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comment by ThurberMingus
ThurberMingus  ·  3008 days ago  ·  link  ·    ·  parent  ·  post: Why Electric Cars Will Be Here Sooner Than You Think

In the US sometimes people lease cars instead of buying them. If they want to drive a new or almost new car and know that in just a few years they will want a different new car, leasing is often a better option than buying and then reselling, I think due mostly to tax reasons and not taking the risk for most repairs.

I don't know more details because I always drive old junky cars.





user-inactivated  ·  3008 days ago  ·  link  ·  

So people rent cars in the US much like they rent apartments. That's an interesting world we live in. Nothing like that happens (yet?) in Russia, where people would rather take a credit or buy from the previous owner.

How much does an average new prestige car (something a medium-time businessman would buy to seem respectful) cost? In Russia, it's between 1.5 and 2.5 million rubles ($25k to $42k).

When I was in school, guys from it would buy shitty old Russian cars from hands for a couple of thousand rubles (about $30) and drive around, not afraid to ruin it. I think you can still do so in the single-house poorer neighbourhoods (which is where a lot of my classmates came from or hanged around at).

ThurberMingus  ·  3007 days ago  ·  link  ·  

$25-$42k will get you a nice car. It's hard here to find a car for less than $500 that will even turn on though. My sweet spot is $3-$4k. There are tons of cars at that price that will keep going another 50,000 to 100,000 miles without any major components breaking, and can be resold for $1k or a few hundred.

kleinbl00  ·  3008 days ago  ·  link  ·  

Leases allow dealers and automakers to arbitrage the price difference between what you get for a used car and what they get for a used car. If the dealer thinks the resale value will be great at the time of the lease, they'll lease you the car and then sell it for more than they would have gotten for the MSRP minus the lease payments.

There are ways where a lease makes more sense than a purchase, but it's still a tricky proposition. Nissan was offering me a Versa lease, unsolicited, for $79 a month, $1000 down, two years. That's basically $3k out of my pocket to have a car for two years. 2016 Versa is MSRP $12k right now, figure prolly $11k out the door (cheap cars have less wriggle room). 2014 Versa at the used car lots right now is about $8k; trade-in is prolly $5500. Makes sense to me to lease the versa rather than buy it. Nissan, on the other hand, can call that a "factory certified pre-owned" Versa and sell it for $9k to the right schmuck. The dealer has a chance to make $12k on the car anyway, and the accounting rules for recurring revenue (like lease payments) mean they get to show it as forward revenue, rather than past revenue. Not only that, but they get that much more of an opportunity to up-sell their customers; we bought a 2009 Fit and I would say we average 2 flyers a month from Honda dealers offering to buy it back in exchange for a new one because (A) Fits sell really well at dealerships (B) if they can convince us to take their shitty trade-in they get to sell us yet another car.