some leasing facts for you all.
02-06-2006, 10:30 PM
#1
Burning Brakes
Thread Starter
Join Date: Apr 2002
Location: Colorado Springs, Colorado
Age: 54
Posts: 904
Likes: 0
Received 0 Likes
on
0 Posts
some leasing facts for you all.
i am posting this because of another thread where someone asked about leases verses purchases
i hope you find this usefull whoever you are, just some of my opinions about leasing...
ive leased many cars, let me tell you a few secrits
1. don't buy a lease with anymore than 10,000 miles per year, its a waste of money, ill explain later...
2. don't bother to put down anymore than you have to
3. don't concern yourself with how many miles you think you will drive unless you drive more than 20 k or so a year
4. dont keep the car for the entire lease
5. never finance through any finance company other than the manufacturers financing company. ex.. AHFC
here is a little more explanation.
in my experience with any honda or acura i have leased usually about 1/2 to 2/3rds of the way through a 4 year lease. by this time your trade in value and or market value of the leased car will be equal to the amount you owe to pay off the lease. with that said keeping the car to the end of the lease is stupid. when you reach this magical point in your lease you now have what is called EQUITY in the leased vehicle. particularly in honda and acuras.
other cars will usually never have any equity in the car upon finishing the lease after 4 years. (most domestics)
with a honda / acura why the hell would you want to take a car that has say 3-5k in equity at the end of the lease and turn it in to the dealer? you get NOTHING!!! you would be so much better off to either sell it to a private party or trade it in early. (about 4 months early best case)
see with a lease being traded in early the trade in is treated exactly the same as if you purchased it. miles on the odometer are just like miles on a purchased situation. if you finish the lease they become an issue, NOT if you trade in early.
by far the best thing to do is sell to a private party you will avoid the dealerships commissions and put more equity in your pocket to use for a down payment on the next lease. this will also lower your payment on an identical vehicle (for simple comarason) using nothing out of your pocket.
if you own a business you can write the whole lease payment as well as expenses like gas, carwashes, oil changes, off on your taxes. this lowers your taxable income by exactly 1:1 for every doller you spend on the car is like a dollar less you took home thereby lowering your tax liability to the feds.
if your like most of us car nuts what is the first thing your likely to do after a purchased car is all paid off? if your like most people you will feel the releif of not having a car payment, but that new 07 model with all the cool gadgets will eventually get the better of you and you will again assume another payment and a new car.
that said i could lease 2 cars in the same time period, both under full warranty pay about 100.00 a month less in payments and make between 6-10K in equity using the above examples.
additionally take into account if im carefull i wont have to buy any tires or brakes or perform any maintenence or buy anything except gas and oil changes during my leased ownership of said 2 vehicles.
if you lease through a bank beware ive done this before and many banks will front end load the lease so all your payments go to interest and you have no choice but to finish out the lease. you will never be right side up on the money if you do this. always use AHFC they want your repeat business. you can be sure they will spread the interest payments out evenly.
ill use 2 examples to prove my point.
in 1998 i leased a honda prelude type SH i got the car for basically cost because it was a year end closeout the 99's were already on the lot. i paid 23,000 out the door + DH and other fees. i kept the car for 26K miles and was 1/2 way through my lease. at that time i traded it in for a 2001 TL with NAV i owed only 16K trade in value was 17,600 retail value was still 19,900. as a trade in i got 600 applied towards my TL and started another lease.
when i leased my 04 TSX i got it for about 1500 under MSRP i have 36K miles on the car and i bought it in AUG of 03. the trade in value on my car now is 22,500 approx according to NADA. right now i owe 22,100 ive got 400 in equity in the lease and i just signed papers for a 2006 TSX with 6 speed NAV BLK / BLK i paid 28,500 for the car. my payment is the same i have been paying because im not putting anything down.
i take delevery in about 10 days, meanwhile im driving my old TSX which belongs to the dealer now untill the new car arrives.
(i am doing this because they pulled my credit about 25 days ago and i didnt want another hit to my credit so i made them do the paperwork and finish the deal as soon as they had the vin for the new car, the credit report is only good for 30 days)
there is only 1 better way to buy a car, PAY CASH! its by far the best way to avoid interest payments. for me it makes no sence because i cannot claim the entire car payment on my taxes. nor do i want to own anything that looses its value every mile i drive.
hope this was informative
i hope you find this usefull whoever you are, just some of my opinions about leasing...
ive leased many cars, let me tell you a few secrits
1. don't buy a lease with anymore than 10,000 miles per year, its a waste of money, ill explain later...
2. don't bother to put down anymore than you have to
3. don't concern yourself with how many miles you think you will drive unless you drive more than 20 k or so a year
4. dont keep the car for the entire lease
5. never finance through any finance company other than the manufacturers financing company. ex.. AHFC
here is a little more explanation.
in my experience with any honda or acura i have leased usually about 1/2 to 2/3rds of the way through a 4 year lease. by this time your trade in value and or market value of the leased car will be equal to the amount you owe to pay off the lease. with that said keeping the car to the end of the lease is stupid. when you reach this magical point in your lease you now have what is called EQUITY in the leased vehicle. particularly in honda and acuras.
other cars will usually never have any equity in the car upon finishing the lease after 4 years. (most domestics)
with a honda / acura why the hell would you want to take a car that has say 3-5k in equity at the end of the lease and turn it in to the dealer? you get NOTHING!!! you would be so much better off to either sell it to a private party or trade it in early. (about 4 months early best case)
see with a lease being traded in early the trade in is treated exactly the same as if you purchased it. miles on the odometer are just like miles on a purchased situation. if you finish the lease they become an issue, NOT if you trade in early.
by far the best thing to do is sell to a private party you will avoid the dealerships commissions and put more equity in your pocket to use for a down payment on the next lease. this will also lower your payment on an identical vehicle (for simple comarason) using nothing out of your pocket.
if you own a business you can write the whole lease payment as well as expenses like gas, carwashes, oil changes, off on your taxes. this lowers your taxable income by exactly 1:1 for every doller you spend on the car is like a dollar less you took home thereby lowering your tax liability to the feds.
if your like most of us car nuts what is the first thing your likely to do after a purchased car is all paid off? if your like most people you will feel the releif of not having a car payment, but that new 07 model with all the cool gadgets will eventually get the better of you and you will again assume another payment and a new car.
that said i could lease 2 cars in the same time period, both under full warranty pay about 100.00 a month less in payments and make between 6-10K in equity using the above examples.
additionally take into account if im carefull i wont have to buy any tires or brakes or perform any maintenence or buy anything except gas and oil changes during my leased ownership of said 2 vehicles.
if you lease through a bank beware ive done this before and many banks will front end load the lease so all your payments go to interest and you have no choice but to finish out the lease. you will never be right side up on the money if you do this. always use AHFC they want your repeat business. you can be sure they will spread the interest payments out evenly.
ill use 2 examples to prove my point.
in 1998 i leased a honda prelude type SH i got the car for basically cost because it was a year end closeout the 99's were already on the lot. i paid 23,000 out the door + DH and other fees. i kept the car for 26K miles and was 1/2 way through my lease. at that time i traded it in for a 2001 TL with NAV i owed only 16K trade in value was 17,600 retail value was still 19,900. as a trade in i got 600 applied towards my TL and started another lease.
when i leased my 04 TSX i got it for about 1500 under MSRP i have 36K miles on the car and i bought it in AUG of 03. the trade in value on my car now is 22,500 approx according to NADA. right now i owe 22,100 ive got 400 in equity in the lease and i just signed papers for a 2006 TSX with 6 speed NAV BLK / BLK i paid 28,500 for the car. my payment is the same i have been paying because im not putting anything down.
i take delevery in about 10 days, meanwhile im driving my old TSX which belongs to the dealer now untill the new car arrives.
