!!
Phillies
Fly Eagles Fly

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I'm with JohnDeanSmith. Leasing is for suckers.

"I say we take off and nuke the entire site from orbit. It's the only way to be sure."

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If you lease a car, the only problem is most leases have a mileage overage fee, that is if you drive more than 10k miles a year, they will charge you more in addition to the already agreed upon lease. If you are "the little old lady that only drives the car to church on Sunday", it's great, but if you are commuting 100 miles to work you are better off buying a reliable cheap import.

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no, Spencer is giving them good advice for planes, boats, and women. and maybe even cars too if we are talking about exotics and super-luxury cars like Bentleys. the cars advice is just not great for most normal people who aren't pro athletes, movie stars, and Fortune 500 CEOs IMO.

“Whoa, whose Bentley? I know this ain't a rental.” “First piece of free advice, y’all gotta listen. Y’all make millions. Never buy a depreciating asset. If it drives, flies, floats, or f44ks lease it. Let’s go have fun.” - Spencer Strassmore – “Ballers”

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It's not bad advice. Leasing means that you don't pay the depreciation. That other poster, John is just using voodoo math. Leasing is renting. You pay until you don't want it, and give it back.

Buying is for life. Once you own it, you have to figure out what to do with it. Sell, store, repair, etc. Buying is fine if you're only going to have a handful of cars your whole life. But if you're the type that always wants the new model, then leasing is the way to go.

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the depreciation is built into every lease payment, dummy. so yes you are paying for depreciation perpetually every month for as long as you lease for each car that you lease and that depreciation is at top dollar every 3 year lease cycle FOREVER. i didn't get rich by being stupid.

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the depreciation is built into every lease payment, dummy.

Only based on that crazy voodoo math you used. A lease payment is less than ownership payment. Also, you can determine your payments by how much you put down or how long you want the lease to be. Once that lease term is over, you just give the car back. The only person taking a hit on the depreciation is the owner of the vehicle. Leasers just pay a monthly rent and move on.
i didn't get rich by being stupid.

Stupid people do get lucky.

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Buying is generally a better idea. You are correct that if you always want the latest and greatest then leasing can work, but wanting the latest and greatest is a very bad idea financially. The sensible thing to do is to buy the Ferrari, buy another car to drive around most of the time, and keep the Ferrari for ten years. People who want the latest and greatest are setting themselves up for problems down the road. You had better be really wealthy if you want to do that.

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If you're the type to buy a Ferrari, you're not the type to drive around in a ten year old Ferrari.

You had better be really wealthy if you want to do that.

That kind of goes without saying.

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I actually do know of some people where I live who drive around in older model Ferrari's. I don't know if they are quite ten year old models, but I do see ones that are not the latest and greatest quite frequently where I live. I am in Orange County, so they are all over the place. I can't afford a Ferrari, but if I could I would buy one and keep it for a long time, so I don't really fit into your category even though I would buy a Ferrari.

As far as being really wealthy, having a Ferrari and keeping it does not require nearly the same level of wealth as turning those vehicles over frequently. Many of the football players featured in Ballers were turning vehicles over frequently when they could not necessarily afford to do that. Vernon was, and was having serious financial trouble. With Vernon's new contract he would vault up into the next echelon, where he really could afford to just turn cars over, but at the beginning of the show he was not at that level.

Many of the people who think they are wealthy enough to turn cars over that way are actually not. It is a shame to see people squander money like that.

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You're wrong. You're making a lot of assumptions based on nothing but opinions. I see you're not the type that fall into the categories that leasers are in, therefore you don't see why leasing is better. But that's because you are restricting your view of the world to only what you see in front of you.

Turning cars over on a lease can be more financially beneficial depending upon the application. For instance, I have a friend, owns a private medical practice. Loves driving brand new Porches. So he leases the latest and greatest under his business and claims the lease as a tax write off.

I asked why he leases and he says that it was more lucrative for taxes and he gets to always drive the latest and newest cars.

Then there are those who don't have businesses to put their car under but make $80 to $100K a year. Those guys don't like driving old cars. They prefer to have the best. So they also lease. Lower payments, and they get a new car every 3 years. Sounds great, and since they would drive $60K+ cars, they always want the latest and greatest. If they make enough where they can afford a lifetime of car payments, and they will be trading in or buying a new car every few years anyways, then why not lease? It makes more sense.

Then last, there is the labor. Time and labor has a monetary value. For instance, I debated upon fixing a toilet myself or calling the plumber. After looking into what parts I will need, and the amount of time it would take me to fix the toilet, I realized I would save $75. Is $75 dollars of saving worth 3hrs of my time? Nope. I called a plumber.

Those factors, that are intangible are also big factors in peoples lives. Would a person who is always seeking a new car every 4 yrs want to buy a car, pay it off, put it on sale, deal with hagglers and sketchy buyers just so they can save a couple grand every 4 years or just lease, drop off the car when done and walk away? Time and labor has a value that a lot of people don't factor in when writing long discussion paragraphs about whether it's better to lease or buy.

