Hacker News Reader

Comment by mulmen | Hacker News Reader

When I rent a car I am not responsible for repairs. If I am on the hook for the repair bill I should get a choice in how the car is repaired. I can buy whatever tires I want for a leased car. If Tesla wants to make these kinds of demands then the repair should be part of the warranty and priced in to the car.

> I would read this as a cautionary tale against renting your cars. If you can’t buy it, don’t! This holds true for any depreciating asset.

If the asset depreciates what's the benefit in buying it? The fact that cars depreciate seems like the best reason to "rent" them. The manufacturer ends up dealing with the now less valuable asset.

View on HN

It really just comes down to math. A lease has a “residual” which is the expected value of the car at lease end. You pay for the difference between the new value and the residual with your lease payment. It’s essentially like buying a car with an installment loan, except you’ve pre-arranged to sell the car after 3 years at a determined price. There’s also a “money factor” which is the implied interest rate you are getting in the lease. It turns out that Tesla leases have a high money factor, which makes them a bad deal.

Tesla lessors pay for depreciation the same way owners do, but the lease is effectively bundled in with a 6% APR loan, which is a lot worse than people with good credit would pay for a new car auto loan.

> The fact that cars depreciate seems like the best reason to "rent" them. The manufacturer ends up dealing with the now less valuable asset.

Except that they charge you for all of the depreciation plus a rental fee. The dealer/manufacturer ends up with an asset that is more valuable than the price they paid for it less the money they've received for it through the terms of the lease.

The asset isn’t always worth more. If you don’t believe me ask GM and Chrysler.

Further, it doesn’t matter. I don’t care if the manufacturer makes or loses money. I only care about maximizing utility per dollar.

Do you only drive like once a month or something? If you drive every other day or so then buying is the way to go...otherwise I agree, renting is probably going to be a better deal than owning a depreciating asset that you rarely use.

Not all cars are set to depreciate. If you buy something more rare or in demand you will probably see it worth about the same when you sell, sometimes decades down the line. If you bought an aircooled 911 or some old land cruiser today, it would probably be worth even more in 15 years even with your mileage.

This is a very niche case, though, maybe 1% of cars, at best. It doesn't apply to mass market cars.

It sure does apply to mass market cars. A 15 year old Jeep wrangler with a manual transmission will hold its value fine. Most trucks actually hold quite a bit of value, especially with the manual transmission as these are sought after.

It’s a complicated formula sometimes it works for you but most of the time the manufacturer gets gets the better deal

Why would that be? If I'm leasing a vehicle, not only does the manufacturer need to earn back the cost of manufacturing plus some margin, they also need to earn back the cost of administrating a lease and the cost of selling the car again later (with depreciation). They're not going to cover those extra costs for free, they're going to pass them on to the consumer. So how can leasing a vehicle possibly work out in the consumer's favor?

Simple financial engineering. Sometimes they take the loss but cover it up or push it out using lease terms. The company has profit now but takes a write off later. Good for juicing executive bonus packages.

Also because lease terms are complex they can stack with other promotions or incentives and allow for leases lower than the cost of ownership would have been otherwise. There is a whole lease community dedicated to finding these crazy deals but they wouldn’t be something you could do by just walking into a random dealer.

Via risk miscalculation or bad luck on the side of the manufacturer. The lease conditions are usually fixed at the start; if the car ends up requiring a lot of warranty covered repairs or deprecates faster than anticipated (for example because they cheated on emissions), the manufacturer ends up with a bad deal.

The miscalculation is often intentional. Manufacturers for example know that Low end EVs depreciate faster than equivalent ic cars but still assign similar depreciation tables because otherwise they couldn’t get rid of the cars or would have to sell em at steep discounts and take immediate losses

While it doesn't always work out, in the long run it works out well often enough to pay for the losses.

> When I rent a car I am not responsible for repairs.

You certainly are, in most places, if you crash it into something. This wasn't a failure of the manufacturer's materials or workmanship, it was a collision loss.

