Working a Slowlane Job, Need a Car by April - Is Leasing the Way To Go?

[Choate]

I'm living at home with my parents, 23, working a slowlane job in sales and working on my fastlane when I'm not at work. I have been lucky to not need a vehicle for the first year out of college as I could drive my parents being an only child, however I will need a vehicle for myself by April.

I'm not trying to tie myself down with a long, high car payment especially with student loans to my name already and get further stuck in the slowlane.

I could save up for an older car, $5k or less, pay outright and own it and then drive that around.

And my last option is to lease. Seems pretty attractive. I'm wondering if anyone has a fastlane perspective from it - I mean monthly payments of $100-$300 seems doable for 3 years, won't be tied down, and I'll be in a better spot financially in my mid 20s to buy a car outright with cash. The low monthly payments of a lease seems attractive because it will leave me with plenty of cashflow to infuse into my fastlane without the shackles of a full blown car loan, or an unreliable car which may need maintenance.

I've done my research but interested in from a fastlaners perspective looking at someone who is 23 and living at home still soon in need of a car - is leasing a viable option?

 

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[MarkNNelson]

...however I will need a vehicle for myself by April.

Let's start here. Are you sure? Really sure? Between taking the T and a nice bicycle ($500 or less), could you get by?

I could save up for an older car, $5k or less, pay outright and own it and then drive that around.

Or, a $2000 car. You're young, you're focused on your fastlane, you don't care what anyone thinks about what you drive, right?

Check out this article, just posted.

I mean monthly payments of $100-$300 seems doable for 3 years

YMMV, but keep in mind that your lease payment will be tied to your credit rating, which may not be great given that you're just out of school. So you may end up closer to the $300 mark.

a lease seems attractive because it will leave me with plenty of cashflow to infuse into my fastlane without the shackles of a full blown car loan

Or, does it seem attractive because you get a hell of a lot more car than you would otherwise? And make no mistake, if you turn it in early, you'll pay a penalty. So the shackles are still there.

 

[theag]

low monthly payments of a lease seems attractive because it will leave me with plenty of cashflow

Your math is off. You don't have any cashflow so any kind of monthly car payment will put you in negative.

I've done my research but interested in from a fastlaners perspective looking at someone who is 23 and living at home still soon in need of a car - is leasing a viable option?

No, its a bad idea. What exactly did you research?

Just get a beater, move out of hotel mommy and focus on business. You can lease a nice car when your business (not job) is producing so much profits that a lease payment won't even be a blip on the radar.

Also, you will miss out on stories to share with friends if you havent owned at least 2-3 piece of shit cars that break down in the worst of moments.

 

[SenGracic]

Your math is off. You don't have any cashflow so any kind of monthly car payment will put you in negative.



No, its a bad idea. What exactly did you research?

Just get a beater, move out of hotel mommy and focus on business. You can lease a nice car when your business (not job) is producing so much profits that a lease payment won't even be a blip on the radar.

Also, you will miss out on stories to share with friends if you havent owned at least 2-3 piece of shit cars that break down in the worst of moments.

+1
I was about to make one huge mistake myself.
I'll invest the money instead of spending it on a car.
Thank you

 

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[hellolin]

DO NOT LEASE, you will die before you lease a car! The worse way to own a car is to lease it. I suggest continue living with your parents, nothing wrong with that, especially if you are saving your earnings from the job to fund your fastlane project, most people in Asia don't live their family's home until they are married, no shame in that especially if you have a good plan for the future. Get a beater around $4k, make friends with people who know how to fix cars(Not hard if you live in rural america). Save as much as you can for now!

 

[mrarcher]

The more bills you have the more worry you have building your business. Especially if you end up quitting your job before the lease is over. I would keep recurring bills to a minimum while you are setting up. Buy a junker car or if you can get away with it a motorbike or something. Keep in mind cash is king you want low running cost and cheap insurance (if you need it i know its a must in the uk) especially if it is essential you have a car.

 

[ddzc]

Read above responses
Read this thread - https://www.thefastlaneforum.com/co...ut-me-in-more-debt-than-i-ever-thought.64730/
Decide.

 

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[Choate]

Read above responses
Read this thread - https://www.thefastlaneforum.com/co...ut-me-in-more-debt-than-i-ever-thought.64730/
Decide.

Appreciate it. Apples and oranges though. A 24 month lease at $200 a month vs financing a brand new 25k mustang?

That is nothing, I have 75k in student loans for a worthless business degree. I ain't worried about it, I pay $900 a month. I'm not trying to talk myself into buying any fancy car.

