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Car lease $150 per month $1,000 down for 2 years
- Thread starter RossMAN
- Start date
RossMAN
Grand Nagus
Bah leases are confusing to calculate.
RossMAN
Grand Nagus
<< the harder thing to do is check out PDV of leasing and then making the final paymest vs upfront payment vs buying with large down vs buying with a balloon. hard to do. >>
Leasing confuses me in general but I keep hearing all these great stories about people leasing new 2002 Honda Accord LX V6's for $850 down and $250 a month.
<< Bah leases are confusing to calculate. >>
Yeesh!
That's exactly why I won't touch leases. You're basically paying the depreciation on the value of the car, + interest. In their scenario, based on 3 years and 9% interest, you're paying $11516 (not including local tax) over 36 months on $6890 in depreciation. At the end of the day the dealer can sell this car as an off-lease for $10000 and STILL end up with more than the $20k it was negotiated for. And this doesn't include any penalties you may incur at the end of the lease.
Yeesh 🙂
Also, at the end of the day, you've got nothing to show for it. If you were to buy a less valuable car (the one in the example was $20k) even though it was worth less, once you've paid it off, any value/equity that it still has is yours. Buy an Accord now for $18k and even if it's only worth $5k in 5 years, that's $5k you can sell it for or borrow against.
Leasing is good for some people, though...
bunker
Lifer
Don't think you can get it down to $150 unless you put an insane amount down.
I've leased my last three vehicles and all were pick-ups which have an insanely good residual (resale) value. That is a major factor in determining how much you will have to pay. The lowest I've gotten was a $180/month pymt. on a stripped down Ford Ranger. All my leases were 2 year leases though. You may be able to get a better deal on a 3 year.
I've leased my last three vehicles and all were pick-ups which have an insanely good residual (resale) value. That is a major factor in determining how much you will have to pay. The lowest I've gotten was a $180/month pymt. on a stripped down Ford Ranger. All my leases were 2 year leases though. You may be able to get a better deal on a 3 year.
ThisIsMatt
Banned
<< But I only want a 4 cylinder because of fuel economy and I'm a cheap ass. >>
Now if only we could add smart to the equation. Then you would buy used, or at least go with a loan, not a lease.
bunker
Lifer
<< jzero hit the nail on the head. leasing "is suck." buying is better, and is far and away better if you keep the car. >>
I would disagree. I've done the calculations and I come out fine. Plus I get a new car every two years that is always under warranty.
Sticker on my current truck is 27,500. I'm paying $300 a month which will total $7200 plus the $500 I put down totals $7700. A two year old F-150 according to Kelly Blue Book is worth a little over $20,000 retail (what the dealer will sell it for).
<<
<< jzero hit the nail on the head. leasing "is suck." buying is better, and is far and away better if you keep the car. >>
I would disagree. I've done the calculations and I come out fine. Plus I get a new car every two years that is always under warranty. >>
As I said...it works for some people. The way I see it is that even though you get a new car every couple years and it's always under warranty, you're still not getting anything for your money. No value, no equity.
<< Sticker on my current truck is 27,500. I'm paying $300 a month which will total $7200 plus the $500 I put down totals $7700. A two year old F-150 according to Kelly Blue Book is worth a little over $20,000 retail (what the dealer will sell it for). >>
If the dealer sells it for $20k, you've still donated him $200, but he'll likely sell it for a little more than that. He profits twice, although he profits even more because you'll re-up and lease another one every 2 years.
It's like the difference between owning property and renting it. Renting is a better solution for some people, but in terms of investment sense, owning is a better idea.
BrunoPuntzJones
Lifer
RossMAN I figured you of all people would buy rather than lease 🙂 It's the superior investment decision, plus you get a great deal of satisfaction out of having your own car. Just don't buy a car that isn't worth anything after you pay it off (F bodies :|).
Of course if you can't afford to buy it may be the only option. I just don't like the dealer having me by the balls throughout the lease.
Of course if you can't afford to buy it may be the only option. I just don't like the dealer having me by the balls throughout the lease.
