Not so fast there. . . let's look at the whole picture.
S & P 500 over the past year has earned what ???
Hint: it's less than zero.
Conclusion: risk is a function of time. The market is a great long term
investment, but risky short term.
Even if it did earn its historical 11 %, you lose almost half those earnings
in taxes, so it's really only about 6 %.
And if you lower your risk by investing in a fund that provides more
predictable short term returns (such as a MM fund), you'd earn a whopping
tax corrected 3 %.
Now do the math with real numbers.
-----Original Message-----
From: James Creasy [mailto:black94pgt@pacbell.net]
Sent: Thursday, July 12, 2001 07:38
To: Michael R. Clements; Anthony Tabacco; Kelly, Katie
Cc: ba-autox@autox.team.net
Subject: !! Re: Leasing Versus Buying
> > When all was said and done, I saved $5000 by buying instead of leasing,
> and
> > this is estimate is conservatively low. Not a bad chunk of change even
for
> > guys who don't worry too much about money.
apparently you dont, =) because if you had left thet $39,000 in the bank and
even collected the historical 12% interest, it would have paid about
$390/month to cover your lease. at the end of the 4 years youd still have
$39,000, not $25,000. the lease would have been free.
im not even going to calculate if you had left it in a S&P500 index fund,
bought in 96 and sold in 2000!!!!
-james
----- Original Message -----
From: Michael R. Clements <mrclem@telocity.com>
To: James Creasy <black94pgt@pacbell.net>; Michael R. Clements
<mrclem@telocity.com>; Anthony Tabacco <atabacco@california.com>; Kelly,
Katie <kkelly@spss.com>
Cc: <ba-autox@autox.team.net>
Sent: Wednesday, July 11, 2001 8:32 PM
Subject: RE: Leasing Versus Buying
> James sed:
> >still i think leasing is good because you tie up less capital than paying
> >cash. too much to consider!
>
> True, but you can often get a lower price by paying cash.
>
> When I first got out of college I was poor and had to borrow money to buy
> that Honda. I felt a surge of pride and excitement the day I paid off the
> loan and got the new pink slip with my name on it and no more lien holder.
>
> When you pay cash you get to enjoy the feeling of legally owning your car
> :-)
>
> If you borrow money or lease, then the bank or the dealership owns the car
> :-(
>
> -----Original Message-----
> From: owner-ba-autox@autox.team.net
> [mailto:owner-ba-autox@autox.team.net]On Behalf Of James Creasy
> Sent: Wednesday, July 11, 2001 19:54
> To: Michael R. Clements; Anthony Tabacco; Kelly, Katie
> Cc: ba-autox@autox.team.net
> Subject: Re: Leasing Versus Buying
>
>
> > Glad I bought it instead of leasing! (civic)
>
> of course, at the end of the lease you could buy the car for the
> pre-determined amount if the purchase price was less than the market
value,
> or turn it in if it wasnt.
>
> disclaimer: even thought ive thought alot about leases, ive paid cash for
> every car ive owned. too much of a cheapskate to do anything else.
>
> still i think leasing is good because you tie up less capital than paying
> cash. too much to consider!
>
> -james
>
>
> ----- Original Message -----
> From: Michael R. Clements <mrclem@telocity.com>
> To: James Creasy <black94pgt@pacbell.net>; Anthony Tabacco
> <atabacco@california.com>; Kelly, Katie <kkelly@spss.com>
> Cc: <ba-autox@autox.team.net>
> Sent: Wednesday, July 11, 2001 7:34 PM
> Subject: RE: Leasing Versus Buying
>
>
> > My experience regarding lease vs. buy is a bit different.
> >
> > For example, take my '95 RX-7. Bought it new in April '96 for $39k
> including
> > all taxes, fees, etc. Sold it in August '00 for $25k. Paid cash so no
> > interest paid. Total cost of ownership: $14k + maintenance and about
$2.5k
> > of high performance addons. The maintenance was purely oil changes, the
> car
> > had only a single minor problem and that was fixed under warranty at no
> cost
> > to myself.
> >
> > If I had leased the car, it would have cost at least $400 per month.
Call
> it
> > only 48 months for round numbers. That's $19200.00 in payments. I'd
still
> > have to pay the oil changes even if I were leasing, and I still would
have
> > bought the extra parts, so they cancel out of the equation.
> >
> > When all was said and done, I saved $5000 by buying instead of leasing,
> and
> > this is estimate is conservatively low. Not a bad chunk of change even
for
> > guys who don't worry too much about money.
> >
> > As you can see, if the RX-7 did not hold its resale value, and I sold it
> for
> > $20k instead of $25k, then it would have been a break-even between
leasing
> &
> > buying. This is what people mean when they say it's better to lease a
car
> > that doesn't hold its value over time.
