Lease a Pontiac GTO for 188/mo ZERO down??

[bolido2000]

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What do you guys think? Is the GTO going for this cheap already??
I wonder what the insurance would be in SoCal

 

[KLin]

read the fine print, it's only 188 for the first 12 months, 238 for the last 12 months.


EDIT: ok, it says 535 due at signing.

 

[EvilYoda]

Wow, that's pretty damn good, but I wonder what qualifications you have to meet in order to hit that number. I already got a pretty good deal at $229/mo including tax, after $999 down including sec. deposit and first month's payment.

Averaged out, that's probably a few bucks less a month than me, but also with $464 less at signing.

 

[Pacfanweb]

That's awfully cheap for a lease payment on a 33k car. I wonder what interest rate and residual they're using?

A typical car of that price should lease for closer to 400 bucks a month, I'd think.

 

[EvilYoda]

Well, I got the EDS/GMS discount, so I assume that you have to qualify for that at least...and maybe a lease-turn in or something too.

 

[Eli]

Isn't leasing a car kinda like throwing your money away? lol.. You don't own anything at the end..?

Can someone explain a situation where it is cheaper and beneficial?

 

[FrustratedUser]

That's pretty sweet.
Isn't it?

 

[Pacfanweb]

Originally posted by: Eli
Isn't leasing a car kinda like throwing your money away? lol.. You don't own anything at the end..?

Can someone explain a situation where it is cheaper and beneficial?

Yep.
Let's say that for whatever reason, you've decided that you are always going to drive a new car, and will always budget for a payment, and you'll trade it about every 2-3 years.
So, if you buy the car and try to trade it 2-3 years later, you will get burnt on the trade. Without a BIG downpayment, almost no car will be worth what you owe on it for the first 3-4 years.

So, as long as you don't drive the car a ton of miles each year, you are the perfect candidate for a lease.

With a lease, all you are paying for is the amount of the car's value that you use up during the term of the lease, plus interest on that money. So when the lease is done, all you do is turn the keys in and walk away. And you're free and clear to buy/lease another car outright, with no trade hassle.

How a lease works, really simply:
Car MSRP is say, 20k.
They estimate the residual, which is what the industry or bank thinks the car will be worth two years from now, with whatever miles you are contracting for. Normal wear and tear is accounted for.
So, let's say the residual is 50%. That means that they think the car will be worth 10k at the end of the lease.
You negotiate a sale price of 19k. That means you are using 9,000.00 of the car's value in 2 years. They add 2 year's worth of interest to that, and divide it by 24 months....there's your payment.

Note that whatever that amount comes out to with interest, tax, tag, etc., you will end up paying the same amount over that 24 months, whether you do it in 24 payments, or pay 2,000 down and divide the rest by 24.
So it makes absolutely no sense to pay a bunch of money down at the beginning of a lease. You're better off to keep your large downpayment in the bank and make a higher payment.....the final amount that you pay is the same either way.

 

[Babbles]

Leasing is cheaper and beneficial when you have more liquid money and you do plan on getting a new car after two or three years. If you finance it then you are basically paying for years you will not actually have the car if you do trade it in after two years. If somebody wants a new car every couple of years, then not actually owning the car is not important to them.

So many people on this forum are eager to talk down about leaes, but the leases make sense for some people.

 

[vi edit]

Originally posted by: Pacfanweb
That's awfully cheap for a lease payment on a 33k car. I wonder what interest rate and residual they're using?

A typical car of that price should lease for closer to 400 bucks a month, I'd think.

That's kinda what I was thinking too. The *only* thing I can figure is that these are demo cars with a couple thousand (or more) miles on them. Most people looking at buying GTO's/Corvette's/Ford SVT vehicles/or just about any other prestige performance vehicle want it brand spanking new. The only miles they want on it are what it takes to put it on the truck and then onto the lot.

I know the GTO sales are pretty abysmal so a used and abused demo car would be even less desireable. Maybe they're just trying to get some money out of them then dumping them on the used car market afterwards in hopes that it's more favorable than what it is now.

