Let's argue "buying" vs. "leasing" and why?
#41
Originally posted by Colin
Look at our 2000 S2000. The residual at the end of the 5 years is going to be around $22,000. When I saw that residual, I knew that the leasing company had missed terribly on this and there was no way it would be worth that.......When we turn this car in, the leasing company loses that money not us! They will have paid 22K for a car worth 15K, and I walk away.
Look at our 2000 S2000. The residual at the end of the 5 years is going to be around $22,000. When I saw that residual, I knew that the leasing company had missed terribly on this and there was no way it would be worth that.......When we turn this car in, the leasing company loses that money not us! They will have paid 22K for a car worth 15K, and I walk away.
But my hat's certainly off to you if you can predict the future value of a car better than Honda and the leasing companies can. I don't doubt you, I just admire your skill!
You did know that giant GE Capital abandoned it's car leasing business because if found that it couldn't profitably do this and still offer competitive pricing?
#42
Originally posted by Buff-Daddy
Equity? I hope you are kidding! This isn't real estate, cars depreciate. Although people like to try and compare these 2 things, this isn't the same arguement as renting an appartment vs. buying a house.
Equity? I hope you are kidding! This isn't real estate, cars depreciate. Although people like to try and compare these 2 things, this isn't the same arguement as renting an appartment vs. buying a house.
4 years of lease payments = zero equity.
4 years of regular payments = ~$15,000 equity.
please refrain from using words that you do not understand. thank you for playing, please try again.
#43
Originally posted by Crazytree
Go look up "equity" in the dictionary. Please post the part where it says that you can only put equity into real estate. and what... real estate never depreciates either? give me a break. and for the record, in many cases renting is a much better financial decision than taking out a mortgage.
4 years of lease payments = zero equity.
4 years of regular payments = ~$15,000 equity.
please refrain from using words that you do not understand. thank you for playing, please try again.
Go look up "equity" in the dictionary. Please post the part where it says that you can only put equity into real estate. and what... real estate never depreciates either? give me a break. and for the record, in many cases renting is a much better financial decision than taking out a mortgage.
4 years of lease payments = zero equity.
4 years of regular payments = ~$15,000 equity.
please refrain from using words that you do not understand. thank you for playing, please try again.
I leased a 1999 Acura CL 3.0 for $2,500 down - $329/mo for 36 months. $2,500+ ($329x36=$11,844) = $14,344
Then I bought that car once the lease was over for $14,248
Sticker on that car was just over $27,500 because I had the chrome wheels. So, I'm not sure who made any money on that car. Then, I sold it 6 months later and made about $1,400 more than my loan payoff. So, 4 years = $1,400 profit! Wow, what an investment!
Now, I bought my 1st house for $219,500 and sold it just under 4 years later for $329,500. That's $110,000 profit.
Moral of the story is that yes, you do have equity in that car, but what is it going to get you? Unless you are buying and selling exotics, you aren't going to make enough for a new TV...
You are small potatoes buddy, or in your case, burrito's!
#44
Originally posted by bob shiftright
I know that automobile manufacturers may ascribe residual values to leased cars that are wildly optimistic and sometimes frankly silly just to move production. I thought Honda was one manufacturer that didn't do this. Did you lease from Honda Finance? Your sig line indicates you work for an Acura dealer.
But my hat's certainly off to you if you can predict the future value of a car better than Honda and the leasing companies can. I don't doubt you, I just admire your skill!
You did know that giant GE Capital abandoned it's car leasing business because if found that it couldn't profitably do this and still offer competitive pricing?
I know that automobile manufacturers may ascribe residual values to leased cars that are wildly optimistic and sometimes frankly silly just to move production. I thought Honda was one manufacturer that didn't do this. Did you lease from Honda Finance? Your sig line indicates you work for an Acura dealer.
But my hat's certainly off to you if you can predict the future value of a car better than Honda and the leasing companies can. I don't doubt you, I just admire your skill!
You did know that giant GE Capital abandoned it's car leasing business because if found that it couldn't profitably do this and still offer competitive pricing?
Hey, Bob (or anyone) -- what do you think about this? You seem to know about the mechanics of how the leasing companies work. Is this valid, or does it not work that way?
(Edit) In essence what I'm saying is: The amount for which the leasing company is really "holding the bag" isn't the full amount of the "residual value," but, the residual value minus whatever "hidden" discount was involved at the start.
#46
ill give you a few good reasons why i lease.
1 i pay less for a nicer car than to purchase
2. i drive within the miledge alotment during the lease.
3. i always lease through american honda finance and as a result i am always right side up on the equity in my cars, (more on this later about my 4 runner i leased)
4. my car is always under warranty
5. i can buy with little to no money down to leave money to invest in other things.
6. i own my own business and therefore write the entire lease payment off on my taxes.
7. i get a new car every 3 years and there is no negotiation about what it is worth if i keep it the full length of the lease and trade in.
now about the 4 runner as an example, i leased the car for 4 years, i made the mistake of going through an outside bank (bank 1) as a result they charged all the interest on my lease up front, this caused me to have to keep the car untill the last day of the lease to trade it in because i was upside down the whole time i leased the car.
the good news was that the 4 runner was only worth about 18,500 and the residule was 21,500 this means the bank took it up the ass on the trade in not me!
another example, my TSX was just involved in an accident, if i were to trade it in they will find out about it on carfax and that will significantly lower the resale value of my car. however if i finish my lease i can trade it in with no loss in value. as long as i trade it in in good condition and take care of it i will walk away from it with no worries.
1 i pay less for a nicer car than to purchase
2. i drive within the miledge alotment during the lease.
3. i always lease through american honda finance and as a result i am always right side up on the equity in my cars, (more on this later about my 4 runner i leased)
4. my car is always under warranty
5. i can buy with little to no money down to leave money to invest in other things.
6. i own my own business and therefore write the entire lease payment off on my taxes.
7. i get a new car every 3 years and there is no negotiation about what it is worth if i keep it the full length of the lease and trade in.
now about the 4 runner as an example, i leased the car for 4 years, i made the mistake of going through an outside bank (bank 1) as a result they charged all the interest on my lease up front, this caused me to have to keep the car untill the last day of the lease to trade it in because i was upside down the whole time i leased the car.
the good news was that the 4 runner was only worth about 18,500 and the residule was 21,500 this means the bank took it up the ass on the trade in not me!
another example, my TSX was just involved in an accident, if i were to trade it in they will find out about it on carfax and that will significantly lower the resale value of my car. however if i finish my lease i can trade it in with no loss in value. as long as i trade it in in good condition and take care of it i will walk away from it with no worries.
#47
Originally posted by larchmont
Hey, Bob (or anyone) -- what do you think about this? You seem to know about the mechanics of how the leasing companies work. Is this valid, or does it not work that way?
Hey, Bob (or anyone) -- what do you think about this? You seem to know about the mechanics of how the leasing companies work. Is this valid, or does it not work that way?
