larchmont

SJHGENIUS

Actually I like the CL too. I'm predicting it's going to be an "instant classic."

debaser_RENAMED

In my opinion, there are far more people leasing who would be better off financing than vice versa. For somebody who isn't numbers-oriented, it can be a daunting task to run all the numbers, so they just default to what provides them with the lower payout NOW.

The cases where a lease might be a better choice would be cash-flow related (eg if you need to put a down-payment on a house, and want to minimize your car payment in order to buy more house). Another example is for tax purposes - in Canada, for example, the tax rules are more leniant towards leases. Also, if it's a company car, the company might prefer the predictability of lease payments to the unknown of resale value, even if it does cost more that way (it makes budgeting easier).

On a straight outflow of cash compared with years of use basis, a lease will always be more expensive, but many don't realize that. If you lease with that knowledge, you are probably doing the right thing - cause you know what your options were, and still chose to pay extra in exchange for the easy out that a lease gives.

It's similar with extended warranties - they definitely make money on those, which is why they push them. Particularly on a Honda/Acura. In mine and my wife's family, there have been loads of Honda's purchased, and NONE of them have ever needed a significant repair within the longest period of extended warranty that is sold. That isn't to say that all Honda's are rock-solid, but the point I want to come to is that the same people who would tend to lease would tend to buy an extended warranty. That's because the primary benefit of both is the same: peace of mind.

I plan to buy (whether it be a TSX or a WRX) when I move back home in a few weeks (Can't wait!!! ) , partly cause I prefer the convenience of an out at any point, partly because i trust Honda and Subaru for reliability, and partly because it's cheaper. But it's a different list of pros and cons for each individual.

larchmont

About the first part: As has been noted here, there doesn't even necessarily have to be a higher monthly payout on a purchase.

About the second part: People think it's better for tax purposes in the U.S. too if you lease rather than buy, but I think they're wrong -- as far as I know, the requirements and limits are identical either way. Do you know what the story really is in the U.S.? And, how are the tax rules more lenient on leases than on purchases in Canada?

Santa Rosa Steve

According to my tax adviser/financial planner, you are correct larch, no difference here whatsoever for an individual using his car for business.

debaser_RENAMED

The more "leniant" tax laws in Canada for leases are because the maximum limit on a purchase price of a car for it to be deductible maxes you out around $30K Canadian (which buys you an Accord), and the lease payments max out around $650 a month (not sure of the exact numbers, but they are in that range). You can easily lease a TSX for $650 a month, but good luck buying one for $30K (MSRP is around $35K in Canada)! So in that case, for business purposes, a lease might be a better choice.

That being said, the rules are far more complicated than this simplistic example (of course) and I don't have any experience doing the calculations, since the only car I ever owned was a Jetta that was nowhere near the $30K/$650 range. Suffice it to say, that there MAY be an advantage to leasing in Canada for business purposes, but it will be negligible anyways...

And I don't know anything about US tax laws...

Let's get back to the more interesting side of cars! I can't believe that I come home from work, to chat accounting on a car message board! Cars are far better than taxes, no matter how you cut it! :-)