(i am doing this because they pulled my credit about 25 days ago and i didnt want another hit to my credit so i made them do the paperwork and finish the deal as soon as they had the vin for the new car, the credit report is only good for 30 days)
there is only 1 better way to buy a car, PAY CASH! its by far the best way to avoid interest payments. for me it makes no sence because i cannot claim the entire car payment on my taxes. nor do i want to own anything that looses its value every mile i drive.
hope this was informative
02-06-2006, 10:58 PM
#2
Interesting read.....I also want to lease but don't own a business. Everywhere I read says to AVOID leasing so I am still a bit skeptical. To keep it short, are you saying it is more practical and financially smart to lease a high resale value car like an Acura/Honda vs financing a car for 2-3 years (assuming I don't own a business and will only put 10k miles a year) ?
02-06-2006, 11:12 PM
#3
Interesting post.
I think we're all vaguely aware that you can if fact kill a lease early without penalty, so long as you return to (in this case) Honda/Acura and sign another lease with AHFC. Honda will always sell you a new car and "let you out" of your current lease, so long as they've got you signed on to a new lease/purchase. Try to terminate a lease without this crucial detail in place and the whole scheme doesnt work...you'd be on the hook big-time.
I would never pay cash for a car unless money was really no object. Its a ton of money to sink into a purely depreciating asset. Money in your pocket now is more valuable than money in your pocket later...a basic principle of finance. Same reason that, you're right, it really is a waste of money to put any down payment or "cap-cost reduction" into a lease signing. The amount it will lower your payment is never worth the hit you take giving them all your money up front.
I think we're all vaguely aware that you can if fact kill a lease early without penalty, so long as you return to (in this case) Honda/Acura and sign another lease with AHFC. Honda will always sell you a new car and "let you out" of your current lease, so long as they've got you signed on to a new lease/purchase. Try to terminate a lease without this crucial detail in place and the whole scheme doesnt work...you'd be on the hook big-time.
I would never pay cash for a car unless money was really no object. Its a ton of money to sink into a purely depreciating asset. Money in your pocket now is more valuable than money in your pocket later...a basic principle of finance. Same reason that, you're right, it really is a waste of money to put any down payment or "cap-cost reduction" into a lease signing. The amount it will lower your payment is never worth the hit you take giving them all your money up front.
02-06-2006, 11:15 PM
#4
Ford Sales Consultant
Join Date: Jan 2006
Location: Chicago
Age: 48
Posts: 71
Likes: 0
Received 0 Likes
on
0 Posts
You sure you're not in the business?
Leasing is awesome...especially if you are leasing something like an Acura (that has strong resale potential, which figures into residuals).
If your desired car has a lease payment that is higher than you can afford...DO NOT GET THE CAR, and absolutely DO NOT put more money down to lower the payment (unless you really want the car). You will never see that money again!
The majority of high line auto companies sell their cars through leasing because their "purchase" payments are commonly too high for most peeps to afford.
Diggs
02-06-2006, 11:31 PM
#5
other cars will usually never have any equity in the car upon finishing the lease after 4 years. (most domestics)
with a honda / acura why the hell would you want to take a car that has say 3-5k in equity at the end of the lease and turn it in to the dealer? you get NOTHING!!! you would be so much better off to either sell it to a private party or trade it in early. (about 4 months early best case)
If the car had 3-5k in equity at lease-end you'd want to purchase the vehicle at that point (If you had plans of eventually escaping with a few bucks in your pocket) or, trade it in for a new Honda before the lease is up if your screwed on miles or damage.
Either way you'll have to compare the current value of the vehicle to the residual value that was declared at lease signing, and see where you're sitting.
with a honda / acura why the hell would you want to take a car that has say 3-5k in equity at the end of the lease and turn it in to the dealer? you get NOTHING!!! you would be so much better off to either sell it to a private party or trade it in early. (about 4 months early best case)
If the car had 3-5k in equity at lease-end you'd want to purchase the vehicle at that point (If you had plans of eventually escaping with a few bucks in your pocket) or, trade it in for a new Honda before the lease is up if your screwed on miles or damage.
Either way you'll have to compare the current value of the vehicle to the residual value that was declared at lease signing, and see where you're sitting.
02-07-2006, 12:05 AM
#6
Burning Brakes
Thread Starter
Join Date: Apr 2002
Location: Colorado Springs, Colorado
Age: 54
Posts: 904
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by ninjamyst
Interesting read.....I also want to lease but don't own a business. Everywhere I read says to AVOID leasing so I am still a bit skeptical. To keep it short, are you saying it is more practical and financially smart to lease a high resale value car like an Acura/Honda vs financing a car for 2-3 years (assuming I don't own a business and will only put 10k miles a year) ?
however leasing is IMO the best option, even if you dont own a business i think you will be better off in the long run.
additionally i cannot stress enough the idea of selling it before lease end to a private party. you will recoop most of your equity that way. unfortunatly this takes time, effort and patience. for me neither of which i have and i am a very impatient.
of course all of this makes no sence if you are the type to keep a car for 100K miles or more. i love cars but grow tired of them quickly and i dont mind the car payment. ive come to accept it as a way of life. of course it doesnt make much financial sence at all to invest your money into cars.
its all in perspective though. depending on how much you make the money may be easier to come by. on the other hand you may be an investor type saving for the future and see driving a car as just basic transportation.
for me, i can afford it and the way i see it you need a balance in life. i dont want to buy a cheap car, save all my money for retirement and get hit by a truck. as i lay in bed as a vegetable i dont want to think about all the things i could have enjoyed in my life but chose to wait for retirement to enjoy. you never know you might not make it. i try to sit in between saving and playing with my money. otherwise whats the point in having a good job and making good money if you never enjoy any of it?
02-07-2006, 12:55 AM
#7
Racer
Join Date: Feb 2004
Location: Atlanta
Age: 47
Posts: 334
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by Brandon24pdx
Interesting post.
I think we're all vaguely aware that you can if fact kill a lease early without penalty, so long as you return to (in this case) Honda/Acura and sign another lease with AHFC. Honda will always sell you a new car and "let you out" of your current lease, so long as they've got you signed on to a new lease/purchase. Try to terminate a lease without this crucial detail in place and the whole scheme doesnt work...you'd be on the hook big-time.
