Thursday, January 21, 2016

Job Tips: Should I Lease A Nice Car

Today we have an open question from reader without a lot of background information:  "Should I lease a nice car?" Of course, most of you will give the standard lawyer answer of it depends, unless we give you more facts, so less ask more specific questions. Should anyone lease vs buy? Does a lawyer need a nice car as part of the job? Does a first-year associate need a nice car? Who is the car impressing? What is it compensating for? What do you think?

51 comments:

  1. Leasing is a financially poor decision. But since you made the choice to go to law school, you're accustomed to those.

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    1. Well, there's that. Excellent point. Sure, let's compound the problem. Why not?

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  2. If you are not in a position to write it off as a business expense, then definitely not. If you are not in that position, then you are likely not in a position in which you "need" a nice car for purposes of image.

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    1. Isn't it increasingly difficult to write off a "luxury" car lease as a business expense? How do you do it?

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    2. 8:08 here. I don't because I drive a non-luxury car that has been paid off for some time.

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  3. Buy a car. Do not lease. Buy American. No foreign junk.

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    1. American cars are garbage. That's all I drove for 15 years. Then I bought a "foreign" car and it was the first time I realized that interior parts/electronics were actually expected to last longer than 2 years.

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  4. Do whatever the hell you want. It's only money.

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  5. I'm about to finish my second two year lease. I was open to buying or leasing and the dealership offered a much better deal on leasing than buying. So I guess the answer depends on the particulars of whatever deal is being offered at the time and what you can negotiate. I must say there is something nice about having a new car every two years and never having to take the car in for repairs (beyond oil changes). But I don't have a "nice" car just a domestic sedan.

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    1. Leasing is never a "better deal"

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  6. If you can't pay cash, you can't afford it. Leases are a ripoff.

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  7. No one really answered the image question. My former employer, the managing partner told me to return the car because it gave the impression to the other employees he paid me too much. Far from the truth. Depends on your clients of course. Do you take them out?

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  8. As a practicing bankruptcy attorney, I regularly see real estate agents, loan officers, and other similarly situated individuals in sales-type jobs come in because of substantial debt. One thing that surprises the hell out of me is the $820 car note on a 3-series BMW for the husband and a $600 car note on a Lexus SUV for the wife. Why the hell someone ever thought they 'needed' $1,420.00 in car payments is beyond me.

    If your current car is costing you more to repair on a regular basis than a new car lease or purchase will cost you, then by all means trade in the beater and get a new car. If your boss is pushing you to get a new car because it doesn't comport with "the firm's image" that's because he or she wants to put you in golden handcuffs so you can't ever leave him/her as an employee.

    If the question is 'should I lease or buy', the reason you lease is because it is a deductible business expense (not available to a non-owner associate employee) or because you can't afford to buy the car. If you can't afford to buy the car, then you shouldn't be buying it.

    Saturday Night Live explains it best: http://www.nbc.com/saturday-night-live/video/dont-buy-stuff/n12020

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    1. Loved the SNL clip. I've worked at a firm with reserved parking for the partners so it's clear what they all drove... everything from a Chevy to a Porsche. It seemed to me that it was more important to buy a car that worked for them and their families - not what a client might think.

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  9. I am a 5th year associate. I drive a total piece of shit. My car blue books at about $1100 right now, but it never breaks down. Here's my calculus: (1) If you can't afford to pay cash, don't buy it. (2) If you can't afford to "go big" with a nice car, go ironically shitty. No one is going to be impressed that you drive a new Honda Accord. (3) While image matters, it's often overstated. My image is affected more by (a) the quality of my workproduct/outcomes for clients; (b) how I treat others; and (c) how I network. I get referrals because I'm good at my job not because of what I drive. (4) I love driving down the road knowing that almost no one has a higher income-to-car value ratio. Mine is well into three figures. When I have to meet people for the first time, I just park far away. Anyone that already knows me knows that I make great money for a 5th year and thinks that my choice of car is ironically hilarious.

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    1. Sounds like you should move to Portland and put a bird on it.