> >
> > I won't even mention my Honda Civic (OK well I guess I just did), which
I
> > bought new for $7k back in 1990. The only unscheduled maintenance it has
> > ever had was a headlight that burned out. Cost me $10. The car still
runs
> > like new and is about as close to free transportation as you can get.
Glad
> I
> > bought it instead of leasing!
> >
> > Now I'll pass on to you the advice my Dad gave me way back when, which
is
> > the same advice that thousands of other Dads have given their kids, and
> that
> > has saved me money several times since:
> >
> > If you intend to keep the car for its useful life (or at least several
> > years), and you expect it to be fairly reliable (or hold its resale
> value),
> > then buy it.
> >
> > If you want to drive a new set of wheels every 2-4 years, and you will
be
> > driving cars that you expect might not be ultra reliable, or that might
> not
> > hold their resale value well, then consider leasing it.
> >
> > The future always has a degree of uncertainty so the buy/lease decision
is
> > always an educated guess. My personal experience makes me lean towards
> > buying unless there is a really compelling reason to lease.
> >
> > -----Original Message-----
> > From: owner-ba-autox@autox.team.net
> > [mailto:owner-ba-autox@autox.team.net]On Behalf Of James Creasy
> > Sent: Wednesday, July 11, 2001 19:00
> > To: Anthony Tabacco; Kelly, Katie
> > Cc: ba-autox@autox.team.net
> > Subject: Re: Leasing Versus Buying
> >
> >
> > > sometimes cars that are expected to hold their value
> > > well can be decent candidates for leasing.
> >
> > the nice thing about leases is that you know in advance exactly how
> > depreciation you will paying.
> >
> > but buy or lease, you pay the same depreciation. more on a fast
> > depreciating car, less on a slower one. typically the slower ones are
> > slower depreciating in percentage, but are more in actual dollars. in a
> > purchase, you can kind of hide the depreciation, but you are paying it
> > none-the-less.
> >
> > the big disadvantage to a lease is that it is harder to get out of than
a
> > purchase.
> >
> > -james c
> >
> >
> >
> >
> >
> >
> > ----- Original Message -----
> > From: Anthony Tabacco <atabacco@california.com>
> > To: Kelly, Katie <kkelly@spss.com>
> > Cc: <ba-autox@autox.team.net>
> > Sent: Wednesday, July 11, 2001 6:20 PM
> > Subject: Re: Leasing Versus Buying
> >
> >
> > > Katie, last time I looked, whether the 2000 will live or die in AStock
> > > (they're going to rename the classes though) depends on the classing
of
> > the
> > > Boxter S. This is still under discussion. If the BoxterS stays SS, the
> Z06
> > > will likely be able to edge it, if it goes to AStock, the S2000 could
> have
> > a
> > > hard time.
> > >
> > > In response to the leasing question, I would note the old truism that
> > there
> > > are only three things that ought to be rented. Propriety (and
> undoubtedly
> > > diligent webmasters) would forbid their mention in a forum such as
this.
> > > Suffice it to say cars are not one of them. I do understand that
> > dependiing
> > > on market conditions, sometimes cars that are expected to hold their
> value
> > > well can be decent candidates for leasing.
> > > Tony
> > >
> > > ----- Original Message -----
> > > From: "Kelly, Katie" <kkelly@spss.com>
> > > To: <ba-autox@autox.team.net>
> > > Sent: Wednesday, July 11, 2001 5:21 PM
> > > Subject: RE: Leasing Versus Buying
> > >
> > >
> > > > A new car doesn't really make much sense. I've just been
corresponding
> > > with
> > > > Brent at SF Honda. He threw some numbers at me. A lease almost
sounds
> > > > reasonable, except for one thing. I can't afford it. Not right now,
> > > anyway.
> > > >
> > > > Any ideas as to how the Honda S2000 will fit in Solo II's new
classing
> > > > structure next year?
> > > >
> > > > Doesn't matter. It's the year FOLLOWING that I'll even be able to
> think
> > > > about it.
> > > >
> > > > In the meantime, anybody know anything about road bikes?
> > > >
> > > > Katie
> > > >
> > > > -----Original Message-----
> > > > From: James Creasy [mailto:black94pgt@pacbell.net]
> > > > Sent: Wednesday, July 11, 2001 5:23 PM
> > > > To: Clifford Richardson; kkelly@spss.com; ba-autox@autox.team.net
> > > > Subject: Re: Leasing Versus Buying
> > > >
> > > >
> > > > if you want to drive a new car, then i see no reason not to lease,
> > > > financially.
> > > >
> > > > new cars, leased or bought, cost you big time in the hidden specter
of
> > > > depreciation.
