ffactoryxx

Ok so I have a 2005 Acura TL w/ Navi with about $5500 left to pay on it from my purchase. Payments are about $450/mo.

I want to trade it in and get either a 2009/10 TL Tech for Purchase or 2012 w/ Tech for Lease.

I am a bit confused on which way to go. I assume I can get around $10K for my car.

1. I still dont understand the Money Factor thing. Can someone explain.

2. Is there a way they could low ball me on the trade in value?

3. Is there anyway to get a 2012 w/ tech lease for around $400 to $450/mo. How much should I look to put down and is this a way for them to some how make out better on the deal? Also what would be the best way to work with the dealer to get it down this low.

4. How much should one look to pay for a 2009 or 2010 w/ tech with 10K-30Miles

Any suggestions would help.

omaralt

just for your info; i put down $10K (trade in) and financed the rest on my 12 TL and my payments are around $550/month. but i do have the sh-awd. if you get a regular fwd tl w/tech you should be able to get it for around $38K ++ = ~$41K. take out $10K for your trade = $31K. with 0.9% for 60 months they're running your right over $500/month... hm.. maybe a little too much dunno.. but it's always better to buy imo.. maybe wait a little longer and see if you can put like $15K down?

Mr.Skytech

iTrader: (13)

Wow I was in the same situation as you not too long ago. Like maybe 6/10/2012.

This is what i did
I had a 2007 TL-S with 46K miles. I owed 8500.00 for it. It was appraised for 18500.00. Giving me 10k in equity. I too was contemplating purchasing a 2011 TL-AWD or a lease on the new TL 2012 Tech.

So I thought, i get tired of cars fast, i love to change stuff up every once in a while, why not a lease. So i went for a lease.

The deal went like this. I gave them my car they gave me a 2012 TL-Tech for 36 months, 15K a year and 2K back to me. My monthly payment was 249.00 for my loan but now i pay 269.00 for my lease.
The first payment was made for me already, so technically i have 35 more to go. If you think about it15K miles a year is not a lot.

omaralt

ya the numbers look "nice" but look at it this way; you put $8K down (which is a horrible idea; you never put money down on a lease; what happens if you total the car tomorrow? your out those $8K) plus you now have 35 payments of $269/month = $9415 + 8000 = $17,415. you pretty much paid $17K to rent the car for three years. thats more than half the price of the car... and you are left with nothing in 3 yrs.. to put it nicely lease is for people to drive nice cars when they really cant afford them..

omaralt

Here is a link explaining why you shouldn't put any money down on a lease::

http://www.leasecompare.com/autolease101_6.php

Mr.Skytech

iTrader: (13)

Damn omaralt you didnt have to go there. I can afford a nice car but i hate the high monthly payments. Maybe i did make a mistake in leasing but its my first time and i feel ok with it.

Maybe by the time the newer TL comes out in 2013 with more toys looking like DAMN I will decide to buy it. Who knows what the future holds.

BTW, your insurance goes up because of the lease. Acura requires more coverage. If it gets totaled i have gap insurance so i am not worried.

omaralt

lol not trying to make you feel bad; you live and you learn; trying to prevent somebody else from making the same mistake. read the link i posted; it doesnt matter if you have gap insurance (which is good because you wont owe anything additional) but you still wont get back the $8K you put down. ie you total it tomorrow, you wont owe anything extra but you just paid $8K to lease the car for one month.

potmilkz

i leased my car and im only paying 400 a month with 3k down.

im leasing to buy... because i got like 2.9% rate. so it wouldnt matter to me.. plus i have another car to drive so im not putting that much miles on the 4g

Mr.Skytech

iTrader: (13)

Its all good ormaralt, yo potmilkz what do you mean lease to own?

HighRevving

Op,
Couple of 'subjective' observations..

