Lease or Buy

[bofa]

Good question. I doubt there's any link between the dealership and the lender once the paperwork is done, at least until its time to turn it in.

Man I remember the days I used to be paranoid about my warranty (Grand Am GT... I know I know, terrible decision). It had an awful electronics problem, 13 alternators in 11 months kind of bad. Every time I took it to the dealer i'd have it dropped off in their lot and swap out the intake for the stock airbox that I kept in the trunk... good times.

[markitect]

I've bought out my leased car, and I didn't loose any money.


I qualified for a 0% lease, but buying would be 2.9%. So after 3 years I bought it off for the original price minus all my payments. I bought it with a 5.25% 3 year loan (which I ended up paying off early), but even if I had paid the loan though the term I still would have saved some nice money.

[dalli]

So, If i took a 2 year lease @ around 300 dollars a month

I would only waste $7200~$8400 ? for having a new car for 2 years in my hands?

[tranzformer]

Originally Posted by dalli

So, If i took a 2 year lease @ around 300 dollars a month

I would only waste $7200~$8400 ? for having a new car for 2 years in my hands?

Depends if you also need to put money down at the time of the lease.

[dalli]

Originally Posted by tranzformer

Depends if you also need to put money down at the time of the lease.

Is this smart for me to do If i already have lets say close to 10k cash already?

Just lease it?

Are we allowed to change rims + lower it?

EDIT:

Actually nvm, I do not want to lease it haha

[RRnold]

Originally Posted by markitect

I've bought out my leased car, and I didn't loose any money.


I qualified for a 0% lease, but buying would be 2.9%. So after 3 years I bought it off for the original price minus all my payments. I bought it with a 5.25% 3 year loan (which I ended up paying off early), but even if I had paid the loan though the term I still would have saved some nice money.

Did you have to put anything down to get that 0%? You mentioned that you bought it at the original price minus the payments. So that means you paid MSRP for the car?!?

[Want.FR-S]

Originally Posted by markitect

I've bought out my leased car, and I didn't loose any money.

I qualified for a 0% lease, but buying would be 2.9%. So after 3 years I bought it off for the original price minus all my payments. I bought it with a 5.25% 3 year loan (which I ended up paying off early), but even if I had paid the loan though the term I still would have saved some nice money.

Wow, you have a good deal with 0% for leasing. In your case, that is a bit different. Typically the rate for leasing is higher than the rate for financing, and hence the *money* wasted because of interests. If you are going to own the car, why not searching for better rate on borrowing, or just buy it with cash to save the cost of borrowing.

[bofa]

That was my point earlier - if the money rate (aka interest rate for a lease) is mathematically less than the best finance rate you can get, the lease is not such a bad deal and gives you a 3 year "out".

On the flip side, if the money factor is higher, fees are outrageous, you know you can't keep it under mileage, you intend to heavily and irrevocably modify the car, or your car has so many dings after 3 years it looks like a golf ball, you should probably pass.

[1660]

Leasing came about so businesses could write off 100% of the car expense. AT that time the IRS made it difficult to depreciate and expense a car for business use, especially if the car was valued at more than $20,000. The IRS came up with the ruling that a lease could be expensed 100%. It became easier for businesses to lease than deal with IRS scrutiny.

Non-business leasing became popular because you could get a nice car with low monthly payments.

In any case, leasing is expensive and in the end, you don't have any equity in the car.

[Laika]

Leasing a car is like having a long term relationship with a prostitute. You'll pay a lot of money and at the end you'll have nothing to show for it. Except maybe syphilis.

[RRnold]

Here is a good read when weighing the decision to either lease or buy or lease to buy.

http://www.leaseguide.com/lease03.htm


Just a Comment on Lease-to-Buy Plans

Some people lease with the intention of buying their vehicle at the end of the lease, or before the end of the lease. It allows them to start out with lower payments by leasing and then buy the car at lease-end with a used-car loan. This is nearly always more expensive in the long run than simply buying outright. However, you may have a good reason for this tactic.

[markitect]

Originally Posted by RRnold

Did you have to put anything down to get that 0%? You mentioned that you bought it at the original price minus the payments. So that means you paid MSRP for the car?!?

Originally Posted by Want.FR-S

Wow, you have a good deal with 0% for leasing. In your case, that is a bit different. Typically the rate for leasing is higher than the rate for financing, and hence the *money* wasted because of interests. If you are going to own the car, why not searching for better rate on borrowing, or just buy it with cash to save the cost of borrowing.

Goes to show that buy and lease doesn't matter, what matters is the terms. I technically paid MSRP, but I also paid no interest on a large part of the cars value. I calculated it at the time, and it was my best option.

[Want.FR-S]

Originally Posted by bofa

That was my point earlier - if the money rate (aka interest rate for a lease) is mathematically less than the best finance rate you can get, the lease is not such a bad deal and gives you a 3 year "out".

On the flip side, if the money factor is higher, fees are outrageous, you know you can't keep it under mileage, you intend to heavily and irrevocably modify the car, or your car has so many dings after 3 years it looks like a golf ball, you should probably pass.

Originally Posted by markitect

Goes to show that buy and lease doesn't matter, what matters is the terms. I technically paid MSRP, but I also paid no interest on a large part of the cars value. I calculated it at the time, and it was my best option.

True and True. It is all based on the terms that you are getting. However, many people may not look at the *overall picture* when they make the decision but just to see how the monthly payment would be. Those are the hidden things that people overlook.

[1660]

Originally Posted by markitect

Goes to show that buy and lease doesn't matter, what matters is the terms. I technically paid MSRP, but I also paid no interest on a large part of the cars value. I calculated it at the time, and it was my best option.

I don't get what you're saying. Can you show us your calculations? I would like to see how it was your best option.