For "market value" go to "Carsdirect-dot-com" look at their price and subract $500. That's a rough approximation that's fairly accurate IMO. Of course, car dealers are car dealers and if they can get away with it they'll try to get you to agree to sticker price or above, because anything they can get you to agree to above "fair market value" is all profit for them.
Kinda like buying - or renting - a camel in Baghdad.
Put another way, you're buying and financing the first 3 years of the car's or the camel's life, and those 3 years only. You're also given the option to then purchase the car or the camel for no more than the residual. If you don't exercise the option the leasing company or the camel merchant then sells the car or camel at auction. He's hoping to recoup at least the residual. Am I being too simplistic or too confusing?
Consumer Reports has a nice piece on buy vs. lease on their website.
http://www.consumerreports.org/main/...=1068330533058
As for "holding the bag", well, GE Capital figured it couldn't make any money on this game. As for Ford Credit, GMC Finance and Daimler-Chrysler - are Ford, GM and DC making any money, anyway???
#48
Originally posted by Buff-Daddy
I suppose an idiot could lose money in real estate (hence your concern), but not the rest of us.
I suppose an idiot could lose money in real estate (hence your concern), but not the rest of us.
LINK
If you want to talk about Real Estate... I've been involved in approximately $30 million in real estate transactions over the past few years and I have a graduate degree in a related field. Wow... you sold grandma's house... excuse me while I gasp in utter amazement.
BTW I like how you're using STICKER PRICE on your leased car as being the ACTUAL VALUE. The sticker price has no real purpose except to convice idiots like you that they got a good deal. And since you used the sticker price to attempt to prove the value of your car... I can see that it worked quite well.
Lesson #1: Look up the word "equity" in the dictionary. If you don't own one... you can use dictionary.com.
Lesson #2: Real Estate "crashes" occur cyclically in the US approximately ever 15-20 years and are usually tied to the Consumer Price Index and stagnant interest rates.
Lesson #3: People who go on and on about how "well to do" (Buff Daddy's quote) they are are full of shit.
Lesson #4: STFU
#50
Originally posted by Crazytree
If you want to talk about Real Estate... I've been involved in approximately $30 million in real estate transactions over the past few years and I have a graduate degree in a related field. Wow... you sold grandma's house... excuse me while I gasp in utter amazement.
If you want to talk about Real Estate... I've been involved in approximately $30 million in real estate transactions over the past few years and I have a graduate degree in a related field. Wow... you sold grandma's house... excuse me while I gasp in utter amazement.
Originally posted by Crazytree
Lesson #3: People who go on and on about how "well to do" (Buff Daddy's quote) they are are full of shit..
Lesson #3: People who go on and on about how "well to do" (Buff Daddy's quote) they are are full of shit..
Since you brought it up, I have a Degree in Sports Management, a Masters Degree in Kinesiology and a PhD in Biomechanics. You are probably a fat-ass and have no idea what those degrees have to do with, but that's ok, you can look those up in that dictionary you keep referring to. All of that education and I still get to wear Nike warm-ups to work and make more money than most business professionals, even those real estate pro's with Graduate Degrees like yourself.
So have fun spending that $1,500 profit you “might” make in 4+ years. At least you will always have that Graduate Degree to fall back on if that equity you have in your car isn't paying the bills…
#51
Originally posted by Crazytree
Go look up "equity" in the dictionary. Please post the part where it says that you can only put equity into real estate. and what... real estate never depreciates either? give me a break. and for the record, in many cases renting is a much better financial decision than taking out a mortgage.
4 years of lease payments = zero equity.
4 years of regular payments = ~$15,000 equity.
please refrain from using words that you do not understand. thank you for playing, please try again.
Go look up "equity" in the dictionary. Please post the part where it says that you can only put equity into real estate. and what... real estate never depreciates either? give me a break. and for the record, in many cases renting is a much better financial decision than taking out a mortgage.
4 years of lease payments = zero equity.
4 years of regular payments = ~$15,000 equity.
please refrain from using words that you do not understand. thank you for playing, please try again.
after 4 years of lease payments = ~15,000 saved from what it would have cost to finance and "own" the car.
So in the end, yeah the guy "leasing" doesnt have a car but he "saved" what the guy who "bought" plans on getting for his car by reselling it without the hassle of trying to resell it.
See the reason why people get meatcleaved when they lease is because they have no idea what they are doing.
#53
Originally posted by Crazytree
Your lack of education and real estate knowledge is painfully evident.
LINK
If you want to talk about Real Estate... I've been involved in approximately $30 million in real estate transactions over the past few years and I have a graduate degree in a related field. Wow... you sold grandma's house... excuse me while I gasp in utter amazement.
BTW I like how you're using STICKER PRICE on your leased car as being the ACTUAL VALUE. The sticker price has no real purpose except to convice idiots like you that they got a good deal.
Lesson #1: Look up the word "equity" in the dictionary. If you don't own one... you can use dictionary.com.
Your lack of education and real estate knowledge is painfully evident.
LINK
If you want to talk about Real Estate... I've been involved in approximately $30 million in real estate transactions over the past few years and I have a graduate degree in a related field. Wow... you sold grandma's house... excuse me while I gasp in utter amazement.
BTW I like how you're using STICKER PRICE on your leased car as being the ACTUAL VALUE. The sticker price has no real purpose except to convice idiots like you that they got a good deal.
Lesson #1: Look up the word "equity" in the dictionary. If you don't own one... you can use dictionary.com.
BTW, how's about you go and look up the word "value" in an economics textbook (which I'm sure you have handy since you're so edumacated on the subject). On second thought, I'll save you the time: "market value" is defined as what an able buyer is willing to pay for an item. PERIOD. If a willing and able buyer will pay sticker, then that's what that car's actual market value is. PERIOD.
There you go, professor - you, too, learned a nice little lesson today.
#55
Originally posted by fuque
On second thought, I'll save you the time: "market value" is defined as what an able buyer is willing to pay for an item. PERIOD. If a willing and able buyer will pay sticker, then that's what that car's actual market value is. PERIOD.
On second thought, I'll save you the time: "market value" is defined as what an able buyer is willing to pay for an item. PERIOD. If a willing and able buyer will pay sticker, then that's what that car's actual market value is. PERIOD.
[QUOTE]Originally posted by Buff-Daddy
[B]Bragging about yourself? Maybe someone needs to re-read thier own lesson #3?
Never said I was rich. I do have a lot of experience with RE purchasing and development though. Enough to tell you that $300,000 wouldn't buy you a crack house in a real metro market like Los Angeles.
You have a degree in SPORTS MANAGEMENT?