• You are still under water (read debt) $5.5k yet considering to dive deeper another $20k
• You seem to have made peace with the fact that you should always have car payments
• You are planning on jumping on a lease yet don't understand the very basic concept that makes leases profitable (money factor)
• Business gurus that opt for a lease are those that actually profit from it while driving their dream car (out of scope of this thread)

As far as bankers are concerned, you are an obedient & well-behaved citizen!

potmilkz

you have an option to buy out your lease at the end of term.

there is a price listed at the end of your lease on your documents. mine shows to be 22k. you have an option to buy the car if you want at the end.. and also negotiate the price and drop it down probably 2k or so.

the dealer does not want your car back, thats for sure, they want to sell you the car as if they are selling any other car.. they will work with you.

the way i see it is that this is the only way to buy a luxury car without forking out 600-700 every month with a high ass down payment.

some of the folks here put 10k down and paying about 600 a month just to finance their car for 3-5 years.

i pay about 400 and save myself 200 every month on payments and also save 7k on down payment. at the end, i can knock off 2k off the total price and still have 2.9%apr.

then when your lease is up, you can either down more if you want to purchase the car.. im downing about 6k so my payments will be about 350-400 every month

potmilkz

oh and, never buy a car off the lot, especially a high end luxury car.

some of the members here bought FWD base and then they end up trading it in for a SHAWD. This shows that not everyone is happy until they have truly driven the car for a period of time.

this way you can keep your options open if there are other cars you want.

do a 3 year lease, down as less as possible, so once your term is up you can get a newer car.

i would never finance a car right off the bat, i would have to test it out for few years before i opt to buy it..

Stew4HD

Man, I agree and see the logic as to why leasing is not the best way to go. I got into a huge argument on here a few months back for saying how bad leases are and even linked to several articles written by money managers.. in the end, I just threw up my hands and let the fool and his money go their seperate ways.

omaralt

lol come on man.. test drive it for a few years? using your method your financing a car for up to 8 yrs! thats nuts; most people dont keep a car for more than 3-5 yrs.. after 3 yrs with a car most people are ready for something new and end up leasing something else and continue in this cycle of always having car payments.

ffactoryxx

So what I hear is buying is the way to go. Maybe buying a 2009-2010 model for around $30-$33K is the way to go.

HighRevving

The 'way to go' is paying off your car and keeping it for sometime assuming it is mechanically feasible. I am sure it is still beautiful & well cared for. Live without car payments for x years. Get out of debt & save some cash. Once you have grown enough feathers on your skin go back to dealerships and play if that is what you like.

The way i look at it (and please don't feel insulted), signing the dotted line on a vehicle which i couldn't write a check for and walk out with no regrets is a repo episode waiting to happen..

potmilkz

everybody has their own points of views in things..

i like to have several cars at my disposal.. so selling my 4gtl is not a option for me..

my car will take total of 6 years to pay off if i go according to schedule. if i decide to dump like 5k to lower it then much faster.

btw, i have 2 cars in my family that was bought new 13+ years ago brand new.

a 98 civic and a 97 toyota previa, both are 200k+ and still runs like a champ and i have no plans selling them.

i dont know if you have younger/older siblings, but i pass my vehicle on to my youngest brother once its done paying it off so the vehicle can be in the family.

jjsC5

As usual, there are two camps on leasing - those who think it's okay, and those who think it's stupid. I have leased quite a few cars, my current Lexus is leased. I don't think leasing is any worse than buying from a financial standpoint. You can pay too much when you buy a car, and you can pay too much when you lease a car.

I am not going to waste my time going through the math, but I find that for me - I only keep a car 2-3 years typically, leasing CAN be just as economical. It does depend on the deals that are available through the companies leasing arms.

If you are the type of person who can happily keep a car for over five years, then yes - I agree that buying will become more economical. But I can no more keep a car that long than I can be happy driving a Honda Civic. I say that for a reason. Why would anyone who drives a $40k plus Acura tell someone they are making a stupid move by leasing? The fact you are driving a $40k car instead of a $25k car could be construed as just as financially stupid.

