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Comment by ornornor | Hacker News Reader

I was at a dealership not that long ago to buy a new car for someone.

The seller explained us how a lease was so much better financially than outright buying. He was completely wrong on the fundamentals: basically with a lease the car company makes you a huge favour because after the three years are up the car is worthless but they’ll take it back and lease you a new one anyway and you get a brand new car. Whereas if you own your car is worth 0 at year 3 (???) and you have to pay 100% of the price of a new car again to get a new one.

Never mind residual value or that you are allowed to keep a car longer than 3 years.

Must be working because most of my relatives friends have a leased car.

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> The seller explained us how a lease was so much better financially than outright buying.

Of course a lease is better than buying.. for the dealer. So the seller was honest, just not entirely transparent.

Leasing is one of the dumbest financial moves ever. Forces you into a perpetual treadmill of payments for life.

Just buy a car, pay it off (cash if you can, or with a loan) and then drive it forever.

Some people want a new car all the time. Leasing is not a bad way to do that.

Wanting a new car all the time is the expensive decision, not leasing, which is merely a manifestation of that decision.

As someone who drives a ten-year-old car that probably has several good years left, I completely understand why someone would not want my boring life. This is the fallacy of people who recount stories of the “millionaire next door” who has high net worth. Many people do not really want wealth. They want to consume a lot: travel, new cars, restaurants, clothes.

> Some people want a new car all the time. Leasing is not a bad way to do that.

True.

But does that make any economic sense? If you're so rich that it doesn't matter, sure why not.

But for most people leasing is a terrible economic decision. If money matters, never lease. If your wealth is past the point where money matters, go for it.

> As someone who drives a ten-year-old car that probably has several good years left

I'd say several decades at least. My new car is 13 years old, which I consider barely broken in.

Second oldest is 22 years old, doing great. My other cars are much older, in their third and fourth decades.

Barring a crash, older cars can go on for a very long time. Newer cars built these days have a very limited lifetime ahead of them, as the electronics will be unrepairable in short order.

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