AHAHHHHHHHHHAHAHAHAHAHAHAH AHAHAHAHAHA AHAHAHAHAHAHA AHA HAH!!!!!!!!!!!!!!!!!!!!!!!!!!!1
I helped coach a Little League team... can I get some credits for that? Multiple degrees in PE? No wonder you're so pissed. What are you... a HS gym coach? Or better yet... a physical therapist? If so... my abs hurt from laughing so hard at your pathetic educational credentials... are there any stretches you could recommend?
#56
Originally posted by pollofrito21
but your missing the point that if you lease "right" (by right i mean not getting meat cleaved), after
after 4 years of lease payments = ~15,000 saved from what it would have cost to finance and "own" the car.
So in the end, yeah the guy "leasing" doesnt have a car but he "saved" what the guy who "bought" plans on getting for his car by reselling it without the hassle of trying to resell it.
See the reason why people get meatcleaved when they lease is because they have no idea what they are doing.
but your missing the point that if you lease "right" (by right i mean not getting meat cleaved), after
after 4 years of lease payments = ~15,000 saved from what it would have cost to finance and "own" the car.
So in the end, yeah the guy "leasing" doesnt have a car but he "saved" what the guy who "bought" plans on getting for his car by reselling it without the hassle of trying to resell it.
See the reason why people get meatcleaved when they lease is because they have no idea what they are doing.
#57
The post by Crazytree touched upon a point that most folks never consider. How about buy the car with cash and then save on insurance by skipping some of the costlier portions like collision. I'd guess this scenario would yield some substatial savings for the younger crowd (especially in NJ).
A long time ago I totalled my fairly new car but still came out ahead if I took into account the payments I saved before the accident and lack of an increase that surely would have followed after if the accident would have been claimed. Maybe in todays' world of 20-30K cars that doesn't work anymore.
A long time ago I totalled my fairly new car but still came out ahead if I took into account the payments I saved before the accident and lack of an increase that surely would have followed after if the accident would have been claimed. Maybe in todays' world of 20-30K cars that doesn't work anymore.
#59
Originally posted by Crazytree
What are you... a HS gym coach? Or better yet... a physical therapist? If so... my abs hurt from laughing so hard at your pathetic educational credentials... are there any stretches you could recommend?
What are you... a HS gym coach? Or better yet... a physical therapist? If so... my abs hurt from laughing so hard at your pathetic educational credentials... are there any stretches you could recommend?
#60
Well, this debate is certainly more spirited than the last lease vs. finance thread...
I'm glad I leased my TSX for many reasons, but for me the beauty of simply turning it in after 4 years can't be overstated... I've been trying to sell my CL for 2 weeks and I'll tell you the market for used cars is extremely soft right now.
I'll be lucky to get $1,000 over what the dealer would have allowed for a trade, which is still $3,000 less than KBB's suggested asking price for a private party sale. :'(
Santa Rosa Steve
I'm glad I leased my TSX for many reasons, but for me the beauty of simply turning it in after 4 years can't be overstated... I've been trying to sell my CL for 2 weeks and I'll tell you the market for used cars is extremely soft right now.
I'll be lucky to get $1,000 over what the dealer would have allowed for a trade, which is still $3,000 less than KBB's suggested asking price for a private party sale. :'(
Santa Rosa Steve
#61
Originally posted by Buff-Daddy
I manage a health club and have my own personal training business. I also leacture on Biomechanics at local colleges and fitness conventions from time to time. Ever heard of the EAS "Body for Life" challenge? Well one of my clients was a Grand Champion in 2000. Maybe I could help you get into shape so you could feel a little better about yourself? And what's wrong with being a gym teacher? At least you get your summers off! Maybe we are the stupid ones who work 12 months out of the year?
I manage a health club and have my own personal training business. I also leacture on Biomechanics at local colleges and fitness conventions from time to time. Ever heard of the EAS "Body for Life" challenge? Well one of my clients was a Grand Champion in 2000. Maybe I could help you get into shape so you could feel a little better about yourself? And what's wrong with being a gym teacher? At least you get your summers off! Maybe we are the stupid ones who work 12 months out of the year?
#62
Whatever... I'm done. Let me share what I did:
$5,000 down
~$23,000 financed @ 3.9%
$390/mo. for 66 months
Since I am back in school I have liquidated my savings and paid it towards the car... luckily with Chase they let you pre-pay. This means that I actually don't have a car payment due for about a year. Consequently, my extra money is reducing my interest base.
My insurance deductibles are as follows:
$1,000 comp
$500 collision
If I were to lease they would be:
$500 comp
$500 collision
which would actually be an extra $200-300 per year which would negate much of the interest savings (@3.9%).
another point to consider is that I drive more than 1,000 miles a month. I probably drive about 1,500/month. this leaves me with two options... pay the difference or negotiate a more expensive lease that covers 18,000mi.
$5,000 down
~$23,000 financed @ 3.9%
$390/mo. for 66 months
Since I am back in school I have liquidated my savings and paid it towards the car... luckily with Chase they let you pre-pay. This means that I actually don't have a car payment due for about a year. Consequently, my extra money is reducing my interest base.
My insurance deductibles are as follows:
$1,000 comp
$500 collision
If I were to lease they would be:
$500 comp
$500 collision
which would actually be an extra $200-300 per year which would negate much of the interest savings (@3.9%).
another point to consider is that I drive more than 1,000 miles a month. I probably drive about 1,500/month. this leaves me with two options... pay the difference or negotiate a more expensive lease that covers 18,000mi.
#63
Originally posted by Crazytree
....$5,000 down
~$23,000 financed @ 3.9%
$390/mo. for 66 months......
....$5,000 down
~$23,000 financed @ 3.9%
$390/mo. for 66 months......
Thank you, Crazytree -- I was hoping somebody would have actual numbers. And I hope it will help convince people that it's simply not true that loan payments are necessarily higher than lease payments.
BTW -- Indeed Crazytree paid more down than you'd usually pay on a lease. But, notice that his loan-term is 66 months. If you want to, you can take a longer term -- up to 84 months, usually -- which would probably allow you to put down about as much as you would on a lease and have a lower monthly payment than Crazytree.
If you buy, you do have the problem of selling the car when you're done with it. But, that burden comes with a benefit. You own something. To some of us, that's important -- which, come to think of it, is maybe the main thing. If that's not important to you at all, I can see why you'd just as soon lease. But this stuff about it being less costly on a monthly basis, or how it's supposedly better from a tax-deduction standpoint -- some of you keep saying those things, but I'm not seeing any evidence for them.
P.S. If you only keep your car for a very short time -- like 2 years or less -- I'm pretty sure you always do better leasing, provided you have a lease that you can get out of without too much trouble.
#64
but keep in mind that what I do is anomalous. I always get the longest possible term to get the lowest payment possible. I usually pay about 2x-3x the minimum payment and end up paying off the loan in 18-24 months. but if there's a month where I need some extra cash... I can appreciate the low monthly obligation. like I stated earlier... last week I sent Chase about $4,000, which should cover my payments for over a year (I'm already ahead two payments).
