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WHY SMART PEOPLE LEASE CARS · Earn Your Leisure

• 0:01
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• 0:43
  Speaker 2: The difference between leasing and buying a car. What are
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  Speaker 2: some key differences in leasing a car and buying a car?
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  Speaker 3: Well, on a least most people you'll hear that a
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  Speaker 3: lot people say, well, you don't own the car, right.
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  Speaker 3: The truth is, do you want to own a vehicle
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  Speaker 3: that's going to lose value? Right? Very rarely do cars
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  Speaker 3: go up in value. So that's why leasing is so prevalent.
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  Speaker 3: Seventy eighty percent, like you said, of people leased the
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  Speaker 3: vehicles when you're financing the vehicle, you do. You technically
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  Speaker 3: own it, but the bank owns and while you're financing,
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  Speaker 3: so until you pay it off, the vehicle still belongs
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  Speaker 3: to the bank title the titles held by the bank.
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  Speaker 3: You're not the owner of that vehicle.
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  Speaker 2: That's something that's that's a common misconception. You don't own
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  Speaker 2: the car the way until you finally pay it off.
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  Speaker 2: And then when you do pay it off more people
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  Speaker 2: want to trade it in.
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  Speaker 4: They want to trade it right away old by the
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  Speaker 4: time you own it now it's old exactly.
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  Speaker 2: But another thing with the leasing that people don't fully
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  Speaker 2: understand is like for me personally, right, the reason why
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  Speaker 2: at least is that I'm a business owner yep, right,
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  Speaker 2: So I get better tax treament for lease in the
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  Speaker 2: car exactly, Whereas like with the least I can write
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  Speaker 2: off the insurance, the gas, and the least payment formula percentage.
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  Speaker 2: We won't get too complicated in it, but I can
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  Speaker 2: write that off on my taxes. If I own the car,
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  Speaker 2: then I could only I have to go about the
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  Speaker 2: depreciation correct because it's own, I get less of a
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  Speaker 2: tax benefit for owning a car, so it's in my
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  Speaker 2: benefit to lease the car because it's pretty much a
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  Speaker 2: right off for me, and I don't have to worry
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  Speaker 2: about maintenance, right, So I never haven't gotten I haven't
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  Speaker 2: paid for oil change and I can't remember when because
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  Speaker 2: or at least everything is paid for the warranties too, yes,
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  Speaker 2: and then I get a new car every three years.
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  Speaker 2: Now I always sell, like if you want to. Everybody's
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  Speaker 2: personal preference is different. You can't foresh your views on somebody, right, Like,
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  Speaker 2: if you want to keep a car for ten years,
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  Speaker 2: that's shit, right, you can do that. I don't want
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  Speaker 2: to do that. I want to get a new car,
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  Speaker 2: so I know it's going to cost me a lot
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  Speaker 2: more money to buy a car and then buy a
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  Speaker 2: new car every three years as opposed to leasing a
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  Speaker 2: car and then getting a new car every three years.
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  Speaker 3: And the upfront is less yep, right, yeah, absolutely. On
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  Speaker 3: a lease, you only pay let's say the taxes right
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  Speaker 3: when you're financing in the vehicle. You pay tax on
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  Speaker 3: the whole price of the car, or at least you
• 2:55
  Speaker 3: only pay tax unlets's say the monthly payment depending on
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  Speaker 3: the state and where you're registering the car, Let's say
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  Speaker 3: like New York you're only paying tax on the monthly payment.
• 3:03
  Speaker 2: Right, So I think that that's something that people could
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  Speaker 2: And as far as for me, I don't drive a lot,
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  Speaker 2: so twelve thousand miles. I never go with twelve thousand miles.
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  Speaker 2: I usually hit like eleven ten to five, So it's
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  Speaker 2: perfect for me. But you were saying, even if you
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  Speaker 2: do go with twelve thousand, that's.