I would never pay cash for a car unless money was really no object. Its a ton of money to sink into a purely depreciating asset. Money in your pocket now is more valuable than money in your pocket later...a basic principle of finance. Same reason that, you're right, it really is a waste of money to put any down payment or "cap-cost reduction" into a lease signing. The amount it will lower your payment is never worth the hit you take giving them all your money up front.
I think we're all vaguely aware that you can if fact kill a lease early without penalty, so long as you return to (in this case) Honda/Acura and sign another lease with AHFC. Honda will always sell you a new car and "let you out" of your current lease, so long as they've got you signed on to a new lease/purchase. Try to terminate a lease without this crucial detail in place and the whole scheme doesnt work...you'd be on the hook big-time.
I would never pay cash for a car unless money was really no object. Its a ton of money to sink into a purely depreciating asset. Money in your pocket now is more valuable than money in your pocket later...a basic principle of finance. Same reason that, you're right, it really is a waste of money to put any down payment or "cap-cost reduction" into a lease signing. The amount it will lower your payment is never worth the hit you take giving them all your money up front.
I have leased 5 Acuras/Hondas in the past and the key is the lease specials they run from time to time. My wifes car is a Honda Pilot and we got the car at cost and the money factor = less than 2%. The best finance rate was 5%. Over the course of 3 years, we will have actually saved about $1500 from the lease vs. financing.
Trending Topics
02-07-2006, 12:56 AM
#8
Originally Posted by Bass Mechanic
i dont want to buy a cheap car, save all my money for retirement and get hit by a truck. as i lay in bed as a vegetable i dont want to think about all the things i could have enjoyed in my life...
02-07-2006, 10:11 AM
#11
Intermediate
Join Date: Apr 2005
Location: WI
Age: 57
Posts: 30
Likes: 0
Received 0 Likes
on
0 Posts
Great post...leasing is the only way to go!
Best case senario for myself and my wife was achieved a little differently but basically the same concept. I convinced her to lease a '94 accord instead of buying it. leased for 3 years. then bought out lease-she loved the car-decided 6 months later she wanted an suv(women). put an ad in local paper and sold it the first day for $3200 more than she owed...
She has leased every time since then. If you lease the right vehicle(honda, toyota) you almost can't go wrong...
Best case senario for myself and my wife was achieved a little differently but basically the same concept. I convinced her to lease a '94 accord instead of buying it. leased for 3 years. then bought out lease-she loved the car-decided 6 months later she wanted an suv(women). put an ad in local paper and sold it the first day for $3200 more than she owed...
She has leased every time since then. If you lease the right vehicle(honda, toyota) you almost can't go wrong...
02-07-2006, 10:31 AM
#12
Three Wheelin'
Originally Posted by Bass Mechanic
of course all of this makes no sence if you are the type to keep a car for 100K miles or more. i love cars but grow tired of them quickly and i dont mind the car payment. ive come to accept it as a way of life. of course it doesnt make much financial sence at all to invest your money into cars.
its all in perspective though. depending on how much you make the money may be easier to come by. on the other hand you may be an investor type saving for the future and see driving a car as just basic transportation.
its all in perspective though. depending on how much you make the money may be easier to come by. on the other hand you may be an investor type saving for the future and see driving a car as just basic transportation.
02-07-2006, 11:23 AM
#13
Grippin' Grain
iTrader: (1)
Join Date: Mar 2005
Location: Katy, Tx
Age: 46
Posts: 474
Likes: 0
Received 0 Likes
on
0 Posts
Very good info. I've always wondered if I could benefit from a lease so I may check into it. The biggest concern is that I live in Houston so I'm sure I'll be driving at least 20k miles a yr. Are there any concerns I should be aware of in this situation??
02-07-2006, 12:25 PM
#16
> 100K Mile Club Member
Consider this
I purchased my '04 auto/non-navi with fogs and convenience package in July '04 for around $28,000 out the door (including ttl). I put down about $2800. I got a loan for the difference from the credit union I bank with for 4.15% interest. Everytime I have gotten a raise at my job I tack that on to my payment. I am currently paying almost $950/month right now (the original payment was $507/month). I have a 10% raise coming in April and a 5% in August. This will put my payment at about $1330/month. I will have the car paid off about this time next year.
According to NADA, KBB and Edmunds (I threw out the lowest and highest quotes) the car is worth $22,138 right now. That is the average of trade-in and retail values for each site. That means the car has depreciated about 7.5% per year from the $26,200 I paid before tax. Meaning, this time next year when it is paid off, it will be worth about $20,478. So that will be all equity for me.
If I take the $1330/month that I was paying on the car and pay it to my "new car" fund. I will have $13,330 by the end of '07. My car should be still worth almost $19,000. Add the two together and I am the proud new owner of an all new 2008 Acura TSX w/Navi FREE AND FREAKIN' CLEAR. Plus I can continue to pay myself the $1330/month plus any additional raises I have received.
You can have your $400 of equity to put toward your '06. I will take my plan any day of the week.
According to NADA, KBB and Edmunds (I threw out the lowest and highest quotes) the car is worth $22,138 right now. That is the average of trade-in and retail values for each site. That means the car has depreciated about 7.5% per year from the $26,200 I paid before tax. Meaning, this time next year when it is paid off, it will be worth about $20,478. So that will be all equity for me.
If I take the $1330/month that I was paying on the car and pay it to my "new car" fund. I will have $13,330 by the end of '07. My car should be still worth almost $19,000. Add the two together and I am the proud new owner of an all new 2008 Acura TSX w/Navi FREE AND FREAKIN' CLEAR. Plus I can continue to pay myself the $1330/month plus any additional raises I have received.
You can have your $400 of equity to put toward your '06. I will take my plan any day of the week.
02-07-2006, 12:29 PM
#17
> 100K Mile Club Member
Originally Posted by Dirk Diggs
Leasing is awesome...especially if you are leasing something like an Acura (that has strong resale potential, which figures into residuals).
If your desired car has a lease payment that is higher than you can afford...DO NOT GET THE CAR, and absolutely DO NOT put more money down to lower the payment (unless you really want the car). You will never see that money again!
The majority of high line auto companies sell their cars through leasing because their "purchase" payments are commonly too high for most peeps to afford.
Diggs
02-07-2006, 12:49 PM
#18
Originally Posted by TSXinTN
I purchased my '04 auto/non-navi with fogs and convenience package in July '04 for around $28,000 out the door (including ttl). I put down about $2800. I got a loan for the difference from the credit union I bank with for 4.15% interest. Everytime I have gotten a raise at my job I tack that on to my payment. I am currently paying almost $950/month right now (the original payment was $507/month). I have a 10% raise coming in April and a 5% in August. This will put my payment at about $1330/month. I will have the car paid off about this time next year.
According to NADA, KBB and Edmunds (I threw out the lowest and highest quotes) the car is worth $22,138 right now. That is the average of trade-in and retail values for each site. That means the car has depreciated about 7.5% per year from the $26,200 I paid before tax. Meaning, this time next year when it is paid off, it will be worth about $20,478. So that will be all equity for me.
