To lease or not to lease, that is the question
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muncybob
Posts: 2,970
My daughter and husband are professionals in the horse showing world. They will be soon leaving the inlaw's property to start out on their own. A truck purchase or lease is on the horizon. (I joked around about just riding the horses to the various shows but of course they would be too tired once they got there....daughter found little humor in that. )
Apparently in their world, keeping up with the Jonses is almost as important as what you do in the shows. So a newer(or new) truck will be needed every 3 to 5 years. S-I-L wants to buy and my daughter says to lease. I have never leased a vehicle, we buy something and run it until it rots out. initially they will be leasing stalls in somebody else's barn, so they will be sub contracting the space and be self employed(at least eh will be, she will have a full time job elsehwere).
The truck will be a dually....something along the lines of a F-450 I guess. They will probably rack up about 15k miles/year. He is no mechanic, so any work will be done by the dealer.
What would you do....any why?
Apparently in their world, keeping up with the Jonses is almost as important as what you do in the shows. So a newer(or new) truck will be needed every 3 to 5 years. S-I-L wants to buy and my daughter says to lease. I have never leased a vehicle, we buy something and run it until it rots out. initially they will be leasing stalls in somebody else's barn, so they will be sub contracting the space and be self employed(at least eh will be, she will have a full time job elsehwere).
The truck will be a dually....something along the lines of a F-450 I guess. They will probably rack up about 15k miles/year. He is no mechanic, so any work will be done by the dealer.
What would you do....any why?
Yep, my name really is Bob.
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Comments
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A lease you essentially pay for the depreciation, so I would find the vehicle that depreciates the least amount and go from there- Not Tom ::::::: Any system can play Diana Krall. Only the best can play Limp Bizkit.
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May want to discuss with a tax advisor, If the vehicle is primarily for business use it may make more sense to lease one every three years and write off the expense. If the truck is not for business and would be driven a lot of miles over that period and may go beyond the planned 15K a year allowed without penalties then purchasing may make more sense. Also, manufacturers may offer better deals if a truck is sold vs leased.
There may be hidden costs with a leased truck at the end because of cosmetic damages but most leases also offer the option to purchase at the end of the lease.
In normal times it would make sense to look for a gently used heavy duty truck and buy it but for now used prices are too high. -
Lease it and write it off.
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Obviously there are benefits (and pitfalls) to both. Leasing is good if you know you won't go over the mileage, or risk excessive wear. Work trucks are especially vulnerable to the latter. Leasing makes it somewhat simpler at tax time if you have a business, but it's not bulletproof; IIRC, you still have to figure for the inclusion amount. Leasing is good if you want to have a new vehicle every 3 years, but I don't like them as much because it's much easier for dealers to manipulate the numbers.
Also, I was once told "Buy a vehicle, or lease a vehicle - but don't buy a vehicle you just finished leasing". I was about to lease a 2020 Santa Fe for my wife to use as her daily driver, but when they threw 0% financing at me, I ended up buying it instead. So the payments are higher than a lease would've been, but at least there is an end in sight 72 months from now.So, are you willing to put forth a little effort or are you happy sitting in your skeptical poo pile?
http://audiomilitia.proboards.com/ -
Go big or go home!
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Having never leased a vehicle (for fun nor for profit
) -- how does the insurance work?
To wit:
Who holds the insurance? The owner or the lease-holder? Who pays the premium? Is the cost of the insurance equivalent to an "owner-operated" vehicle?
What happens if one leases a truck and, a year into the lease, it's totaled. There is some gap between what the insurance pays and the value of the truck. Who eats that? What happens to the remaining term of one's lease (i.e., the cost that one is contractually committed to pay)?
https://dilbert.com/strip/1989-11-29 -
The person leasing the vehicle carries insurance on the vehicle in their name. Same as if they owned the vehicle.
Leasing usually is accompanied by the same type of gap insurance you typically can get from your financial institution if buying for the same type of scenario.
From an insurance perspective, owning and leasing are not really any different.
"Some people find it easier to be conceited rather than correct."
"Unwad those panties and have a good time man. We're all here to help each other, no matter how it might appear." DSkip -
Buy a used truck. Best of both worlds. Lower payments and you own it. No need to worry about how many miles you put on it. Someone else has already taken the hit on depreciation and they have already had door dings and small scratches so you don't have to freak out about that first one.