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  Speaker 3: A big misconception. Also, it's a lot of people think
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  Speaker 3: that if I drive a lot of mileage, I shouldn't
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  Speaker 3: be leasing. You know, you'll hear a lot of people
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  Speaker 3: come in and they say, you know, I do fifteen
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  Speaker 3: twenty thousand miles a year, I shouldn't you know? Leasing
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  Speaker 3: is not for me. I think the contrary. The way
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  Speaker 3: I look at it is when you're leasing the vehicle,
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  Speaker 3: even if it's a high mileage, least you know your
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  Speaker 3: true cost of ownership. Like you said with maintenance, right,
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  Speaker 3: you know that you're gonna have this car three years,
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  Speaker 3: you're gonna put fifteen thousand miles a year, You'll have
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  Speaker 3: forty five thousand miles. Most warranties are let's say, four year,
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  Speaker 3: fifty thousand miles. Bumper to bump a warranty, so you'll
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  Speaker 3: still covered under your warranty, you see what I mean.
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  Speaker 3: So you'll be able to look at it and say, hey,
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  Speaker 3: you know what, I know exactly what I'm gonna be
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  Speaker 3: paying every month for this car as long as I
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  Speaker 3: have my lease. Now, when you're financing a car and
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  Speaker 3: you're putting high mileage on the car, the two things
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  Speaker 3: that lower the value of the car quickest is the
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  Speaker 3: amount of mileage you put on it and the condition
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  Speaker 3: of the car. So let's save the vehicle is in
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  Speaker 3: an accident. So if I'm leasing my car and someone
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  Speaker 3: that my next door neighbor's buying their vehicle and they're
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  Speaker 3: financing their car in three years, I have a lot
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  Speaker 3: more flexibility of what I can do. I don't have
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  Speaker 3: to worry about if my car was in an accident,
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  Speaker 3: or did somebody key my car? Did a garbage truck
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  Speaker 3: come down the street to hit my car? Because their
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  Speaker 3: value is dropped now. So now you're playing this guessing
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  Speaker 3: game of well, wait a minute, what is my car
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  Speaker 3: now worth? And you run into a situation where you
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  Speaker 3: finally pay off your car. You've put money into the
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  Speaker 3: vehicle trying to fix it, and they turn around and say, hey,
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  Speaker 3: your car's worth six thousand dollars. Now. The other thing
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  Speaker 3: that we talked about was that technology is moving so fast,
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  Speaker 3: so things get antiquated quick. So that's why leasing is
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  Speaker 3: nice because in three years you may not need a
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  Speaker 3: small sedan right now, in three years, your life changes,
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  Speaker 3: You have a family, you have kids. Now I want
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  Speaker 3: to ask your V my lease is up? I come
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  Speaker 3: out of the leasing, go into the brand new SUV
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  Speaker 3: if I want to can't cord anymore?
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  Speaker 2: Exactly?
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  Speaker 5: Yeah, Now that's true.
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  Speaker 4: Technology changes even like the few if I have now,
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  Speaker 4: like I sold the two thousand, twenty twenty Mode, I'm like, wait, yeah,
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  Speaker 4: that is ridiculous, Like I need that technology now. So
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  Speaker 4: it's like you can just come in every three years. Man,
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  Speaker 4: that's a that's a huge benefit in leasing. One of
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  Speaker 4: the things that is important when you're leasing all finances
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  Speaker 4: is the credit.
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  Speaker 3: Yep, how does that work?
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  Speaker 1: Is there a specific bureau that car dealerships use or
• 5:27
  Speaker 1: the bank?
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  Speaker 3: So it varies between manufacturers, so different banks. So let's
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  Speaker 3: say if you're going to Honda Honda Financial, Toyota has
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  Speaker 3: Toyota Motive Credit. Mercedes Benz has Mercedes Benz financial They
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  Speaker 3: all have different criterias, right, so it's not it's not
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  Speaker 3: a blanket as far as what they use. Some people
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  Speaker 3: use transunions, some people use echo facts. Other manufacturers use
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  Speaker 3: what's called the auto score. So an autoscore means your
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  Speaker 3: automotive history. So even if you had some trouble on
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  Speaker 3: your credit, but they saw, let's say, for whatever reason,
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  Speaker 3: you had some medical bills or something happened, but you
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  Speaker 3: always paid your car node on time. The bank may
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  Speaker 3: look at that and say, hey, well wait a minute,
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  Speaker 3: they miss some payments over here, but they always pay
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  Speaker 3: their car on time. So that means that, hey, you
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  Speaker 3: know what, this person needs that car. They need to
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  Speaker 3: get to work, they need to provide for their family.
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  Speaker 3: So no matter what happens, they're going to take care
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  Speaker 3: of that monthly payment.
