Robert Farrington is America's Millennial Money Expert, and the founder of The College Investor , a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here. One of his favorite tools is Personal Capital , which enables him to manage his finances in just minutes each month.
Best of all - it's free! He is also diversifying his investment portfolio by adding a little bit of real estate. But not rental homes, because he doesn't want a second job, it's diversified small investments in a mix of properties through Fundrise. Worth a look if you're looking for a low dollar way to invest in real estate. I used to manage a corporate fleet of vehicles for my company and we had open-end leases as opposed to the closed-end leases consumers have.
Essentially, instead of the mileage restrictions, we were responsible for the difference in the book value and selling price of the vehicle. Totally agree! Leasing is a losing proposition. Even if you want to drive the latest and the greatest, it may prove more cost effective to sell and buy the latest. I once heard leasing is like renting. The best deal would be paying cash and holding on to it forever. I am close since my cars are 16 and 14 years old. Dave, thanks for sharing your first hand experience!
I knew that was a practice, but I have never heard it directly before! I never lease a car since it seems like such a bad deal to me. I agree on leasing, and have never leased a car for these reasons. While I really like newer cars and nice cars in particular, I like saving money better. I basically calculated the length of ownership vs. Depending on what car of course, I figured it would be close to a breakeven on leasing vs.
If you plan on owning the car longer than 3 years, it almost always makes more financial sense to buy. I think people who are vehemently anti-lease do not look at all of the variables. There is always something that needs to be done: brakes, rotors, tires, ball-joints, oil, air. Not to mention, fuel efficiency decreases as they get older.
I think your write up is mostly accurate but not all of the facts are there to make a decision based on choice and not need. If you prefer to own a brand new car for a while with warranty and maintenance then you can get this with a lease option. Like the value of a new house. The lease company estimates the value of your car after driving it for the agreed time and miles and nowadays is reasonably accurate.
You pay that drop in value plus an interest element like any other loan. In addition the manufacturers often give special lease discounts and they can be combined with other money off like student discount bonus and whatever you can negotiate on the ticket price BEFORE you declare if you are buying or leasing. Inventory is high in some areas like sedans, do your research and you will find bargains.
Example Chevrolet sales tanked in May so they are offering some great discounts. VW need to buy back loyalty but they still have great cars. Kia Hyundai great cheap models all the time. The car will still de value at the same rate if you buy it or lease it so the asset depreciation is the same.
In fact in my experience when I have bought a car and traded it after 3 years I have NOT built up equity the difference between what I owe and what it is now worth and would have been better off leasing and in fact have done so for several cars. Do I really need a car? Taxi, uber, Lyft, car2go, rental and public transport are the very real choices for students and city livers.
Spoken like the dad of kids who will soon be in college! If you want doubt it is a hygiene factor a car do tou want a lower priced car that is older and will need more maintenance then figure out your monthly budget and agree the loan. Then compare that to lease prices and see what you could get for the same money with the same money down I always do zero. Your email address will not be published.
Is leasing a car really better than owning for college students and graduates on a tight budget? What is a Car Lease? How to Get the Best Deal on a Lease If you are set on leasing a new vehicle, then there are some tactics you can use to get the best leasing deal at the dealership. Research: Spend some time doing research. Know the Hidden Costs: Lease agreements can have a lot of hidden costs. It is wise to get a copy of a lease agreement to take home and study before ever striking a deal.
Make sure you also know and prepare for any extra fees and charges. For example, you can expect a startup fee, document charges, security deposit, and additional fees for extra miles used or extra wear and tear to the car. Closed-End Leases: Make sure to only opt for close-end leases to save money. An open-end lease may have extra requirements attached, such as buying the car afterwards or paying for other expenses. Know the Residual Value: The residual value of your car is what the car will be worth the day you return it.
Vehicles that hold their value the best are ones that are going to be the most affordable to lease. Comments The lessors are definitely profiting on these vehicle leases. Very interesting insights.
The Honda Fit is a direct competitor of the Yaris and is clearly comparable in many ways. It boasts a similar MSRP, similar handling, and similar entertainment and safety features. Depending on your trim and preference, you can choose from front-wheel and all-wheel drivetrain options, the latter being ideal for drivers who live in cold, snowy climates or who anticipate driving on unpaved surfaces frequently. Plus, CR-V has an impressive safety lineup, including many features not found in comparably priced models, such as lane-keeping assistance, adaptive cruise control, and lane departure warnings.
Thousands of reliable CR-Vs from the late s and early s remain on the road, many in decent condition. Once the niche vehicle of choice for the environmentally conscious, the Toyota Prius is now a thriving family of small gas-electric hybrid sedans and hatchbacks.
The Prius family also has a slew of impressive safety features, including a blind spot monitor, rain-sensing windshield wipers, and an integrated backup camera. Keep in mind, however, that though the Prius lineage stretches back before the start of the millennium, older Priuses are not very plentiful and may have significant reliability issues. Many other affordable, reliable, reasonably safe options are worthy of your consideration.
Ultimately, your choice will come down to your unique needs, preferences, and personality. All Rights Reserved. Money Crashers. About Money Crashers. Recent Stories. Negative Effects Amy Livingston. Read more. Advertiser Disclosure X Advertiser Disclosure: The credit card offers that appear on this site are from credit card companies from which MoneyCrashers.
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Dig Deeper. Follow MoneyCrashers. Trending Articles. Become a Money Crasher! Join our community. Share this Article. Still, many students prefer owning a car. Efficiency Ratings The price of gas fluctuates over time. Do you or your college-age kid need a car?
Chegg is our favorite site for getting the best deals on textbooks. Since the discount is already calculated for you, no haggling is required. Key safety features include Electronic Stability Control and Electronic Roll Mitigation, both of which are important in this historically roll-prone model. Join our community. Not to mention, fuel efficiency decreases as they get older. Invest Money Explore.
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