BajaNomad - Vehicle leasing vs. buying

Vehicle leasing vs. buying

thebajarunner - 8-27-2006 at 02:19 PM

There has been so much heat on this subject that I decided to add fuel to the fire.
Way back.... when I had my CPA practice, easily the most frequently asked question was "Should I lease or should I buy?"
And, the easy answer.... "Leasing is simply another way of financing, make your best deal from an overall economic standpoint."
In today's market, with so many zero percent finance deals, and such small downstrokes required, and 60+ month financing available, I cannot imagine that leasing is an advantage. Maybe you cut a better deal, I would like to see it.
The one advantage I know of in leasing, at least in California, you only pay sales tax as you go, by the payment, and not by the full amount.
As to tax deduction ease.... either way you need to qualify the vehicle as a biz expense... Today's rapid writeoffs can actually give a greater up front write off by purchasing than by leasing.
The greatest disadvantage of leasing- you never build equity.
I drive my vehicles 'til they die. Thus, I have three fully paid for vehicles in my garage, lots of miles, but have not had payments for some time. That makes me smile, a lot!!

O.K., bring it on!!! Tell me why you disagree.

(and I have a wonderful Baja related anecdote about leasing which I will disclose after the first salvos come across my desk)

jerry - 8-27-2006 at 04:03 PM

back in the seventies when you leased it was at wholesale prices i dont think that whats happening now??
it all depends on the position your in recently one could buy a new rig and wright it all off in one year .but that can hurt you down the line or when ever you have to recap it

jerry - 8-27-2006 at 04:05 PM

i should qualify that a busness could wright it all off in one year up to $100,000 for equipment including a work truck

JZ - 8-27-2006 at 04:13 PM

Lease benefits are: 1) tax deduction for business use, and 2) lower monthly payments putting you in a nicer car, and 3) a clear path to change cars every 3 years or so for people who want to do that.

For certain circumstances leasing makes more sense, for most it does not. I know a girl who writes off 75% of her payments on a Porsche Cayan that she uses to visit clients in her sales terriority. The terriority is pretty small geographically, so she is not racking up a bunch of miles. She deals with high-end clients where having a newer car is part of the image she needs to keep up. For her example, leasing makes a lot of sense.

I don't follow this comment: "Today's rapid writeoffs can actually give a greater up front write off by purchasing than by leasing."

[Edited on 8-29-2006 by JZ]

jerry - 8-27-2006 at 04:24 PM

its not that it gives you a greater write off. it the fact that you can write it off totally in one year
example
your having a banner year or a one time deal thats your going to make more money then usuail thuse leaving you with more taxes to pay that year
you buy a new rig and wright it all off in that year thuse reducing your taxes

Careful here!!

thebajarunner - 8-27-2006 at 07:47 PM

Quote:

Originally posted by jerry
its not that it gives you a greater write off. it the fact that you can write it off totally in one year
example
your having a banner year or a one time deal thats your going to make more money then usuail thuse leaving you with more taxes to pay that year
you buy a new rig and wright it all off in that year thuse reducing your taxes

This is marginally correct (except for the spelling) and also misleading.
Not to get into the delicacies of taxation and depreciation, but...... if your vehicle is under 6000 gvw, then you are not eligible for the $100,000 annual deduction under IRC Sec. 179. Also, luxury vehicles are not eligible for this deduction.

So, buy a nice car, have a "banner year" and write (wright?) off at your risk..... NOT!!!

Also, whoever says that leasing gives deductibility subscribes to the "Urban Myth sector of Taxation"

Leasing has nothing to do with deductibility!!!!!!!!!
Business usage has everything to do with it.

And again, leasing, or buying, it is just a method of financing, and I have yet to see the leasing deal that is as economically plausible as buying...
Show me!

jerry - 8-27-2006 at 11:04 PM

yup it has to be over 6000 gvw

depending on what your business is a nice car still may be able to be ductable
when a lease was based on wholesale prices its total cost would be less and a advantage but the way there figured now i see no advantage

JZ - 8-28-2006 at 12:08 AM

Quote:

Originally posted by jerry
when a lease was based on wholesale prices its total cost would be less and a advantage but the way there figured now i see no advantage

It is up to the buyer to negoiate the price of the vehicle the lease will be based on just like you would when buying a car.