<< I look at it this way. A car (unless we're talking about a classic collectible) is a losing proposition either way. They will always depreciate and you will always lose money whether you buy or lease. >>
That's true, but you lose far more (or gain far less as the case may be) when you lease. When I've paid off my car, it will still be worth $8000, maybe even a little more. I can borrow against the car's value, or I can sell it and have $8000 to put towards another car. When my car is paid off, though, you won't have any equity or value from the payments you've been making. You've been tossing money out the window.
As long as you're aware that you'd be getting far more value by buying/financing the car, if you still prefer the convenience of a lease, then go with it. It works for some people.
<< The way I see it is that even though you get a new car every couple years and it's always under warranty, you're still not getting anything for your money. No value, no equity. >>
Nobody ever retired from the equity they had in a car anyway. If you like to trade every couple of years, and don't drive a ton of miles, leasing is the only way to go.
If you buy a 30,000 dollar car, and it's worth 8 grand (if you're lucky) in 5 years, don't feel like you gained anything.....you paid that 8 grand in interest, and then some.
Likewise, if you buy a 30k car and try to trade it in 2 years, you're most likely 5 grand upside down.
Rule of thumb: if you're definitely going to keep the car long term, buy it. If you trade every 3 years or less, lease. This can vary with some cars, like now with certain domestics that have massive rebates and low interest rates....in those cases, you can buy as cheaply as you can lease...but these are the exception, not the rule.
Nobody ever retired from the equity they had in a car anyway. If you like to trade every couple of years, and don't drive a ton of miles, leasing is the only way to go.
If you buy a 30,000 dollar car, and it's worth 8 grand (if you're lucky) in 5 years, don't feel like you gained anything.....you paid that 8 grand in interest, and then some.
Likewise, if you buy a 30k car and try to trade it in 2 years, you're most likely 5 grand upside down.
Rule of thumb: if you're definitely going to keep the car long term, buy it. If you trade every 3 years or less, lease. This can vary with some cars, like now with certain domestics that have massive rebates and low interest rates....in those cases, you can buy as cheaply as you can lease...but these are the exception, not the rule.
OK it's time to dispell the horror stories that come with leases,
Myth - Leasing is the worst way to buy a car.
Fact - Leasing is the most cost effective way IF you plan on purchasing a new vehicle every 2 or 3 years.
Myth - buying is a cheaper way to go.
Fact - Leasing can be cheaper IF you plan on getting a new car every 3 or 4 years
Myth - Leasing is risky
Fact - there is accually less risk involved with a lease vehicle than a bought vehicle.
RossMan-
If you are looking at getting a car to drive for two or three years AND don't plan on putting more than 15K a year then leasing can be cheaper.
Here's why
Typically your lease payment on a three year lease is LESS than that on the same vehicle financed for 5. After the three years you can walk away, minus any over milage OR damage that is not NORMAL WEAR AND TEAR (the national average is bout 800 paid ON A TURN IN VEHICLE).
Here is where it gets really interesting.
If you lease a car for 3 years (say a honda) after three years and two kids you need a bigger car, You already know the predetremained value of the car so you can.
a. buy it (normally not the best idea)
b. Trade it in for a new car
c. Turn it in
If you buy it you will paid a little more than if you had just bought it outright. But unlike a purchase YOU have the option of walking away from a lemon.
Trade it in - this is normally the best option as most manufactures Give EVEN better lease rates to second lease customers.
Turn it in - just walk away (my company does this)
While you own the vehicle you have some protection that buying just does not give you. Lets say you get in an accident (you are not at fault) the car is not totalled BUT it was in an accident the other insurance fixes the car and then you call the lease company and tell them. Since if a car is in an accident it is value is lower than a NON accident car the insurance has to pay the lease company for the devaluation. Getting this as an owner is ALMOST IMPOSSIBLE. SHOULD THE CAR BE TOTALED the other inshurance pays off the lease (unlike a purchased vehicle where You are burdened with the GAP of value to amount owed).
