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Current time:0:00Total duration:2:34

When leasing might come out better than buying

Video transcript

I have my friend Matt here. He just saw the video I made upon leasing versus buying the subcompact car. You had a question. Yes, Sal. So I see from the video that it makes sense to buy the car in both those scenarios you went through. But does it ever make sense to lease a car? Yeah, I was actually thinking about that myself when I went through it. Okay, under what scenarios? In that video I kinda threw out the idea that, oh, well, maybe there are reasons from a tax point of view, if you're a small business owner or you're a salesman and a car is essential for your business, you might be able to deduct the lease. That's a subject for another video, but let's say you didn't have that. If you're just, it's not a business expense in some way, one thing that you could think about, if you're gonna keep the car, it's hard for me to imagine scenarios where buying doesn't win over leasing, but maybe there are some that people could think of. If you're going to give up the car, if you think you're going to give up the car on a regular basis, in that video we had the buying still came out better. But a big part of the reason why buying came out better was based on this assumption of what the resale value of the car actually is. I assumed here $12,000, and actually I did try to estimate for the subcompact car based on its historic depreciation, but this $12,000 was based on the private market. And to sell something on the private market you gotta post something on the internet, people come to you, you have to do some work in order to sell your car. If you just wanted to sell it to a dealer, they're not gonna give you this $12,000. They'll give you something less. They'll maybe give you, say, they'll maybe give you $10,500, actually seemed like the likely price. So if we make this $10,000, if we make this $10,500, then the giving up the car scenario is gonna be $18,740 minus $10,500. It gets us to $8,240. $8,240. So in this scenario, if we make these different assumptions where you just trade it into the dealer and you don't get as much for it, but you just did it because you wanted an easy transaction, it actually comes out that hey, maybe for these numbers, not always, but for these numbers, that the lease could actually make a little bit more sense. Yeah, absolutely. I can see where that, in this case, it would make sense to lease versus buy. Cool.
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