[Edited on 8-28-2006 by JZ]

Skeet/Loreto - 8-28-2006 at 03:35 AM

Leaseing is just another "Sales Gimmick" just like "Extended Warranty"

When you are in a Position to need the use of your Cash leasing does free up the Cash and allows that use and write off on a Monthly Basis.

Extended Warranty is just another Sales Gimmick which will bring you back to the Dealership so that they can Charge the $100 an Hour Labor rate!

Same type of Sales Gimmicks as the "Equity Loans" and borrowing to pay off Credit Cards, making your Payments smaller and over a longer period of Time.

Watch the Foreclosure Actions in the Near Future as those Peole who have borrowed on their Equity each time the vaule of thier House increases, then take the money, make a Down payment on a new Car or Toy..

Control your Desire for that New car, purchase or Lease in the Near Future, buy a 3 year old Model, that has been depreciated out. There are going to be some Great Deals on Vehicles that are within the Warannty miles.

Skeet/Loreto,

.

oxxo - 8-28-2006 at 05:48 AM

Quote:

Originally posted by JZ

I don't follow this comment: "Today's rapid writeoffs can actually give a greater up front write off by purchasing than by leasing."

We're talking about "accelerated depreciation" available in some cases for business purposes rather than straight line depreciation.

From a simple economic standpoint, buying is more cost effective than leasing for MOST people.

[Edited on 8-28-2006 by oxxo]

Bob and Susan - 8-28-2006 at 05:52 AM

Skeets thinking is from 1940's
Welcome to the 2000's

If everyone followed his plan we be in a depression again.

Why would someone care who really owns a car if it's sitting in their garage?
They have complete use of it.

3 year old cars start to break down and repairs need to be completed...
and the smell....

Davik K has the right idea...nicer car for less monthly payment...

Nothing wrong with an "equity loan"
At least it's a tax write-off...credit card commerical credit is not.
People don't need to sell-out to benifit from their profit in their real property.

Buy buy buy...lease lease lease...
The economy and the USA will thrive.

jerry - 8-28-2006 at 09:06 AM

borrow and spend, borrow and spend, seems people are following the federal government idea and it simply doesnt work. your squandering your future when you spend your equity on a car or pickup you are basicly financing the rig for the next 15-30 years
now if you take the equity and buy another house rental you will be levegering your future and come out way ahead now you can write off at least part of that qualifying pickup because you have a business

thebajarunner - 8-28-2006 at 05:00 PM

Wow!!! Glad I don't take tax and/or financial advice from this board :!:

O.K. I promised a Baja leasing story, here goes, mebbe we can lighten the mood on this post....

Back in the 70's we were having some success at racing the 500 and the 1000.
Some of the local guys who had followed and watched decided they wanted to enter a pickup in the next 500.
Problem- no vehicle!
Solution- amble over to the little old Ford dealer in Escalon and lease a new F-100.
So they did, took it home, totally stripped it of all seats, carpets, headliners, dash, etc. etc.
Installed all the roll bars, skid plates, reinforced the frame, made it pretty respectable.... brand new truck and all.
Took it down for the 500 and wrecked right off the start.
Came home and reported it stolen.
End of story.....
Except the real story kept coming around in the local community and their credit never recovered,
they eventually started racing boats instead.
Never went back to Baja. :bounce:

I am conditionally in Skeet's camp

Hook - 8-29-2006 at 11:56 AM

Do your research. Buy a reliable car (based on Consumer's Reports analysis) that's used and let someone else take the initial depreciation. Dont buy used cars from dealers; be patient and find a pp vehicle with good maintenance documentation and relatively low mileage. It will be much cheaper than a dealers used car. Start looking for a vehicle long before you HAVE to have it so you dont make a decison based on desperation.

