jesuswalks

Should I Lease a 2006 TSX or buy an older car...im going 2 college in 3 years....

can u get good deals at acura leaseing? or does Audi Have better deals on their 2005/6 A4?

leftride

iTrader: (1)

jimmyg

Many financial advisors and CPA's agree that it generally makes more financial sense in the long run to lease a car if you know the milage you're going to drive each year.

They take into account average maintence cost of used cars and the depreciation rate. If your credit is good to great, you loose MORE money buying cars in the long run. Cars are an automotive expense you will have for most of the rest or your life, think about how you want to manage that expense.

Now, first learn a lot about lease before you sign anything and if you do your own maintence or you like to mod, forget everything I said. Its also a good rule of thumb to never lease a car you can't afford to purchase.

Remember, cars are about loosing money. The goal is too loose the least.

STL

That statement is extremely misleading. The only way it would be true is if you get a new car every few years. I guarantee it's cheaper to outright buy a car and drive it 8-10 years than it is to lease a new one every 2-3 years.

That's precisely why you DON'T get a new car every few years!

STL

Then just get the new Civic Si coupe and enjoy it until you need a sedan.

hawaiiantsx

what you have to take into account is ......in 2-3 years when you go to college...how are you going to make the monthly payments wether its lease or purchase.it is cheaper to lease (monthly payment wise), but if you plan to keep the car for a while.....then it is best to just outright purchase it if you can afford it.think about how much money the finance company will make off your lease payments then from financing if you decide to keep it and purchase it after... ...just my

fedlawman

Do yourself a huge favor. Spend $10,000 on a nice 5 year old Integra.

peter_bigblock

Leasing is to make quick turnover easier (no car to sell after 2-3-4 years) and may also save you money over that short term vs. buying and then trading -- depends on the residual and lease vs. buy interest rate.

I'm no fan of leasing, however, from a cash-flow standpoint. A car is a depreciating asset, sure, but it's a necessary one just like a pair of pants. The longer you can get use out of each car, the less you'll have paid in car payments over a lifetime, all other things being equal.

Leasing is often (I say often) a way for someone to buy more car than they can really afford. That includes accountants.

jimmyg

Every one "plans" on having their car for a long time, but don't take into account the cost of owning a car out of warranty. 90% of American households own a car for no more then 3.5 years. 9 out of 10 people trade in their car because they claim maintence cost have gotten too high.

I'm sure they're out there, but I haven't run into an accountant who has purchased their car yet. Too much is lost money that can't be leverged.

Remeber: as long as you need a car, a car will loose you money.

gsrthomas

Just buy the car.

I would never lease a car.

I havent had a car payment in 3 years and I love it!

People in America think its normal to have a car payment their whole lives. They think its just like a mortgage payment that you have to have.

Jason

Amen. Why would you piss your money away on a TSX? Save it for later.

hawaiiantsx

well, i was just saying if he was planning on keeping his car for more then 5 years.Hey,wait a minute,theres an idea!!!!!!!!actually keeping a car for more then 5 years!!!! Keep it on the down low...i wouldnt want other people to actually think of this

STL

Are you honestly trying to claim it is cheaper to make payments on a new car then it would be to maintain a 4-8 year old car -- especially a Honda/Acura? LOL Even the crappiest american cars don't cost $300-400/month to maintain.

Those 9 out of 10 people simply want a new car and try to jusify it (to themselves) by whining about maintence costs. Yes it cost smoney to maintain an out-of-warranty car, but nowhere near as much as it costs to make lease payments on a new one!

That is only because the accounts you know have enough disposable income they can afford to waste money on new car every 2-3 years. That doesn't mean it's cheaper than buying and owning a car 8-10 years. If you truly want to minimize your automobile losses then you buy a car and drive it at least 8 years.

gdcwatt

acura.ca and various financial institutions also offer "future value financing", whereby you make lease-like payments, but you are the owner of the car; there is a balloon payment at the end of the financing term, and typically you can also walk away from the deal, but the financing rates are high. It sounds just like leasing, and I haven't looked into the detail, but it is another option.

One advantage that leasing offers many Canadians, vs financing, is that the 15% sales taxes don't have to be paid up front, so they don't need to be financed starting the day you buy the car.