And as for writing off the lease... that is not going to stand up to IRS scrutiny. From what I understand from people who have undergone audits... the IRS intends the deduction to be taken for autos that are ONLY used for business purposes. A Civic or a Focus... maybe. However, the IRS is of the opinion that John Q. Taxpayer should not have to subsudize your luxury vehicle lease as a business expense.
And as for writing off the lease... that is not going to stand up to IRS scrutiny. From what I understand from people who have undergone audits... the IRS intends the deduction to be taken for autos that are ONLY used for business purposes. A Civic or a Focus... maybe. However, the IRS is of the opinion that John Q. Taxpayer should not have to subsudize your luxury vehicle lease as a business expense.
#65
Is there an accountant in the house?
Originally posted by Crazytree
However, the IRS is of the opinion that John Q. Taxpayer should not have to subsudize your luxury vehicle lease as a business expense.
However, the IRS is of the opinion that John Q. Taxpayer should not have to subsudize your luxury vehicle lease as a business expense.
http://www.boston.com/business/globe...n_suv_through/
#67
Originally posted by Crazytree
yea... but that got abused... so I think this is the last year to do it.
yea... but that got abused... so I think this is the last year to do it.
I'm no accountant, but it might be interesting to look up the specifics of deductions for auto leases in one of the tax guides like JK Lassers. My uncle has been deducting Cadillacs as a business expense for years and years and has never lost an I.R.S. audit. Your experience, of course, might vary.
Considering how much tax money the politicians waste, squander and steal each year I think it's my patriotic duty to pay as little in taxes as I can, legally. But driving a 6000 pound truck that looks like a garden shed to save money on taxes would be a stretch even for me!
#68
You guys are comparing apples to oranges. Some of you guys are comparing 36 month lease payments to 66 month finance payments. Of course in that scenario the finance payment is going to be lower than the lease payment. I work at a car dealer so lets crunch some real numbers to compare. We are going to compare the same length of loan so that you can see the real numbers.
If we did a compare using these factors:
TSX (with nav) base price = $28990
Tax (NJ 6%)= $1739.40
For simplicity sake we'll have a world of no fees except for tax (As a carsalesman all those fees are B.S anyway).
Total amount to be financed = $30729.40
Using leasecompare.com (which as a carsalesman i find there quotes to be realistic)
downpayment = $0
length of term = 36 months
money factor = .00219 ( 5.256 % )
12k miles per year
Risidual value = $14,815
PAYMENT = $513
Tax on payment = $26.13
TOTAL PAYMENT LEASING = $539.13
(TIP: Remember fellas never pay tax upfront always roll it in, as a matter of fact never pay anything upfront). A few states will vary as I think texas and another have to pay tax on the whole vehicle not the leased amount.
Now if we finance using the same terms...
Total to be financed = $30,729.40
$0 down
36 months
5.256% rate
Payment = $924.51
Now if we take the difference which = $385.38
and multiply by the length of the loan:
385.38
x 36
-----------
$13873.68
Now the guy leasing just saved $13,873. His risidual is $14,815. As a car salesman I can say the car is never worth what the residual is. But by leasing that number is in stone. Where as the guy who "owns" the car now has to worry about selling the car which like i stated earlier car is never worth that much. So you see guys leasing , let me state again if you lease "right" by right i mean not getting meat cleaved and not becoming Mr. Weekspay to your salesman its always better to lease. BUT REMEMBER this only applys to people who change cars every 3-4 years. IF you keep them 5+ years you should not even consider leasing. Hope i educated you guys. LET THE COMMENTS BEGIN!
If we did a compare using these factors:
TSX (with nav) base price = $28990
Tax (NJ 6%)= $1739.40
For simplicity sake we'll have a world of no fees except for tax (As a carsalesman all those fees are B.S anyway).
Total amount to be financed = $30729.40
Using leasecompare.com (which as a carsalesman i find there quotes to be realistic)
downpayment = $0
length of term = 36 months
money factor = .00219 ( 5.256 % )
12k miles per year
Risidual value = $14,815
PAYMENT = $513
Tax on payment = $26.13
TOTAL PAYMENT LEASING = $539.13
(TIP: Remember fellas never pay tax upfront always roll it in, as a matter of fact never pay anything upfront). A few states will vary as I think texas and another have to pay tax on the whole vehicle not the leased amount.
Now if we finance using the same terms...
Total to be financed = $30,729.40
$0 down
36 months
5.256% rate
Payment = $924.51
Now if we take the difference which = $385.38
and multiply by the length of the loan:
385.38
x 36
-----------
$13873.68
Now the guy leasing just saved $13,873. His risidual is $14,815. As a car salesman I can say the car is never worth what the residual is. But by leasing that number is in stone. Where as the guy who "owns" the car now has to worry about selling the car which like i stated earlier car is never worth that much. So you see guys leasing , let me state again if you lease "right" by right i mean not getting meat cleaved and not becoming Mr. Weekspay to your salesman its always better to lease. BUT REMEMBER this only applys to people who change cars every 3-4 years. IF you keep them 5+ years you should not even consider leasing. Hope i educated you guys. LET THE COMMENTS BEGIN!
#69
Originally posted by pollofrito21
You guys are comparing apples to oranges. Some of you guys are comparing 36 month lease payments to 66 month finance payments. Of course in that scenario the finance payment is going to be lower than the lease payment. I work at a car dealer so lets crunch some real numbers to compare. We are going to compare the same length of loan so that you can see the real numbers.
If we did a compare using these factors:
TSX (with nav) base price = $28990
Tax (NJ 6%)= $1739.40
For simplicity sake we'll have a world of no fees except for tax (As a carsalesman all those fees are B.S anyway).
Total amount to be financed = $30729.40
Using leasecompare.com (which as a carsalesman i find there quotes to be realistic)
downpayment = $0
length of term = 36 months
money factor = .00219 ( 5.256 % )
12k miles per year
Risidual value = $14,815
PAYMENT = $513
Tax on payment = $26.13
TOTAL PAYMENT LEASING = $539.13
(TIP: Remember fellas never pay tax upfront always roll it in, as a matter of fact never pay anything upfront). A few states will vary as I think texas and another have to pay tax on the whole vehicle not the leased amount.
Now if we finance using the same terms...
Total to be financed = $30,729.40
$0 down
36 months
5.256% rate
Payment = $924.51
Now if we take the difference which = $385.38
and multiply by the length of the loan:
385.38
x 36
-----------
$13873.68
Now the guy leasing just saved $13,873. His risidual is $14,815. As a car salesman I can say the car is never worth what the residual is. But by leasing that number is in stone. Where as the guy who "owns" the car now has to worry about selling the car which like i stated earlier car is never worth that much. So you see guys leasing , let me state again if you lease "right" by right i mean not getting meat cleaved and not becoming Mr. Weekspay to your salesman its always better to lease. BUT REMEMBER this only applys to people who change cars every 3-4 years. IF you keep them 5+ years you should not even consider leasing. Hope i educated you guys. LET THE COMMENTS BEGIN!