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I actually said that I could understand why some might prefer leasing for the short term, I just don't see it as the best idea because I don't think turning over cars that way is wise. If someone wants to do that it might work out, I just don't think that is the smartest way to handle money. In other posts on this board I made it very clear that I understand why people do it, and I never said that I couldn't understand why people did it in the post you are responding to.



So no, I'm not wrong. You said that the type of person who would buy a Ferrari would be the type to always want the latest and the greatest, and I said there are plenty of cases where that is simply not true. If you had said that people who buy Ferrari's generally don't fall into that category I would agree with you, but you didn't.


If someone wants to turn over cars quickly they might consider leasing, I just would not advise people to turn over cars quickly. If you do that you have to accept that you are making an emotional decision more than a rational one, as having the latest in the greatest is something that has intangible benefits more than rational ones. I never said or even hinted at not understanding this.

Many people remodel their houses to suit their own tastes, this will often (though not always) reduce the value of the home for resale. Those people have to make the decision that the intangible benefits of the remodel are worth losing a bit of money at resale. If you never intend to leave the home than it makes more sense. If it is worth it to them that is their business. A swimming pool with a mural of the family on the bottom might make the residents happy, but no buyer wants to see that. Like turning over cars quickly that decision would be based on the belief that the emotional return is worth sacrificing financially. If people want to do that that is their business, they just have to decide what type of financial loss they are willing to accept.

And I certainly understand about time and labor. It is just one more factor that has to be evaluated when people make their decision.

Like I said, I never even hinted that I did not understand why people do it. All I said was that liking the latest and the greatest does not make a whole lot of sense financially, which it doesn't. If someone is only maing 80 to 100k a year they have no business leasing a 60k or higher car, you had better make well more than 100k to do that. In my area the rent on a two bedroom apartment that is livable is around 2500. I am not looking up the numbers but I would guess that a 60k car payment would be at least 750 a month. That makes 3250 a month that someone is paying for just car and rent. If you make 80k a year that is almost half of your monthly income before taxes. In fact, in California you would be taking home around 4,500 a month after taxes with an 80k salary, so you would only have 1250 a month for savings and all other expenses combined. Even if you rent a one bedroom you are still paying 2000, which would make it 2,750 total between car and rent for the month, which would only leave 1750 for savings and other expenses. Given those numbers, rough as they are, leasing a 60k car with a salary of 80k is simply stupid. Unless you have a trust fund or some other source of income, in which case you would not fall into this category anyway, leasing that car is an incredibly stupid thing to do. People spending money they don't have is a major problem in this country. If you can write the car off that changes the equation a bit, but very few people fall into that category. I would not call that sound financial planning. I realize why people do, but having money in the bank, to me, is much more important than having nice things, and everyone should feel that way. Having nice things but no money in the bank is not very intelligent. Letting your ego guide you into having the latest and greatest is almost never a good decision. For the truly filthy rich it is fine but most people don't fall into that category. If people want to do that it is their savings that will suffer, I just hope they are going into it with their eyes open. Unless their earnings really explode it will probably hurt them in the future. I realize many people don't think like me, it is their money not mine so if they want to leverage themselves I'm not going to lose any sleep. Lots of the people who lease do so because they can't afford to buy the car they want. I would not base a decision on a reason like that the same way I would not want to turn cars over all the time. Like I said, it is an emotional decision rather than a rational one. I understand that those things mean more to other people than they do to me, I just don't think it tends to make sense financially to be that way. When those folks lose their job and can't afford their car payments because they bit off more than they could chew I won't feel sorry for them.

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I see the problem here. You can't think outside the box you've built for yourself. Noted. Understand that your points are all based on your personal opinion and we'll just agree to disagree.

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That's true, nothing's sadder than an old expensive sports car that has oxidized paint and dents. If it's kept up in "cherry" condition, it's a thing of beauty to show off for car shows.

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If you plan on keeping the car for life, buy it. If you want a new car every few years, which most athletes do, leasing is usually the better option.

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It really depends on the person its not the same for everyone. As for johndeansmith advice some of that is good some of it depends, don't buy cash buy on credit card that builds points for either travel or some type of reward and pay the card/cards off every month. Just buy on the card what you'd buy every month anyway like gas, groceries etc. Don't overspend like a moron cuz plastic doesn't "feel like spending" the way using cash does that's just dumb your buying something. As for homes its depends on where you live stretching yourself montage wise can be beneficial if your home is your investment to not just where you live. I know a guy he builds, lives in the home for a year or 2 then sells for profit between doing that business with his wife and having the job of a realtor and his wifes job as a nurse they do very well.

Also a buddy of mine didn't move out until hes 28 and bought an apartment which here in a not so great part of town costs about 150-160,000 rather then waste a decade in rent or just not saving while staying at home, he got a education (no debt), worked and saved. Families working together to increase family holdings is always a good idea. So theres a lot of methods to hustle it just depends on the situation hell I know a plumber who works on high end homes and works as a plumbing inspector for the city and drives a aston martin.

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I know a plumber who works on high end homes and works as a plumbing inspector for the city and drives a aston martin.


What year?