It's a stretch to describe road debris hitting the undercarriage of a car a "collision". You should expect a vehicle to be engineered so that small objects hitting the undercarriage don't cause significant damage.

Making subassemblies replaceable in part rather than in whole is definitely a bonus. When they're only replaceable in whole, I do consider it deficient engineering, especially if a small change would make it possible.

An example from motorbikes: I would never buy a Triumph Tiger 800 because the rear subframe is welded to the rest of the frame. Any drop which causes a bend in the rear subframe - easily enough done since the passenger footpegs and exhaust are attached to it - would require replacing the whole frame to fix. In most high performance bikes, the rear subframe is bolted on.

These terms are clearly defined in auto policies and are strictly regulated. I just read mine, and the things that are covered under my comprehensive policy are in a plain-english list that, clear as day, wouldn't cover this.

Although if we're just talking plain-english and not legalese, I'd say that your assertion is a stretch: that colliding with debris is not a "collision".

And yes, Tesla repairability is poor. That's kind of what you can expect to get when you prioritize time-to-market above anything else. I like to buy old motorcycles that don't have any parts availability and everything has to be custom done... but I wouldn't do that with my daily driver.

As pointed out in another comment, I think this is a case of US / UK difference in insurance jargon. Debris damaging the undercarriage would not be covered by the closest UK equivalent of collision insurance (CDW on rentals), as I understand it.

I also think insurance is a bit of a red herring here. You wouldn't claim on insurance for a flat tyre either; some things are just bad luck. It's the quality of engineering - what I do think is on topic - which controls the risk.

Except, in most vehicles something like this would not result in 16k quote to repair so the insurance not covering it is not the end of the world.

This I would say is more of design oversight on tesla’s part. At the very least there should have been a shroud or cover over more vulnerable parts.

That's a pretty typical construction for a cradle tube frame. A Triumph Tiger 800 is not a high performance bike. Cradle frames are cheap, the bikes that have bolted on subframes typically have backbone frames and use the engines as stressed members. Also that subframe attachment is an adjustment point for fine-tuning rider position.

> It's a stretch to describe road debris hitting the undercarriage of a car a "collision".

The insurance that covers such an event is literally called collison insurance.

I have no clue why you're being downvoted (and I'm being downvoted now too, lol). If you hit a rock in the road, or a pothole, or a tree, it is covered under collision insurance.

For posterity: https://www.investopedia.com/terms/c/collision-insurance.asp

> ... it will cover damage from potholes, and accidents involving an inanimate object.

Perhaps part of the confusion here is UK vs US? A collision in the UK would normally involve a third party.

In the rental space, collision damage waivers - CDWs - explicitly don't cover undercarriage, wheels, windshields and so on, the kind of damage we're talking about here.

https://www.aviva.co.uk/insurance/motor/car-insurance/what-a...

At the US rental companies I've used, CDWs specifically do cover those things, and in fact cover pretty much everything related to any damage of the vehicle (with caveats, like you were using the vehicle for something illegal). I guess the US/UK difference is good to keep in mind next time I head to the UK.

https://www.avis.com/en/help/usa-faqs/cdw-insurance

https://www.avis.com/en/products-and-services/protections/lo...

Ah yeah. In the US, collision also typically applies to single vehicle collisions. (With the frequent exception of animal collision)

Indeed. I have full coverage with Geico, as well as uninsured motorist coverage, damage etc.

Well the other night some asshole decided to pac-man all the cones on the highway late at night so we had to navigate a field of almost impossible to see cones (the borders are black and there were no lights up). Several cars, including mine ended up running over a few. I got lucky as it just messed up my paint a bit on the front bumper and I lost a license plate. Two other vehicles crashed over it, really sucked.

Called Geico when I got home and was informed I don't have collision coverage. They told me for this I would have needed comprehensive coverage and collision coverage.