CGTSX2004

iTrader: (1)

If you are not planning on having a car when you go to college, then a lease is not a bad idea as you won't have to worry about selling the car or depreciation or anything of that nature.

If you want to have the car during college, then I suggest buying a used car outright.

As for the A4, from what I can tell, the current pricing for their "special" lease does not allow for MT cars so you'll have to speak to a dealer specifically about that.

vitocorleone

Get a used Integra hatchback and call it a day: it's usually reliable if you get one that's been taken care of, it's fun (can even be modded a bit if you want), it can pack quite a bit of stuff around which is typically important during the college years, and it's still reasonably stylish. I personally would not get a TSX if I was in your situation.

05TLMAN

How much do you really think it will cost to maintain a TSX between year 5 to 8? A realistic and justifiable number now!

STL

Based on the Hondas I've owned (one for almost 8 years, another for 10 years, and one going on 11 years) I would say no more than $1k/year on average -- in some cases half that. Compare that to $3600-4800/year for a lease.

bz268

is this your first car?
If it is your first car, I will buy a cheap used car.
Drive it for a year or 2, and then just trash it and buy a new one.

RJG_TSX

TSX Lovers;

Wuz up! I have a slight dilema Well im a BIG Acura fan, and have been for many years, I had a 99 Integra GS-R. Loved that car....that was not the last car I had though (03 Nissan Maxima). Well here goes the story, I had perfect credit!! (Tier 1) last year I let a so called "friend" borrow my name and credit so he could get a car, well anywho he totalled his car, and well he didnt have insurance at that particular time, I had no freaken clue the guy didnt have insurance. So what ends up happening when someone co-signs?? (everyone knows) it goes back to the one who helped out. Well last Dec 04 I had to file BK, it was horrible!!! (I felt ripped apart). Bottom Line, I would love the TSX, what does everyone think I should do (any good financial advice here) Lease or buy? I am willing to give a pretty good downpayment (5-7k) if they can work me a payment about 450 each month. Do you guys think I can get into an 04-05 TSX (All Opts). I know beggers cant be choosers, but in this case I have the money but not the credit ...any response would greatly be appreciated.

Thanks!

RJG

05TLMAN

Ok, since I have a bit of time now, I will entertain this thread. Let use the 05 AT TSX as an example at $36100 plus plus plus. If we use a 4 yr lease with $5000 due on delivery, the monthly payment is $515.38 tax-in. But if you finance for 5 years with $5000 Down payment, the monthly is $695.40 tax-in. Now, the difference per month is $180.02, multiply by 47 payments on the lease (first payment is done in the due on delivery), that's $8460.94. Now you have to make an additional 13 payments of $695.40 for the finance (60-47=13) which amounts to $9040.20. Adding these 2 numbers up equals $17501.14.
Now assuming you want to lease a new vehile after the first lease for another 4 years, and assuming it's another TL with pretty much the same payments, it will be $515.38 X 47 + $5000 = $29222.86. With the $17501.14 that you saved from financing the first car for 5 years, the difference is $11721.72. And I am quoting $1000 per year on average that you stated, that would be a $4000 total. So the bottom line is this, would you pay $7721.72 more for driving a 2009 TSX as oppose to a 4 year old model? And that is the question you will have to answer to determine whether you lease or finance! Hope this is not too confusing.

05v6solara

Well, you deserve to drive what you want, etc. Now I am not saying two wrongs make a right, but why don't you get your friend you cosigned to co-sign you to make up for your difficulties. Beyond that... you are probably better off buying the car outright if you have no credit or bad credit. I would first consider applying for the lowest leasing/financing rates you can to see if you can pull it off.

STL

I'm not sure I followed all you said, but I'll read it again sometime. Looking at what you said above, you also need to note that you would own the 4-year-old model and thus have some equity -- but with the lease you have nothing (but never-ending payments).

