txathlete

So who here leases a TSX and then buys it at the lend of the lease? Besides the lower monthly payments at the beginning, what are some other reason(s) one would lease a car that you plan on buying in the end? Lower payments and new car every 2-4 years seems like the only good ideas for a lease. Otherwise, it's just like throwing money away. Any rebuttals?

iamhomin

Because people like to change their cars as often as possible without worrying about the hassel of re-selling or fixing their cars.

telco1

I lease my TSX. I'vw always believed that you buy what appreciates and rent what depreciates. With todays warranties on cars, car ownership for me costs very little on an annualized basis. I can also right off a portion of my lease payments. At the end of the term on my TSX, I will just turn it in and if I still like the car as much as I do now, I will just order another one. Easy and simple.

In addition, since I generally don't put alot of miles on my cars, and impeccably maintain them both inside and out, the value at the end for have been typically higher than the buyback. I also have an excellent relationship with the leasing company that I use. At the end of the lease, I usually get back money. It has varied depending on the vehicle and the market conditions at the time. I have a alot of flexibility.

Bottom line for me is that my leasing experience has always been a good one.

Lawrie

TdotSSTSX

I lease as a write-off measure. It is simpler to deduct vehicle expenses that have a lease cost, as opposed to a purchase and asset cost. Also, the first car I ever bought was a lemon, and I felt like a sucker for buying it. Now, I lease first, and if the vehicle is quality, and retains it's value, I buy it out.

If you add up the purchase versus lease costs, the difference is marginal (less than $2k), so the lower monthlies make driving a nicer car easier on the wallet.

bob shiftright

Since (post-9/11) my office is now out in the boondocks, I need to drive about 25,000 miles annually. Using the Acura lease calculator for a conventional 36 month lease I came up with total payments of $22,525 including the excess mileage charges of $0.15/mile. Vs. $25,990 cash (+TTL) to BUY the car in the first place. Think I would have much trouble selling a 3 year old TSX with 75k on the clock for more than $3,465?

Bass Mechanic

i lease because i can write the whole carpayment off on my taxes. because i own a business and use my car for business use only (well there are exceptions, shhh)
anyway like the others said its a great way to drive a car, under warranty, no price haggeling upon returning the car, get a new car every 3 years. also it was mentioned how you get money back. i have done this oin the last 2 hondas i have leased.
buyer beware though.. Dont lease a car with any bank besides the bank that represents the car maker IE American Honda Finance. i can tell you from personal experience other banks will take the interest out of the lease upfront. if this happens you cant trade in early if you want.
Honda on the other hand doesnt play games like this because they would like to see you come back for another car and they structure their leases so it's easier to trade in and get another car early.

txathlete

OK, so basically, lease if you don't want the hassle of taking care of the car when a mechanical or other problems erupt with the car (leasing under warranty), lower monthly payments on a lease, tax write-off (if you use it for business purposes), and the ability to get a new car every 2-4 years.

I had thought about leasing a TL b/c the monthly payments were cheaper during the lease but after running the numbers (this is just an example at MSRP, yes I know no one ever pays MSRP) here is what I got:

Example: Base Acura 2004 TL non navi lease: 48 months at $389/month with 10% down & TT&L (ex. 6.25%). Residual is 51%. MSRP: $33,195 (cap cost). After 48 months you would have paid: 48 months X $389 +($3319.50 + 1016.60 +160) = $23,168.10. $3319.50 is 10% of the MSRP, $1016.60 is the sales tax, and $160 is the title and license. Sales tax is 6.25% of 49% of MSRP (or (49% X MSRP) X 6.25%). Some dealers have a no sales tax special.

This is what you would have paid after 48 months and if you didn't buy the car at the end of the lease, you just spent $23, 168.10 and have nothing...no equity (no that automobiles appreciate anyways). Now, if you decided to buy at the end of your lease, you would still owe 51% of the MSRP or $16,929.45. So add the amount you leased ($23,168.10) to the residual ($16,929.45) and your total for the car (not including the interest rate if you had to finance the car at the end of the lease), your total cost of leasing and then buying the car is $40,097.55. THAT'S $6,902.55 more than if you bought the car at MSRP!!!!