There is no way I could ever own a vehicle and keep it under the maximum mileage of a lease. Same goes for my wife. We are active people who love to travel in our vehicles, especially since 9/11.

That said, I bought a Ford diesel truck even though I knew there were reliability issues with them.
The truck had capabilities that I needed; it would tow ANYTHING economically and it would be replacing a motorhome that was only getting 7mpg. Plus, it was too good a deal to pass up from a pp who wanted it gone. A desperation sale. Since then, I have managed to mitigate some of the reliability issues with aftermarket add-ons. The total cost of mitigation was the equivalent of what three lease payments or monthly payments would have been on this vehicle. Well worth it.

I would never buy a new car.....unless I came into a large amount of cash. I like the smell of money better than the smell of a new car interior.

I tend to buy cars with an eye towards function. So if I've done my research correctly, the car should last for quite a few years. I tend to keep cars/trucks at least 6 years, often longer. When we sold my wife's last car, she had had it for 9 years and it had 180,000 on it. My Toyota before the Ford had 150,000 on it before we sold it. Sure, we got almost nothing for them.....but we also had many years of no monthly payments and no collision/comprehensive insurance. Money in the bank!

If something goes wrong with a used car, its usually fixable by me. And for much less than the cost of that limited warranty you are indirectly paying for when buying a dealer's used car. About the only things I dont fix myself are ones related to the tranny, the block itself or the rear end. Alternators, water pumps, belts, hoses, PS pumps, radiators, brakes, etc, are pretty easily replaced and are the things most likely to fail. The other things are pretty reliable these days, IF YOU DO YOUR RESEARCH.

On financing, the money we save by not having monthly payments for so long ends up in our savings accounts, unintentionally. We have LARGE cash down payments or buy them outright. Maybe its old-fashioned, depression-era thinking but we would rather not pay interest to someone if we can avoid it. I would never consider refi-ing the house JUST to pay for a car....too many other associated expenses with the loan.

Leases are for people who are cash poor or credit poor or who have just the right business to make it justifiable. A real estate agent comes to mind; someone where fashion and luxury and newness can be important aspects of buying, as well as the write-off. That's just not us.

Besides, why do you think all the car ads these days tout what they will lease the car for instead of its purchase price? Its because they make a killing on leases and the eventual resale. Who is being killed here? Not the dealer, not the manufacturer......who's left?

JZ - 8-29-2006 at 12:27 PM

Quote:

Originally posted by thebajarunner
Wow!!! Glad I don't take tax and/or financial advice from this board :!:

Don't be lumping everyone in the same bucket there partner. I'll put my financial planning skills against yours any day.

Hook

Baja Bernie - 8-29-2006 at 01:19 PM

I'm with you and doubt that our buying habits will throw the country into a depression.
My last two cars have been purchased for cash from Budget Car Rentals. I have been very please with each purchase, normally they have only about 20,000 miles on them, and I drive them to about 120,000 and then sell them myself. My wife insists on a new vehicle and because I love her so much we get her one about every 8 years--this works well because they only have about 25,000 miles on them when we give hers to the kids.

I always get the warranty because I have become lazy and I now hate to work on cars.

Because I write books on Baja I can take the tolls, mileage, Mexican Insurance, hotels/motels/camping spots, and the Sentri costs off as a business expense.

My CPA thinks very much like the Runner does and I believe they both give very good advise.

Good thread! But lighten up on the spelling--schoolmarm.

It would be fun to see JZ and Runner go head to head on financial planning. Hey! they just might do mine--nah! I would be far to embarrassed to reveal my inner self. Besides I hate to pay for that which I can do fairly well myself. Color me a control freak when it comes to green stuff and I ain't no golfer.

Dave - 8-29-2006 at 02:34 PM

Quote:

Originally posted by Hook
I would never buy a new car.....unless I came into a large amount of cash. I like the smell of money better than the smell of a new car interior.

Haven't bought a new car in over 20 years, and won't. If I'm gonna spend 30k+ on something it had better appreciate.