Well joke's on them, my renewal is this month and I'm bouncing. I'd rather find another company that won't weasel out on me. When I signed up I said I wanted to be covered no matter what. I pay enough monthly I should be.

Forcing nsurance (health and renters, cars,etc) should be illegal,it doesn't work as it should. It ends up being a tax we pay to still have to pay out of pocket no matter what.

Yikes. That’s an unfortunate but sadly common mistake. Terms like “full coverage” don’t really have any real meaning, despite people repeating the made-up term.

I am fairly certain that it would be illegal for an agent to sell that to you without clarifying.

Funny enough, one of the first articles to pop up in a search for this is from Geico: https://www.geico.com/information/aboutinsurance/auto/full-c...

We shouid start giving age, area code, points on license, and price per year for auto insurance.

I have a feeling the rats are collaborating on price.

> Forcing nsurance (health and renters, cars,etc) should be illegal,it doesn't work as it should.

What's your alternative to mandatory liability insurance, given that there are drivers with much greater liability risk than others?

Not sure maybe we all just pay a tax to cover the damage...exactly like insurance is supppsed to be, but more like a co-op so it's just us, no C-Suite asshats stealing 99% of the money for themselves. Insurance on paper sounds good, it's the ever-greedier businesses that eff it all up.

As another reply to me mentioned, 'full-coverage' should be just that. The US allows so much lies I believe nothing, our gov't lies ,ads lie, politicians lie,police lie,lawyers...well

That doesn't pass the smell test for me - with a co-op, incentives are aligned for everyone. With liability that's covered by society, you create incentives that are directly opposed - e.g. you can drive a giant SUV that's more deadly to other drivers and pedestrians - and without mandatory insurance, you're getting the benefits of driving a tank-like vehicle while offloading all the costs and risks onto others.

You'd also need some new framework for dealing with high-risk drivers - e.g. instead of increasing the insurance cost for someone with a DUI conviction, you'd need to simply take away their ability to drive.

There also exist numerous jurisdictions with publicly provided insurance, e.g. https://en.wikipedia.org/wiki/Insurance_Corporation_of_Briti...

From Merriam-Webster:

Definition of collide

intransitive verb 1 : to come together with solid or direct impact

https://www.merriam-webster.com/dictionary/collide

Its a stretch to describe road debris coming together with solid impact to the undercarriage a collision?

Important words in contracts are usually defined in the contract itself. "Collision" is almost certainly defined in any automobile insurance contract you purchase. If you can read code, you can (and should!) read the contracts you sign, especially contracts that could pay you money.

Relying on the dictionary alone can mislead you.

Here's the pertinent definition from my policy (USAA specifically):

  "Collision" means the impact with an object and includes upset of a vehicle. Loss caused by the following is covered under Comprehensive Coverage and is not considered collision: fire; missiles or falling objects; hail, water or flood; malicious mischief or vandalism; theft or larceny; riot or civil commotion; explosion orearthquake; contact with bird or animal; windstorm; or breakage of window glass

I understand words can often have their definitions narrowed and agree people should read their contracts. I tend to irk sales people because I do bother to read all the papers they start throwing my way and start asking questions they've never been asked by the hundreds of customers.

The person I was replying to wasn't referencing any particular contract. They were just speaking generally about hitting road debris being a stretch to define as a collision.

> It's a stretch to describe road debris hitting the undercarriage of a car a "collision".

Seeing as how neither I nor he referenced any particular insurance contract, why would we then bother to use your insurance contract to define the term instead of probably the one shared point between us to define the term (the dictionary)? Why not reference a contract I'll sign with a friend where for the purposes of the contract a collision is defined only as a 5 foot person running into a blue colored wall. I guess a car slamming into a wall isn't a collision anymore since this one contract defines it a different arbitrary way!

Whenever I see contract language like

> bird or animal

I want to know the background behind why some lawyer found that necessary. :)

My guess is that it happens so frequently that it wouldn't be profitable to cover damages caused by hitting animals.

