Comment by vaksel | Hacker News Reader

Comment by vaksel | Hacker News Reader

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I'd say it also applies to new cars too(leasing). if you plan to replace your car after 3-4 years, I found out that you end up losing the same amount of money, and in many cases you actually save money.

i.e. you lease a car, you end up paying 10K in payments. But if you finance it, you end up paying 25K in payments, and get 15K back when you sell it privately. And the number is even less if you trade in, which you might consider since selling a car is a pain in the ass(unless you are sell it way below market value)

But when you lease, you don't have to worry about selling it, you just turn it in. And even if you ever end up going over the limit, pretty much every dealer will forget the overcharges/damages, if you lease another car from them.

And even if you plan to keep the car, leasing is the best option, since essential it's a 3-4 year test drive. You pretty much get to find out EVERYTHING about the car, before you decide to keep it long term. And in the end, you will be able to see what the market is like...in many cases when you lease a popular car that keeps it's value, the buyout is less than the current market value of the car.

If your priority is to always drive a new car, then leasing might make sense. If your priority is building wealth at the expense of looking flashy, it is a terrible, terrible, terrible idea.

My priority is to make my first $1M, then worry about the model year of my car.

Indeed. Simple formula for minimizing car expenses: Buy a used (3-5 yr old) Honda or Toyota sedan. Drive it until total annual cost of repairs exceeds the cost of another used Honda/Toyota, and/or it falls apart. Repeat.

That's the most economical way to own a car, sure, but there is opportunity cost to driving something you don't enjoy when you're young enough to enjoy it. If you don't care about cars or driving, this is the best option, but if you do, it might not hurt to spend a few extra dollars on something you'd actually enjoy.

That's raising my level of ramen profitibility, no thank you.

Not agreeing or disagreeing with OP, but ramen profitibility sucks if your life sucks...

I know someone who drives a Ferrari and really enjoys it - and he's nearly 50. You've got to be pretty old before you're too old to enjoy driving a nice car.

I have a $2k motorcycle for fun, the equivalent car would cost $50k (performance wise). That way I don't think about my econobox commuter car.

Drive it until the total annual cost of [repairs, inconvenience of breakdown, time lost due to failed vehicle] exceeds the cost of another used Honda/Toyota.

As someone who remembers their first high-school vehicle too well, there's value in a level of reliability.

Or, if applicable, take the subway/tram/train/bus/bike.

Until the crucial meeting with your first customer/investor/partner happens and you're stuck on the side of the road waiting for AAA.

Seriously, it's not always just about spending the least.

Agreed, but the quote was from when you are already filthy rich. But it applies to many people in this country, since getting a new car every 4 years is so popular.

Personally I'm a fan of finding a good deal on a used car, buying it, driving it for 1-2 years, and then selling it for the same amount I paid for it. Pretty much the only cost this way is a) insurance(which you can save a few extra bucks by getting only liability) b) gas c) 2-3 oil changes.

And since you are owning the car for a short period, you won't get hit by any costly repairs.

The costs of buying and selling the car, as well as adjusting to a new car, are non-trivial for most people.

It's another case of doing more work to make more money. The question should be, "Is doing a better investment of time and effort than simply buying a newer car and keeping it longer?"

I'll still be driving my piece of shit Civic after I make my first million.

Leasing is a replacement for the buy new, sell after 2-4 years model. That's not an uncomment way to own a care, some places more common then others.

That job, it does reasonably well.

In my experience if you plan to keep the car, leasing is a horrible option financially at least. My girlfriend recently bought out a 2006 Honda CRV after a three years lease, and she ended up paying more than $10k above the nominal price. [To add insult to injury, in CA when Honda gives you the buyout quote, it doesn't include the sales tax and (I think) the registration fee. Once the transaction is finalized you may realize you have to pay a few more k to the DMV.]

If you want to drive a new car every three years, then I'm guessing leasing could be better or similar than buying if you finance close to 100%. Whether you should change cars every three years if you can't afford the downpayment is another question.

I'll see your "lease a car" and raise you "learn the auto market, buy a car, drive it for 3/4 months and sell it at a profit."

Lots and lots of people do this for a living; they're called "wholesalers". You can pretty easily get a wholesale dealer license (go to your local DMV if you're in the United States). Once you have this, it will allow you access to dealer-only auto auctions, and the ability to sell more than 3-4 cars a year (I forget what the law is).

Granted, this is a considerable amount of work, with a pretty high risk, but it can be really profitable if you know what you're doing.

I like the idea, but am inclined to complain that I'm a programmer, not a used car salesman.

I know several computer programmers that do this as a side job. Their analytical minds are well-suited to determining the value of cars.

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