Lease vs Buy

June 1, 2013

I am not really much of a car guy. I like nice things but my car does not need to tell the world anything other than ‘I am practical’. I have owned some nice cars in my life. Like the Volvo S80 I drove a few years back, which is still by far my nicest.

If your commute requires you to put a lot of miles on your car, in this economy, get a commuter like a Honda Civic with an extended warranty. If not, I suggest a lease. For often nothing down (depending on how ruthless a negotiator you are) you can drive just about anything you want, within reason, for a few hundred dollars a month. I appreciate driving a new car every few years, and not having to worry about maintenance or depreciation. I think ‘fixed cost’ and feel justified.

313 for lease

When it comes to lease vs buy I suppose that I have a somewhat unique opinion. To me, they are the same. Only the financing is different. What it means to own vs lease a thing is purely emotional. So, let me ask you, in a very real sense, do we really own anything in the way people who take pride in owning things think about owning those things? I don’t think so. Not to get too dark, but in the end, us, you and me, and all our stuff, is just on lease.

Why do I favor car leasing? I have a few reasons why leasing is right for me. I will admit that leasing isn’t for everybody. We don’t all have the stomach for it. Some folks think leasing is like flushing your money down the toilet. I disagree. Here are a few reasons why. Some math. Some emotion.

(1) Fixed Cost. Leasing turns your car into a fixed cost. You know, as opposed to a variable cost. A moving target. What makes the target move? See number two.

(2) Maintenance. I won’t go into details but based on my past experience this is key. At the end of the lease you get to hand the keys and all that looming (inevitable) maintenance cost over to the dealer (right before stuff starts to break down.)

(3) New Car Smell. Drive a new car every 36 months. Enough said.

(4) It’s a Rental. If something minor happens, a ding here and there, you get to relax and say, “Don’t worry about that. It’s a rental”.

(5) Flexibility. One example: My wife has worked from home for the past 6 years. When I started working from home we realized we only needed one car. We kept the Jetta and turned in the Volvo when the lease ran out. No hassle of having to sell a used car.

(6) Making Car Salesmen Cry. I know there are good honest trustworthy car salesmen out there (I can even name two offhand). Then there are the others. At some point I began to treat the car leasing experience like war. It gets ugly folks. The result? I compared notes with a friend of mine a few years back. Turned out I was paying less to lease two cars than he was to buy his one. To top if off, my two cars had, combined, three times the MSRP. No exaggeration.

In conclusion, I know exactly how much I’m going to be paying to drive my new car. All the while enjoying a great sense of flexibility and freedom, accompanied by a feeling, that is, the less things that I own means the less things that own me. That is, as they say, priceless.

I like money. I like to have it. I like to spend it. I like to keep it. More specifically, I like to keep mine safe until I’m ready to spend it. This is a story about how.

Several folks I know have recently reported having experienced identity theft. It’s never happened to me personally but it’s got to be something akin to a home invasion. I was sorry to hear about these sad crimes. Sure, identify theft happens all the time, but you know it’s just not real unless it happens to you or someone you know. Not only is it an invasion but getting the issue corrected, getting your bankroll back can be a great big hassle. On the heels of this tragedy I began to reflect on ways I protect my loot.

1. Restricted Debit Card Use – Most of the time when you hear about identity theft, the origins get traced back to this one. I heard a story about a guy that traveled all over Asia Pacific, where identify theft runs rampant, and only when he returned home and used his debit card at a gas station near his house did he get his identity stolen. The attendant at the station took one extra little swipe and bam. Victim. Personally, I only use my debit card at the ATM to take out cash.

2. Cash is King – There aren’t too many businesses that won’t take cash. Southwest Airlines no longer takes cash for drinks and snacks during their flights. They are the exception. Most places like cash because there’s no middle man taking a cut. You also have a tendency to spend less if you have to part with the actual greenbacks themselves as opposed to the 1’s and 0’s that is an electronic money exchange which is not a particularly visceral experience.

3. American Express – When I do need to use a card, for online purchases, hotel rooms, rental cars (or, umm, Best Buy) I use my Amex. Yes, I have a Visa and Discover as plans B and C but they’re only used when the business doesn’t take plan A. Why? They offer 100% forgiveness on all fraud. This happens immediately and without question. I simply dispute over the phone and it gets take care of. No paperwork on my end.

4. Bank Account Firewalls – A few weeks ago we moved the bulk of the bread from my checking into a new savings account. One of the tellers at my local Wells Fargo suggested this to me the last time I was in the branch. She asked if I was saving all the money in my checking for something specific. Was there something that I was planning to buy in the near future? No, I answered. Then it dawned on me what she was getting at. Now, even in the unlikely event someone does get their hands on the dough in my checking, the chips in my savings safe.

That’s it. It is these four simple rules that have kept my pesos safe thus far. In review: Use your debit card sparingly, mainly to take out cash to spend, use a bulletproof credit / charge card when you can’t use cash, and partition your money in the bank via checking and savings. Have yourself a happy holiday season and a identity theft free new year!