I am referring to the fact that birds are animals.

Not really the debris is colliding with the car. Even a pebble hitting a wind shield can hit with quite a bit of force and is also a collision. Let alone larger debris on the road. Also both objects dont need to be moving for instance you can collide into a tree or guard rail.

Now insurance certainly can exclude things that are collisions. A common on in the US are animal collisions like deer ect...

Usually rentals require/include max comprehensive insurance (regulations vary based on the state in US), so if the warranty doesn't cover it then the insurance should.

While I am on the side of right to repair I don't see how this is that relevant to the issue. It seems like more of an issue with insurance/rental laws, transparency in legal agreements, tesla's pricing & service being a bad deal, and possibly negligence on the renter's behalf. I don't think that any company should be allowed to hold a renter liable unless it's proven they damaged the property on purpose. Usually there are a lot of protections in place for renters so it's possible tesla is breaking the law or the renter accepted some liability attempting to save money.

Rentals and shared ownership situations are always messy anyways... A lot of this just reminds me of: "My condo HOA decided to hire the most expensive roof repair company in town!! Why can't we just pour some cheap tar across the roof and call it good for a few more years?!?!"

A bit off topic, but tar should only be used as temp repair to prevent further damage from water and moisture. For example its winter and you have asphalt shingle roof. Asphalt shingles are brittle when cold so attempting a proper repair could damage more shingles on what was a rather localized problem. Also ice and snow makes working on a roof more hazardous.

An other possible reason would be you don't have enough money on hand at the moment the issue was discovered giving you a few months to set asside enough money. Similar, thing the contractors schedule is packed so a quick temp repair can hold you off while you wait the week or two for his crew to begin work. An other similar issue is waiting on materials if your roof uses a material that is not locally stocked.

Tar also has a nasty problem of becoming brittle from UV light something roofs get plenty of. So instead of flexing under thermal expansion and contraction it just cracks. So its not ideal for anything but a temporary fix.

Now for choosing the most expensive contractor that is on your condo. Although they could have certainly been valid reasons.

Thats interesting, I never knew that about tar but it makes sense.

The article doesn’t say his insurance wouldn’t cover it. It says his comprehensive coverage on his insurance wouldn’t cover it. Which is highly likely because this type of incident is usually a collision claim.

If he has comprehensive at all then he almost certainly has collision coverage. It’s just that, then it’s $16k accident that’s he’s at fault for.

I'm not sure if it said he had comprehensive, sounds like he didn't, but the wording is a bit strange.

> "the owner's insurance policy didn't cover comprehensive claims from road debris"

My guess was that this would have been a comprehensive claim, but he didn't have that insurance plan. Could just be a deceptive play on words to evade the real issue...

I am not aware of any US insurer or state where striking an object on a road would be a comprehensive claim. After watching the video I think he’s probably just confusing the two. Which might be likely since he clearly doesn’t have his whole insurance situation figured out.

The benefit of buying it is that you can drive it well after it's paid off. Leasing and trading up all the time means you're constantly making never-ending payments. It's not that hard to sell your car when the time comes to get rid of it.

It’s not that simple. Sometimes the lease is a better deal if you fall into the correct mileage band or if a manufacturer over estimates residual value. This happens a lot for fast depreciation luxury cars that aren’t a as popular or low end economy cars that manufacturers are dumping.

Those never-ending payments are covering depreciation. Unless you keep your car for 10+ years and it’s one of the rare models that holds value after that, you’re not much better off buying it.

> The fact that cars depreciate seems like the best reason to "rent" them.

Last I checked, the average age of cars in the US is 13 years. on average you are going to be better off buying.

The number of people who, after an item is paid of, go out and replace it immediately are the same people who are bad with money anyway, so it makes sense that those people think it's financially better to rent.