If I take the $1330/month that I was paying on the car and pay it to my "new car" fund. I will have $13,330 by the end of '07. My car should be still worth almost $19,000. Add the two together and I am the proud new owner of an all new 2008 Acura TSX w/Navi FREE AND FREAKIN' CLEAR. Plus I can continue to pay myself the $1330/month plus any additional raises I have received.
You can have your $400 of equity to put toward your '06. I will take my plan any day of the week.
According to NADA, KBB and Edmunds (I threw out the lowest and highest quotes) the car is worth $22,138 right now. That is the average of trade-in and retail values for each site. That means the car has depreciated about 7.5% per year from the $26,200 I paid before tax. Meaning, this time next year when it is paid off, it will be worth about $20,478. So that will be all equity for me.
If I take the $1330/month that I was paying on the car and pay it to my "new car" fund. I will have $13,330 by the end of '07. My car should be still worth almost $19,000. Add the two together and I am the proud new owner of an all new 2008 Acura TSX w/Navi FREE AND FREAKIN' CLEAR. Plus I can continue to pay myself the $1330/month plus any additional raises I have received.
You can have your $400 of equity to put toward your '06. I will take my plan any day of the week.
So it's all a matter of perspective. I'd rather have the money now to invest rather than taking all that money and pour it into a depreciating asset that I'm not likely to keep longer than 2 to 3 years anyway.
02-07-2006, 01:15 PM
#19
> 100K Mile Club Member
Originally Posted by CGTSX2004
Good for you, but not everyone has nearly $1000 a month to put towards a car. Plus, if you think about it, during that period, you've spent a total of about $32,000. During that same period, on a lease, you'll have spent around one-third of that. If you take the $20k difference and keep that in a high yield bank account or even invest it, you'll likely see some pretty good returns.
So it's all a matter of perspective. I'd rather have the money now to invest rather than taking all that money and pour it into a depreciating asset that I'm not likely to keep longer than 2 to 3 years anyway.
So it's all a matter of perspective. I'd rather have the money now to invest rather than taking all that money and pour it into a depreciating asset that I'm not likely to keep longer than 2 to 3 years anyway.
BTW, I will have spent $30K not $32K as in your example. Basically, your arguement reflects that you would borrow $30K at 4.15% interest so that you could invest it in a high yield bank account or other investments. Not for me.
To get an idea of the "big picture" of where I am coming from, visit www.daveramsey.com. Enjoying the discussion!
02-07-2006, 01:18 PM
#20
Burning Brakes
Thread Starter
Join Date: Apr 2002
Location: Colorado Springs, Colorado
Age: 54
Posts: 904
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by CGTSX2004
Good for you, but not everyone has nearly $1000 a month to put towards a car. Plus, if you think about it, during that period, you've spent a total of about $32,000. During that same period, on a lease, you'll have spent around one-third of that. If you take the $20k difference and keep that in a high yield bank account or even invest it, you'll likely see some pretty good returns.
So it's all a matter of perspective. I'd rather have the money now to invest rather than taking all that money and pour it into a depreciating asset that I'm not likely to keep longer than 2 to 3 years anyway.
So it's all a matter of perspective. I'd rather have the money now to invest rather than taking all that money and pour it into a depreciating asset that I'm not likely to keep longer than 2 to 3 years anyway.
i am glad you caught that, i couldnt have said it better myself.
here is an even better idea, how about you take that excess money and put it in a universal life insurance policy where you can earn interest at the prime rate and take a loan against the cashvalue when your car is paid off.
rather than purchase the car with cash from your paycheck how about you pay cash for the car with the cash from your life insurance and pay your life insurance policy back with interest you would have paid to any bank?
you can do all of this without paying or reporting any of it on your taxes
02-07-2006, 01:33 PM
#21
> 100K Mile Club Member
Originally Posted by Bass Mechanic
i am glad you caught that, i couldnt have said it better myself.
here is an even better idea, how about you take that excess money and put it in a universal life insurance policy where you can earn interest at the prime rate and take a loan against the cashvalue when your car is paid off.
rather than purchase the car with cash from your paycheck how about you pay cash for the car with the cash from your life insurance and pay your life insurance policy back with interest you would have paid to any bank?
you can do all of this without paying or reporting any of it on your taxes
here is an even better idea, how about you take that excess money and put it in a universal life insurance policy where you can earn interest at the prime rate and take a loan against the cashvalue when your car is paid off.
rather than purchase the car with cash from your paycheck how about you pay cash for the car with the cash from your life insurance and pay your life insurance policy back with interest you would have paid to any bank?
you can do all of this without paying or reporting any of it on your taxes
Man did you mess up! I have worked for the largest financial services company in the world for almost a decade - a few of which were spent in the UNIVERSAL LIFE AND ANNUITY DEPARTMENT. The UL is THE worst financial investment in existance. Which is why there are so many lawsuits about them. Please refer to the link in my previous message. You need it - BAD!
So what insurance company do you sell for?
02-07-2006, 03:05 PM
#22
Originally Posted by TSXinTN
Not picking a fight here, just thought someone needed to show a different perspective. Aren't you talking out of both sides of your mouth? First you say not everyone has $1000/month for a car note, then you explain what should be done with the extra money if you lease rather than buy.?. IMO if you do not have enough discretionary income to purchase a $30,000 car, then you should not "fleece" one either.
Originally Posted by TSXinTN
BTW, I will have spent $30K not $32K as in your example. Basically, your arguement reflects that you would borrow $30K at 4.15% interest so that you could invest it in a high yield bank account or other investments. Not for me.
And I am not saying that one should borrow $30k. For example, suppose a person has $500/month allotted each month to a car payment. If they buy, they will like spend all of that and then some. If they lease, they will likely spend about $350/month. Take the remaining $150/month and invest that. Over the course of 2 years, with a little bit of smart investing, your total expenditure over the two years on the lease would have come to substantially less than if you had financed the car.
Now, in your rather extreme case, suppose of the $1000/month, you spend $350/month on the lease. Take the remaining $650/month and save it up or invest it somewhere with strong returns. In two years, you'll have saved $15,600 + interest (or gains, depending on the investment).
In the scenario you presented, at the end of those two years, you have spent all the money and not saved any of it. That's all I'm getting at.
02-07-2006, 03:13 PM
#23
Three Wheelin'
Keep in mind that sometimes even smart investments loose money for a couple years so that return is far from guaranteed.
In my opinion the smart thing to do is buy a car you truly like (and spend as little as you can on financing whichs includes paying it off as early as possible) then really get your money's worth by driving the car for 10 years. If you're like me, you would have the car paid off in 2 years then spend 8 years without a car payment thus freeing up a lot of money to invest. I know the average american gets tired of their cars much quicker, but personally I don't -- and it's nice not having a car payment.
In my opinion the smart thing to do is buy a car you truly like (and spend as little as you can on financing whichs includes paying it off as early as possible) then really get your money's worth by driving the car for 10 years. If you're like me, you would have the car paid off in 2 years then spend 8 years without a car payment thus freeing up a lot of money to invest. I know the average american gets tired of their cars much quicker, but personally I don't -- and it's nice not having a car payment.