I guess for me, I would like to own something after paying $23K. As for the warranty, you can always buy an extended warranty from the dealership when your original warranty is almost up or just buy an after-market warranty for alot cheaper. Just my 2 cents. Thanks for your responses

Jim J

you mention interest, but you didn't calculate

say 5 year loan for @5%, you'd pay 38,7k. so you are only talking ~2k.

txathlete

To each their own.

YBA

http://www.acura-tsx.com/forums/show...ighlight=lease

floridaowner

If you are turning in the car why does it make a difference if the car is immaculate? The only thing you have to make sure is that you are not going to be charged for any damages etc. Otherwise you turn the car in and that's it.
In terms of advantages- leasing gives you opportunity to always have a car under warranty. Yes you can lease a car you can't afford to buy.

Bass Mechanic

i know a guy that leased a toyota 4 runner and waited 17,000 miles to do the first oil change. after much arguing with him to change it he finally did. his attitude was that if i lease a car im not putting any money into anything if ill be rid of it in 3 years, what do i care if it craps out, warranty will cover it.
just interesting story i thought i would share.

gfxdave99

Your friend is a M O R O N.



Lease if : you always want a new car, you like to keep your monthly out of pocket low, you have your own business and you can write it off. I mean if you are going to do the typical 60 mo loan and in 5 years you are going to want a new car, the money you will have from trading it in vs the money you would have saved with a lower lease payment over 36/48mo is pretty close.

Dont lease if : You like to eventually own something and you wouldnt trade your car in before its paid off or get into the situation where you are upside down on a loan, you want to modify your car in a way that is not reversable before turning in.

Nick250

FWIW there are not tax advantages by leasing over buying as far as business deductions on your federal taxes are concerned. Nadda, zip, zilch. This is a very common misperception. The maximum amount of your automobile business deduction is capped at fairly low number and does not distinguish between leasing and owning. Everyone who uses their car for business will hit that cap and not be able to deduct anything more. The person who drives a $75,000 car for business gets no more of a deduction than one who drives a $27,000 car because of the cap (we are talking cars here, not trucks). I work for the largest real-estate firm in the world where there are tens of thousands of people using their personal cars for business and this has been looked at six ways from Sunday by tax experts. So buy or lease as you wish, but tax consequences should not be part of your decision.

Bass Mechanic

i dont know who does your taxes but i know for a fact my adjusted gross income was determined by the more than 5,500 dollars worth of carpayments, oil changes, car washes, and fuel i claimed as business expenses last year.
i think the cap you speak of is set so you cant claim a hugely expensive car like a 75,000 one and expect the IRS to belive it is a necessary car to buy to run your business.
i wached as my accountant put all the numbers from my profit and loss statement into the computer and calculate the adjusted gross income.
just like all the other expenses such as rent, phone, postage, office supplies, computers, internet access, advertising, ect... are all business expenses. now if you use your car for personal use you cant claim the whole car expense. but my wife drives the "family" car and the only thing we can claim on our itemized taxes is the cost of the registration costs on the car's
food and entertainment can only be deducted at 50% for business expenses and you dont have to keep any receipts for anything you buy under 20.00.
now im no accountant but i know at least these facts were explained to me by my accountant. and in my opinion are all legitimate business expenses that you should be claiming as expenses running a business. therefore all are eligable for a tax exemption.

also i belive that purchasing a car implies that you will be keeping some of the equity since you pay it off faster than it depreciates. leasing on the other hand is 100% tax deductible because your basically RENTING a car, not owning it. and also it is used as a tool for you to conduct business.

now i have a friend that bought a 2500 chevy HD truck for a business he is running. apparently vehicles with a certain load capacity or special function (im not sure which) also classify as a tax deduction and in this case a purchase qualifies for a 100% tax writeoff.
maybe someone with an accounting background can shed some light?

Nick250

I took a quick look at my 2003 Turbo Tax and came up with this (unfortunately you cannot cut and past fromTurbo Tax). For cars purchased in 2003 the limit on the business write offs for federal tax is:

$10,710 First Year
$4,900 Second Year
$2950 Third Year
$1775 Fourth & Fifth Year

I believe you get to add your other expensive, like insurance, gas, etc., to these numbers. These numbers have increased quite a bit in the past few years. The last time I looked at them a few years ago the first year cap was in the $4500 range.

Bass Mechanic

so i guess the answer is to lease a new car every few years and keep the payments to a predetermined limit.