You guys are comparing apples to oranges. Some of you guys are comparing 36 month lease payments to 66 month finance payments. Of course in that scenario the finance payment is going to be lower than the lease payment. I work at a car dealer so lets crunch some real numbers to compare. We are going to compare the same length of loan so that you can see the real numbers.
If we did a compare using these factors:
TSX (with nav) base price = $28990
Tax (NJ 6%)= $1739.40
For simplicity sake we'll have a world of no fees except for tax (As a carsalesman all those fees are B.S anyway).
Total amount to be financed = $30729.40
Using leasecompare.com (which as a carsalesman i find there quotes to be realistic)
downpayment = $0
length of term = 36 months
money factor = .00219 ( 5.256 % )
12k miles per year
Risidual value = $14,815
PAYMENT = $513
Tax on payment = $26.13
TOTAL PAYMENT LEASING = $539.13
(TIP: Remember fellas never pay tax upfront always roll it in, as a matter of fact never pay anything upfront). A few states will vary as I think texas and another have to pay tax on the whole vehicle not the leased amount.
Now if we finance using the same terms...
Total to be financed = $30,729.40
$0 down
36 months
5.256% rate
Payment = $924.51
Now if we take the difference which = $385.38
and multiply by the length of the loan:
385.38
x 36
-----------
$13873.68
Now the guy leasing just saved $13,873. His risidual is $14,815. As a car salesman I can say the car is never worth what the residual is. But by leasing that number is in stone. Where as the guy who "owns" the car now has to worry about selling the car which like i stated earlier car is never worth that much. So you see guys leasing , let me state again if you lease "right" by right i mean not getting meat cleaved and not becoming Mr. Weekspay to your salesman its always better to lease. BUT REMEMBER this only applys to people who change cars every 3-4 years. IF you keep them 5+ years you should not even consider leasing. Hope i educated you guys. LET THE COMMENTS BEGIN!
i like leasing because the residule is already set in stone when i buy the car, if i decide to keep the car i can always do that after im done if i choose to. or if it suits me i can sell it to a private party.
another lease i did ill show a good example of why i lease.
i had a 98 prelude type SH i was in a 36 month lease, 12k per year. MSRP was 26,300 i think. i paid 23 for the car out the door (they were moving the 98's to make room for the 99's) so i leased for about 24 months and decided to trade it in for a 2001 Acura TL with Nav (MSRP 31030)
anyway when i traded in the prelude my payoff was 17300 and the retail value of the car was 19900 at the time according to nada. now we all know the prelude lost resale value badly because they were impractical for a lot of people. if this werent the case on this particular car i could have sold it outright and got 19,900 approx and pocketed 2700 bucks minus any taxes i owed.
but the dealer offered me 16800 as a trade and for only 500 bucks and no money down i got into the TL in a new lease walking away from the lude for practically nothing 3/4 way through the lease.
this is an example of why i buy hondas, and why i lease through AHF because honda/ acuras hold their value so well that even leasing the car you still pay it off faster than it will depreciate. and if you sell to a private party before the end of the lease you can actually get some of your equity out of the car before you get a new one.
#70
pollofrito21
you can also use your example with 2 cars, try it again this way, a guy leases for 36 months. but he also trades his car in after 36 months to buy another equal value car for another 36 months.
guy B buys the same car but for a 60 month term purchase
while guy B has his car into the 4th-5th years guy A has a brand new car with a brand new warranty still paying less than guy B on his 2nd new car.
guy B still had the old car with 50-60 k miles, out of warranty, and still paying the higher payment on a 5-6 year old car.
i dont know about you but i think you may agree that most people that buy the car will turn right around and sell the car once it's paid off within a year of actually owning the whole car.
people who buy get all excited that they actually own the car but who gives a rip when we all know they will turn right around and buy another car again anyway?
i mean comeone really.. anyone who buys a TSX buys it because it is a totally bomb ass car, having said that how many TSX ownners do you think will actually sit by and watch all the new cars that are state of the art comming out and not want to buy one.
the fact that all of us are on this board says that we are all car nuts. you cant tell me that any of us would spend the next 3-4 years on these boards hearing everyone else talk about how awsome the new TSX or whatever it is to come out in the next 3 years isn't going to make people want to trade in their TSX in the next 3 years.
if anyone here actually belives that they are kidding themselves.
you can also use your example with 2 cars, try it again this way, a guy leases for 36 months. but he also trades his car in after 36 months to buy another equal value car for another 36 months.
guy B buys the same car but for a 60 month term purchase
while guy B has his car into the 4th-5th years guy A has a brand new car with a brand new warranty still paying less than guy B on his 2nd new car.
guy B still had the old car with 50-60 k miles, out of warranty, and still paying the higher payment on a 5-6 year old car.
i dont know about you but i think you may agree that most people that buy the car will turn right around and sell the car once it's paid off within a year of actually owning the whole car.
people who buy get all excited that they actually own the car but who gives a rip when we all know they will turn right around and buy another car again anyway?
i mean comeone really.. anyone who buys a TSX buys it because it is a totally bomb ass car, having said that how many TSX ownners do you think will actually sit by and watch all the new cars that are state of the art comming out and not want to buy one.
the fact that all of us are on this board says that we are all car nuts. you cant tell me that any of us would spend the next 3-4 years on these boards hearing everyone else talk about how awsome the new TSX or whatever it is to come out in the next 3 years isn't going to make people want to trade in their TSX in the next 3 years.
if anyone here actually belives that they are kidding themselves.
#71
The short take on what I needed.
I needed no more than a $500/mo. car payment, whether it be a lease or loan. I got tired of minding the mileage, etc. etc. so I decided I wanted to have a car that I would keep for some time...6-7 years...if it financially good to do so.
It ended up that I'd save a little bit of money financing, but then it's MY car and I get to keep it, and do whatever I want to it.
I needed no more than a $500/mo. car payment, whether it be a lease or loan. I got tired of minding the mileage, etc. etc. so I decided I wanted to have a car that I would keep for some time...6-7 years...if it financially good to do so.
It ended up that I'd save a little bit of money financing, but then it's MY car and I get to keep it, and do whatever I want to it.
#72
Originally posted by pollofrito21
You guys are comparing apples to oranges. Some of you guys are comparing 36 month lease payments to 66 month finance payments. Of course in that scenario the finance payment is going to be lower than the lease payment. I work at a car dealer so lets crunch some real numbers to compare. We are going to compare the same length of loan so that you can see the real numbers.
If we did a compare using these factors:
TSX (with nav) base price = $28990
Tax (NJ 6%)= $1739.40
For simplicity sake we'll have a world of no fees except for tax (As a carsalesman all those fees are B.S anyway).