02-07-2006, 03:16 PM
#24
Back to the art of escaping out of a lease:
Im aware there is a "lease payoff" amount you can pay AHFC to walk away free an clear from the deal, but wouldnt you first need their (AHFC) permission to sell the car to a private 3rd party in order to aquire the money needed for the lease payoff? See I was under the impression, possibly mistakenly, that you could not put a leased vehicle up for private party sale.
Im aware there is a "lease payoff" amount you can pay AHFC to walk away free an clear from the deal, but wouldnt you first need their (AHFC) permission to sell the car to a private 3rd party in order to aquire the money needed for the lease payoff? See I was under the impression, possibly mistakenly, that you could not put a leased vehicle up for private party sale.
02-07-2006, 03:18 PM
#25
Burning Brakes
Thread Starter
Join Date: Apr 2002
Location: Colorado Springs, Colorado
Age: 54
Posts: 904
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by TSXinTN
Dude, where do think the money comes from to pay your life insurance premium???? YOUR PAYCHECK!!! Yeah, I would much rather pay back a loan on my life insurance since it was MY MONEY TO BEGIN WITH!!! If you want to talk investing...take the $100 a month you pay on your universal life policy. Pay $10 a month for a term policy for the same amount of coverage as the universal and invest the other $90 a month in a mutual fund pulling 8% MORE than the prime rate.
Man did you mess up! I have worked for the largest financial services company in the world for almost a decade - a few of which were spent in the UNIVERSAL LIFE AND ANNUITY DEPARTMENT. The UL is THE worst financial investment in existance. Which is why there are so many lawsuits about them. Please refer to the link in my previous message. You need it - BAD!
So what insurance company do you sell for?
Man did you mess up! I have worked for the largest financial services company in the world for almost a decade - a few of which were spent in the UNIVERSAL LIFE AND ANNUITY DEPARTMENT. The UL is THE worst financial investment in existance. Which is why there are so many lawsuits about them. Please refer to the link in my previous message. You need it - BAD!
So what insurance company do you sell for?
stay out of my thread on this subject, but since you brought it up ill have my say and this will be the end of it here and now.
here is the thing, i know im right, and you know your right, so who's right?
well it depends on who you ask and where you got you information from.
just because you work for a financial services company doesnt mean you know the best solution for people when it comes to life insurance, further you dont know what kinds of life products i sell. your UL product may be a lot different from mine. you dont know that that my UL products and annuities are fixed and some are tied to the stock market and make the same rate of return as your investments but arent investment products, they also arent variable and also dont have sales loads like variable products.
buying term and investing the rest as you would advise your clients is not only risky but in a down market and nearing retirement age a person will loose their term insurance and may not be prepared for retirement based on the value of their portfolio when they are ready to retire.
you cannot GUARENTEE anything with variable products. you can loose just as much as you stand to gain.
then there is tax consequenses that every investor i have ever met fails to consider when they talk about the rate of return on the investments.
say you made 8% in investments, well did you really? if you look at the money spent for the investment minus commissions, sales loads and fees not to mention if you take it out TAXES did you really realise 8% on your investment? i think not!
was your money liquid to you? probably not it depends on what you invested in.
my point is you made a blanket statement that does not apply to every consumer. some consumers like to take a little risk for a potential gain. others don't i can only assume you have a securities license. if you do you should know that as a good securities rep you must disclose all pros and cons of a particular investment stratagy to the client.
you making a blanket statement like that shows your interest lies in taking risks with peoples money. you better be really carefull before you make statements like that with your clients or you might risk an E and O claim or possible suspension of your license and or fines.
if your not licensed then you have no busness making any statements as to whats better for people or not.
each person has investment objectives, and for that matter may not have any desire to invest. perhaps they want to play it safe and buy life insurance be it whole life, UL or term. perhaps a annuity, one of the safest investments anyone could possibly make and no market risk!
it depends on the needs and objectives of the investor.
there, ive had my say, now get off your high and mighty investment horse and stay on topic thanks!
02-07-2006, 03:20 PM
#26
Burning Brakes
Thread Starter
Join Date: Apr 2002
Location: Colorado Springs, Colorado
Age: 54
Posts: 904
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by Brandon24pdx
Back to the art of escaping out of a lease:
Im aware there is a "lease payoff" amount you can pay AHFC to walk away free an clear from the deal, but wouldnt you first need their (AHFC) permission to sell the car to a private 3rd party in order to aquire the money needed for the lease payoff? See I was under the impression, possibly mistakenly, that you could not put a leased vehicle up for private party sale.
Im aware there is a "lease payoff" amount you can pay AHFC to walk away free an clear from the deal, but wouldnt you first need their (AHFC) permission to sell the car to a private 3rd party in order to aquire the money needed for the lease payoff? See I was under the impression, possibly mistakenly, that you could not put a leased vehicle up for private party sale.
no you have an obligation to either finish the lease or pay off the balance + taxes. wether you trade it into a dealer or sell it outright what does AHFC care? they got their money and the assets were liquidated
02-07-2006, 03:28 PM
#27
Originally Posted by Brandon24pdx
Back to the art of escaping out of a lease:
Im aware there is a "lease payoff" amount you can pay AHFC to walk away free an clear from the deal, but wouldnt you first need their (AHFC) permission to sell the car to a private 3rd party in order to aquire the money needed for the lease payoff? See I was under the impression, possibly mistakenly, that you could not put a leased vehicle up for private party sale.
Im aware there is a "lease payoff" amount you can pay AHFC to walk away free an clear from the deal, but wouldnt you first need their (AHFC) permission to sell the car to a private 3rd party in order to aquire the money needed for the lease payoff? See I was under the impression, possibly mistakenly, that you could not put a leased vehicle up for private party sale.
02-07-2006, 03:53 PM
#28
Senior Moderator
Curious, please explain more of what it takes to acquire the title to do this sale, I've never leased anything before. How much is this payoff amount, assuming that's out-of-pockey money and you have to have the title in hand to make a private sale.
Maybe it would make sense for my next vehicle, but I'm happy with having purchased / financed my new TSX for now.
Maybe it would make sense for my next vehicle, but I'm happy with having purchased / financed my new TSX for now.
02-07-2006, 03:57 PM
#29
Racer
Join Date: Feb 2004
Location: Atlanta
Age: 47
Posts: 334
Likes: 0
Received 0 Likes
on
0 Posts
This is a common misconception about leasing.
Suppose someone has a $400 lease payment with one year left and needs to get out of the lease, they call the dealer and the dealer says you need to pay $4000 (about the amount of the remaining payments) to get out of the lease. It reality, you may owe $24000 on the car, and the dealer is basically giving you $20,000 for it. This is the same situation as if you were financing the car.
To buy the car, or sell it to someone else, you simply call to get a payoff amount, send AHFC a check, and an odometer statement and they either will send you the title or send it to who you sold it to.
Check out option 3 from AHFCs Website
Suppose someone has a $400 lease payment with one year left and needs to get out of the lease, they call the dealer and the dealer says you need to pay $4000 (about the amount of the remaining payments) to get out of the lease. It reality, you may owe $24000 on the car, and the dealer is basically giving you $20,000 for it. This is the same situation as if you were financing the car.