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    2. ^^^ 10:19 Here. Would you believe that I'm a Portland native? AND... the 90's were best!

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    3. Ha. Now that is ironic. Having lived there for 5 years, your mentality made me think Oregonian. Agree with your 10:19 post completely.

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    4. I stand by 10:19's comments. I had the highest income-to-car value ratio for the longest time, and I loved it.

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    5. Why would anyone want to work hard to make good money, and then decide to be ironic instead of just getting a car they actually want to drive. There is nothing ironic about leaving you office at 9:00pm after putting in a 14 hour day preparing for trial only to have to drive home in a POS. That's just sad.

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    6. "Why would anyone want to work hard to make good money, and then decide to be ironic instead of just getting a car they actually want to drive."

      OP here (10:19).

      Great question, even if it was intended otherwise.

      There are a million better places to put the money, that's why. I still have student loans. I want to save money so that my kids have a chance to go to college without taking on crushing debt like I did. I want to save for retirement. I am young. Every dollar that I spend today on a car has a massive opportunity cost in my future.

      I am not against owning a luxury car. Maybe, some day I will. I won't buy one, however, until my law school loans are repaid, my kids college is paid for and my retirement is secured.

      I'm still relatively young, but I am old enough to know what really makes me happy. My kids make me happy. My wife makes me happy. Yesterday, when I was driving to work, I had my sunglasses on, it was a beautiful day, I had a DDP in my hand and a great 90's song came on the radio and I sang along. That made me happy. Things don't make me happy. I won't be happier driving a Benz or a BMW. I won't be happier wearing an expensive suit. But I will be happy tomorrow when I play Legos with my kids (I'll admit that I DO spend a lot of money on stuff like that).

      Driving my piece of shit gives me freedom to enjoy the things that really matter in life and to provide security for myself and my family into the future.

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    7. so you're not being an ironic Oregonian. you just decided that spending your money on other things is more important. totally understandable.

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  10. When I was at a big firm, I always thought it was humerus when brand new associates bought striver entry level Benzes or BMWs. But it's their money so whatever makes them happy I guess.

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    1. I always thought it was ulna but everyone arms themselves differently in this profession.

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  11. @10:03a here - I enjoy it when new associates, new real estate agents, new loan officers, new shoe salesmen, etc buy expensive cars they can't afford it - more business for me.

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    1. When I did consumer bankruptcy, every client had a better car than me. That said, I have to admit appearances matter. If you get pierced and tatted, you send a message just as much as when you comb your hair and put on a nice suit. People will judge.

      So, drive something nice. I am seriously thinking of finally abandoning the car I have had for almost 15 years.

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    2. Or a truck. Born/Raised in Texas. I've driven extended cab & super crew trucks for the past 20-25 years. I can't fathom driving a two door or four door car, except for entertainment. A two door or four door car towing my ~20 ft ski boat looks really funky anyway.

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  12. Just like how you take care of your appearance and, I think, even more so than how you keep your office, how you take care of your vehicle is far more important than the type of car you drive. You should have a car that is in good mechanical and cosmetic condition, and clean enough, that if you need to give a client, a partner, or a potential referral source an unannounced ride to the airport you can do so without having to throw your dirty clothes into the trunk in front of them. A clean and smell-free, eight year-old Toyota Camry is far better than a one-year old BMW Pig Pen.

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  13. I like my car. I was raised to not trust turds who drive fancy cars.

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  14. Unless you can write it off, leasing is usually a bad deal for all of the reasons mentioned above. The one that hasn't come up is mileage. If you drive more than 10-12k per year, it is an especially bad decision to lease.

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  15. If you're thinking of buying/leasing a luxury car for "image" you're giving too many [very expensive] f*cks to all the wrong people.

    The Subtle Art. Know It. Live it. Love it.

    http://markmanson.net/not-giving-a-fuck

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  16. Its the same for cars and clothes:

    If you're just a baby lawyer, drive and wear whatever you can afford, but keep it clean and smelling nice.