I really want people's opinions on the numbers. I don't care about driving a new car. I want to figure out what's most cost efficient.

A 2k beater with many risks and unknowns or a guaranteed $200 per month payment for 2-3 years everything taken care of? I don't care what's going to look better. What's going to be cheaper over the course of 2-3 years? I don't want to have to buy another 2k beater in a year. I need a car. A bicycle is not an option nor is the T in the suburbs. This is the research I shall do.

 

[niftyg]

Not the answer you want to hear but the lease is going to certainly come out more expensive.

Your insurance will go up, there will be taxes and I imagine you'll almost certainly looking at 300 a month for a basic car (unless you go with one of those micro ones)

Counting 300 a month and estimating a 50 dollar insurance increase (no idea how accurate that is) you'll be looking at $8400 for 24 months.

I paid $1200 for my car and have owned it for 2 years. All maintenance and repairs in, I have spent under 2500 dollars in total since purchase and haven't had one breakdown. Second owner, approaching 270k km. My insurance is MUCH cheaper than anything new. I know some people have bad luck with used vehicles, but just be careful what you buy and you'll probably be fine.

I have debated the same thing as you, but after climbing out of a pile of debt, I know any and all monthly fees are not worth it, especially trying to start a business with very little money and working full time.

Ask anyone with a lease or car loan if it was worth it and I think you will get the same answer.

 

[ddzc]

Appreciate it. Apples and oranges though. A 24 month lease at $200 a month vs financing a brand new 25k mustang?

That is nothing, I have 75k in student loans for a worthless business degree. I ain't worried about it, I pay $900 a month. I'm not trying to talk myself into buying any fancy car.

I really want people's opinions on the numbers. I don't care about driving a new car. I want to figure out what's most cost efficient.

A 2k beater with many risks and unknowns or a guaranteed $200 per month payment for 2-3 years everything taken care of? I don't care what's going to look better. What's going to be cheaper over the course of 2-3 years? I don't want to have to buy another 2k beater in a year. I need a car. A bicycle is not an option nor is the T in the suburbs. This is the research I shall do.

It was just a reference point. Where can you find a 24 month least for 100-300 a mth with 0 down? I've never heard of this, then again I'm not in the States...but that's pretty damn good if it's 0 down. Personally, I don't believe in financing or leasing, I've always owned every vehicle I've had, paid down cash...even when I was a lot younger at 18 with little money. With 5K, you can get a Civic and boot around with it and repair them for dirt cheap.

 

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[Andy Black]

My personal opinion?

Hustle. You've already a big enough millstone around your neck with the monthly student loan.

Also, don't tell yourself your business degree is "worthless". That's defeatist. Maybe it hasn't helped you get the job you want so far, but I dare say you've learned some useful things, met some great people, and have some great life experiences out of it.

I like @theag's take on old cars. I remember my beat up old Astra with 4 gears that I used to bomb up up and down the motorways in the wee hours from Scotland to London. It was always overheating so I'd have the heating on full blast (I've no idea if that helped), the windows open a bit so I didn't melt, and the stereo cranked up to cover the wind noise. Great times.

It reminds me of when Matt Damon gets his car from his buddies in "Good Will Hunting".

You're going to look back on these days and laugh at the adventures you have.

You can try and work it all out mathematically (and tbh, I'm not saying you don't), but you can't account for what you'll learn by going the hustle route.

Just my own 2c.

Good luck!

 

[mrarcher]

[You can try and work it all out mathematically (and tbh, I'm not saying you don't), but you can't account for what you'll learn by going the hustle route.

Good luck!

Agreed, The only reason I know how to fix cars is because for a long time i could only afford beater cars and could never afford to put them into a mechanic. Turned out to be a useful skill to have in future. Albeit at the time standing at the roadside swearing at a clapped out old corsa I didnt see it that way. Two ways of looking at things I suppose and I’m sure you’ll make the right choice for you.

 

[FastNAwesome]

I could save up for an older car, $5k or less, pay outright and own it and then drive that around.

If I were you I'd do this. You need a friend who's a car mechanic (or find a friend of a friend) and go find a good reliable car that won't break in the first place.

I don't know your local car market, but I know multiple people with old Hondas which don't have any issues, even with 20+ old cars. Of course, these cars are not perfect, but they are in a driving condition and reliable. At least where I live.

Agreed, The only reason I know how to fix cars is because for a long time i could only afford beater cars and could never afford to put them into a mechanic. Turned out to be a useful skill to have in future. Albeit at the time standing at the roadside swearing at a clapped out old corsa I didnt see it that way. Two ways of looking at things I suppose and I’m sure you’ll make the right choice for you.