To buy the car, or sell it to someone else, you simply call to get a payoff amount, send AHFC a check, and an odometer statement and they either will send you the title or send it to who you sold it to.
Check out option 3 from AHFCs Website
02-07-2006, 04:00 PM
#30
Ford Sales Consultant
Join Date: Jan 2006
Location: Chicago
Age: 48
Posts: 71
Likes: 0
Received 0 Likes
on
0 Posts
Out of pocket?
Originally Posted by Reach
Curious, please explain more of what it takes to acquire the title to do this sale, I've never leased anything before. How much is this payoff amount, assuming that's out-of-pockey money and you have to have the title in hand to make a private sale.
Maybe it would make sense for my next vehicle, but I'm happy with having purchased / financed my new TSX for now.
Maybe it would make sense for my next vehicle, but I'm happy with having purchased / financed my new TSX for now.
In order to even get your title, you would need to sell your vehicle and send your payoff amount in to your lienholder (bank/lender), who would then send you the title.
Diggs
EDIT: I think there is something called lease trader on the net, that lets peeps assume payments on other people's leases...taking it over in effect.
02-07-2006, 04:22 PM
#31
Senior Moderator
I totally know nothing about leasing, so pardon, but I'll try to restate. I thought you had to *already have* a title in hand to sell a car. I've sold 2 used cars, but they were my earlier cheaper cars and they were paid off. I signed the title, did the odometer statement, took a cashiers check, and handed over the title and keys.
I wouldn't buy a car unless the person had a clear title ready to sign and give to me. What am I missing here if you can't get the title until after you sell the car? That's what I'm referring to as out-of-pocket cost... assuming its a temporary out-of-pocket cost for the buyoff amount that is reimbursed (to yourself) when you actually sell/trade-in your lease.
I wouldn't buy a car unless the person had a clear title ready to sign and give to me. What am I missing here if you can't get the title until after you sell the car? That's what I'm referring to as out-of-pocket cost... assuming its a temporary out-of-pocket cost for the buyoff amount that is reimbursed (to yourself) when you actually sell/trade-in your lease.
02-07-2006, 04:32 PM
#32
> 100K Mile Club Member
Originally Posted by Bass Mechanic
dude, we could argue this all day long, and trust me you wont win. lets just keep this civil and on topic.
stay out of my thread on this subject, but since you brought it up ill have my say and this will be the end of it here and now.
here is the thing, i know im right, and you know your right, so who's right?
well it depends on who you ask and where you got you information from.
just because you work for a financial services company doesnt mean you know the best solution for people when it comes to life insurance, further you dont know what kinds of life products i sell. your UL product may be a lot different from mine. you dont know that that my UL products and annuities are fixed and some are tied to the stock market and make the same rate of return as your investments but arent investment products, they also arent variable and also dont have sales loads like variable products.
buying term and investing the rest as you would advise your clients is not only risky but in a down market and nearing retirement age a person will loose their term insurance and may not be prepared for retirement based on the value of their portfolio when they are ready to retire.
you cannot GUARENTEE anything with variable products. you can loose just as much as you stand to gain.
then there is tax consequenses that every investor i have ever met fails to consider when they talk about the rate of return on the investments.
say you made 8% in investments, well did you really? if you look at the money spent for the investment minus commissions, sales loads and fees not to mention if you take it out TAXES did you really realise 8% on your investment? i think not!
was your money liquid to you? probably not it depends on what you invested in.
my point is you made a blanket statement that does not apply to every consumer. some consumers like to take a little risk for a potential gain. others don't i can only assume you have a securities license. if you do you should know that as a good securities rep you must disclose all pros and cons of a particular investment stratagy to the client.
you making a blanket statement like that shows your interest lies in taking risks with peoples money. you better be really carefull before you make statements like that with your clients or you might risk an E and O claim or possible suspension of your license and or fines.
if your not licensed then you have no busness making any statements as to whats better for people or not.
each person has investment objectives, and for that matter may not have any desire to invest. perhaps they want to play it safe and buy life insurance be it whole life, UL or term. perhaps a annuity, one of the safest investments anyone could possibly make and no market risk!
it depends on the needs and objectives of the investor.
there, ive had my say, now get off your high and mighty investment horse and stay on topic thanks!
stay out of my thread on this subject, but since you brought it up ill have my say and this will be the end of it here and now.
here is the thing, i know im right, and you know your right, so who's right?
well it depends on who you ask and where you got you information from.
just because you work for a financial services company doesnt mean you know the best solution for people when it comes to life insurance, further you dont know what kinds of life products i sell. your UL product may be a lot different from mine. you dont know that that my UL products and annuities are fixed and some are tied to the stock market and make the same rate of return as your investments but arent investment products, they also arent variable and also dont have sales loads like variable products.
buying term and investing the rest as you would advise your clients is not only risky but in a down market and nearing retirement age a person will loose their term insurance and may not be prepared for retirement based on the value of their portfolio when they are ready to retire.
you cannot GUARENTEE anything with variable products. you can loose just as much as you stand to gain.
then there is tax consequenses that every investor i have ever met fails to consider when they talk about the rate of return on the investments.
say you made 8% in investments, well did you really? if you look at the money spent for the investment minus commissions, sales loads and fees not to mention if you take it out TAXES did you really realise 8% on your investment? i think not!
was your money liquid to you? probably not it depends on what you invested in.
my point is you made a blanket statement that does not apply to every consumer. some consumers like to take a little risk for a potential gain. others don't i can only assume you have a securities license. if you do you should know that as a good securities rep you must disclose all pros and cons of a particular investment stratagy to the client.
you making a blanket statement like that shows your interest lies in taking risks with peoples money. you better be really carefull before you make statements like that with your clients or you might risk an E and O claim or possible suspension of your license and or fines.
if your not licensed then you have no busness making any statements as to whats better for people or not.
each person has investment objectives, and for that matter may not have any desire to invest. perhaps they want to play it safe and buy life insurance be it whole life, UL or term. perhaps a annuity, one of the safest investments anyone could possibly make and no market risk!
it depends on the needs and objectives of the investor.
there, ive had my say, now get off your high and mighty investment horse and stay on topic thanks!
And when it comes to the subject of finance, I will. This is what I do for a living. I don't sell the products, it is my job to know them inside and out so that people like you (if you worked for my company) could call me up and ask questions when you don't know the answers to your clients questions. How do you think I knew that you sold the crap??? And who are you to say when the discussion is over? You want the last word and so I have no right to post a response to your message???? I will respond to what you replied and then I will not respond unless you send me a PM. About the UL products, I am very aware of what products are on the market. So, I not only know our products but I know yours too. All UL is crap. It is a great vehicle for the company and therefore you (the selling agent) to make money. How soon do your products start to build cash value? Three to five years. Which means your previous suggestion would not help someone with a four or five year car note. About the risk involved with investing. No 10 period in the stock market has ever lost money. Invest in mutual funds with long, proven track records and you will only make money. Folks that are near retirement should shift their investments to fixed vehicles - not the annuities and UL products that you sell but maybe a money market fund. Something with no out of pocket expense. If an individual has saved and invested for 30 years they will be well suited to retire and can be self-sufficient and self-insured, therefore leaving no need for insurance once their 30 year level term policy runs out.