Buying 10 year old cars that are nearly fully depreciated is where you save big money. You can get a dependable car for a few thousand dollars, and even if it needs more repairs than a new car you still come out money ahead especially if you can do small repairs yourself.

Buying whatever is unfashionable and just a hair older than whatever lenders will finance is where the value always is.

Of course both of those are moving targets to some extent.

> Buying 10 year old cars that are nearly fully depreciated is where you save big money.

Not in my experience. You either pay in depreciation or in maintenance, there is no escaping car expenses.

A 10 year depreciated car may need a timing belt/water pump, possible head gasket issues, possible transmission issues, etc.

You're also just paying for predictability. While lemons are a thing, they're less so than they used to be, and there's something to be said--if you can afford it--for buying a car that can probably run for 10+ years with minimal risk of serious maintenance issues.

And, in snow belt areas, you start to run into rust issues 15 or so years on.

I used to live in the snow belt (or salt belt, if you will) and it took much less than 15 years to have rust issues.

I've seen plenty of freak issues with new cars that turn them into a similar pit, and not all of it under warranty or recall. The trick is to find a used car that just had some of this work done and from models that aren't plagued with these issues typically, and if the cars are 10 years old or so people start learning which of these models are the lemons and which will happily go 300k miles with not much drama.

What messes with the perception is people buy used cars they could never afford new. An apples to apples comparison is what that same car would have cost new not simply what someone can afford because it’s new.

A nice new BMW SUV is likely to depreciate 30k in 5 years, but that same car is extremely unlikely to need 30k of repairs if bought after 10 years and kept for another 5.

More critically you’re also paying dramatically more in sales and property taxes.

An older bmw could easily cost you 3-5k a year in repairs . Couple that with lesser but still substantial depreciation and you might find it too be a lot more expensive than you thought.

Anecdotal. But I haven't spent $5k in repairs to my 17 year old bmw in the 10 years I've owned it. I do budget for $1k a year though.

My 2010 BMW had $5,000.00 in repairs in the first year after the warranty expired. That doesn’t include the $15,000.00 in unnecessary repairs the dealership quoted me. In the four years since then repairs have been closer to $2,000.00 a year.

The electric water water pump alone was $2,000.00. $1,200.00 in parts and $800.00 in labor. This is basically a “maintenance” item. The car has less than 100k miles and is on the third pump.

you got scammed, VDO 11519455978 is $330

You are in the bmw sweet spot I think. Newer ones have even more complex and expensive parts but reliability isn’t better and access is difficult

Sure. I'm pre turbo. The electric water pump is undoubtedly better for long term, but had initial issues (on the other hand, it has a clear engine code and is easier to access)

I have a 2010 BMW 335, which is twin turbocharged. It is on electric water pump #3 in less than 100k miles. My mechanic tells me not to worry about coolant change intervals because these water pumps will never last that long anyway.

The electric pump is great from a performance/efficiency perspective because the car can make choices about coolant temp irrespective of engine speed. It's a horrible device from a reliability perspective though. I have already been stranded by it once.

My turbos are "fine". But I know they will fail in the next 30k miles. In talking to my mechanic the prices fluctuate quite a bit, so I am going to start keeping an eye out and just buy a pair to have on hand when mine finally let go.

The previous owner of mine installed a new water pump at 80k miles, and I did it again at 150k. Similarly don't have to change the coolant because the coolant expansion tank will break in 5 years time. (the corner is plastic and can't take the pressure.

But they've been saying that as long as I've been buying used BMWs (20 years). It's just a way of conveniently saying "you'll be wrong in the future".

My experience with BMWs is that they do tend to have ridiculous flaws, like the main bearing problems in the E90 M3s and the V10 M5s, or the fuel pump issues on the E90s in general. But BMW will set them right.

The reality is BMWs just have a lot of stuff on them and so it is a numbers game. Things are going to break. Cars are a hostile environment. This is compounded by the fact that it is a BMW. I expect everything to work. If it was a used Corolla I may not complain as much about the seat mechanism not working perfectly every time.

