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I'm not saying this young'uns thinking is wrong, but it doesn't fit with my thinking at all. I had thought that people that took out seven year car loans or leased them and then 100% financed the residual were just stretching too far for a car. This fellow has no such thinking. He's "normal" as he sees it. A car is just another monthly expense.
I always took the other approach, and worked with the approach if I couldn't pay the car off in 3-4 years then I just plain couldn't afford it. You know, you can buy a car over 48 months and then buy another car at the end of the loan term, just like leasing. The main difference is the purchase price. No way could someone making $50K buy a $60K car then. It's why I have a C-Class and not an E or S. When I bought the C230, I could have swung the lease payments on an S430, but cripes, why would I do that? Well, this fellow would! Happily!
Leasing has it's own set of problems. A friend of my Dad's had an Explorer on lease, and when it came time to turn it in, they assessed him thousands of dollars in lease end charges. The windshield was pitted...of course, it's three years old! Rock chips added up to something like $1700 to repaint the front clip. I saw the truck and thought it was in really nice shape. Then Ford had him. they "forgave" a chunk of the charges as he leased another Explorer. This time he got smart and found someone to take over the lease right away, bought a 1992 300E for cheap and hasn't looked back. Leasing scares me thanks to the uncertainty of the lease end.
The main problem as I see it is the relative high price of a new car. Most Canadian families have to really stretch to buy ANY new car, and leasing has opened up the market for them. Buying domestics for years, they've been burned on out-of-warranty major repairs and huge depreciation and find leasing works for them.
Perhaps it's the youth? Helen and I put our money into our house (an appreciating asset) and other things. Heck, we've been talking about her working three days a week. Thanks to no debt, we can have one person work part time and the other at home. Four day weekends EVERY week? Can't do that with a G-note lease payment.
My daughter attends a playchool and I've got to know some of the Moms. It never ceases to amaze me how stressed people are over money. We're not talking about low income families. But, they're carrying huge mortgages, two big lease payments on two late-model SUV's and so on. These folks are amazed that we can have so much time, but they don't seem to be able to klick on the secret. We have a very modest home and don't have any "toy debt." Nothing gets bought on credit.
In conclusion, I think it's just an attitude towards things versus time. Maybe I just think my time is worth more?
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