Well said. In San Francisco area here, it has almost gotten to the point that it's dumb to own a car. You just need to pay $40 for a fast-pass and then you can use it for any type of transportation within the city for a whole month. It saves you time, saves you money and saves you headache. Time for a trip? Just give the car rental company a call.
Why? The house is a capital that is typically inflation resistant and the mortgage is a rent to a bank instead of a landlord. Except instead of paying rent, you're getting a house.
but if you want to live in a nice place it will cost you around $1000-1200 a month, I am a generation Y and i will be getting a house
Getting burdened with a house is a hassle. If you can't pay off the entire house with cash at signing, the mortgage, interest rate, maintenance, insurance, homeowners association, sensitivity to neighbor/neighborhood (crime rates, falling prices), suburbs, and more will tie you down. If you want to move to another city or country, you have a lot more stuff to sell as well as worrying about the house itself and selling it at the right price. Renting an apartment in the city might be bad, but ease of mind, convenience and the flexibility to move are too important.
Good idea: buy a car. Pay it off in 3 years. Keep driving it for 12+ more years while banking money. Sell it for a small amount of money. Bad idea: lease a car. Make payments on it indefinitely, never owning it and risking repossession. Never be able to sell it for anything. It's an especially bad idea for this new generation because of all the additional costs, inflation, and taxation that they're about to face.
This is what it's all about now. convenience. The new generation has been deceived into thinking that the convenience is worth the money. It isn't. With time and maturity, the appeal of convenience will fade and financial security will become more appealing. By then, of course, it will be too late.
I think you miss the point. People that are deciding not to buy cars aren't leasing them. They are using other forms of transportation. Obviously if those alternatives are not available or practical, a car may still be necessary. So its more like- buy a car, make payments, pay insurance, pay for gas, deal with accidents (higher rate being in a car than public transportation), have the car depreciate and sell it for a fraction of what you paid. Average car bought in America is 30,000. To pay it off in three years is the equivalent of 833.34 a month. Plus an average of 220 in gas. Keeping the car for 15 years = about 400 a month on gas and car payments. Or- bike and take the metro, pay the monthly fare fees (as low as 30 for students), less pollution, health benefits, saving money.... it doesn't look that bad. If you are keeping your car for 15 years you are spending an average of 386 a month on car payments/gas. This doesn't include insurance and maintenance costs. You can always rent a car when necessary for as low as 10 bucks a day.
I'd rather have a car than not. There's a freedom associated with owning a car. I'm not waiting on mass transit or tied to their schedule. I'm not waiting at bus stops or wherever else instead of just getting in the car and going. There're a lot dumber things people spend money on than cars and houses.
Point taken. But, I didn't say leasing was a good idea. More like car ownership is becoming less and less necessary as alternatives pop up.
It all depends on where you live. Owning a car in nyc is 10x the hassle as compared to taking the bus or subway.
I agree. I'm not the NYC type and doubt I'd ever want to live there (no offense to those who may). I like wide open areas and love to drive.
What's financially secure about buying a house, then losing your job or having it move on you? Renting a house gives more financial freedom in many ways than buying a house because you can be more flexible about future employment opportunities. It isn't just about convenience, no matter how much you may roll your eyes.