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  Speaker 2: And another thing I want people to think too. A
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  Speaker 2: lot of times people will look at it like, Okay,
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  Speaker 2: well I'm not a business owner and we're talking about
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  Speaker 2: luxury cars just because we have luxury cars. But it's
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  Speaker 2: the conversations for any type of cass doesn't matter. But
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  Speaker 2: also people have to realize is that you don't have
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  Speaker 2: to be a full time entrepreneur to be an entrepreneur
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  Speaker 2: because the tax system. I can't stress this. The tax
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  Speaker 2: system is set up for entrepreneurs and investors. It's not
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  Speaker 2: set up for employees. Right, So as an entrepreneur, you
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  Speaker 2: get all kinds of benefits. You can write off meals,
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  Speaker 2: you can write off travel, you can write off almost
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  Speaker 2: anything realistically as long as it makes sense. Don't get
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  Speaker 2: what it is. And cars is one of the things
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  Speaker 2: that you can write off.
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  Speaker 3: Right.
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  Speaker 2: So if you work in a regular job, and you
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  Speaker 2: might have a side, so why not get that incorporated,
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  Speaker 2: get an LLC, get a seat, whatever you want to do,
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  Speaker 2: and get a tax id, opening up bank account. Now
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  Speaker 2: you have a business. So now you can lease that
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  Speaker 2: from your side hustle business, and you can deduct the
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  Speaker 2: same deductions like if you work the regular job. Right,
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  Speaker 2: Like now that that goes against any money that you
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  Speaker 2: make on that. And so I say that to say
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  Speaker 2: we have to think like business people. And you don't
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  Speaker 2: even have to actually be a full time business owner.
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  Speaker 2: Salespeople as well, right, if you're a ten ninety nine
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  Speaker 2: or if you are in some former sales where you
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  Speaker 2: can take deductions like real estate and stuff like that.
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  Speaker 2: Insurance you sell insurance the same thing. So a lot
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  Speaker 2: of times people, you know, they have negative views towards
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  Speaker 2: things because they don't they have a lack of understanding.
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  Speaker 2: There Once you have a lack of understanding, and like
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  Speaker 2: I said, now, if you still choose to do that,
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  Speaker 2: then it's it's your decisions free country. But a lot
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  Speaker 2: of times we make decisions based out of ignorance not knowledge, right,
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  Speaker 2: So exactly. So one of the things I want to
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  Speaker 2: ask you was you said MSRP versus price, right, what's
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  Speaker 2: the difference towards.
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  Speaker 5: The selling price?
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  Speaker 3: All right? So yeah, so you have MSRP, right, that's
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  Speaker 3: what's on the windowsticker, right, So the manufacturer suggests the
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  Speaker 3: retail price of the vehicle. That's MSRP. Manufacturer suggests the
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  Speaker 3: retail price. That's what they recommend you should be selling
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  Speaker 3: that car for now. The selling price is what you negotiate,
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  Speaker 3: right or whatever. However you can reduce the selling price
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  Speaker 3: of the vehicle. That's what that comes down to. Is
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  Speaker 3: that the same thing as a cap cost. So no
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  Speaker 3: cap cost. Let's say you're leasing or your finance in
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  Speaker 3: the vehicle. The final cap cost is the selling price
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  Speaker 3: plus anything else. So whatever money the bank is lending you.
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  Speaker 3: Whatever it's a leaset or finance, they're still lending a
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  Speaker 3: certain amount of money. So let's sayd the lease, if
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  Speaker 3: you rolled your taxes into your payment, that's going to
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  Speaker 3: add to your cap cost. If you negotiated a fifty
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  Speaker 3: thousand dollars selling price and then you rolled your taxes
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  Speaker 3: of two thousand dollars into the lease, that's fifty two
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  Speaker 3: thousand dollars cap cost. And is that negotiable. Well, it's
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  Speaker 3: based on what you negotiate as far as you let's
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  Speaker 3: say you're selling price. So whatever fees you put into it,
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  Speaker 3: those aren't those let's say taxes and DMV fees, things
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  Speaker 3: like that.
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  Speaker 2: So all right, we talked about okay, talk about leasing
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  Speaker 2: a car, but buying a car. Somebody wants to buy
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  Speaker 2: a car, right, and you were saying, most of the time,
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  Speaker 2: if you do want to buy a car, it makes
• 9:11
  Speaker 2: more sense to buy a used car.
