I bought a crv in 07, traded it in for a Pilot in 09. Now we are thinking of getting an MDX, but someone suggested that if I am going to be changing cars again, why not lease it. So I was looking at leasing numbers and it does seem cheaper to lease it(560 vs 730 per month). Should I go that route. What should I look for when trying to lease a car? Should I haggle for the selling price just like buying a car? Also I see all these offers for qualified buyers, any idea what is the benchmark score for a qualified buyer.
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Lease vs buy
- Thread starter tornadog
- Start date
IIRC, you don't get money back after the lease.
lease:
560/mo * 12mo * 5 years = $33,600 cost
buy:
730 * 12 * 5 = $43,800
then you sell the car
-$15,000 ??
= $28,800 cost
I guess it depends how good you are at selling cars. Do you get the most out of people or are you the type of guy who can be negotiated down? Do you want to deal with the hassle of selling this car every 5 years or would you rather have the dealer take it off your hands without much hassle?
Meghan54
Lifer
If you plan on having a car payment always, plan on trading every 3 years, can live with whatever mileage restrictions you sign up for, then leasing is probably good for you.
And just like with buying, everything in a lease is negotiable....mileage allowance, residual, etc.....but every concession the dealer makes will cost more.
And just like with buying, everything in a lease is negotiable....mileage allowance, residual, etc.....but every concession the dealer makes will cost more.
JulesMaximus
No Lifer
$730/mo for a car payment? Holy crap!!! Remind me not to buy a new car ever again.
Not out of line for that car. My Outback is $534.
Now that I am closer to work, I plan to lease. The payments are two-thirds of buying, and no worries about being upside down at trade in time.
If you drive less than 12k miles, leasing a car is really pointless because the car doesn't need to be replaced after 5 years. What a total waste of money.
So basically the expectation is that you pay $30,000 to borrow a car then not use it? That's like renting a movie and not watching it.
Ok I thought of something. Instead of renting shitty cars every 5 years, how about buy a really damn awesome car and keep it for 10 years? Instead of a Civic for 5 years, you get a V6 Accord for 10 years. Instead of a pedovan, you get a 3/4 diesel truck with a canopy 😀
Even five years is a long time to keep a car. With all the salt they put on roads here I won't keep a car more than three winters. Sell it before it rusts and the value plummets.
That's the downside of leasing. It forces you to keep a car for three years.
the DRIZZLE
Platinum Member
Oh come on. You certainly don't NEED a new car every 3 years. I live in the snow belt and have put very little into my car in 7.5 years and 82,000 miles. The maintenance cost to keep a car on the road in first 100k/8 years is at most $1000/year. If you WANT a new car that's something else.
Doppel
Lifer
I've mentioned to this before to you and I agree the rust becomes a problem (though only the sh*tiest of cars will show any door panel rust within 3 years, that's really unheard of nowadays). However, it's inviolable that the depreciation of a car slows as time goes on. You are paying a premium to replace the car every three years after you've already lost value at the fastest rate it ever will lose it at.
DominionSeraph
Diamond Member
Financing $43k at 4% for 60 months will give you a payment of $792/mo. At the end of 36 months (the same as the lease period), you'll have paid $24,737 and you'll still owe $18,263,
With the lease you'll pay $19,600.
So you're paying $5000 more over the same period to buy. Now the question is, will the MDX be worth more than $5000 over what you still owe? (so will it be worth more than $23,263?)
A base 2009 MDX with 36k miles looks to have has a trade-in value of $28500 excellent/$26800 good. So if the same holds for the 2012, buying will end up being $3500 less at the good price and $5200 less at excellent. Buying also gives the option to hold onto it for longer, saving more money.
How does sales tax work where you live? That can also be a rather large issue. In some states you pay sales tax on the entire vehicle cost when leasing. When that happens, since you don't get to use it as a trade-in you don't get to pay down the sales tax on the new car. 'Round here a $26,800 difference in car price is worth $1620 in tax.
With the lease you'll pay $19,600.
So you're paying $5000 more over the same period to buy. Now the question is, will the MDX be worth more than $5000 over what you still owe? (so will it be worth more than $23,263?)
