# Buying vs. leasing cars and having 2nd car



## Tyler Durden (15 December 2012)

This is sort of like two topics in one, but because it's both about cars, I thought I should put it in the same thread.

Firstly, has anyone ever seriously compared the alternatives of buying a car vs leasing a car? I suppose with buying a car, you have the comfort of knowing you own it, but it's a depreciating asset after all, so might not be worth to use money (which can appreciate) to buy a depreciating asset. On the other hand, if you lease a car, you can maintain a relatively new model throughout the times by changing it, but I'd imagine the cost of leasing wouldn't be small.

Secondly, does anyone here have a second car? If so, do you find it an additional financial burden to have a second car? I have a 2005 Holden Commodore which I love, but my dad keeps banging it up with scratches here and there. I remove the scratches, and he'll do it again in the next few weeks. I'm thinking about getting a very cheap car for him to drive, but thinking with registration and insurance costs, it might be quite hefty. The alternative is I just let go of my car emotionally and save up for a newer car later on.

Would appreciate any thoughts


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## tech/a (15 December 2012)

*Re: Buying vs leasing cars and having 2nd car*

My view

Get your dad a metro card ( bus train ) or get him to buy his own car--- perhaps yours!

Cars
I lease mine due to business BUT
I gave my kids this hint and they have used it.

I buy through Govt Car Auctions right now no one wants second hand cars.
EG you can buy a 2 year old AWD ford territory for $17000 would be bugger all a week over 5 year on a Loan
It's still under warranty.
All you'll have to do is register/insure/and put tyres on it----a 2010 commodore even cheaper!

Now in 5 years you'll still get around 10 k.


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## MrBurns (15 December 2012)

*Re: Buying vs leasing cars and having 2nd car*



tech/a said:


> My view
> 
> Get your dad a metro card ( bus train ) or get him to buy his own car--- perhaps yours!
> 
> ...




Good advice .........unless you're a car lover, I've lot $100k on cars over the past 5 years and I know people who have lost over $1M 

One guy says when he buys a car he considers the money gone, then when he trades it in he gets a lovely surprise when he gets some back


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## Julia (15 December 2012)

Leasing makes sense when you can claim it as a tax deduction on your business.

Why does your father keep getting your car damaged?  Why doesn't he buy his own car?


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## Tyler Durden (15 December 2012)

I think he's just getting old and his eyesight is not as good.
He can't afford his own car.


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## MrBurns (15 December 2012)

Tyler Durden said:


> I think he's just getting old and his eyesight is not as good.
> He can't afford his own car.




Take 3rd party property in case he hits a Ferrari or similar.


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## Tyler Durden (15 December 2012)

MrBurns said:


> Take 3rd party property in case he hits a Ferrari or similar.




Hehe...

Actually I probably shouldn't say he can't afford one; rather he doesn't want to buy one. He's pretty happy driving (and scratching) my one. Thing is, I don't drive to/from work, so don't really need it, it's only for convenience if I want to go somewhere on the weekend. And he finishes work at 2am, so I'd be a pretty bad son to deny him the car when I'm not even using it.


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## Julia (15 December 2012)

Tyler Durden said:


> And he finishes work at 2am, so I'd be a pretty bad son to deny him the car when I'm not even using it.



You sound like a pretty good son, caring and tolerant.  I'd be a bit worried about him driving, however, if his prangs are because he isn't seeing too well.  Won't be as easy to take if he hits a person.


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## Garpal Gumnut (15 December 2012)

Agree with tech.

If in business that is making a quid- Lease

If not buy at Govt. auction.

gg


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## stewiejp (18 December 2012)

Garpal Gumnut said:


> Agree with tech.
> 
> If in business that is making a quid- Lease
> 
> ...




Here here - a few of the lads at work are right into the leasing thing, and apparently it used to be a good thing since we can salary sacrifice the payments (or could) - but after looking at the figures myself - not anymore. It seems they have upped the payments, and what used to be a good deal, especially if you drove a lot of kms, isn't anymore. Again, just my opinion.

Govt auctions, pay cash - can't go wrong, especially under warrantee.


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## waimate01 (19 December 2012)

Leasing only makes sense in a business scenario if your business is one that needs to care about the appearance of its balance sheet (because the lease obligation doesn't show as a liability, nor does it deplete your assets).

But if you have more than enough cash for your needs, IMO you are always better to just buy the damn thing rather than lease. Leasing companies make money, and guess where they make money from -- you!  If you choose not to do business with them, the money they would have made stays in your pocket.

Yes, businesses can claim the lease as a deduction. But so they can with depreciation.

Yes, you can invest the money you'd otherwise spend on some brilliant fool-proof investment scheme and double your money, but that falls under the heading of not have enough cash for your purposes.

Leasing is a good way to hide something on a balance sheet. Other than that, it's best thought of as a more complicated loan (you them owe money, and you even owe them the car back at the end). Lease companies are not humanitarian organisations - they profit from the difference between what it costs and what you pay. You have the option to not be involved.


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