Additionally BMW also expects the car to work perfectly and the car is eager to tell you any time something is abnormal. This creates something of an illusion of unreliability. An old Toyota also has a lot of problems, you just don't notice until you go looking.

And finally, dealers are predatory. They take advantage of the reputation of BMWs as expensive unreliable cars and sell unnecessary services, which perpetuates the expensive/unreliable reputation.

Thanks for the anecdote; Makes me glad I have an e46. About the only thing that didn't make it 80k miles on my car was the plastic headlight reflectors. (and that coolant expansion tank that fails 5 years on the dot)

I'm also lucky enough to be trained in vehicle maintenance; The only service I've had done by professionally were recalls and when I didn't have garage available to do the expansion tank (and Pep Boys didn't have a supply chain, so I got my choice in parts)

The timing belt and water pump are each <2 hour jobs if done preventatively.

Head gasket shouldn't be a problem if the pump and coolant are changed before they go bad.

Anecdotal source; bought a 7 year old bmw at 123k miles (timing chain is still good at 185k), clutch is still good, brake parts cost $250, shocks less than $500, a valve cover gasket and oil filter housing gasket. Coolant expansion tank has to be replaced every 5 years ($150). My 10 years, 180k miles has been a better experience than many friend's first 5 years.

This. I drive a bmw 3 series. It retailed for $41k in 2004. I bought used in 2011 for $11k. It's now worth about $4. I still drive it, my maintenance costs are minimal, about $250 a year (I do it myself)

Did you mean to write $4k? Because I will absolutely buy your 2004 BMW 3 series for $4.

lol, yee, yes i did mean $4k; and no, hard enough to even get me to consider selling for a newer car, much less for its value or less.

Eh, that depends. Typically car depreciation is not linear. Depreciation is higher in the initial years and the % depreciation reduces each year. Buying a car, keeping it for 5 years and selling it off might be cheaper than leasing a new one every 3 years.

That calculation ignores transaction costs. Selling every 10 years is cheaper 9 years. 9 years is cheaper than 8 years etc.

Eventually starting over is cheaper, but that’s usually at 15+ years when facing a major repair.

Depreciation is not a cash flow.

> The fact that cars depreciate seems like the best reason to "rent" them.

Like any other depreciating asset, the renter charges the rentee(sp?) the depreciation anyway, plus a small profit.

You appear to be under the impression that renting is better; this cannot be correct. The rent for any asset is ($COST_OF_PRODUCT + $COST_OF_ADMIN + $PROFIT). How do you figure that it's cheaper to pay those additional costs than to buy?

You only rent if you want something temporarily and don't want to deal with the hassle of resale. For this convenience, you pay extra.

> You appear to be under the impression that renting is better; this cannot be correct.

Except that it obviously can be correct by virtue of being a common financial construct. Your formula is meaningless to a person making a choice between buying a renting. There’s seller profit in both situations but it’s irrelevant to the purchaser. A fundamental assumption of our economic system is that value can be created in parallel with profit.

If I always want a car that is less than five years old then a lease is a great option. It’s a matter of what fulfills my needs for the least money. That could be buying or leasing depending on my needs.

For car dealers and manufacturers, the math is more complicated than that--the lease can be a loss leader, which may be useful to the dealer or manufacturer for any number of reasons.

In the early 2000s it was not unusual for leases on slow-selling models to have negative interest rates (and that's with a realistic residual), not sure if that is still the case today. I certainly don't ever remember seeing a negative interest rate on non-lease financing offers, not sure why.

> How do you figure that it's cheaper to pay those additional costs than to buy?

Pushing those costs years into the future can be to my advantage. That argument applies to any loan.

Leasing also gives me the option to buy the car at the end of my term, so I can end up owning the car while deferring much of the up-front cost in exchange for interest payments.