Total amount to be financed = $30729.40
Using leasecompare.com (which as a carsalesman i find there quotes to be realistic)
downpayment = $0
length of term = 36 months
money factor = .00219 ( 5.256 % )
12k miles per year
Risidual value = $14,815
PAYMENT = $513
Tax on payment = $26.13
TOTAL PAYMENT LEASING = $539.13
(TIP: Remember fellas never pay tax upfront always roll it in, as a matter of fact never pay anything upfront). A few states will vary as I think texas and another have to pay tax on the whole vehicle not the leased amount.
Now if we finance using the same terms...
Total to be financed = $30,729.40
$0 down
36 months
5.256% rate
Payment = $924.51
Now if we take the difference which = $385.38
and multiply by the length of the loan:
385.38
x 36
-----------
$13873.68
Now the guy leasing just saved $13,873. His risidual is $14,815. As a car salesman I can say the car is never worth what the residual is. But by leasing that number is in stone. Where as the guy who "owns" the car now has to worry about selling the car which like i stated earlier car is never worth that much. So you see guys leasing , let me state again if you lease "right" by right i mean not getting meat cleaved and not becoming Mr. Weekspay to your salesman its always better to lease. BUT REMEMBER this only applys to people who change cars every 3-4 years. IF you keep them 5+ years you should not even consider leasing. Hope i educated you guys. LET THE COMMENTS BEGIN!
You guys are comparing apples to oranges. Some of you guys are comparing 36 month lease payments to 66 month finance payments. Of course in that scenario the finance payment is going to be lower than the lease payment. I work at a car dealer so lets crunch some real numbers to compare. We are going to compare the same length of loan so that you can see the real numbers.
If we did a compare using these factors:
TSX (with nav) base price = $28990
Tax (NJ 6%)= $1739.40
For simplicity sake we'll have a world of no fees except for tax (As a carsalesman all those fees are B.S anyway).
Total amount to be financed = $30729.40
Using leasecompare.com (which as a carsalesman i find there quotes to be realistic)
downpayment = $0
length of term = 36 months
money factor = .00219 ( 5.256 % )
12k miles per year
Risidual value = $14,815
PAYMENT = $513
Tax on payment = $26.13
TOTAL PAYMENT LEASING = $539.13
(TIP: Remember fellas never pay tax upfront always roll it in, as a matter of fact never pay anything upfront). A few states will vary as I think texas and another have to pay tax on the whole vehicle not the leased amount.
Now if we finance using the same terms...
Total to be financed = $30,729.40
$0 down
36 months
5.256% rate
Payment = $924.51
Now if we take the difference which = $385.38
and multiply by the length of the loan:
385.38
x 36
-----------
$13873.68
Now the guy leasing just saved $13,873. His risidual is $14,815. As a car salesman I can say the car is never worth what the residual is. But by leasing that number is in stone. Where as the guy who "owns" the car now has to worry about selling the car which like i stated earlier car is never worth that much. So you see guys leasing , let me state again if you lease "right" by right i mean not getting meat cleaved and not becoming Mr. Weekspay to your salesman its always better to lease. BUT REMEMBER this only applys to people who change cars every 3-4 years. IF you keep them 5+ years you should not even consider leasing. Hope i educated you guys. LET THE COMMENTS BEGIN!
#73
First of all... never believe anything a car salesman says. Hell he didn't even include the security deposit!
"Now the guy leasing just saved $13,873." Yes... minus the equity in the car... so the leasor probably saved about $1,000
$1,000
minus extra mileage for 3 years
minus extra insurance premiums for 3 years
is not much
Secondly... here is couple of handy tips from a site that exposes common car dealer scams:
Deceptive Lease vs. Buy Comparisons
To trick people into leases, salespeople often use deceptive comparisons that are designed to make even bad lease deals look better than conventional purchases. Instead of comparing lease payments to 5-year loan payments (the term that buyers commonly choose), salespeople may use the higher payments on 4-year or 3-year loans to make the purchase look unattractive. Don't fall for the trick of comparing similar terms, because a lease is nothing but a long-term rental agreement, while a conventional loan involves ownership.
Leasing companies love leasing because it usually allows them to make a lot more interest on every car they finance. First, since they're not required by law to disclose the effective APR that's being charged, they don't disclose it. Because of this loophole, a lot of leasing companies have charged higher interest rates on leases than they have on loans. (They have to disclose those.) Second, since less principal is being paid off in a lease payment, total finance charges on a lease will usually be higher than they would be on a loan -- even when the balance, term and APR are the same for both.
For example, on $20,000 lease and loan balances, at 8% for 3 years (50% residual on the lease), total finance charges on the lease would be $3,608. On the loan, total finance charges would only be $2,572. So you would pay $1,036 more in finance charges on the 3-year lease than you would on the 3-year loan. In fact, the finance charges on this 3-year lease are just a little less than the total finance charges on a 5-year loan (same balance and APR). Worse yet, since lease residuals are often inflated by lenders, and lease charges are based partly on the residual, many leases will have higher finance charges than our example because it had a conservative residual.
"Now the guy leasing just saved $13,873." Yes... minus the equity in the car... so the leasor probably saved about $1,000
$1,000
minus extra mileage for 3 years
minus extra insurance premiums for 3 years
is not much
Secondly... here is couple of handy tips from a site that exposes common car dealer scams:
Deceptive Lease vs. Buy Comparisons
To trick people into leases, salespeople often use deceptive comparisons that are designed to make even bad lease deals look better than conventional purchases. Instead of comparing lease payments to 5-year loan payments (the term that buyers commonly choose), salespeople may use the higher payments on 4-year or 3-year loans to make the purchase look unattractive. Don't fall for the trick of comparing similar terms, because a lease is nothing but a long-term rental agreement, while a conventional loan involves ownership.
Leasing companies love leasing because it usually allows them to make a lot more interest on every car they finance. First, since they're not required by law to disclose the effective APR that's being charged, they don't disclose it. Because of this loophole, a lot of leasing companies have charged higher interest rates on leases than they have on loans. (They have to disclose those.) Second, since less principal is being paid off in a lease payment, total finance charges on a lease will usually be higher than they would be on a loan -- even when the balance, term and APR are the same for both.
For example, on $20,000 lease and loan balances, at 8% for 3 years (50% residual on the lease), total finance charges on the lease would be $3,608. On the loan, total finance charges would only be $2,572. So you would pay $1,036 more in finance charges on the 3-year lease than you would on the 3-year loan. In fact, the finance charges on this 3-year lease are just a little less than the total finance charges on a 5-year loan (same balance and APR). Worse yet, since lease residuals are often inflated by lenders, and lease charges are based partly on the residual, many leases will have higher finance charges than our example because it had a conservative residual.
#74
Originally posted by justinjsw
I totally disagree with the example you set up. The numbers are way off in both cases. Right now I just don't have the time to break it apart.
I totally disagree with the example you set up. The numbers are way off in both cases. Right now I just don't have the time to break it apart.