BTW, that $1000/year figure was definitely for a worst case scenario. I know I haven't spent $7,000 maintaining my almost 11-year-old Civic. Of the top of my head, I would say I've spent $3k or less.

amadeus303

iTrader: (2)

Here's your first "accountant" that highly recommends that you DON'T lease the vehicle. Sure, leasing a vehicle has its benefits... generally lower payments, easy to switch to a new car after a short amount of time, etc… but especially considering the situation that the thread starter is in, leasing doesn't sound like the right fit. The prudent thing to do would be to get an old car and buy it outright as someone suggested... However, I'm going to assume that jesuswalks wants to drive a relatively nice car (i.e., TSX or Audi A4). If you want a “nice” car, you should go buy a used one. Cars ARE a depreciable asset, but the biggest hit comes in the 1st year. Additionally, if we can judge the TSX’s reliability by other Honda products, maintenance costs should be no less reasonable than whatever car he leases… and that’s one of the reasons that Honda products’ resale values are so high. In 3 years when jesuswalks goes to college, he’ll probably be right-side up on his financing, and be able to pocket some cash by selling the vehicle if necessary. If you lease a vehicle, at the end of the 3 years… what do you have?

I also forgot to add...

If you can afford lease payments on a TSX or Audi (I don't know how much you're willing to put down), I'm fairly certain you'll be able to afford a rather nice used car...

05TLMAN

You should read it again. My senario is comparing a car financed for 5 years and kept for 8 as oppose to lease for 4 years a 2005 TSX and another 4 years a 2009 TSX. If you still don't get it, PM me.

STL

Okay then I should have said: you also need to note that you would be one year of payments away from owning the 4-year-old model and then at that point have some equity -- but with the lease you have nothing (but never-ending payments). So the difference is really more than $7721.72 once you take into account that buying means you actuall own something. Like I said before, leasing only makes sense if you plan to always make a car payment, but that is no way to save money!

05TLMAN

READ IT AGAIN! Better yet, write down the number than you will understand what I am getting at.

$695.40(finance)-$515.38(lease) multiply by 47 payments equals $8460.94
$695.40(finance) multiply by 13 remaining payments equals $9040.20
Add these two numbers up, that's how much extra you paid to "have" equity at the end of the lease. which is $17501.14.
Do another 4 years lease in 2009 will cost you a total of $515.38x47+$5000, which amounts to $29222.86. with the money you saved for not financing, which is $17501.14, the difference is $29222.86-$17501.14=$11721.72. So you pay extra $11721.72 to drive a 2009 TSX, but you quoted $1000 per year to fix the car, that's why I subtracted $4000 from the $11721.72 giving you only a $7721.72 difference. I hope this explains it for you.

BTW, I didn't want to totally destroy you on the idea of finance, but this is the shocker, the buy out at the end of the 4 year 2005 lease senerio is $17851.45. Go back to my calculation:
$695.40(finance)-$515.38(lease) multiply by 47 payments equals $8460.94
$695.40(finance) multiply by 13 remaining payments equals $9040.20
Add these two numbers up, that's how much extra you paid to "have" equity at the end of the lease. which is $17501.14.
You are paying $350 more to lease than to finance, that's a price you pay for deciding whether you want to keep the car and buy it out, or simply walk away from the lease. I think $350 is not much to pay to not have to worry about selling the car myself after 4 years if I financed the car and didn't like it. Beside, if you want to get out of a 5 year finance term at the end of 4 years, that $350 difference would be even less. Anyways, hope this helps!

05TLMAN

I meant "at the end of the FINANCE"

hans007

i have read a lot of other articles that say the crossover point for whre a lease and buying dont make a difference is under 4 years.

this would be on a car with good resale values (like an acura, bmw, new infinitis, etc).

so for me i figured i might as well buy the car since i dont know i just felt better actually owning it. and in 4 years i can buy a 2009 tsx or some other car.

if the car has awful resale value (say you bought a ford contour when they came out) then yes leasing is probably better.

STL

Agreed, at the end of 4 years a buyer will have paid $8460.94 more than leasing. Then after another year to finish off the payments that figure will be $17501.14, BUT then you are done with payments for the next 4 (or more) years. Whereas the person leasing has to fork out another $29222.86 over the next for years -- that puts them paying $11721.72 more than a buyer. Taking the worse case scenario and using $4000 for 4 years of maintence still means the two leases will cost $7721.72 more. And like I said before, at the end of eight years the person leasing has nothing. The buyer has now paid substantially less and has a used car worth at least $8k. So how does leasing save money?

05TLMAN

If you think a 8 year old TSX is worth $8k, you must be the biggest sucker in the used car market.

