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Cash or leasing?
 

Hi guys!
What’s your opinion on buying things like real estate, cars is it better to save up and pay in cash or get it on leasing?
Like if you were in your 20-30 would you better be renting a place to live and saving to buy house or would you take a loan?
And if you were to buy a car would you wait year or two to save up and pay cash or you would better get it leased, pay monthly and do something else with the rest of money you have had saved up for a car?

Re: Cash or leasing?
 

Typically if an asset appreciates in value, then buy it. (like a house)

If an asset depreciates (like a car) then better to lease.

Many, many factors to consider though when buying or leasing.

Re: Cash or leasing?
 

For cars - really depends on the car and how it’s long term residuals work out

You could buy for let’s say 30k and well 3 years later for 18k. That is a -12k ROI. If you have borrowed the money you then need to also take into account the interest rate

Then look at the cost of leasing - what would it cost you over 3 years? Can you fund it as a company car? Can you easily affords the monthly repayments?

Just do the maths from there

Houses - always best to buy if you buy smart IMO as they are commodities that usually increase in value

Re: Cash or leasing?
 

Nice simple analysis there

Re: Cash or leasing?
 

it depends on your own personal situation.......

for me, it is better to rent than to buy at the moment.......

because putting a large down payment of 100-200k would dramatically hurt my business leverage purchase power.......

rent is smarter for me because I can keep my 200k+ of cash and use it for my business and generate 5 figures monthly in profits.......

I think of mainly just the opportunity cost..........

Re: Cash or leasing?
 

Leasing cars is always a bad idea, and the reason why leasing cars is a bad idea is because it forces you to lease a new car every 2-4 years. It's flawed to compare leasing a NEW car to purchasing a USED car. If you COULD lease a used car, that would probably be better then purchasing a used car, just like leasing a new car is better then purchasing a new car. Plus, you gotta lease it from a dealership. And if you're walking through a dealership every 2-4 years I PROMISE YOU, someone is going to crack you for some gross and give you a big boy payment and you're going to wake up the next morning confused.


The smartest thing to do, is going 2-5 years back (assuming you are making under 250k a year, over 50k a year and don't have 7+ figures in the bank), on a economy car. If you make less money then that, go further back, the older your car, generally, the more economical it's going to be. A $2000 car that gets you around for a couple of years is super economical. The issue is the older you go, the more likely you are to have to repair (still cheaper) your car, which can be inconvenient. And if you don't make over $250k a year, don't ****ing worry about spending over 10-15k on a car. There's no point, it's bread and butter, the cars melt, invest your money.

Re: Cash or leasing?
 

Depends where you're from, leases are often good in the UK/US for cars.

Buying a house also probably good there where you only need a 5-10% deposit and can get 3-4% interest rates. Not so much fun where my 2nd home is in the Philippines where you need a 25% deposit and interest rates are 7-8%.
I ended up buying a house with cash in the Phils for $350k, I'd of been a lot better off financially just renting a similar quality house for $800-$1000 per month and investing the $350k in my businesses, don't like to live in someone elses house though and the wife wanted to buy.

Re: Cash or leasing?
 

How big was the house for that price in the Philippines?

Re: Cash or leasing?
 

About 4000 square feet, I think you can get cheaper houses in the US these days if you're willing to live in the countryside.

Re: Cash or leasing?
 

what is that saying,Once you lease a car,you lease forever.when you retire and your income dipped ,leasing is no longer a feasible idea,
I paid 20k for a 2005 Honda Accord,a certified preowned one from the dealer with 2000 miles in 2005,so far the only repair is the steering wheel rod,new tires and on my third battery,Honda and Toyota truely live up to its reputation,I can list it today and sell it today/tomorrow.
People dont realise if there is repair to your car,how inconvenient it is ,so a good car is worth its weight in gold.
Always buy quality,it saves you money in the long run