#75
In the real world lease vs a buy for a 04 TSX. Including all fees and taxes.
04 TSX AT NAVI
Price 29.035.00
36 month lease @ 12,000 miles per yr
Out of pocket fees include(first payment, DMV(CA), Bank Fee, 0 Sec Deposit)=1,500.00
35 remaining payments @ 446.92+tax@7.75%(SD, CA)=481.55
Real money factor= .00220 (5.28%)
Real Residual=58% (AHFC)=16,840.00
Total amount paid after 36 months=18,354.25
04 TSX AT NAVI
Price 29,035.00+Tax/Lic (Based off SD, CA rates)
Payments include all taxes and DMV fees...
60 month finance contract based on 5.28% interest
Total down payment=1,500.00
60 payments @ 578.78
After 36 months...total amount paid=22,336.08
Amount owed to bank after 36 months=13,890.72
Total paid on finance contract =36,226.80
Total paid on lease if you buy the car after lease is over=36,499.35... assuming you do not finance the 16,840.00
What does it all mean? It means if you brought the car you leased you will end up paying MORE than if you financed the car.
It means if you leased the car for the 36 month period your upfront expenses are LESS than the upfront expenses of a purchase.
If you financed the car you pay more upfront but owe less than a lease at the same 36 month period.
Bascially in the case of the TSX its better to finance the car than to lease because if you buy it after the lease you have to pay the 16,840.00(and remember you still have to pay sales tax on that amount). So that just really leave you with one option...you have to walk away and lease another car. But then that means you are walking away from 18,354.25 you spend to lease this car.
Now Im not saying rather its better to lease or finance because sometimes it is better to lease. But in the case of the TSX ONLY it is better to finance than to lease.
i await your rebuttal.
04 TSX AT NAVI
Price 29.035.00
36 month lease @ 12,000 miles per yr
Out of pocket fees include(first payment, DMV(CA), Bank Fee, 0 Sec Deposit)=1,500.00
35 remaining payments @ 446.92+tax@7.75%(SD, CA)=481.55
Real money factor= .00220 (5.28%)
Real Residual=58% (AHFC)=16,840.00
Total amount paid after 36 months=18,354.25
04 TSX AT NAVI
Price 29,035.00+Tax/Lic (Based off SD, CA rates)
Payments include all taxes and DMV fees...
60 month finance contract based on 5.28% interest
Total down payment=1,500.00
60 payments @ 578.78
After 36 months...total amount paid=22,336.08
Amount owed to bank after 36 months=13,890.72
Total paid on finance contract =36,226.80
Total paid on lease if you buy the car after lease is over=36,499.35... assuming you do not finance the 16,840.00
What does it all mean? It means if you brought the car you leased you will end up paying MORE than if you financed the car.
It means if you leased the car for the 36 month period your upfront expenses are LESS than the upfront expenses of a purchase.
If you financed the car you pay more upfront but owe less than a lease at the same 36 month period.
Bascially in the case of the TSX its better to finance the car than to lease because if you buy it after the lease you have to pay the 16,840.00(and remember you still have to pay sales tax on that amount). So that just really leave you with one option...you have to walk away and lease another car. But then that means you are walking away from 18,354.25 you spend to lease this car.
Now Im not saying rather its better to lease or finance because sometimes it is better to lease. But in the case of the TSX ONLY it is better to finance than to lease.
i await your rebuttal.
#76
Originally posted by bob shiftright
I know that automobile manufacturers may ascribe residual values to leased cars that are wildly optimistic and sometimes frankly silly just to move production. I thought Honda was one manufacturer that didn't do this. Did you lease from Honda Finance? Your sig line indicates you work for an Acura dealer.
But my hat's certainly off to you if you can predict the future value of a car better than Honda and the leasing companies can. I don't doubt you, I just admire your skill!
You did know that giant GE Capital abandoned it's car leasing business because if found that it couldn't profitably do this and still offer competitive pricing?
I know that automobile manufacturers may ascribe residual values to leased cars that are wildly optimistic and sometimes frankly silly just to move production. I thought Honda was one manufacturer that didn't do this. Did you lease from Honda Finance? Your sig line indicates you work for an Acura dealer.
But my hat's certainly off to you if you can predict the future value of a car better than Honda and the leasing companies can. I don't doubt you, I just admire your skill!
You did know that giant GE Capital abandoned it's car leasing business because if found that it couldn't profitably do this and still offer competitive pricing?
#77
You my friend are a prime example of someone who swears they know what leasing is about and what they're talking about when in actuality they dont. Let me disect your scenario for you.
Here is your first mistake: FEES. FEES are what dealerships call front end gross. Please tell me why you would put anything down on a lease??? What if you put 3'Gs down and totaled the car the next day. You know what happens to your 3g's. You lose it because insurance will not cover that, and neither will GAP. Just a tip since you obviously werent reading the first time. But i'll let it slide since you have 1500 as down for both so they just cancel out.
35 remaining payments @ 446.92+tax@7.75%(SD, CA)=481.55
Real money factor= .00220 (5.28%)
Real Residual=58% (AHFC)=16,840.00
Total amount paid after 36 months=18,354.25
04 TSX AT NAVI
Price 29,035.00+Tax/Lic (Based off SD, CA rates)
Payments include all taxes and DMV fees...
60 month finance contract based on 5.28% interest
Total down payment=1,500.00
60 payments @ 578.78
After 36 months...total amount paid=22,336.08
Amount owed to bank after 36 months=13,890.72
Ok here you proved my point for me. First of all I told you, you can't compare 36 month leases with 60 month buys, "apples and oranges" but since you insist i will show you how you proved my point.
According to your example leasing the TSX came to
Total amount paid after 36 months=18,354.25
The same TSX on a 60 month finance came to:
After 36 months...total amount paid=22,336.08
Now if we take the difference after 36 months:
22336.08
- 18354.25
-----------------
3981.83
So buy financing this car you paid $3981.83 more than the guy who leased it. And guess what. You still owe the bank $13890.72. YOU DONT OWN ANYTHING! The whole point of financing is to OWN the car. If you financed it for 60 months and are already looking to trade it in after 36 months you have not only paid $3981.08 more than the guy who leased it, but now you have to worry about not being upside down and trading it in hoping to get more money than you owe on the car (equity).
Remember you still owe the bank $13980. So at that point if you dont get more than $3981.08 on top what you already owe which would be a grand total of $17961.80 (WHICH WILL NEVER HAPPEN BECUZ DEALERSHIPS ONLY GIVE WHOLESALE VALUE) you sir would have been better off leasing because it would have cost less. You following me? Keep reading as I will finish up my argument with your next point.
Total paid on finance contract =36,226.80
Total paid on lease if you buy the car after lease is over=36,499.35... assuming you do not finance the 16,840.00
What does it all mean? It means if you brought the car you leased you will end up paying MORE than if you financed the car.