> > > >
> > > > > -Buy if you don't intend on paying for a car for the rest of your
> life
> > > >
> > > > but you see, this isnt true. you pay depreciation. at least with a
> > lease
> > > > you can get out of it when the lease ends, or buy the car if you
like
> > it.
> > > > (only true for closed-end leases)
> > > >
> > > > however, to me all new cars are pretty much the same as the next, so
i
> > > dont
> > > > bother much with them.
> > > >
> > > > -james 'never bought a new car' creasy
> > > >
> > > >
> > > >
> > > > ----- Original Message -----
> > > > From: Clifford Richardson <the_brain7@hotmail.com>
> > > > To: <kkelly@spss.com>; <ba-autox@autox.team.net>
> > > > Sent: Wednesday, July 11, 2001 4:48 PM
> > > > Subject: Re: Leasing Versus Buying
> > > >
> > > >
> > > > > Not sure how my thoughts would rate since my first autox run is
yet
> to
> > > > come
> > > > > but here goes...
> > > > >
> > > > > My car's leased. An advantage for me is that I don't worry too
much
> > > about
> > > > > pushing her too hard. She's still under warranty and after I've
> > whipped
> > > > all
> > > > > the performance out of her, I get to give her back and get a fresh
> > car.
> > > > The
> > > > > minus is the possibility that she and I may become a perfect
> > driver/car
> > > > > combo after so many miles. Returning her might set me back a bit
> while
> > I
> > > > > essentially build a whole new relationship with a new vehicle. You
> > > > > know...learning how that car handles, it's moods, limits, etc...No
> two
> > > car
> > > > > is ever the same, just like no two g/fs...um...nevermind.
> > > > >
> > > > > Did any of that make sense? :-) didn't think so...
> > > > >
> > > > > General thoughts:
> > > > > -Don't use your leased car to auto-x if you're afraid of extra
> charges
> > > for
> > > > > dings, etc...
> > > > > -Lease if you don't drive long distances and you have excellent
> credit
> > > > > -Lease if you're loaded
> > > > > -Buy if you don't intend on paying for a car for the rest of your
> life
> > > > > -Buy if you're gonna customize the car
> > > > > -Lease if you want a brand new car every 3-5 years
> > > > >
> > > > > Just thoughts, I'm sure some of you may disagree.
> > > > >
> > > > > -Arnold
> > > > >
> > > > >
> > > > > ----Original Message Follows----
> > > > > From: "Kelly, Katie" <kkelly@spss.com>
> > > > > To: "'ba-autox@autox.team.net'" <ba-autox@autox.team.net>
> > > > > Subject: Leasing Versus Buying
> > > > > Date: Wed, 11 Jul 2001 15:59:18 -0700
> > > > > MIME-Version: 1.0
> > > > > Received: from [207.173.21.42] by hotmail.com (3.2) with ESMTP id
> > > > > MHotMailBD162861004540043260CFAD152A0BE50; Wed, 11 Jul 2001
> > > 16:12:35 -0700
> > > > > Received: (from majordom@localhost)by teamfat2.dsl.aros.net
> > > > (8.11.0/8.11.0)
> > > > > id f6BN8QJ04434for ba-autox-actors; Wed, 11 Jul 2001
17:08:26 -0600
> > > (MDT)
> > > > > Received: from hqmrelay.spss.com ([64.16.210.2]) by
> > > teamfat2.dsl.aros.net
> > > > > (8.11.0/8.11.0) with ESMTP id f6BN8Mx04429 for
> > > <ba-autox@autox.team.net>;
> > > > > Wed, 11 Jul 2001 17:08:22 -0600 (MDT)
> > > > > Received: from sfemail1.spss.com ([10.10.53.4]) by
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> > > > > (8.9.3/8.9.3) with ESMTP id SAA27604 for
<ba-autox@autox.team.net>;
> > > Wed,
> > > > 11
> > > > > Jul 2001 18:08:16 -0500 (CDT)
> > > > > Received: by SFEMAIL1 with Internet Mail Service (5.5.2650.21) id
> > > > > <3TQSVFRG>; Wed, 11 Jul 2001 15:59:20 -0700
> > > > > From ba-autox-owner@autox.team.net Wed, 11 Jul 2001 16:13:43 -0700
> > > > > Message-ID: <93456CB7A08FD211B33D00A0C99D6373701E19@SFEMAIL1>
> > > > > X-Mailer: Internet Mail Service (5.5.2650.21)
> > > > > Sender: owner-ba-autox@autox.team.net
> > > > > Precedence: bulk
> > > > >
> > > > > Hey, anyone out there leasing their autocross vehicles? Can you
tell
> > me
> > > > the
> > > > > pluses and minuses?
> > > > >
> > > > > Thanks,
> > > > > Katie K.
> > > > >
> > > > > _________________________________________________________________
|