About the tax consequences of investing...one should chose a vehicle that is tax deferred and therefore holds no tax consequences until the time that the money is used - which in my scenario will be when I have the most money I have ever had in my life. Also, the tax consequences will be minimal since you are only pulling out money as needed for retirement. I suggest putting the maximum amounts into a Roth IRA and 401K.
You can continue to use your "scare tactics" on your clients about investing so that they will buy your crap products but it doesn't work on those of us that have some sense. BTW, you are more likely to end up in court than I based on my previous experiences with knucklehead agents. You are so worked up to make a sale you make promises that these products cannot keep.
Enjoy your retirement!
02-07-2006, 05:56 PM
#34
Burning Brakes
Thread Starter
Join Date: Apr 2002
Location: Colorado Springs, Colorado
Age: 54
Posts: 904
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by TSXinTN
O.K. we are getting off topic here. Maybe you and I should exchange PMs and continue the conversation. Let me say a couple things here. First off this is a PUBLIC forum. Meaning when you post a thread I have ever write to throw in my And when it comes to the subject of finance, I will. This is what I do for a living. I don't sell the products, it is my job to know them inside and out so that people like you (if you worked for my company) could call me up and ask questions when you don't know the answers to your clients questions. How do you think I knew that you sold the crap???
And who are you to say when the discussion is over? You want the last word and so I have no right to post a response to your message???? I will respond to what you replied and then I will not respond unless you send me a PM. About the UL products, I am very aware of what products are on the market. So, I not only know our products but I know yours too. All UL is crap. It is a great vehicle for the company and therefore you (the selling agent) to make money. How soon do your products start to build cash value? Three to five years. Which means your previous suggestion would not help someone with a four or five year car note. About the risk involved with investing. No 10 period in the stock market has ever lost money. Invest in mutual funds with long, proven track records and you will only make money. Folks that are near retirement should shift their investments to fixed vehicles - not the annuities and UL products that you sell but maybe a money market fund. Something with no out of pocket expense. If an individual has saved and invested for 30 years they will be well suited to retire and can be self-sufficient and self-insured, therefore leaving no need for insurance once their 30 year level term policy runs out.
About the tax consequences of investing...one should chose a vehicle that is tax deferred and therefore holds no tax consequences until the time that the money is used - which in my scenario will be when I have the most money I have ever had in my life. Also, the tax consequences will be minimal since you are only pulling out money as needed for retirement. I suggest putting the maximum amounts into a Roth IRA and 401K.
You can continue to use your "scare tactics" on your clients about investing so that they will buy your crap products but it doesn't work on those of us that have some sense. BTW, you are more likely to end up in court than I based on my previous experiences with knucklehead agents. You are so worked up to make a sale you make promises that these products cannot keep.
Enjoy your retirement!
And when it comes to the subject of finance, I will. This is what I do for a living. I don't sell the products, it is my job to know them inside and out so that people like you (if you worked for my company) could call me up and ask questions when you don't know the answers to your clients questions. How do you think I knew that you sold the crap??? And who are you to say when the discussion is over? You want the last word and so I have no right to post a response to your message???? I will respond to what you replied and then I will not respond unless you send me a PM. About the UL products, I am very aware of what products are on the market. So, I not only know our products but I know yours too. All UL is crap. It is a great vehicle for the company and therefore you (the selling agent) to make money. How soon do your products start to build cash value? Three to five years. Which means your previous suggestion would not help someone with a four or five year car note. About the risk involved with investing. No 10 period in the stock market has ever lost money. Invest in mutual funds with long, proven track records and you will only make money. Folks that are near retirement should shift their investments to fixed vehicles - not the annuities and UL products that you sell but maybe a money market fund. Something with no out of pocket expense. If an individual has saved and invested for 30 years they will be well suited to retire and can be self-sufficient and self-insured, therefore leaving no need for insurance once their 30 year level term policy runs out.
About the tax consequences of investing...one should chose a vehicle that is tax deferred and therefore holds no tax consequences until the time that the money is used - which in my scenario will be when I have the most money I have ever had in my life. Also, the tax consequences will be minimal since you are only pulling out money as needed for retirement. I suggest putting the maximum amounts into a Roth IRA and 401K.
You can continue to use your "scare tactics" on your clients about investing so that they will buy your crap products but it doesn't work on those of us that have some sense. BTW, you are more likely to end up in court than I based on my previous experiences with knucklehead agents. You are so worked up to make a sale you make promises that these products cannot keep.
Enjoy your retirement!
thanks
02-07-2006, 06:02 PM
#35
Burning Brakes
Thread Starter
Join Date: Apr 2002
Location: Colorado Springs, Colorado
Age: 54
Posts: 904
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by Reach
I totally know nothing about leasing, so pardon, but I'll try to restate. I thought you had to *already have* a title in hand to sell a car. I've sold 2 used cars, but they were my earlier cheaper cars and they were paid off. I signed the title, did the odometer statement, took a cashiers check, and handed over the title and keys.
I wouldn't buy a car unless the person had a clear title ready to sign and give to me. What am I missing here if you can't get the title until after you sell the car? That's what I'm referring to as out-of-pocket cost... assuming its a temporary out-of-pocket cost for the buyoff amount that is reimbursed (to yourself) when you actually sell/trade-in your lease.
I wouldn't buy a car unless the person had a clear title ready to sign and give to me. What am I missing here if you can't get the title until after you sell the car? That's what I'm referring to as out-of-pocket cost... assuming its a temporary out-of-pocket cost for the buyoff amount that is reimbursed (to yourself) when you actually sell/trade-in your lease.
02-07-2006, 06:48 PM
#36
Originally Posted by Reach
I totally know nothing about leasing, so pardon, but I'll try to restate. I thought you had to *already have* a title in hand to sell a car. I've sold 2 used cars, but they were my earlier cheaper cars and they were paid off. I signed the title, did the odometer statement, took a cashiers check, and handed over the title and keys.
I wouldn't buy a car unless the person had a clear title ready to sign and give to me. What am I missing here if you can't get the title until after you sell the car? That's what I'm referring to as out-of-pocket cost... assuming its a temporary out-of-pocket cost for the buyoff amount that is reimbursed (to yourself) when you actually sell/trade-in your lease.
I wouldn't buy a car unless the person had a clear title ready to sign and give to me. What am I missing here if you can't get the title until after you sell the car? That's what I'm referring to as out-of-pocket cost... assuming its a temporary out-of-pocket cost for the buyoff amount that is reimbursed (to yourself) when you actually sell/trade-in your lease.
As a buyer, no, you would never want to give payment in full without driving off in it with the title in hand (if you payed cash for the car.)
I sold a car i owed money on to a private party once. (Finance, not a lease). We met at the bank I had the financing through. He gave me the check, I gave it to the bank. Bank gave me the title, I gave the title and keys to the guy.) Actually the bank cut me a "refund" check for the equity I had too.
In theory you should be able to do a deal like this with a AHFC lease, assuming AHFC would allow it. If you could, you still wouldnt want to do it until the "magic point" when the car was worth more than the lease payoff.