+1. And it's cool to be able to do your own basic maintenance

This is just my point of view, of course, you'll know best what works for you.

Another thing some people do, is buy a used car for the purpose of reselling it/swapping it for another one. They always trade up, at least a little bit, and over years end up with a much better car. For those who like to tinker around with cars, can be an interesting hobby/challenge.

 

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[EvanOkanagan]

I'm living at home with my parents, 23, working a slowlane job in sales and working on my fastlane when I'm not at work. I have been lucky to not need a vehicle for the first year out of college as I could drive my parents being an only child, however I will need a vehicle for myself by April.

I'm not trying to tie myself down with a long, high car payment especially with student loans to my name already and get further stuck in the slowlane.

I could save up for an older car, $5k or less, pay outright and own it and then drive that around.

And my last option is to lease. Seems pretty attractive. I'm wondering if anyone has a fastlane perspective from it - I mean monthly payments of $100-$300 seems doable for 3 years, won't be tied down, and I'll be in a better spot financially in my mid 20s to buy a car outright with cash. The low monthly payments of a lease seems attractive because it will leave me with plenty of cashflow to infuse into my fastlane without the shackles of a full blown car loan, or an unreliable car which may need maintenance.

I've done my research but interested in from a fastlaners perspective looking at someone who is 23 and living at home still soon in need of a car - is leasing a viable option?

IMO don't do it.

I rewarded myself by getting a new car on a lease when I hit a milestone of $1500/Mo cash flow from my RE investments.

New caddy and only $650/MO payments which I didnt think was too bad considering the cash flow I was making.

Now though, the cars a couple years old and 2 years left to go on the lease. I make a lot more cashflow than I originally did when I purchased the car but still I wish I would've just bought outright something in good shape and less expensive.

It takes a way a bit of freedom knowing you have this extra payment each month and on a depreciating asset.

 

[hellolin]

A business degree is not worthless, and your sales job? Worth gold right now, because machines can not replace a great salesman, not in a thousand years. Don't worry about how much you are selling but focus on learning how to sell, you are gonna need it later anyways.

 

[CycleGuy]

Pre-owned Honda Accord or Toyota Camry.
That is if you actually "Need" a car (transportation to make income or additional income).
Leasing is terrible option that leaves you with nothing at the end of a contract.
You are often docked for any damages, even minor scuffs scratches tears, etc. (It's in the fine print on most contracts)


Right now, however, is the absolute worst time of year to find quality pre-owned, affordable drivers.
With tax returns, cars under $5k that are reliable drivers are bought up instantly.

 

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[lowtek]

Few options:

1) get by on a bicycle and public transportation. Put the money into your business

2) Get a really really cheap beater and learn how to fix it yourself / with a friend

3) get an inexpensive used car (2-3k) but definitely get a pre purchase inspection to make sure it doesn't have any engine or transmission problems.

4) buy a beater, drive it until it blows up, repeat.

I would not lease a daily driver. They put mileage restrictions with expensive overages and can dock you at the end for "wear and tear above what is expected" - which doesn't have a standard definition. You will almost certainly end up paying more than you think.

I think option 1 or 4 is your best bet.

 

[Jon L]

I financed a $14,500, 3 year old 1995 Nissan Maxima right out of college with my dad as co-signer. One of the worst decisions I've made. It set me up for many years of 'its not thaaaat much money, and I deserve it, so why not.' Maybe you don't have as bad of a mindset as I did, but its far better to adopt the opposite mindset of 'sacrifice now, reap the rewards later.'

At 41, I'm driving a $1200 Ford Explorer (I paid $5000 for it used, years ago). I'll keep driving this until I have enough money in the bank that I can pay cash for a nicer car, and it won't devastate my net worth. I consider my vehicle a badge of honor when I drive past neighbors that drive $50K BMW's, but live in rented condos just like I do.

 

[HyperFocus]

Id spend 2000 now instead of 300 for several years any day. I hate contracts, they seem cheap to the sidelaners yet are almost always worse.

Debt is your enemy!! Fight it like you would fight someone offering you drugs.

Save up money and buy things when you have enough money (much more than enough money) to pay for it. There are also several people on this forum who make a lot of money but havent figured out what I just said, chances are they will meet themselves when times get rough.

 

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[mrarcher]

Id spend 2000 now instead of 300 for several years any day. I hate contracts, they seem cheap to the sidelaners yet are almost always worse.

Debt is your enemy!! Fight it like you would fight someone offering you drugs.