That might be an interesting session!?

thebajarunner - 8-29-2006 at 02:38 PM

Quote:

Originally posted by JZ

Quote:

Originally posted by thebajarunner

Don't be lumping everyone in the same bucket there partner. I'll put my financial planning skills against yours any day.

Nahhh, you won't get me into that scuffle.
Three years ago I breezed into the CPA practice office that I founded years back and dropped off some stuff.
My two former partners ambushed me in the lobby,
placed one hand on each of my shoulders.
And formally declared me incompetent!!!
Then John smiled and said, "And you are dangerous, too!"
So there you have it.
Two of the last three years they have awarded me the
"Best scheme of the tax season" award.
Last year John refused to sign my return...
Oh well, been more fun turning farms into subdivisions, than numbers into financial statements.
And that's the truth!!!!

What the heck Because I know nothing I'll jump in too

Sonora Wind - 8-29-2006 at 02:45 PM

Back in the Nevada Wholesale Nursery Inc. days. I would buy trucks tractor trailer rigs trailers backhoes, you name it. I purchased these as a contractor, then I would lease the equipment to the nursery. I could wright/write/right everything off as a contractor and take the deprisated value. The corp/Inc. could wright off the lease payments (made to me ). Corprate tax year ended Oct, mine ended Dec. My tax guy would decide in Oct if the company needed to pay more or less lease payments. SIDE NOTE the first time I bought a truck under the the 179 plan uncle came after me. :cool:

Oh my 2sents Buy a low mileage used vehicle from someone who just refied the equity in their house, and now wants a new ride. :cool:

I almost forgot

Sonora Wind - 8-29-2006 at 03:01 PM

All of the above mentioned tax loop holes were closed in the late 80s and early 90s. Today the best tax brake/break/broke is cash. :cool:

Hook - 8-29-2006 at 03:13 PM

Quote:

Originally posted by Sonora Wind Oh my 2sents Buy a low mileage used vehicle from someone who just refied the equity in their house, and now wants a new ride. :cool:

Damn straight! Refi Fools are a dime a dozen in this economy.

Then, there's my next door neighbor. He jumped at the chance to get a new truck when Ford announced their new "6 year, no interest plan for people with less-than-perfect credit." I guess he got tired of all the other husbands on the block with trucks. :lol:

Anyway, I guess he figured he didnt need to negotiate price, with the financing deal. BAD MOVE! He comes home with a four door F-150 2wd. Yeah, it's the Lariat package with the leatherette interior. But the thing ran him 38k, out the door!

Obscene!

Now, he's talking about another 2k in new wheels and tires and another 500.00 for an exhaust.

Never can seem to find any money for a down payment on a house......just keeps on renting, even though he's been with the same outfit for 10 years.

Paul Lynde said it best....."What's the matter with kids TOOO-DAYYYYYYY !!!!!!

I'm off to see the wizard

Sonora Wind - 8-29-2006 at 03:22 PM

I need a brain and an equity loan. $40,000 plus PU. Where does the the line start? :cool:

PS: What do you do with an F150? :cool:

[Edited on 8-29-2006 by Sonora Wind]

Hook - 8-29-2006 at 03:57 PM

Quote:

Originally posted by Sonora Wind
I need a brain and an equity loan. $40,000 plus PU. Where does the the line start? :cool:

PS: What do you do with an F150? :cool:

[Edited on 8-29-2006 by Sonora Wind]

You drive around and pretend it's a REAL truck while you're doing all the things the sedan you traded in could do'like dropping off the kids at school and dropping off the kids at the beach..... :lol:

Seriously, you can get a helluva lot more truck for 38k if you negotiate in this climate, IF YOU HAVE TO HAVE A NEW TRUCK! The Big Three are desperate right now.

I'm not that down on the F-150. The newer version is an improvement over the one they dumped around 2003-4. That one was a truck body on a mid-sized sedan or something.

Personally, I'd look for someone dumping a late model Dodge Diesel 4wd.....someone who is out of work, due to the housing slowdown and who bought it during the housing boom. The newer Ford diesels have issues......