 

[thomsbrain]

Originally posted by: Eli
Isn't leasing a car kinda like throwing your money away? lol.. You don't own anything at the end..?

Can someone explain a situation where it is cheaper and beneficial?

yeah, basically like pacfanweb says: if you "have" to have a new car every two years, and you're too lazy to sell the used ones on your own, then leasing is cheaper. if you drive your cars until they get old, buying is cheaper every time.

 

[Eli]

Ahh.. So basically it's only beneficial if you're one that wants a new car every few years?

Wow, interesting. I don't think I could ever go for that.

I'm more of the "spend 2-5k on a car and drive it until it's dead" type .. lol

If you're lucky, that can be quite a few miles with nothing but routine maintenance costs.

 

[Ronstang]

A car lease is always a losing proposition. Car companies don't want yout to know that and the prices seem too good to be true because they are. Read the fine print and the conditions. They draw people into leases because with the price of new cars many cannot afford one but the lease deal is made to look affordable.....at least on the frontside, but you have no asset when the period is over and it is highly likely with their low mileage limits you may be parking it in your garage for the last year you are paying for it to avoid a panalty.

 

[vi edit]

Originally posted by: Eli
Isn't leasing a car kinda like throwing your money away? lol.. You don't own anything at the end..?

Can someone explain a situation where it is cheaper and beneficial?

Pacfanweb gave a pretty good description. But basically it just comes down to individual preference. There's a significant number of people out there that SHOULD be leasing but aren't. These are people that trade in a car every 3-4 years and take a bath when it comes to resale/trade in prices.

If you want a different car every 3 or so years, do yourself a favor and lease. Assuming you aren't doing a massive amount of traveling.

Obviously buying a low milage used vehicle and driving it into the ground is the most financially responsible move. But lets face it. We don't always make, or care to make, the most intelligent choices with our money. If you can afford to get a different car every three years, then more power to you. If you can afford to do that, leasing is the smarter choice.

 

[Pacfanweb]

Originally posted by: Ronstang
A car lease is always a losing proposition. Car companies don't want yout to know that and the prices seem too good to be true because they are. Read the fine print and the conditions. They draw people into leases because with the price of new cars many cannot afford one but the lease deal is made to look affordable.....at least on the frontside, but you have no asset when the period is over and it is highly likely with their low mileage limits you may be parking it in your garage for the last year you are paying for it to avoid a panalty.

You need to read my earlier post. What you are saying here is not correct.
It COULD be correct, in certain cases, but those cases have to involve stupidity on the part of the customer.
As far as "having no asset when the period is over", you don't have any asset during the first 3 years of a regular car purchase, either, on 99% of all cars. The car is always worth less than what you owe, unless you put a large amount of $$$ down, and if you did, you're still losing that money.

Leasing certainly is the best option for someone who trades frequently, as long as they don't run up a lot of miles.

 

[Pacfanweb]

One more thing about folks who think you actually "own" a car when you've purchased it conventionally with a bank loan:

You don't have a damn thing for the first 3+ years. If you buy most any vehicle, finance it for 5 years or more like most people do, then for the firs 3 or more years, under no circumstances is your car worth more in trade (or for sale outright) than you owe on it.

Even if you are a dealership employee, and get the car for less than invoice AND get whatever rebate there is at the time, during that first 2-3 years, you are stuck. If you sell the car, you won't get what you owe, more often than not.

Putting a large downpayment makes no difference, either....you're still out that amount of money, whether you paid it at the time or purchase, or when you sold the car for less than you owe.

So again, for many people, leasing is the best option. Just do the research to see if you are one of those people.

 

[Ronstang]

Originally posted by: Pacfanweb

Originally posted by: Ronstang
A car lease is always a losing proposition. Car companies don't want yout to know that and the prices seem too good to be true because they are. Read the fine print and the conditions. They draw people into leases because with the price of new cars many cannot afford one but the lease deal is made to look affordable.....at least on the frontside, but you have no asset when the period is over and it is highly likely with their low mileage limits you may be parking it in your garage for the last year you are paying for it to avoid a panalty.