The listed residual value is normally set to make it extremely unfavorable to buy out the lease. The appropriate amount of depreciation still occurs, they just achieve this by inflating the sales price for leases as most people only care about direct costs to themselves when starting a lease.

It’s stuff like this that’s the real reason dealerships love leases. Their much more complex than a sale so the dealerships have far more options to screw people.

>The listed residual value is normally set to make it extremely unfavorable to buy out the lease.

Close but it's a little more nuanced.

You lease a trendy car (4Runner or something) and they expect able to turn it around, detail it and sell it on their CPO lot for way to much money to someone who thinks they're being savvy by buying CPO. You wanna keep it then you gotta pay them the way too much money they'd otherwise make.

You lease a black sheep (say a Sentra, Chrysler 200, Focus or some other cheap lower end compact that there's gonna be a ton of with high miles in a few years) and the buyout will be minimal because they expect to make peanuts reselling it.

Your lease rate is based in part on their expectation of how much profit the car will get them at the end of your lease. Something with a low MSRP and customer base that drives the used value straight into the ground won't make them squat after cost of turning it around and selling it used. So in those case you pay much less on the buy out.

Lowering the buyout without lowering the upfront cost simply increases what you’re paying during the lease. Anyway a favorable buyout price means they lose out on charging you for excess mileage at the end of the lease because you can simply buy out the lease and skip those fees.

The buy out on the black sheep cars can be a really good deal. Instead of lowering the price a manufacturer can artificially raise the residual thereby dropping the lease rates down.

They loose more money but they make up for it in volume and get to book profits now and losses later (financial engineering).

I don’t think leasing a 4Runner ever makes financial sense unless you flip though cars every 2 years and live in a high sales tax state.

One thing leasing does is push the depreciation risk onto the leasing company. If you know you intend to keep the car a limited amount of time, then by leasing it, you don’t have to worry about the resale volatility. Mitigating that risk has value.

Hiring a car can be significantly cheaper if there are odd tax laws in the country the car is in.

For example, if there is heavy tax on new cars, but no tax on cars over 6 months old, then you add more terms to your addition: + $DEPRECIATION - $EXTREME_TAX

Not the OP but "If you can’t buy it, don’t!" might mean not owning/renting it. Either buy it or don't even think about it.

Why though? What if renting makes more sense for my use case? Why not leave the dealer/bank on the hook for the depreciation and maintenance?

> Why though? What if renting makes more sense for my use case? Why not leave the dealer/bank on the hook for the depreciation and maintenance?

They aren't on the hook for anything - those costs are billed to you in the standard lease so you're paying the cost of the vehicle, plus the cost of the expected maintenance, plus a profit for the bank.

Trust me, no bank is leasing assets at a loss.

Expected repairs and actual repairs are very different. The expected repairs are exactly that, expected. I know what they are up front. There’s value in that predictability.

If it makes sense for you, do it. The question isn't who pays the depreciation or maintenance (this is explicitly factored into leases) -- the question is, who can predict it more accurately?

The question is how much utility I get per dollar.

The dealer/bank are running a profitable business. They are not on the hook for anything, you are paying for it all.

When I lease a new car repairs happen under the warranty. The manufacturer is “on the hook” for fixing the car. Not necessarily because it is leased but because it is under warranty. Leases are a way to always have a car that is under warranty.

You are replying to a counter argument to the claim that leases are always a bad idea.

The article this thread is on is a strong counterexample to your assertion. You may very well end up on the hook for a repair that isn't covered by the warranty.

They're on the hook for the finance, if you're leasing.

If you're talking about a short-term rental to pootle around in for a while: they're on the hook for the car itself, because that's now a car they can't rent to someone else.

If they weren't on the hook for anything, there wouldn't be much of a business.

A bit of splitting hairs, the notable exception I can think of is that if it comes with run-flats, you are expected to return it with run-flats since it's a specification. Higher end cars also usually have a "similar quality" clause in addition, but I don't know how frequently that is enforced, if at all.

Reply on news.ycombinator.com