Or, you could wait for the new Tundra that is supposed to be out in January, if you're going new.

Taco de Baja - 8-29-2006 at 04:02 PM

[

Quote:

Originally posted by Bob and Susan
Skeets thinking is from 1940's
Welcome to the 2000's

If everyone followed his plan we be in a depression again.

3 year old cars start to break down and repairs need to be completed...
and the smell....

Davik K has the right idea...nicer car for less monthly payment...

Buy buy buy...lease lease lease...
The economy and the USA will thrive.

I disagree.
Buy a car and keep it for a long long time.

The economy is not run on cars. But if you have to choose between buying and leasing, go with buying.

My 10 year old Toyota Tacoma has yet to break down. Simply minor regular maintenance.
And what is my monthly payment after buying it 10 years ago? $0.00 (Priceless!)
What is my yearly "car tax"? a measly $100

If leasing were so good why not lease everything like houses?, furniture to go in the house? computers? CD's?, MP3's?, videos?, DVDs?, clothes? All we should have to buy would be food, since the leassor probably would not want it back at the end of the brief lease period..... :lol:

[Edited on 8-29-2006 by Taco de Baja]

As I reflect

Sonora Wind - 8-29-2006 at 04:13 PM

I took it in the shorts with several vehicles I bought in the past. So I guess the young one you spoke of may still have some growing/learning to do. If I had a $100,000.00 for every mistake I made. I Know ( I'ed buy Baja ) Notice how I got back to the Baja topic. :lol:

So Taco

Sonora Wind - 8-29-2006 at 04:19 PM

Let's say your ten year old Toyota stops running, say in Cardiff on your way to La Fonda for a great surf trip. You open the hood! Discribe what you see, and what you do without your TYNR-4530-4 engine analizer :cool:

[Edited on 8-29-2006 by Sonora Wind]

I know what I would do

Sonora Wind - 8-29-2006 at 04:22 PM

Call AAA :cool:

Taco de Baja - 8-29-2006 at 04:38 PM

Quote:

quote]Originally posted by Sonora Wind
Let's say your ten year old Toyota stops running, say in Cardiff on your way to La Fonda for a great surf trip. You open the hood! Discribe what you see, and what you do without your TYNR-4530-4 engine analizer :cool:

Well, I'd...Ummmm...Wellll.....I'd guess I would have to unpack my TYNR-4530-4, plug it in and see what it said to do.

In reality though I would have a better chance of fixing my partly mechanically controlled 1996 Tacoma, or finding parts for it, than I would knowing want to do with a completely electronically controlled 2006 Tacoma.
I have done a lot of the maintenance on the truck myself and could fix or replace many parts that might break. If a circuit board gets fried though in either the 1996 or 2006....Well then I am back to the TYNR-4530-4 telling me there is a failure in the com-link between the wizzy-hoot and the muffler bearings. And that I can not fix!

Dont get me wrong, SW.....

Hook - 8-29-2006 at 04:41 PM

...if you are looking at 3/4 ton and up with creature comforts, 4wd, and an engine that will tow, you are talking at least 40k new.

But not for an F-150...... :rolleyes:

No

Sonora Wind - 8-29-2006 at 04:50 PM

Check with Kelogg Idaho :cool:

Or someone who just refried: ouch! refied. :cool:

GMC Chevy or Dodge. In Kelogg. Sorry no F 2 or 350. But check Galager Ford in Elko Nv or St George Ut Or Canada as in BC Ford. Great prices. Airline ticket Doc signing lunch, long but interesting drive home. :cool:

Did I mention no sales Tax. Most States charge when you get the plates : ( :cool:

[Edited on 8-30-2006 by Sonora Wind]

[Edited on 8-30-2006 by Sonora Wind]

Skeet/Loreto - 8-29-2006 at 08:10 PM

Hello?
Wow, some real good advice from some very different Angles.
Bob and Susan- !940's??????