You need to read my earlier post. What you are saying here is not correct.
It COULD be correct, in certain cases, but those cases have to involve stupidity on the part of the customer.
As far as "having no asset when the period is over", you don't have any asset during the first 3 years of a regular car purchase, either, on 99% of all cars. The car is always worth less than what you owe, unless you put a large amount of $$$ down, and if you did, you're still losing that money.

Leasing certainly is the best option for someone who trades frequently, as long as they don't run up a lot of miles.

Yeah, I guess you are right, but in the early days of this marketing ploy I watched a lot of friends get totally screwed because a lease was all they could afford.

 

[vi edit]

Note that whatever that amount comes out to with interest, tax, tag, etc., you will end up paying the same amount over that 24 months, whether you do it in 24 payments, or pay 2,000 down and divide the rest by 24.

Maybe it varies by state. But I think that in Iowa at least, you only pay sales tax on the payments.

So, in your example:

9000/24 = 375

each month you pay sales tax on that payment so on $375 you'd pay about $22.50 in tax (at 6%). Over the length of the lease you would end up paying $540 in sales tax.

If you were to purchase you'd have to pay $1140 up front (assuming no trade in to lower taxible amount).

 

[Eli]

Originally posted by: Pacfanweb
One more thing about folks who think you actually "own" a car when you've purchased it conventionally with a bank loan:

You don't have a damn thing for the first 3+ years. If you buy most any vehicle, finance it for 5 years or more like most people do, then for the firs 3 or more years, under no circumstances is your car worth more in trade (or for sale outright) than you owe on it.

Even if you are a dealership employee, and get the car for less than invoice AND get whatever rebate there is at the time, during that first 2-3 years, you are stuck. If you sell the car, you won't get what you owe, more often than not.

Putting a large downpayment makes no difference, either....you're still out that amount of money, whether you paid it at the time or purchase, or when you sold the car for less than you owe.

So again, for many people, leasing is the best option. Just do the research to see if you are one of those people.

Yeah.. I understand that you don't own anything at least. I was going to say "Even if it's only worth 40% of new when it's finally yours, that's still more than when leasing." But I can understand how it can work for some people. I don't look at cars like that, though.

I treat my automobiles like people. They have personalities.

 

[bolido2000]

Originally posted by: Eli
Ahh.. So basically it's only beneficial if you're one that wants a new car every few years?

Wow, interesting. I don't think I could ever go for that.

I'm more of the "spend 2-5k on a car and drive it until it's dead" type .. lol

If you're lucky, that can be quite a few miles with nothing but routine maintenance costs.

If you own a business, you can lease a car and write off the tax (something like that). That is another big reason people lease. Plus the fact the smaller downpayment that you have to make up front (or even zero).
Another reason I've read is that with VERY expensive cars you can save some money because you only pay tax on the payments and not on the total value of car. Like others said, it makes no sense to put a large payment upfront for a lease, especially because if the car gets stolen or totalled the insurance won't cover that amount. However, when you buy a car is preferable to do so because otherwise you are also financing the tax of the vehicle. Unless you got 0.0% APR.

 

[Pacfanweb]

Originally posted by: Ronstang
Yeah, I guess you are right, but in the early days of this marketing ploy I watched a lot of friends get totally screwed because a lease was all they could afford.

The key in that situation was, your friend couldn't afford that car to begin with.

 

[Babbles]

Pacfanweb has made the best arguements here for leases. Like I said earlier, AToT has a hard-on for trashing leaes however they are more than acceptable for many people.

 

[RU482]

check out how many GTO's they have in inventory
~20...they better be trying to move them

EDIT:
Even worse...look how many Assteks they have in stock

 

[vi edit]

Good grief. I've got about $2500 in GM points whisping sweet nothings in my ear about this :

That'd cover the down payment.