    If you've been out more than 5 years, you need to start looking the part. If you drive a piece of crap and/or wear ill-fitting or outdated threads, you will appear sloppy and/or unsuccessful, which is a turn-off to most clients/potential clients.

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    1. If you drive a piece of crap and/or wear ill-fitting or outdated threads, you will appear sloppy and/or unsuccessful, which is a turn-off to most clients/potential clients..

      Hey, I resemble that remark!

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    2. Hey, I am a good enough attorney that it does not matter what I drive, or what I wear. You all who are concerned about appearances probably cannot even pay your bills.

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  17. If you can afford it, then do whatever you want. Also understand what kind of buyer you are. If you understand you will always have a car payment, then lease as you get more bang for your buck. The lease is always cheaper because you are only paying for part of the vehicle, which is why a lease has a residual value. If you own your own business you should also lease. You get to deduct the entire payment, whereas if you purchase you have to take a depreciation on the vehicle and you essentially can't "write off" as much. In simple terms - if you like a new car every 2 or 3 years, then lease. If you keep your car for ever, then buy a used vehicle.

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    1. This is the best response in the thread, AINEC.

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  18. I read all these comments but when I go to court I see all the prestige autos that many new attorneys are driving. I just bought a new car and chose something utterly conventional and reliable instead of prestige name plate. I saved about 10 to 15 thousand doing it this way. There are no cheap new cars for anything decent. Most new cars sticker out in the $30s for a decent amount of options.
    Leasing a car is nothing more than a perpetual car payment. It makes sense if you can write it off or if the firm provides it. I like new cars because you have warranty and lemon law protection. Nothing worse than car problems. Most used cars have issues.

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    1. What firm provides a car, other than farmers?

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    2. That is right, you are paying insurance premiums, so they can deny your claim, attorneys get a free car to drive in, you can file a law suit, and get yelled at by the judges, because you filed a legitimate law suit. Ah, the vicious cycle.

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  19. Yes, you have to be concerned. When I was a mid-level associate, I was entrusted to argue a high-stakes motion. When I picked up the client at his hotel that morning driving a little piece of shit, he was visibly concerned and asked "when did you graduate?"

    BUT, you need only enough car to show that you did not graduate yesterday and have been steadily employed. A well kept 5-to-10 year old sedan fits the bill. You also can get a Passat for $200 per month.

    Or you could drive a Prius. For all anyone knows, you're doing it out of principle. Wealthy people drive them to. Similarly, if you can't afford a $10,000 watch, wear a fitbit.

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  20. When I was about a 5th year associate I had to drive out-of-state co-counsel from a 1000-plus attorney firm to the airport in my Hyundai. I immediately updated to an used Acura. As much as I hate it, I do believe this is a profession where you need to portray you have had some success. And, I would go forgo an entry level luxury vehicle in favor of a used higher model or a new higher model without all the bells and whistles.

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    1. I hear a rolled-up pair of tube socks with also help with this situation.

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  21. I'm at the end of my first three year lease. I have a luxury car because I actually wanted that car, not to impress others or to get a tax write-off. I like sitting on leather and heated/cooled seats are pretty damn awesome. I leased because I wasn't willing to pay $850 a month for 6 years. And if you really think about it, I could have bought my 2013 and kept it for a good ten years (probably the limit without having to make significant repairs), or, the better option, I can have a new car every three years for the same friggin' price. I'll continue with the lease option!

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    1. Pleasure is a legitimate consideration.

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  22. Carmax. Carmax. Carmax. Best warranty deal, never buy new and you don't have to worry about the miles like you do on a lease. I got screwed first car I bought out here and then went to carmax the next time around and they see me every four or five years. I swear by them.

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    1. CarMax seems overpriced. When I bought my last car, I priced out what I wanted at CarMax. With a general price range in mind, I then looked at local car dealers and found the car I wanted for about $5000 less than Carmax pricing.

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  23. I'm a first year associate and I bought a 2 year old American muscle car. Do I regret my decision no? Was it financially responsible? Probably not but I don't car. I was embarrassed about my old piece of junk.

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