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  Speaker 3: I always recommend people, if you are going to buy
• 9:14
  Speaker 3: a car, buy a certified pre on.
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  Speaker 2: Now.
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  Speaker 3: Listen, there's vehicles you can find out these lots that
• 9:19
  Speaker 3: are not authorized the same Mercedes Benz dealerships or Toyota
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  Speaker 3: dealership me personally, I think you're better off going to
• 9:27
  Speaker 3: You may pay a couple of dollars more, but you're
• 9:29
  Speaker 3: getting it from the manufacturer, so you have the backing
• 9:32
  Speaker 3: of manufacturers. And just give you an idea, most companies,
• 9:34
  Speaker 3: when they certify a vehicle, the vehicle goes through let's say,
• 9:37
  Speaker 3: you know, one hundred and fifty point one hundred and
• 9:38
  Speaker 3: sixty point inspection. So not only will they inspect a
• 9:42
  Speaker 3: vehicle to make sure that it's in a certain conditions,
• 9:44
  Speaker 3: so they'll eliminate things like let's say this frame damage
• 9:47
  Speaker 3: to the car. If the car is frame damage doesn't
• 9:49
  Speaker 3: qualify for a certification, so it's eliminated. Most dealerships won't
• 9:52
  Speaker 3: even take that car. They'll send that car out, and
• 9:55
  Speaker 3: that's what you'll see the vehicles on these other side
• 9:57
  Speaker 3: lots right and they're selling those vehicles. So this really
• 10:00
  Speaker 3: no recourse when it comes to something happened to the car.
• 10:03
  Speaker 3: Not to mention the fact that once that car goes
• 10:05
  Speaker 3: through the certification, a lot of manufacturers will put new
• 10:09
  Speaker 3: car interest rates on those cars. So typically pre owned
• 10:13
  Speaker 3: cars are used cars will have a higher interest rate
• 10:15
  Speaker 3: than a new car. But if it's certified, you get
• 10:17
  Speaker 3: a better interest rate. So like right now, like let's
• 10:19
  Speaker 3: say you have one point nine nine percent, you can't
• 10:21
  Speaker 3: get one nine nine percent on a used car, you know,
• 10:24
  Speaker 3: anywhere else, you know what I mean? If the vehicles certified,
• 10:27
  Speaker 3: that's the way to do it me personally, the vehicles.
• 10:29
  Speaker 3: As you guys have all heard this, people say, oh, well,
• 10:32
  Speaker 3: the vehicle loses value as soon as you drive it
• 10:34
  Speaker 3: off the lot. Now what happens is really it's once
• 10:36
  Speaker 3: it's registered the vehicle loses value. That's when that's when
• 10:40
  Speaker 3: the vehicle loses value. That's normally when you're driving off
• 10:41
  Speaker 3: the lot.
• 10:42
  Speaker 4: That's when you got it brand new.
• 10:43
  Speaker 3: So yeah, when you're buying the car brand new, it
• 10:46
  Speaker 3: initially loses its value when you drive it off a
• 10:48
  Speaker 3: lot or the vehicle is titled. So now you're buying
• 10:51
  Speaker 3: a vehicle, who's going to that's gonna depreciate in value.
• 10:54
  Speaker 3: That's what a car does. It's going to go down
• 10:55
  Speaker 3: in value. So you're financing a car that's losing value.
• 10:58
  Speaker 3: It already took a big hit. When you're buying a
• 11:00
  Speaker 3: new opposed to a certified pre on that the initial
• 11:03
  Speaker 3: depreciation has already happened. It's already taking place, but you
• 11:06
  Speaker 3: knew that car was taking care of The manufacturer of
• 11:09
  Speaker 3: the dealership, you know, is putting themselves behind that vehicle, saying, hey,
• 11:12
  Speaker 3: we know this vehicle, We've inspected this vehicle, we know
• 11:15
  Speaker 3: this vehicle's in good shape. We're willing to even put
• 11:18
  Speaker 3: a new car rate on it, so you have some
• 11:20
  Speaker 3: more confidence when they're buying that type of vehicle.
• 11:22
  Speaker 5: Okay, all right, earners, what's up?
• 11:42
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