As car guys, we are all paying more than we have to for our transportation in order to get what we enjoy. We spend stupid money on aftermarket stuff to make the cars the way we want - because we are enthusiasts, we change our oil more than we should -because we are enthusiasts....you get the picture.

omaralt

leasing can make sense for some people; thats not my argument here. what is stupid is putting money down on a lease. some companies (i know bmw does, not sure of others) allow you to put done security deposits which lower your payment, and you get that money back at the end of the lease; you should pay the max on those. but putting money down on a lease is not smart as you can lose the whole amount. like i explained above; you put $10K down on a lease. 2 months later you total the car. your insurance will pay off your lease; gap insurance will take care of the rest. you dont owe anything, but your also out the $10K you just put down. you just paid $5k/month to lease a TL

jjsC5

I'm not convinced that it true. If something happens to your car (stolen, totaled etc) you are responsible for the loss to the leasing company regardless of how much you put down or not. The only factor that could effect that is what "gap" insurance pays or doesn't pay - I'm not as familiar with that. Saying that you don't get the money back makes no sense. It's all about what the car is worth when the loss occurs versus how much has been paid on the car.

It's no different than buying a car at that point. If you buy a car and it's totaled your insurance company pays you what the car is worth, and if you have a loan you are responsible for paying off the loan. Neither the leasing company nor your insurance companies cares whether you have put money down or not - its a "pay me now or pay me later" scenario.

Leasing is the same. Your insurance company is going to pay you the value of the car at the time it was totaled. You then owe the leasing company whatever the payoff of the lease is. If you put money down, the payoff is less by that amount, right?

Stew4HD

All good points. I guess I hadn't looked it in terms of the way we on here go about things. We do go against "conventional" wisdom. Smart money says to buy a clean used car with cash.. drive it until the wheels fall off.. save money during that time.. buy another clean, used car... wash rinse repeat.

I normally keep a car about 5 years or so, the 3G was 3 years.. so a lease would have been perfect on it since it had 42K miles on it, under the 15k a yr limit. .. hmmm.. looks like I need to re-think things

potmilkz

on the dot!

im not sure if the check goes to the person that leased the car or the finance company first..

n-spring

I'm glad you somewhat see the light/logic. I started leasing vehicles for the same reasons jjsC5 states. I can't keep a car for more than 3 years if I tried. I kept the last one 2.5 years, and have had some for as short as 4 months. I got tired of taking it in the shorts every time I got low-balled on trade value. At least with a lease, I'm paying for just the depreciation plus a small lease charge every month, and I know exactly how much the car will be worth at the end of the lease. Leasing also stabilizes my cash flow. I can get into a lease with no money down, and have lower payments than if I was buying the entire amount of the car.

n-spring

To the OP, check out this website to learn everything there is to know about leasing: http://leaseguide.com/. The discussion of how to calculate monthly lease payments and money factor is here: http://leaseguide.com/lease08.htm

n-spring

The difference between money down on a loan vs lease is that the former is equity, the latter a capital cost reduction. The lessee cannot hold equity in the vehicle; therefore you run the risk of losing the amount of the cap cost reduction if the car is lost/stolen/totaled early in the lease. It's a moot point if the car is lost/stolen/totaled in year 2.8 on a 3 year lease.

With a down payment on a loan, you get built-in equity. Chances are that if the car is lost/stolen/totaled shortly after taking out a loan, the car is worth more than your outstanding balance on the loan, and you'd get some money back.

Moral is, don't put anything down on a lease if you can get away with it.

jjsC5

While I think there are two sides to the issue, I will say that I do not put money down. To me it defeats the purpose of leasing. Frankly, I have bought most of my cars, and for my daily driver I got tired of putting $10,000 or whatever down, then two years later trading the car with less than that in equity, so I had to pull money out of savings again. I realized I'm better off leasing my car so I don't have to be putting money down.

I do have three cars and two motorcycles. All the "toys" I paid cash for, and the TL I bought with about 50% down. So it's not like I'm trying to buy more than I can afford.