I had the same exact reaction. I like cars. I like to a variety of drive cars, but I'm not wealthy enough to afford a car collection. Thus, I tend to change cars more than is "fiscally optimal" (every three years). I actually like leasing cars, because I get to negotiation the terms of the buy-back up front. This gives me A) peace of mind knowing exactly what I'll pay in depreciation, B) the opportunity to negotiate that amount up front and in clear terms (I understand the math involved in leasing), and C) a much, much shorter time investment in said negotiation.
Consider the rest of this post to be an anecdotal piece titled, "Hacking the car buying process means getting your hands dirty."
When I picked up a 2006 VW GTI, the dealer was offering 0% financing. I couldn't bring myself to pass up free money, so I bought the car with the intention of turning it around in three years, just like I normally would with a lease. My reasoning was that I'd be giving up the opportunity to negotiate the residual value up front in exchange for the free use of a few thousand dollars over three years. No brainer, right?
Yeah, not exactly. I ran in to a couple of issues.
Lease residuals are actually on the generous side
Leasing residuals are normally pretty generous on the types of cars I like. My GTI was 57%. I negotiated a 63% residual on my current car. Looking at the math from my GTI, with an MSRP of $24,750, the lease residual would have been ~$14,100. When I sold the car at the 3-year mark, it took me three months, and I only got $12,000 for it. So, in exchange for the zero percent financing over three years, I gave up $2,000 on the residual, plus the time and effort involved in selling. I took many phone calls, and drove out to meet about 5 people before executing a sale. Had I leased the car and negotiated decent terms, I would have paid the same, maybe less.
Selling a car over $10,000 is a pain in the ass
Words you really don't want to hear when selling a car: "I've got $3,000 saved up. Can you take payments on the rest."
Times I heard them during the sales process: 9 out of 10.
Selling private means dealing with all kinds of people who really can't afford the car you're selling, but are bold enough to offer you anything. I have no envy for car salesmen. Their job is tough. You're constantly assaulted by people who really don't care if the deal is any good for you. I wouldn't say I was offended, but I did begrudge the time I wasted.
I'm back to leasing now, and very happy with it. If you want a new car every few years, and are ok with the associated financial impact, it's worth your time to sit down and understand the math involved in leasing. You can probably do better (fiscally) than you think.
Consider the rest of this post to be an anecdotal piece titled, "Hacking the car buying process means getting your hands dirty."
When I picked up a 2006 VW GTI, the dealer was offering 0% financing. I couldn't bring myself to pass up free money, so I bought the car with the intention of turning it around in three years, just like I normally would with a lease. My reasoning was that I'd be giving up the opportunity to negotiate the residual value up front in exchange for the free use of a few thousand dollars over three years. No brainer, right?
Yeah, not exactly. I ran in to a couple of issues.
Lease residuals are actually on the generous side
Leasing residuals are normally pretty generous on the types of cars I like. My GTI was 57%. I negotiated a 63% residual on my current car. Looking at the math from my GTI, with an MSRP of $24,750, the lease residual would have been ~$14,100. When I sold the car at the 3-year mark, it took me three months, and I only got $12,000 for it. So, in exchange for the zero percent financing over three years, I gave up $2,000 on the residual, plus the time and effort involved in selling. I took many phone calls, and drove out to meet about 5 people before executing a sale. Had I leased the car and negotiated decent terms, I would have paid the same, maybe less.
Selling a car over $10,000 is a pain in the ass
Words you really don't want to hear when selling a car: "I've got $3,000 saved up. Can you take payments on the rest."
Times I heard them during the sales process: 9 out of 10.
Selling private means dealing with all kinds of people who really can't afford the car you're selling, but are bold enough to offer you anything. I have no envy for car salesmen. Their job is tough. You're constantly assaulted by people who really don't care if the deal is any good for you. I wouldn't say I was offended, but I did begrudge the time I wasted.
I'm back to leasing now, and very happy with it. If you want a new car every few years, and are ok with the associated financial impact, it's worth your time to sit down and understand the math involved in leasing. You can probably do better (fiscally) than you think.