I am sure this has been discussed lots before.  Is there an accountant or 
someone who really knows the current scoop on the best thing to do?  My gut 
feeling is that leases are not the better choice, but maybe an important 
factor is how well the particular vehicle retains its value over time?  What 
other considerations are there?

We're thinking of getting a Subaru Forester to replace a leased Honda CRV.  I 
read in a consumer report somewhere that Subaru is struggling financially and 
that their quality isn't what it should be.  We want to get a Subuaru because 
they are the only SUV with decent legroom (a CRV is pretty bad for legroom).

Any opinions out there?

TIA,
Gil Nicholls

Leases account for 20% or so of all car purchases.  They are down right now to 
very low numbers, since interest rates are low.  The trend is, rates are high, 
leases increase.  People in the unfortunate position of buying a car by the 
monthly price, not the total price.

Generally speaking if you can't write it off or don't have a compelling reason 
to lease, you'll get screwed.  You get the luxury of paying full taxes on the 
vehicle, full registration price, full ad valorem (if you live in the people's 
republic of Georgia you get this every year), capital reduction fees, etc.  
Then you assume responsibility for the vehicle even though you don't own it.  I 
hate leases but have had two of them for financial reasons (see below).

My experience is this:  we lease one Audi and own another.  I will have paid 
over $25k and have nothing to show for it - BUT - in our case, we can write off 
a good bit of it and the insurance cost.  I don't want to own the car after the 
lease is over, it's useful life (to me) is over.  The Audi we own I plan to own 
for 10-12 years.  If you want the leased A6, let me know, it's nice.

Subaru makes a good car, but get an Audi instead.  They are better cars, have 
more service centers, better AWD system (IMHO), etc.  I'm very happy with 
them.  Get a 03,04, or 2005 Allroad (if you don't mind used).  I have an '01 
(same as the '05 except for the stereo in the '05 and a few other creature 
comforts).  Awesome cars, twin turbo V6 and hell of a lot of legroom front and 
back.  Get an Audi Assured one for about $26-$32 and the warranty is good for 
6/100,000.


------------------------------------------------------------
http://www.artigue.com/fiat

   - Fuel Injection, Carburetion, and Performance Guides
   - Wiring Diagrams

A lease is good also if you just like to get into something new every couple 
or three years. Whenever you're buying a car, there's always the tendancy to 
think "iI'll keep this car for at least 5 or 6 or 10 years but that new car 
smell/feel fades pretty quickly! 

I leased my previous Ford ranger before this current one which I am 
buying....now I'm getting that itch for something cleaner, bigger, etc....but 
selling it would be tough.

I'm trying to figure out how I can get away with writing off a lease payment 
(you really have to pretty much use it JUST for work if you are gonna write 
off the payment).

Gil Nicholls (Vancouver, B.C.) wrote:
: I am sure this has been discussed lots before.  Is there an accountant or 
: someone who really knows the current scoop on the best thing to do? 

Leasing is okay for a business, but normally is very bad for a person. A
business leases to decuct all the costs of ownership from their taxes as they
are paid. If a company purchases a car, only interst and depreciation are
deductable.

For a person the only good part about leasing is a set cost. The effective
interest on a lease should be far higher than the interest rate to buy a car.
When you lease a car you pay up front a security deposit and 1 or more months of
lease payments. This is money you are not borrowing, but is used by the leasing
company to calculate the amount you owe on the lease. Therefore the effective
interest rate is the interest rate on the amount borrowed not including the down
payment and the security deposit.

There was a Dilbert where the customer ask how stupid the seller thought he was.
Dogbert answered, " I will not know until after you decide whether or not to
lease".

Todd Rosenthal President Star Leasing, Inc
Hagerstown MD
72 Fiat 124 Spider
87 Fiat/Bertone X1/9
93 Alfa 164S

I always thought leasing a car was meant for people who could not afford to 
buy one. But based on what I've read it's much more expensive in the long run 
than buying one. I personally thing it's a scam.

Maybe in the case of owning a business where you can write this stuff off your 
taxes it may be practical.

And then there is stuff like if they find a door ding, they charge you for the 
repair when the lease it over. Like rental car companies do. Do they actually 
fix the ding or just charge you for it?

If you rack up allot of miles, I they charge you because your only limitied to 
say no more than 15,000 miles a year.

As far as owning an Audi over a Subaru. I've bought my Baja four years ago and 
I've been very pleased with it. 

James Seabolt  
Tennessee, United States
Homepage --->>> http://users.chartertn.net/jseabolt/

2003 Subaru Baja 
1980 FIAT 2000 "turbo" Spider
1968 Ford Fairlane 500 (Not a Ford Galaxie!!)
1987 Yugo GV 1500cc also turbocharged
1979 131 Brava Future project
1980 131 Brava Current project.

Gil,

Basically if you generally get a new car every 3-4 years and trade your old one 
in every time than in the long run leasing is cheaper, as your payments are 
less.
If you plan on keeping the car for a long time then it is not worth it.

You really have to decide ahead of time how long you will keep the car and do 
the math to see which one is cheaper.
In reality the best deal is to buy used - or at least something like a program 
car.