You sir are a genius. Of course your going to end up paying more if you buy the lease out. 98% of the public already knows that. But why would a person who leased the TSX wanna buy it out after the 3 years. IF THAT WAS THE CASE THEY WOULD HAVE FINANCED AND NOT LEASED TO BEGIN WITH! It would be cheaper to finance over the 60 months and not lease then buy it out. Everyone knows that. Now I will finish up my argument after this great bit of insight you gave us.
It means if you leased the car for the 36 month period your upfront expenses are LESS than the upfront expenses of a purchase.
Wrong here again. According to your scenario upfront costs were the same. $1500.
If you financed the car you pay more upfront but owe less than a lease at the same 36 month period.
Wrong again. SEE ABOVE
Bascially in the case of the TSX its better to finance the car than to lease because if you buy it after the lease you have to pay the 16,840.00(and remember you still have to pay sales tax on that amount). So that just really leave you with one option...you have to walk away and lease another car. But then that means you are walking away from 18,354.25 you spend to lease this car.
You see my friend you truly have no idea what your talking about. You contradicted yourself a buch of times. REMEMBER I SAID LEASING IS ONLY GOOD IF YOU FIND YOURSELF TRADING VEHICLES EVERY 3-4 years. If your going to keep the vehicle 5+ years every Tom DICK AND HARRY knows not to lease it. What did I say in my earlier post. ITS ONLY MAKES SENSE TO LEASE If you switch cars every 3-4 years. By leasing you can walk away and get another. But like your scenario, by buying you not only have paid more money than the guy who leased at that point but now you have to worry about getting good money on the trade, at least getting what you owe on it back.
So you see the guy who financed spent $3981.83 more than the guy who leased it and walked away and now has to worry about oweing the bank $13,980.72. Did I clarify enough for you? Leasing, i mean leasing right (by right i mean not getting meat cleaved) is always better in the short run if you change cars every 3-4 years.
Originally posted by justinjsw
In the real world lease vs a buy for a 04 TSX. Including all fees and taxes.
04 TSX AT NAVI
Price 29.035.00
36 month lease @ 12,000 miles per yr
Out of pocket fees include(first payment, DMV(CA), Bank Fee, 0 Sec Deposit)=1,500.00
In the real world lease vs a buy for a 04 TSX. Including all fees and taxes.
04 TSX AT NAVI
Price 29.035.00
36 month lease @ 12,000 miles per yr
Out of pocket fees include(first payment, DMV(CA), Bank Fee, 0 Sec Deposit)=1,500.00
Here is your first mistake: FEES. FEES are what dealerships call front end gross. Please tell me why you would put anything down on a lease??? What if you put 3'Gs down and totaled the car the next day. You know what happens to your 3g's. You lose it because insurance will not cover that, and neither will GAP. Just a tip since you obviously werent reading the first time. But i'll let it slide since you have 1500 as down for both so they just cancel out.
35 remaining payments @ 446.92+tax@7.75%(SD, CA)=481.55
Real money factor= .00220 (5.28%)
Real Residual=58% (AHFC)=16,840.00
Total amount paid after 36 months=18,354.25
04 TSX AT NAVI
Price 29,035.00+Tax/Lic (Based off SD, CA rates)
Payments include all taxes and DMV fees...
60 month finance contract based on 5.28% interest
Total down payment=1,500.00
60 payments @ 578.78
After 36 months...total amount paid=22,336.08
Amount owed to bank after 36 months=13,890.72
Ok here you proved my point for me. First of all I told you, you can't compare 36 month leases with 60 month buys, "apples and oranges" but since you insist i will show you how you proved my point.
According to your example leasing the TSX came to
Total amount paid after 36 months=18,354.25
The same TSX on a 60 month finance came to:
After 36 months...total amount paid=22,336.08
Now if we take the difference after 36 months:
22336.08
- 18354.25
-----------------
3981.83
So buy financing this car you paid $3981.83 more than the guy who leased it. And guess what. You still owe the bank $13890.72. YOU DONT OWN ANYTHING! The whole point of financing is to OWN the car. If you financed it for 60 months and are already looking to trade it in after 36 months you have not only paid $3981.08 more than the guy who leased it, but now you have to worry about not being upside down and trading it in hoping to get more money than you owe on the car (equity).
Remember you still owe the bank $13980. So at that point if you dont get more than $3981.08 on top what you already owe which would be a grand total of $17961.80 (WHICH WILL NEVER HAPPEN BECUZ DEALERSHIPS ONLY GIVE WHOLESALE VALUE) you sir would have been better off leasing because it would have cost less. You following me? Keep reading as I will finish up my argument with your next point.
Total paid on finance contract =36,226.80
Total paid on lease if you buy the car after lease is over=36,499.35... assuming you do not finance the 16,840.00
What does it all mean? It means if you brought the car you leased you will end up paying MORE than if you financed the car.
You sir are a genius. Of course your going to end up paying more if you buy the lease out. 98% of the public already knows that. But why would a person who leased the TSX wanna buy it out after the 3 years. IF THAT WAS THE CASE THEY WOULD HAVE FINANCED AND NOT LEASED TO BEGIN WITH! It would be cheaper to finance over the 60 months and not lease then buy it out. Everyone knows that. Now I will finish up my argument after this great bit of insight you gave us.
It means if you leased the car for the 36 month period your upfront expenses are LESS than the upfront expenses of a purchase.
Wrong here again. According to your scenario upfront costs were the same. $1500.
If you financed the car you pay more upfront but owe less than a lease at the same 36 month period.
Wrong again. SEE ABOVE
Bascially in the case of the TSX its better to finance the car than to lease because if you buy it after the lease you have to pay the 16,840.00(and remember you still have to pay sales tax on that amount). So that just really leave you with one option...you have to walk away and lease another car. But then that means you are walking away from 18,354.25 you spend to lease this car.
You see my friend you truly have no idea what your talking about. You contradicted yourself a buch of times. REMEMBER I SAID LEASING IS ONLY GOOD IF YOU FIND YOURSELF TRADING VEHICLES EVERY 3-4 years. If your going to keep the vehicle 5+ years every Tom DICK AND HARRY knows not to lease it. What did I say in my earlier post. ITS ONLY MAKES SENSE TO LEASE If you switch cars every 3-4 years. By leasing you can walk away and get another. But like your scenario, by buying you not only have paid more money than the guy who leased at that point but now you have to worry about getting good money on the trade, at least getting what you owe on it back.
So you see the guy who financed spent $3981.83 more than the guy who leased it and walked away and now has to worry about oweing the bank $13,980.72. Did I clarify enough for you? Leasing, i mean leasing right (by right i mean not getting meat cleaved) is always better in the short run if you change cars every 3-4 years.
#80
Originally posted by Crazytree
you sell cars. why would you purposefully omit the security deposit from this analysis other than to be misleading?
you sell cars. why would you purposefully omit the security deposit from this analysis other than to be misleading?