I was 40 years old and always had worked for someone else,had bought a House in Pleasanton Calif. Made $16,800 net Cash. First time I had ever seen $16,,000 in Pile.
Bought a Ford Van, Full of Tools and Accounts{Snap-On Tool Route} in 1972- In 1983 I Sold out as I had 1 million Dollars! Married Virginia and Moved to Baja and Built Rancho Sonrisa and went fishin every day I wanted.
I am now employed on a Partime basis as a Buyer for the Dealer Banker of 6th St in Amarillo, Texas-Go to Oklahoma City where 14 Lanes of Cars are Auctioned every Thursday, and to Lubbock Texas Auction for 2 Auctions on Wed. and Thursday.

Bought a New 1993 Jeep Cherokee 6 Cylinder, put 167,000 miles on the Baja Highway-Purchased for $20,000 sold 8 years later for $10,000.
Bought a used Jeep Cherokee in Arizona for $15,000 drove it for 5 years ,sold for $10,800. Put about $700 in rear Bearings.

All the money I saved on not buying new Cars or Leasing I put into Pro[perty and made another Million!!Right. now if anyone is interested I will loan out what you need at 10%- All it takes is a Warranty Deed on your Home .

Let me Know.

Skeet/Loreto

Debra - 8-29-2006 at 08:48 PM

HA! Skeeter, you can have a deed to my home anytime! (well, maybe just a LEASE on a room!)

I have to say, again......I'm with the 'pay it off people' ....a car note gives me hives, I've had 2 car notes in my life.....couldn't wait to pay them off, and did in short order. I really have no idea how high finance works, all I know is that the less debt I have (except my home loan, which is tax deductible) rent and just put a match to your living expences, tax wise) the better off I am......If you are still working people, buy, BUY, BUY! Especially if you live (well, on the Planet Earth) every dollar you spent on Rent, you might as well just put a match too, much more fun I would think would be to deduct every dollar that you spend on interest, which is most of your home costs. If you rent, you are paying your landlord's taxes and mortgage. MHOP

JZ - 8-29-2006 at 09:06 PM

That has been very true historically. It is less true in certain parts of the US today where the increase in rents has not matched the increase in housing prices. Short-term renting can make more financial sense in the current state of affairs in certain locales. But you are right regarding longer term purchases.

Debra - 8-29-2006 at 09:41 PM

JZ,

Is there some part of the USA where rent is tax deductible? (that is federal) And I have to wonder, where is renting, short term or otherwise making more financial sence, not doubting you, (or maybe I am, I really want to know.)

JZ - 8-29-2006 at 10:08 PM

Let's take an example. I have a friend that was just looking at a Condo in LA. They think they want to be here for at least 2 years, but not sure after that. A 1,100 sq place in a nice neighborhood runs maybe $480K (+ closing costs). Even putting 20% down ($100K), you are looking at payments of close to $3K per month including mortgage, property taxes, and hoa.

The same place will rent for maybe $2,000-$2,300. There are no other payments for the renter except a security deposit of probably $4-5K.

If the buyer is thinking about moving in say two years, they face two possible negatives, 1) there is real possibility housing prices in LA could dip short term and 2) they need to pay sellers closing costs on the re-sell.

The renter can put the $100K in some other investment and pay less per month.

In a short term scenario renting may be best.

[Edited on 8-30-2006 by JZ]

jerry - 8-29-2006 at 10:15 PM

by the way the $100,000 wright off doesnt need to be a new rig

and i hear ya skeet my first home was $13,500 and i still never lived in it 2nd was $17,000 3rd $27.500 4th was 2 and a half acers and a 3 br for$42,000
i had all of them for over 30 years still own 2 just sold the 2 and a half acers there tearing down the house and building 30 condos

i have never bought a new car but had 1967 camero ss rs 1969 LT1vett
1952 fl ridgid chopper, 1963 reno police special 80 incher 1969 sanfransisco trike 45 ci.in and a bunch of otheres and i been simi retired sinice was i was 42 guess were doing somthing wrong?? time and money can make sweet bedfellows it eather works for ya or against ya

jerry - 8-29-2006 at 10:17 PM

ps and still dont waist my time on spelling and typing lessons :lol:

Skeet/Loreto - 8-30-2006 at 05:04 AM

It is difficult for the "Youngsters that have not been trained properly" to understand basic "Make and Spend, Save!
I know several places and ways for anyone to Make a Million Dollars in the nexr 5 to 10 years.
One example:
Seek out an area away from California{Because of the Heavy Tax Structure} Go into a Neighborhood of Older Homes where the Townhas a Community Development, buy a House say for $65,000, Apply to Hud for a One Half Payback on cost of Repairs in exchange for Renting to a Sec. 8{Guaranteed Rent Check} for 2 years.
Selcet the Renter who is looking to buy a House, is working, rent for the 2 years then sell him the House, take a Note for 30 years at 10%

Buy a 3 year old Car with less than 36,000 Miles, leave your Cash, say $20,000 in a CD, borrow aganist your own Money, usually costs you about 2 %.

Did the Lessors every wonder why the Car Dealership can afford so many Sales People to Greet you, then take you to a "Closer" then to a finance Person????

Stop , Look. and Listen. Make your next Car Purchase a Need, not a Want!!

Anon The Preacher

Bob and Susan - 8-30-2006 at 06:03 AM

10%...that's usery...

when you talk about cars and realestate you are talking about "apples and oranges"

a car deperciates the day you drive it off the lot....realestate historically does not.

Owning a car 10 years...technology makes cars better and better each year.
Most people keep a new car 4 years...the next guy can repair it :lol:

David K needs a newer car...he travels long distances all the time.
A 10 year old truck would just put him and his family at "risk"

He pays for 1/2 the truck and lives a better life.
so what's wrong with his lease...
you can't take it with you...and he is having "fun" while he's still young. :bounce:

Bob and Susan

Baja Bernie - 8-30-2006 at 07:06 AM

Not usery--Don't believe it exists anymore. Pay Day loans charge up to 300% some more when the fools can't make the payments and have to re-fry (thanks Sonora Wind) the rate can hit 700%. Look ar what banks charge when they guaranty overdrafts.

Bob and Susan - 8-30-2006 at 07:41 AM

usury=The practice of lending money and charging the borrower interest, especially at an exorbitantly high rate.

An excessive high rate of interest charged on borrowed money.
-----------

realestate loans do not exceed 6% right now

Where do you folks get this info?

thebajarunner - 8-30-2006 at 08:52 AM

Quote:

Originally posted by Bob and Susan
usury=The practice of lending money and charging the borrower interest, especially at an exorbitantly high rate.

An excessive high rate of interest charged on borrowed money.
-----------

realestate loans do not exceed 6% right now

This mornings FHA 30 fixed rate is 6.49% (apr 6.59%)

Also, usury, in California, generally does not apply to corporations or financial institutions.

And, even back when usury was a big issue in the state the statutory cap was always 10%- so Skeet is within the limit.

As to Skeet and his claims about avoiding California because of high taxes...
Property tax is probably the only thing that is affordable in this state, compared to others.
Thanks to Proposition 13 it is limited to 1% of value, and after the initial rate is set it cannot raise more than 2% of the initial amount per year. (except if locals vote by 2/3 to overlay bonding, special taxes, etc.)

****By the way, IMHO, Prop. 13 is incredibly bad policy and law!!! We can discuss that elsewhere.

jerry - 8-30-2006 at 09:13 AM

Larry
yes :bounce:

i loose respect for ppl who pick on my typing and spelling

Mortgage rates today, August 30, 2006

thebajarunner - 8-30-2006 at 10:54 AM

Mortgage Loans
Type Rate +/- Last Week
30 Yr Fixed Mtg 6.08% 6.09%
20 Yr Fixed Mtg 5.99% 5.99%
15 Yr Fixed Mtg 5.80% 5.80%
30 Yr Fixed Jumbo Mtg 6.32% 6.30%
15 Yr Fixed Jumbo Mtg 5.99% 5.99%
3/1 ARM 5.66% 5.64%
3/1 ARM (I/O) 5.75% 5.71%
3/1 Jumbo ARM (I/O) 5.79% 5.78%
5/1 ARM 5.82% 5.79%
5/1 ARM (I/O) 5.94% 5.91%
5/1 Jumbo ARM (I/O) 6.01% 6.01%
7/1 ARM 5.97% 5.94%
7/1 ARM (I/O) 5.99% 5.99%
7/1 Jumbo ARM (I/O) 6.08% 6.06%
30 Yr FHA Mtg 6.62% 6.61%