Csaba

'71 124 Spider hi-po 2000, A/C, big brakes, r&p, 3.9 with LSD
personal: http://www.geocities.com/f124ss/
work: http://www.vickauto.com

Getting a 2 y/o car with 25-35k miles then driving it nearly to the grave 
works well for us. On our Sube wagon the difference in price between new and 2 
y/o for the same car ('cept ours had a better stereo) was nearly $11K.  That's 
a lotta cash to dump in depreciation in 2 years.  We've put another 129K miles 
on the car  (total  = 164K) and expect to run it beyond 200K, then sell cheap -
 maybe $2-3K.  Assuming we sell for $2500 at 200K miles, we'll have driven the 
car for 165K pleasant, reliable miles for $14500. In miles per dollar purchase 
cost, that's 11.4 miles per dollar. First owner drove 35K total miles - 
admittedly with more new car smell -  for $11000, which is 3.3 miles per 
dollar. I think I got the better deal - and have had a good car for 6 years.

All mine have been secondhand.  In fact, I save a bunch of money buying cars 
with 100k on them.  Fleet vehicles are nice...highway miles and properly 
maintained, and I save on collision insurance by paying cash.  Here's the real 
kicker...they're all GM!  If you want the new car smell, I think they sell it 
in a bottle.

Christopher Judd wrote:
: Getting a 2 y/o car with 25-35k miles then driving it nearly to the grave 
: works well for us. 

I will never buy or lease a new car.  I picked up a fully loaded 2003 Town and 
Country including a built in DVD and all the goodies and largest engine 2.5 
years ago.  List on it new was ~ $35K with all the junk on it.  We bought it 2 
years old w/24,000 miles for less than $16K!  I also bought a 2002 Durango with 
~ 30K miles two years ago for under $10,000.

Buy newer used.  No lease, lower payments, AND you will own it!

Jon W. Logan
Midwest-124, Ltd
www.midwest124.com
parts@midwest124.com

All I need to do is convince the s/o of that.  In 30+ years of driving, I 
think I have had a new car for only about 3-4 years out of that.  On all non-
new vehicles I have owned, I have NEVER purchased collision insurance, and 
have never needed it.  I have saved enough over the years to pay for a new 
vehicle just on the insurance savings alone this way.  But now we have a 16 
year old that is just learning to drive, so collision insurance is a must....

Since we intend to keep the new SUV for a long time, the arguments seem to be 
in favor of an outright purchase.

Gil Nicholls

Jon W. Logan wrote:
: Christopher Judd wrote:
: : Getting a 2 y/o car with 25-35k miles then driving it nearly to the grave 
: : works well for us. 
: I will never buy or lease a new car.  I picked up a fully loaded 2003 Town 
and 
: Country including a built in DVD and all the goodies and largest engine 2.5 
: years ago.  List on it new was ~ $35K with all the junk on it.  We bought it 
2 
: years old w/24,000 miles for less than $16K!  I also bought a 2002 Durango 
with 
: ~ 30K miles two years ago for under $10,000.
: Buy newer used.  No lease, lower payments, AND you will own it!
: Jon W. Logan
: Midwest-124, Ltd
: www.midwest124.com
: parts@midwest124.com

Todd wrote: A business leases to decuct all the costs of ownership from their 
taxes as they
: are paid. If a company purchases a car, only interst and depreciation are
: deductable.

If a company purchases a car they can also deduct for maintenance and repairs.
Correct me if I am wrong... When an individual uses his vehicle as his work 
vehicle (traveling from one job site to another, transporting materials, etc) 
he can also deduct from the expenses from his taxes.
Rule of thumb, you can deduct mileage and fuel OR maintenance and repairs. 
Depending on the amount of road miles you put in (and considering todays 
prices) mileage and fuel is usually the better way to go. 



3 Fiats
1 Mini
1 Motorcycle
2 Quads 
1 snowmobile (if I could fix it, I could sell it)
3 kids
0 sense

I do that for my commuter beast usually, which I prefer to turn over every 1-2 
years or so just because I have a relatively short attention span. Since 2001, 
I've driven a 240sx, an Audi Coupe GT, a BMW 535i, and a Mazda pickup (yuck - 
but stone relaible).  I've been recycling the same $3,000, give or take, since 
then.  

The queen's barge is replaced less freqently but with a more expensive used 
vehicle.  After this will be a dreaded Minivan (2nd kid coming)...probably a 
Honda. Next for me will be another 535i, with a 5spd this time..what a great 
car!  Also quite reliable, quick, comfy, and easy on the eyes.

Mira (Vernon, CT) wrote:
: Todd wrote: A business leases to decuct all the costs of ownership from their 
: taxes as they
: : are paid. If a company purchases a car, only interst and depreciation are
: : deductable.
: If a company purchases a car they can also deduct for maintenance and repairs.

All expenses for a company is tax deductable. Only purchase of assets is not tax
deductable.

: Correct me if I am wrong... When an individual uses his vehicle as his work 
: vehicle (traveling from one job site to another, transporting materials, etc) 
: he can also deduct from the expenses from his taxes.

Yes but you need to remove any reimbursed expenses. You can not deduct your
normal commute. You can only deduct driving other than your normal commute. You
can deduct a percentage of your expenses of ownership (gas, repairs,
depreciation, ect) bsed on the amount of personal mileage versus business
mileage. You can choose to take the goverment mileage rate times the # of miles
you drive for business instead. You can not take both. You can not take mileage
and fuel, only expenses or mileage.

: Rule of thumb, you can deduct mileage and fuel OR maintenance and repairs. 
: Depending on the amount of road miles you put in (and considering todays 
: prices) mileage and fuel is usually the better way to go. 

Todd Rosenthal
Hagerstown MD
72 Fiat 124 Spider
87 Fiat/Bertone X1/9
93 Alfa 164S