Save up money and buy things when you have enough money (much more than enough money) to pay for it. There are also several people on this forum who make a lot of money but havent figured out what I just said, chances are they will meet themselves when times get rough.

I have found if you have a healthy attitude to debt you can use it to your advantage. I wouldn't get into debt for a car or something for myself but to expand a company with machinery or warehouse as long as it is something well assessed and worth it it is something i would definitely think about.

 

[HyperFocus]

I have found if you have a healthy attitude to debt you can use it to your advantage. I wouldn't get into debt for a car or something for myself but to expand a company with machinery or warehouse as long as it is something well assessed and worth it it is something i would definitely think about.

Yes I agree. I would do it but only if the odds are in my favor + I dont mind risking it.

for example I bought crude oil with 10 000€. If it goes down to 15$ i will lose all my money. It could go down there but prolly not. I think there is a bigger chance of it going up to 60, ill then make 20 000€ profit. But would I do it with my last 10k? No. Btw, it already went up 20%, could drop tho, Im expecting some drops later so I sold half and will rebuy if it drops to 25-27.
Im also considering going short on the Dow Jones, I think the crash could be coming this year.

You see the analogy here.

 

[mrarcher]

Yes I agree. I would do it but only if the odds are in my favor + I dont mind risking it.

for example I bought crude oil with 10 000€. If it goes down to 15$ i will lose all my money. It could go down there but prolly not. I think there is a bigger chance of it going up to 60, ill then make 20 000€ profit. But would I do it with my last 10k? No. Btw, it already went up 20%, could drop tho, Im expecting some drops later so I sold half and will rebuy if it drops to 25-27.
Im also considering going short on the Dow Jones, I think the crash could be coming this year.

You see the analogy here.

Under NO CIRCUMSTANCES should this be considered investment advice to YOU or ANYONE ELSE READING this thread, but if i was still a broker IT WOULD BE MY OPINION that trying to short crude oil at this time would be unwise. It would be more advisable IN MY OPINION to hold on oil stock and forget about it for a good few years until oil comes back up in price. It wont stay low forever but will take a good long time to recover to a reasonable price.
investments and debt aren't really the same thing. You buy a machine on credit for 10k and the business goes bust you can always resell the machine. If stock price drops you don't get your money back. Stocks and commodities are really just gambling and as much as you can make an educated guess no one really knows what will happen.

 

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[Ikke]

The key to cheap motoring is not necessarily buying a car vs leasing. The key is buying at the most flat depreciation spot

Example: My mother in law has (operational) leased a brand new car for 3 years. The total cost over 3 years vs buying are withing a few €100 euro considering depreciation and regular scheduled maintenance. Depreciation being the biggest cost. She choose an operational lease because of less risky and the capital cost of buying a car.

I myself have bought a 3 year old second hand car with 23k miles for just over half of new invoice value. Even then depreciation is still one of the largest costs of car ownership.

My previous car was an 27 year old land rover. I bought it for €5300, fixed up rust issues and other issues increasing its value. Maintained it. Drove it for 1.5 years and sold it for €6000. Still the car has cost me more money than it sold for but the almost flat depreciation spot made it the cheapest car I've ever had.

 

[mrarcher]

The key to cheap motoring is not necessarily buying a car vs leasing. The key is buying at the most flat depreciation spot

Example: My mother in law has (operational) leased a brand new car for 3 years. The total cost over 3 years vs buying are withing a few €100 euro considering depreciation and regular scheduled maintenance. Depreciation being the biggest cost. She choose an operational lease because of less risky and the capital cost of buying a car.

I myself have bought a 3 year old second hand car with 23k miles for just over half of new invoice value. Even then depreciation is still one of the largest costs of car ownership.

My previous car was an 27 year old land rover. I bought it for €5300, fixed up rust issues and other issues increasing its value. Maintained it. Drove it for 1.5 years and sold it for €6000. Still the car has cost me more money than it sold for but the almost flat depreciation spot made it the cheapest car I've ever had.

It depends on your perspective. If you are 23 and just starting out a new business the last thing you need is a bill you might not be able to make on the months there is no money coming in. Depreciation isnt really an issue. If you are more established and know there wont be a problem making payments and then some than it may well be a viable option. Too many people look at cost of car, insurance and everything else that it entails and forget to look at themselves. The thing to think about is what do you plan on doing the next 3 years of your lease. If you plan on quitting your job and starting a business its not an option to lease. Its a commitment and can tie you down. A bit like having a dog you cant just up and leave on holiday or get a job that requires you to work away without sorting out what to do with the dog. Consider all options at hand then make an informed decision.