STL

Edmunds.com says an eight year old TL is worth $8k USD. I personally sold a 10 year old Prelude S (not even the Si or VTEC version) for $4k USD a couple years ago -- so my estimate doesn't seem way out of line. I'm not sure how much the TLs were new back then, but I bet it isn't too far off from what the TSX runs now. And for the record we were talking canadian dollars, so that's only $6,700 USD. No matter what it's actual value is, you TOTALLY ignored the fact that the used car is worth a considerable amount of money!
And you still haven't shown me how leasing saves money!

05TLMAN

[QUOTE=STL]Edmunds.com says an eight year old TL is worth $8k USD. I personally sold a 10 year old Prelude S (not even the Si or VTEC version) for $4k USD a couple years ago -- so my estimate doesn't seem way out of line. I'm not sure how much the TLs were new back then, but I bet it isn't too far off from what the TSX runs now. And for the record we were talking canadian dollars, so that's only $6,700 USD. No matter what it's actual value is, you TOTALLY ignored the fact that the used car is worth a considerable amount of money! QUOTE]

The Canadaian Black Book goes as far as 1999, and for a 2000 TL it goes for $9300, a 1999 TL goes for $7300, so you should get $5300 the most out of an 8 year old TL, and TSX is no TL, so it will not yield the same price in 8 years.

dom

[QUOTE=05TLMAN]I think a 99TL probly sold for the same money a TSX sells for today. And the tranny will likely work so you should have no problem getting the same if not more money.

05TLMAN

I never said anywhere in my post on this matter about leasing "SAVES" money did I?

My point is that people don't fully understand the difference in terms of cost to lease and to finance a vehicle, that's why I gave you the senario. If you want to keep the car after the lease, I never said it was not a good idea. That is why I did the buy out senario for you as well.

Cars depreciate no matter you lease or finance, when you trade in the car at the end of the 4 years, the value of the vehicle is independent of you leaseing or financing the vehicle. It's just the freedom of choice with a lease, and that freedom comes with a price tag, in the 2005 TSX case is $350. GET MY POINT!

STL

I didn't realize that in 1998 the TL came in a 2.5 and 3.2 versions. Checking www.edmunds.com again, and this time selecting the 2.5 TL it says the private party value is $6.6k USD. Checking www.kbb.com, a 1998 2.5 TL comes in at almost $7k USD for a private party sale. Going to www.nada.com, it says the average trade-in value for a 1998 2.5 TL is $7.9k USD. Evening taking the lowest value from the three above (the $6.6k USD) that equates to $7.8K CAD.

You're right the a TSX is no 1998 2.5 TL -- the TSX is much, much better!

Even if the TSX is only worth $5k eight years from now (which is highly doubt), that just adds to amount one saves from buying rather than leasing! So how does leasing save money?

STL

I never said cars depreciated different depending on financing! I was saying that buying and keeping is cheaper than leasing. Then you tried to show that leasing for 8 years was only $7.7k more than buying once and owning for 8 years. I pointed out major flaw in that -- you ignored the fact the car that was bought is worth a notable amount of money at the end of the eight years.

Your $350 only applies if one would finance a car for 4-5 years. I personally pay my cars off within a year or two -- which isn't so hard when you have equity in previous car (to trade-in or sell yourself).

05TLMAN

Once again, where in my quote did I say that leasing SAVES money?

jlukja

STL has got to be the most argumentative member here.

05TLMAN

In my original reply, all I was trying to do is illustrate the difference in lease and finance subjectively, the preference is up to the individual and dependent on the condition. If you want to buy a car out right with cash, then you don't have to worry about the financing rate that Acura is offering, and yes it will be cheaper to finance. However, if you are mortgaging your house at 5% interest and Acura is offering 2.9% financing rate, you would be stupid to buy the car out when you can put that money in your mortgage. All I am saying is that leasing makes sense to most people, for some that refuse to lease could be because they do not understand the concept, they think that they have to pay a lot more money leaseing, or they want to have "Ownership" of their car.

In conclusion, if you got money to burn, buy the car out right. If you are considering either lease or finance, work out the total number, then decide. If you want to OWN the car, and don't have cash to buy it out or don't have the kind of money STL has got to pay it off in 1 year, then consider both options and make your decision based on that. For me, I would pay $350 more for leaseing the 05 TSX and have the freedom to decide what to do in 4 years, as oppose to finance.