A base 2009 MDX with 36k miles looks to have has a trade-in value of $28500 excellent/$26800 good. So if the same holds for the 2012, buying will end up being $3500 less at the good price and $5200 less at excellent. Buying also gives the option to hold onto it for longer, saving more money.
How does sales tax work where you live? That can also be a rather large issue. In some states you pay sales tax on the entire vehicle cost when leasing. When that happens, since you don't get to use it as a trade-in you don't get to pay down the sales tax on the new car. 'Round here a $26,800 difference in car price is worth $1620 in tax.
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not every vehicle leases out the same...
we lease a pickup for our business. 32k dollar MSRP ford leases out at 600/month. 31.7k dollar MSRP toyota leases out at 315/month -> same out of pocket up front, same lease term
Doppel
Lifer
Yep, the rates definitely do vary hugely depending on vehicle, and even depending on when it's done. An example I keep belaboring is a third gen Prius. About a year ago it could be leased at $200/month, now the rates are about $300/month. All has to do with the money factor (interest rate) and then the difference between final purchase price and depreciation, but leasing cars with high resales is more attractive than those with less, due to less money depreciated over the term.
Yeah, I understand it's rare to charge full purchase price tax on a lease, but some states do that and it's pretty nasty for a leasee. On the other hand if you're in a state that doesn't do that AND that state has a high tax rate, you can potentially save a lot leasing vs buying simply in taxes. For example if your tax rate is 7% and the car is $22,500 with $16k residual your taxes are $455. If you bought it they'd be $1575. Now if you bought it and then after three years got rid of it that $1100 was totally flushed down the toilet! On the other hand if you do end up buying it at end of lease term you'll have to pay the remaining tax 😉
+1
I'm on year 10 with my van with 192,000 miles on it....and apart from regular maintenance and normal ' wear and tear ' items ( tires, belts etc. ) the only somewhat minor ' atypical ' repair I've had only occurred the past 6 months or so ....bad ignition coil, a dead rear wiper motor and a worn sliding door roller....that's about it.
And speaking as somehow who drives in the salty brine crap they use up here in the winter, so long as you stick with the manufacturers' recommended maintenance schedule ( as a minimum I might add ), just rust-proof your vehicle & wash it regularly in the winter and a vehicle should last for at least 12 years / 200,000 miles in my view without any significant ' atypical ' repairs IMO.
When you consider most folks will drive cars for as much of 60 years of their lives, buying ( instead of leasing ) and holding on to it for about 200,00 miles makes a lot more financial sense ( i.e keeping costs of ownership to a minimum over 60 years ) than leasing a new vehicle every 3 years ( 20 times over 60 years ).
Gibson486
Lifer
Hahahha....even $500 a month is "Holy Crap!!!!!"
Gibson486
Lifer
Agreed. As break happy as my 07 Mazda3 has been, the cost to fix it is no where near the cost of buying a new car. Heck, if I have to replace my transmission, it would still come out to less since I have not had car payment for the last year and a half.
I would hate to drive six vehicles during my life.
no doubt...
I am early thirties, and I think I have had 9 or 10 already.
I have a list of at least half a dozen that I would like to own in the not too distant future
boomhower
Diamond Member
If your going to be getting a new car every three years, drive within the allotted mileage range, and don't like haggling then leasing may be for you. Personally I don't care for it but I'm cheap and tend to keep cars for a long time. I recently got rid of my new car I bought a year ago and went back to driving an old car.(did cash for clunkers and actually came out a head, bought for $9.7k and sold for $10.3 after 15k miles) I have found that I hate having a car payment.
I'm 32 and I'm on my 5th....
JTsyo
Lifer
So far I've driven the same car for 10 years but I'm considering leasing my next one. What I want is a good plug-in hybrid but it seems it might be a few years before one with the performance I'm expecting comes to be. So I'm thinking a 3 year lease might hold me over until new models come out. I'll hold my current car until it dies or I need to take my kids in it regularly.
5th NEW car or just 5th car?
I can't imagine having 5 new cars at that point unless you're also including your wife's cars. That's over 100k just on cars.
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