nmvettec7

Some good advice.

http://www.cnbc.com/2016/12/13/jay-l...a-car-buy.html

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dmhines

LOL .. according to article Jay Leno owns everything .. no debt. A quick Google shows his current net worth at $350 Million dollars ... pretty easy to not have debt in that scenario.

nmvettec7

^^^ True. But many celebrities with high incomes are "deep in debt". Many celebrities and sports athletes have lost everything or are deep in debt, and financial ruin.

Leno shows good financial responsibility. And his current net worth of $350M, he owns everything.

Good job Jay.

rmorin1249

Leasing makes sense if you run a business and can write off the lease payment as an expense. Also, some manufacturers, like BMW, make leases attractive by offering a very high residuals so that payments are much lower than traditional financing if you don't have cash. This appeals to many who really can't afford to buy a BMW but want to drive one. I agree that buying is always better and paying cash is best. That is what I do now but in my younger days as a young Officer with a family I could not afford to pay cash, I had to finance. Then again, I wasn't buying BMWs or Corvettes then either.

MeHeartCorvettes

Leasing has many advantages depending on the scenario. I lease my DD but purchase my toy C7.

Hard to compare what makes sense financially for the masses coming from a guy worth $350M.

roadbike56

If you turn your cars over every three years, leasing might work out. We keep our cars for around 5 to 7 years, some longer. Leasing just doesn't work out for us. I did look into it when I owned a business, but it didn't work as a write off for me.

jcthorne

Its not like a business that OWNS a vehicle or other equipment cannot claim it as expense. Its a depreciating asset and can be claimed as such to offset income.

T_B

Lease to buy folks. If you have good credit, that's the way to go. Jays answer is typical for someone who's pockets run deep.

runutzzzzz

My friends and family always ask me why I lease instead of purchasing some cars since I'm basically just renting it.

I explain that some manufactures offer you ridiculous money factors (interest rates) sometimes as low as .01% so why not take "free money" also the residuals are also high, 65% or so for 3 years, if I were to purchase that car, it would be a easy 50% loss after 3 years.

Example, I leased a new 07 BMW M5, MSRP was 105K IIRC. My lease payment was $808/month $0 Down. My payments total about $25k ($29K but $4k of that was sales tax and fees). When time was to turn it in, it was worth about $50-55K. So I would have lost $40-45k if I would have purchased it... Plus, you get to beat the crap out of it, get into accidents or whatever and just hand the keys in and not worry about the dealer low balling you.

It's all in how the manufactures structure their leases. GM hardly ever subsidizes Corvettes leases and when they do it's only a 5K lease so I would never lease a Corvette.

Michael A

There is no way to make a blanket statement about whether or not it is better to lease or buy without running the numbers for both on the same car. There are too many variables.

"But at the end of the lease, you don't have anything." This statement doesn't mean anything, because you didn't put as much in. If you bought the car, during the duration of a lease, you are out a huge percentage of your purchase price in depreciation, usually about half in three years. Either way you are out the money.

I've done the calculations for a number of purchase vs. buy scenarios, and usually the purchase comes out slightly better, but not much. You have to factor in, you are taking more risk when you buy, because you don't know what you will get for the car at the end of three years. With a lease it's figured out in advance.

On the flip side, you have to calculate your miles driven pretty accurately in advance with a lease, so there is some risk there. If you move, and your commute increases, you could be out mileage penalties. If you under drive the car, you are giving the leasing company some free depreciation money.

Now I will say, you can prevent yourself from getting a car you really can't afford by paying cash. You'll think long and hard about whether or not you "need" the car when you do that.

Michael

defaria

This is a common misconception or at least incomplete answer. You can write off car expenses of a car you bought or leased and use for business. There are some differences but they don't seem like much. I know when deciding to get my car I purchased this time (and leased the time before). I asked my CPA and he said he could write off things whether I purchased or leased.

For more on this see http://blog.turbotax.intuit.com/tax-...ss-vehicle-67/

Meantime I've been debt free since 2008 (well the last 4-5 months I carried a little debt but that was because I moved twice this year. Now debt free again). And I assure you I do not have $350 million in the bank, but being debt free is not an impossibility and it's wonderful. Once you are debt free you don't want to have any debt anymore so I purchased my 2016 in cash. No payments, no worries. When you have no debts you can utilize your full paycheck to pay off any debt that might creep in. I highly recommend it.

Bill Dearborn

It doesn't make sense to own a BMW after the warranty expires due to the frequency and high cost of repairs. Ask BMW Aficionados and a large number will say get rid of the car once the warranty is gone. There is one group that says to follow the old school maintenance routine which requires far more oil/fluid changes/services than the current BMW recommendations since that eliminates some of the issues.

Bill

Squeaky Wheel

I'm sure there is a practical side to leasing, but for me, it's a pride of ownership issue. I take exceptional care of anything I have worked for and know is, (or will one day) be mine. And depreciating or not, it's still a piece of property and something that I know is mine! I buy things I know I'll be happy to own, and only rent or lease something I don't much care about and can easily part with.

UsernameProtected

I'm guessing this will go at least 30 pages, if it doesn't get locked before.

Supersonic 427

I leased my '16 Malibu and bought my '16 Corvette on the same day. Got a great lease price on the Malibu and a huge discount on the Vette. I usually put about 10-12000 miles on my DD annually and only 3-4000 on the Vette. Made sense to lease the Malibu and Buy the Vette.

DaveFerrari458

Love Jay Leno and he seems like a normal celebrity. I think he exited the Tonight Show just in time because he was starting to lose a connection with the younger people and current times & trends. NBC made a wise choice by going with Jimmy Fallon. Anyways as much as Leno is a car guy, he is not an Accountant and should stick with collecting cars and not giving leasing advice! Leasing makes perfect sense to some people and some cars. The Gentleman in the other post gave a perfect example of leasing his M5 vs. buying it. He would have lost much more money had he purchased the car. That said, if you're planning on keeping a car five years or longer then leasing probably won't make sense unless you have a very attractive residual buyout at the end.

///ADMAN

He didn't get where he is because of his financial knowledge

AORoads

But he's kept a lot of his money because of his earning and spending savvy.

JK 23112

Leasing SOMETIMES makes sense......and other times is quite dumb. As others have said, using the 'write off' for business purposes can be a good thing (I did it as a short-haul trucker years ago); but you have to watch out for the fine print!

Everyone's circumstances are different, of course, and most of us would LOVE to be in the same fiscal health as Mr. Leno.

nmvettec7

The moral of the story is not Jay Leno's net worth or income. It is about his attitude and financial discipline that he has employed all of his life. The video presented, stated nothing about his net worth or income, that matter was brought up here by members using his net worth and income as a reason for him having no debt.

Whether Leno has a net worth of $350M or a net worth of $5M, his discipline would be the same. He just wouldn't own all of those personal assets.

As he stated, he owes nobody, and never will. I am sure much of his net worth is in his automobile collection and properties that he owns.


Many of the C7 owners who have smaller net worth's, lower incomes, and paid cash for their Corvettes or any other asset they own, can fully understand the moral of the story that was presented here.

Kudo's to Jay Leno and his financial discipline(s).

And we all know, you do not have to be in Jay Leno's state of financial health to obtain success and have no debt. Anybody can achieve the same results with a long-term plan and discipline.

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