02-07-2006, 07:33 PM
#37
Racer
Join Date: Feb 2004
Location: Atlanta
Age: 47
Posts: 334
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by Brandon24pdx
I understand the confusion there. What you have to do in the event the seller does not have the title free and clear in his/her possesion to give to the buyer, is arrange to have the title sent to the seller's financial institution, which in this case of a leased car would possibly be the dealership, or another physical location that was "okayed" by AHFC.
As a buyer, no, you would never want to give payment in full without driving off in it with the title in hand (if you payed cash for the car.)
I sold a car i owed money on to a private party once. (Finance, not a lease). We met at the bank I had the financing through. He gave me the check, I gave it to the bank. Bank gave me the title, I gave the title and keys to the guy.) Actually the bank cut me a "refund" check for the equity I had too.
In theory you should be able to do a deal like this with a AHFC lease, assuming AHFC would allow it. If you could, you still wouldnt want to do it until the "magic point" when the car was worth more than the lease payoff.
As a buyer, no, you would never want to give payment in full without driving off in it with the title in hand (if you payed cash for the car.)
I sold a car i owed money on to a private party once. (Finance, not a lease). We met at the bank I had the financing through. He gave me the check, I gave it to the bank. Bank gave me the title, I gave the title and keys to the guy.) Actually the bank cut me a "refund" check for the equity I had too.
In theory you should be able to do a deal like this with a AHFC lease, assuming AHFC would allow it. If you could, you still wouldnt want to do it until the "magic point" when the car was worth more than the lease payoff.
The only way around this for the buyer's peace of mind is for the buyer to have a bank check written out to the finance company. I am also assuming you would have a bill of sale written up and notorized as well. Secondly, you would need the seller to fax a letter to AHFC with his intent on paying off the loan and releasing the title directly to the buyer, with the buyers name, address and copy of the check included, signed (and notorized if possible) by both parties.
But the seller could always just have the loan paid off and say the car was stolen, but then you woud have proof the car was sold to you.
02-07-2006, 08:20 PM
#38
> 100K Mile Club Member
"Actually, $13,300 + $19,100 = $32,400 (using the numbers you presented)."
Sorry, misunderstood which money you were referencing.
Bass Mechanic - I have PMed you.
Sorry, misunderstood which money you were referencing.
Bass Mechanic - I have PMed you.
02-07-2006, 08:24 PM
#39
Senior Moderator
OK so the title is still in escrow through the lending institution and there are a few hoops to jump through if you want to go the private party route. What GT above is saying makes sense, you just act as a third party to the sale, you're connecting your buyer and the financial institution that actually owns the car. In the end you just clear yourself of it.
I see what yall are saying about how easy it is to 'trade up' a lease under the right circumstances, and how it can be a good idea when you're nearing the end, but not quite at the end of the lease. Still, this does only apply to a select amount of low-payment lease transactions, and generally speaking, high resale vehicles such as acura, lexus, bmw.
For now I know that I *don't* know enough about how to make all this magic work to make it worth it, and I do enjoy the sense of actually owning my car, as opposed to making rent payments on it. I put a lot down on my car and I plan to pay it off rather quickly within a year or two and just eat the depreciation when I go to sell it. No matter what, there's no way to escape the general fact that you must pay economic rents on any depreciating asset.
Fun thread though, it'll make me think twice and consider a lease on my next vehicle. I've honestly never thought it through before and always gone the own / finance route.
I see what yall are saying about how easy it is to 'trade up' a lease under the right circumstances, and how it can be a good idea when you're nearing the end, but not quite at the end of the lease. Still, this does only apply to a select amount of low-payment lease transactions, and generally speaking, high resale vehicles such as acura, lexus, bmw.
For now I know that I *don't* know enough about how to make all this magic work to make it worth it, and I do enjoy the sense of actually owning my car, as opposed to making rent payments on it. I put a lot down on my car and I plan to pay it off rather quickly within a year or two and just eat the depreciation when I go to sell it. No matter what, there's no way to escape the general fact that you must pay economic rents on any depreciating asset.
Fun thread though, it'll make me think twice and consider a lease on my next vehicle. I've honestly never thought it through before and always gone the own / finance route.
02-07-2006, 09:04 PM
#40
Burning Brakes
Thread Starter
Join Date: Apr 2002
Location: Colorado Springs, Colorado
Age: 54
Posts: 904
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by Reach
OK so the title is still in escrow through the lending institution and there are a few hoops to jump through if you want to go the private party route. What GT above is saying makes sense, you just act as a third party to the sale, you're connecting your buyer and the financial institution that actually owns the car. In the end you just clear yourself of it.
I see what yall are saying about how easy it is to 'trade up' a lease under the right circumstances, and how it can be a good idea when you're nearing the end, but not quite at the end of the lease. Still, this does only apply to a select amount of low-payment lease transactions, and generally speaking, high resale vehicles such as acura, lexus, bmw.
For now I know that I *don't* know enough about how to make all this magic work to make it worth it, and I do enjoy the sense of actually owning my car, as opposed to making rent payments on it. I put a lot down on my car and I plan to pay it off rather quickly within a year or two and just eat the depreciation when I go to sell it. No matter what, there's no way to escape the general fact that you must pay economic rents on any depreciating asset.
Fun thread though, it'll make me think twice and consider a lease on my next vehicle. I've honestly never thought it through before and always gone the own / finance route.
I see what yall are saying about how easy it is to 'trade up' a lease under the right circumstances, and how it can be a good idea when you're nearing the end, but not quite at the end of the lease. Still, this does only apply to a select amount of low-payment lease transactions, and generally speaking, high resale vehicles such as acura, lexus, bmw.
For now I know that I *don't* know enough about how to make all this magic work to make it worth it, and I do enjoy the sense of actually owning my car, as opposed to making rent payments on it. I put a lot down on my car and I plan to pay it off rather quickly within a year or two and just eat the depreciation when I go to sell it. No matter what, there's no way to escape the general fact that you must pay economic rents on any depreciating asset.
Fun thread though, it'll make me think twice and consider a lease on my next vehicle. I've honestly never thought it through before and always gone the own / finance route.
for example in about 20 days from now im getting a very large profit bonus check. i will be paying cash for a new 2006 Honda shadow Sabre 1100 cc V twin cruiser. this is somthing i am buying for me just to reward myself for the hard effort i put into building a million dollar book of business in only 2.5 years.
i need this bike to feel like MINE or whats the point?
for a car, its transportation. when i drive it, it still feels like mine but not the way paying for it cash feels.
be it a lease or a financed car the feeling is the same, you make the payment every month, its just that a s a lease i make less of a payment and i know i wont keep it.
Thread
Thread Starter
Forum
Replies
Last Post
lanechanger
Member Cars for Sale
4
10-13-2015 10:56 AM
kb1rl
2G RL Audio, Bluetooth, Electronics & Navigation
5
09-30-2015 10:17 AM
TLguy42
4G TL Audio, Bluetooth, Electronics & Navigation
0
09-26-2015 11:27 AM