jimgrms - 8-30-2006 at 11:07 AM

Being my income is barely above the poverty level , i have no need to participate in this thread just wanted to say hi jim

[Edited on 8-30-2006 by jimgrms]

Cypress - 8-30-2006 at 11:15 AM

I'm with jim!;

Runner

Baja Bernie - 8-30-2006 at 11:49 AM

Sorry! Bad law or policy is over taxing--not under taxing. Unless you are talking about Baja and Mexico as a whole where very few pay their terribly low taxes. That is a big reason why the country never seems able to move from square one. If they were effective in taxing the rich and the middle class as the US does they would shortly become a first world country. If they taxed everyone, like the US does not, they would really move forward and everyone would think they had a stake in the success of the the 'Motherland."

Well, at least I worked Baja and Mexico into it.

leasing or buying

jimgrms - 8-30-2006 at 02:45 PM

Quote:

Originally posted by jimgrms
Being my income is barely above the poverty level , i have no need to participate in this thread just wanted to say hi jim

[Edited on 8-30-2006 by jimgrms]

being my income is barely above the poverty level i have no need to participate just wanted to say bi to all you folks in baja (how about that bernie ) jim

Larry

Baja Bernie - 8-30-2006 at 03:19 PM

I was talking about Mexican taxes there.

Skeet/Loreto - 8-30-2006 at 04:11 PM

Bob and Susan:
Last year I sold a Piece of Property in Calif:
Calif. held $16,926.00 out of the Escrow>
I paid 15 % Capitol Gains;
Sold another Property- Same thing:
Tax Bill to Feds $85,00 plus the two Calif. Tax Bills.

Fischer Mfg.-Largest Mfg of Gieger Counters is moving to Texas this Month: Why? Taxes-Labor are much Less.
Outdoor Mfg. is also moving to Texas Same Reason.
50 New doctors are coming to Amarillo-Same reason, They are being Taxed out of the State of Calif.
Check the Rates of Workman Comp being Charged to just the Dairy Farmers Alone.
The small Town of Los Banos Calif. is attempting a "Stoppage of Building Permits" to try to allow the Schools to Catch up. Many Students have to Stand up as the classes are so Crowded.

The Tax people get around Prop 13 by putting Fees on every other item involved.
Check some of the Stats of the movement out of Calif. for other States such as going to New Mexico{Santa Fe for Example}

Back to Usury/regards Leasing- Several years ago some outfits were charging 100 %. Now as far as Cars are concerned the limit on Used Cars in Texas is 24%.
Back in 1972 the Limit in California was 18%

I paid up to 14.5 % on a Fourplex I built in Montana during the Time Jimmy Carter was the President- It went to 21.5% Remember??

The leaseing and Warranty Game by New Car Dealers are at the Max of 24%.

Always remember the Rule of 72.

Skeet/Loreto

Rule of 72?

thebajarunner - 8-30-2006 at 04:23 PM

Pretty close SKeets...
Actually, it is the "Rule of 78" and all it means is you get seriously front loaded on interest on an installment loan, only matters if you intend to payoff early.
No, I am not going to explain it.
Google it, you can muddle through if you are interested.

Baja Bernie - 8-30-2006 at 07:01 PM

I would consider that nothing but fun until they started collecting taxes and then I would follow my Mexican friends

Larry

Baja Bernie - 8-31-2006 at 07:03 AM

What is the world coming to? Pay checks in Baja, the horror of it all. The romance has surely slipped away. :lol: