Lease or buy the 05
4/7/04, 07:47 PM
#21
In my opinion, leasing a car is for suckers... the way I see it being beneficial is if you have a business and you can use it as a deduction (in Canada at least)
V10, you make a good point... driving a car into the ground is a good idea as long as you have a good mechanic or can fix it yourself. My parents have kept their cars 13 years on average.
V10, you make a good point... driving a car into the ground is a good idea as long as you have a good mechanic or can fix it yourself. My parents have kept their cars 13 years on average.
4/7/04, 07:57 PM
#22
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Originally posted by akfa@Apr. 7th, 2004, 7:11 PM
i'm just new learning about leases, anyone wanna help me out how u can figure out payments likeif u were gonna lease for 5 years?
i'm just new learning about leases, anyone wanna help me out how u can figure out payments likeif u were gonna lease for 5 years?
4/7/04, 08:16 PM
#23
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i drive way too much for any lease to be worthwhile... id hate to be one of those guys on a 12k per yr lease and have 12k on the car with 4 months left in the year... hmm then what do you do? park it or they bend you over for like 10 cents a mile.
4/8/04, 03:05 PM
#24
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Hey guys, new to the board, big drooling fan of the new '05. Would like to get one but am also debating lease vs. buy. (Which I already know is sketchy and against my conservative financial tendencies.) LeaseGuide.com is a great place for info, I second that recommendation. Not to make my first post a rebuttal, but I think jarradasay's math might be off a bit. Open to additional debate, I am certainly not claiming my calculations are right either.
Assuming that a 3 year old GT would be worth $13,000...
Quote:
"So With the above examples for the buying option 416*36mon=14976. Take that off the price of the car you get 10024, so you have about 3000 dollars equity."
I thought Equity is the difference between your total payments up to time period x vs. what the car is worth at time period x, not what you paid for it three years ago. In this example, after 36 months you have paid out $14,976 for a car that is now worth $13,000. You are already $1,976 in the hole, plus any remaining balance left on the purchase loan, if you have any. But you own the car.
Quote:
"If a lease was, let say 300/mon with 0.0 rate. you would have paid 10800 toward the car. subtracted from the purchase price. leaves 14200 bucks. you owe 1200 more then the car is worth."
In this example, after 36 months you have paid out $10,800 for a car that is now worth $13,000. Assuming this was also the residual value amount you agreed to at lease signing, you are $2,200 ahead cash-wise (not for long, though), but you don't own anything, you have nothing to show for that $10,800 outlay.
As mentioned earlier, the only good lease is the lease that keeps your total cash outlay lower than the current market (or residual) value of the car. After a certain point in time payments to value will cross each other, the key is to return or trade in the car before this happens. This is always a gamble.
Of course leases are rarely 0% APR - they are higher than purchase rates. I'm sure its just that I'm being nitpicky about the example's figures - just checkout leaseguide.com and do your own analysis with your own real world #s and see if you come out ahead or not. Best advice comes from jarradasay also - "If you can't afford it, don't buy it."
Bets on the GT-R's MSRP??? $70K Anyone?
Assuming that a 3 year old GT would be worth $13,000...
Quote:
"So With the above examples for the buying option 416*36mon=14976. Take that off the price of the car you get 10024, so you have about 3000 dollars equity."
I thought Equity is the difference between your total payments up to time period x vs. what the car is worth at time period x, not what you paid for it three years ago. In this example, after 36 months you have paid out $14,976 for a car that is now worth $13,000. You are already $1,976 in the hole, plus any remaining balance left on the purchase loan, if you have any. But you own the car.
Quote:
"If a lease was, let say 300/mon with 0.0 rate. you would have paid 10800 toward the car. subtracted from the purchase price. leaves 14200 bucks. you owe 1200 more then the car is worth."
In this example, after 36 months you have paid out $10,800 for a car that is now worth $13,000. Assuming this was also the residual value amount you agreed to at lease signing, you are $2,200 ahead cash-wise (not for long, though), but you don't own anything, you have nothing to show for that $10,800 outlay.
As mentioned earlier, the only good lease is the lease that keeps your total cash outlay lower than the current market (or residual) value of the car. After a certain point in time payments to value will cross each other, the key is to return or trade in the car before this happens. This is always a gamble.
Of course leases are rarely 0% APR - they are higher than purchase rates. I'm sure its just that I'm being nitpicky about the example's figures - just checkout leaseguide.com and do your own analysis with your own real world #s and see if you come out ahead or not. Best advice comes from jarradasay also - "If you can't afford it, don't buy it."
Bets on the GT-R's MSRP??? $70K Anyone?
4/8/04, 06:27 PM
#25
Leases can be very good, or should I say used to be very good on occasion, for the right driver. If you trade often, like every three years, don't drive a lot and the lease rates are good...relatively speaking..then leasing can be good.
When I sold Volvo's I got a few of my customers into their cars for a lot less money a month than if they had actually bought it with the same down payment. (Keep in mind this was in 98-2000 and interest rates were very different...Volvo's also had no incentives) Generally, these people went into a lease on my advice, virtually always traded every two to three years, and didn't drive a lot......maybe 12-18 thousand miles a year. Frankly, they would have been upside down in the car in three years when they came to trade if they had bought it instead of leased which is why I advised a lease.
However, interest rates were higher then and for some reason Volvo was offering stellar lease rates. Imagine with the same down payment your monthly payment of $620 to buy dropping to like $480 with the lease...some even thought it was an error on Volvo's part. That is less than a purchase payment would be at zero percent interest on the car he bought. But, remember leasing is not as simple as financing either as there are residuals and other things to consider.
You can very easily get burnt on a lease, so be careful. And, with current incentives and low interest financing a lease would have to look awful danged good for me to think about it. Right now I doubt there are many, if any, good leases to be had frankly.
Currently the auto-makers have very little incentive to offer really good lease deals...so they don't. Not to mention they got burnt on occasion with special leases like the one above where they literally would lose a good deal of money on the car so a lot of them don't have fond feelings toward leasing either.
When I sold Volvo's I got a few of my customers into their cars for a lot less money a month than if they had actually bought it with the same down payment. (Keep in mind this was in 98-2000 and interest rates were very different...Volvo's also had no incentives) Generally, these people went into a lease on my advice, virtually always traded every two to three years, and didn't drive a lot......maybe 12-18 thousand miles a year. Frankly, they would have been upside down in the car in three years when they came to trade if they had bought it instead of leased which is why I advised a lease.
However, interest rates were higher then and for some reason Volvo was offering stellar lease rates. Imagine with the same down payment your monthly payment of $620 to buy dropping to like $480 with the lease...some even thought it was an error on Volvo's part. That is less than a purchase payment would be at zero percent interest on the car he bought. But, remember leasing is not as simple as financing either as there are residuals and other things to consider.
You can very easily get burnt on a lease, so be careful. And, with current incentives and low interest financing a lease would have to look awful danged good for me to think about it. Right now I doubt there are many, if any, good leases to be had frankly.
Currently the auto-makers have very little incentive to offer really good lease deals...so they don't. Not to mention they got burnt on occasion with special leases like the one above where they literally would lose a good deal of money on the car so a lot of them don't have fond feelings toward leasing either.
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