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I havent read everyones posts (maybe first 5), but take it from someone who has bought Brand New and Used and has also Leased. And given my age, and over all picture, leasing is the best way to go. Especially Luxury and loaded. Im not talking Kia Forte or Soul or Nissan Versa. I mean VW CC or Lincoln or Cadillac ...

When I bought Used (and paid it off in 1 year), I eventually had to nickle and dime it,so I mine as well had a car payment. So traded it in and bought a VW Jetta Wolfsburg Edition, payments were good, interest low because of my credit, and I took care of it. But I had to use synthetic oil, over $100 oil changes. I kept the miles alright. I had about 6-9 payments left, but it felt like it was getting wear and tear, and time for something new. I actually had equity in the car. Insurance is relatively low, then went higher when I traded it in and bought a VE Jetta SE loaded. Payments exactly the same, so Im used to paying that, but again I had to pay for my own oil changes and repairs. And this car had issues with the keyless ignition. It would shut down while I was driving!! So different experience from the 1st VW (which I loved and no problems). Took it in to get it repaired, and they didnt give a loaner car...I had to PAY to rent a car. They'd give a car with barely any gas, but Id have to fill it up. Got it back, within 1 mile, it did it again!! They put miles on my car, just wasnt worth it.

So after 2 years I traded it in and leased a Lincoln. My interest is .0013%, payments the same (again), except virtually EVERYTHING is covered. They come and pick up my car for the oil changes, and drop off a loaner all for free. Insurance was actually lower when I switched from Progressive to Geico. Everyone worries about milage, but its not that bad, and plus I dont drive my car for a job nor travel for work (I work from home). I have taken 2 long trips, so it evens out. My tires are also covered for so many miles. I know Ill want something new every few years, so leasing makes sense. Once I am retired or have kids who are driving Ill probably buy. But doing all 3, leasing is better for me. And always remember to negotiate.

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1. The poor and the middle class work for money. The rich have money work for them.
2. Rich people acquire assets. The poor and the middle class acquire liabilities, but they think they are assets. An asset is something that puts money in your pocket, a liability is something that takes money out of your pocket. The rich buy assets and the poor only have expenses.
3. Poor people buy liabilities to look rich. Rich people buy assets to get richer.
4. The rich get richer because they continue to do things that make them richer. The poor get poorer because they continue to do things that make them poorer.

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[deleted]

For the stuff they want leasing makes sense, if for nothing more than to control costs and have and escape plan. If you have lots (or even decent amounts) of money, opportunity costs and the time value of money also come into play and budgeting becomes a very different proposition.

The car that spurred the comment was, IIRC, a Bentley Continental Flying Spur (MSRP $169,000). Without looking to hard, a decent lease for this is $25,000 down + $1498 per month for 48 months. In simple money this is a total of $96,904 going out. If you include the time value of money and include a 10% cost of capital (in this case representing the opportunity for investment forgone by spending your cash vs. investing it), it's actually an even lower [25K down + NPV of payment stream + 0 residual] $81,981 cost to lease. Older flying spurs go for $53-60K today, so buying costs brake down like this [(money out at time 0, $169,000) - (NPV of $60,000 4 years from now ($40,980))]. This puts the total cost to buy at $128,020 ($169,000-40,980). The advantage of leasing then is a savings of: $46,039.

The spread gets even bigger on higher cost items. Leases theoretically are supposed to make you pay for the depreciation and the calculations above should, ideally, really be a wash, but in reality this is rarely that case and it is quite easy to come out ahead on a lease if you do your due diligence.

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Jay Leno: Don't lease a car. Buy.
Kathleen Elkins | @kathleen_elk Tuesday, 13 Dec 2016 | 10:03 AM ET
CNBC.com

Leasing cars is becoming more and more popular as the price of new vehicles continues to climb.

But is it the right option for you?

Jay Leno, pioneering car builder and host of CNBC's "Jay Leno's Garage," would advise against it.

"I always think it's better to buy a car," he tells CNBC. "Everyone seems to lease now. Everyone thinks you can write off this and write off that, and to a certain extent, you can. But at the end of the lease, you don't have anything."

The comedian and former host of NBC's "The Tonight Show" prefers ownership when it comes to most things: "I don't carry debt. I own everything. I own my buildings. I own my cars. That way, if it ends tomorrow, I know what I've got."

There are pros and cons to both leasing and owning that you'll want to consider.

Lease payments per month are typically cheaper than loan payments per month. Buying offers more flexibility, though: The car is yours to keep or sell, and you don't have to worry about going over an annual mileage limit.

Plus, once you pay off your auto loan, you eliminate a fixed monthly cost and won't have to worry about a car payment until you buy again.

In an ideal world, you'd pay for your car in cash and avoid loans completely, says Leno.

Of course, he is in the enviable position of being a uniquely high earner — he reportedly earned as much as $30 million a year at the height of his career — but he was financially conservative long before he hit it big. He says he didn't buy his first home until he had the cash to do so.
After all, Leno says, "when you don't have to write checks every month, you're just better off."

CNBC's "Jay Leno's Garage" airs Wednesdays at 10 p.m. ET.

http://www.cnbc.com/2016/12/13/jay-leno-dont-lease-a-car-buy.html

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