Of course these thing vary state to state
If you have a multiple problem car (i.e thing keep breaking) then you can get out of it MUCH easier than if the car is owned by you.
Leasing is not the best option for every one BUT it can be a liability SAVIOR If you are one who can truely benifit from leasing.
I recommend IF you lease to extend the warrenty OUT to the lease end, miles and time. NEVER lease more than 3 years and ALWAY BUY DURING A LEASE SALE (ie special rates)
Do the math.
Always do research ask about the lease multiplier. REMEMBER the sales tax is added after the payment INSTEAD if at the sale time with a buy. (the lease payment is 149 +tax) You pay sales tax on the paymnent NOT THE CAR.
During lease Sales when they are offering the best deals leasing can be a very finacially sound choice.
BOTTOM LINE DO THE MATH, and assess your risk and what they are worth.
Consumer reports, clark howard, and many other BUYER ADVOCATES say leasing can be good IF you fit the proper profile (ie milage and abusing your car). ANd I will take those opinions over those of a slew of uninformed and closed minded people on an internet board.(you know who you are) 🙂
Myth - Leasing is the worst way to buy a car.
Fact - Leasing is the most cost effective way IF you plan on purchasing a new vehicle every 2 or 3 years.
Myth - buying is a cheaper way to go.
Fact - Leasing can be cheaper IF you plan on getting a new car every 3 or 4 years
Myth - Leasing is risky
Fact - there is accually less risk involved with a lease vehicle than a bought vehicle.
RossMan-
If you are looking at getting a car to drive for two or three years AND don't plan on putting more than 15K a year then leasing can be cheaper.
Here's why
Typically your lease payment on a three year lease is LESS than that on the same vehicle financed for 5. After the three years you can walk away, minus any over milage OR damage that is not NORMAL WEAR AND TEAR (the national average is bout 800 paid ON A TURN IN VEHICLE).
Here is where it gets really interesting.
If you lease a car for 3 years (say a honda) after three years and two kids you need a bigger car, You already know the predetremained value of the car so you can.
a. buy it (normally not the best idea)
b. Trade it in for a new car
c. Turn it in
If you buy it you will paid a little more than if you had just bought it outright. But unlike a purchase YOU have the option of walking away from a lemon.
Trade it in - this is normally the best option as most manufactures Give EVEN better lease rates to second lease customers.
Turn it in - just walk away (my company does this)
While you own the vehicle you have some protection that buying just does not give you. Lets say you get in an accident (you are not at fault) the car is not totalled BUT it was in an accident the other insurance fixes the car and then you call the lease company and tell them. Since if a car is in an accident it is value is lower than a NON accident car the insurance has to pay the lease company for the devaluation. Getting this as an owner is ALMOST IMPOSSIBLE. SHOULD THE CAR BE TOTALED the other inshurance pays off the lease (unlike a purchased vehicle where You are burdened with the GAP of value to amount owed).
Of course these thing vary state to state
If you have a multiple problem car (i.e thing keep breaking) then you can get out of it MUCH easier than if the car is owned by you.
Leasing is not the best option for every one BUT it can be a liability SAVIOR If you are one who can truely benifit from leasing.
I recommend IF you lease to extend the warrenty OUT to the lease end, miles and time. NEVER lease more than 3 years and ALWAY BUY DURING A LEASE SALE (ie special rates)
Do the math.
Always do research ask about the lease multiplier. REMEMBER the sales tax is added after the payment INSTEAD if at the sale time with a buy. (the lease payment is 149 +tax) You pay sales tax on the paymnent NOT THE CAR.
During lease Sales when they are offering the best deals leasing can be a very finacially sound choice.
BOTTOM LINE DO THE MATH, and assess your risk and what they are worth.
Consumer reports, clark howard, and many other BUYER ADVOCATES say leasing can be good IF you fit the proper profile (ie milage and abusing your car). ANd I will take those opinions over those of a slew of uninformed and closed minded people on an internet board.(you know who you are) 🙂
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