Leasing thread..recovered from the "other" site..
07-09-2003, 11:40 PM
#1
Burning Brakes
Thread Starter
Leasing thread..recovered from the "other" site..
I know we have had a lot of threads on leasing lately and I managed to recover this piece of a thread from you-know-where. Not sure if these people are members here, but the answer to the question (from a guy who worked at Edmund's) actually totally changed my view of leasing. Thought I would share it with the "new" group... 
"I've heard many "financial advisors" say, "never lease a car"; quite frankly, I am surprised an "Edmunds guy" would lease
a car (since Edmunds is kind-of a consumer-advocacy group).
What am I missing, Edmundsguy? Does the "never lease a car"
adage only apply to cars with poor residuals (i.e, NOT Acura)?
Not trying to sound insulting, just trying to better understand your
perspective -- since you do work on the inside of the business. "
--------------------------------------------------------------------------------
"Actually, most financial advisers recommend buying things that appreciate (like homes) and leasing things that depreciate (like cars).
Now, leasing is always best with cars with either high residuals or low money factors (interest rates). At it happens, Acura has some of the best residuals in the industry.
For me, I like to get a new car every three years (yes, I like to drive the best and newest out there), I don't mod my cars, I like to always have a car under warranty and I would rather have my money elsewhere, rather than tied up in a rapidly depreciating object.
I am assuming that the TSX will have similar residuals as the TL has. If this is the case, I should be able to lease one for about $350/mo for 36 months (12K miles/year). This assumes an MSRP around $25K and a selling price of $24K. Now, let's say you buy the car. Take that same $24K selling price, add in sales tax (6% in my case) and you have a final selling price of about $25.5K. Let's say you can finance at 5.9% for 60 months, you would have to put down almost $7300 to get the same payment. I would much rather use that money to make home improvements, pay down my mortgage faster, invest or go on a nice vacation. When the lease is up, I don't have to worry about trying to sell the car for a certain amount or arguing over trade in values. I simply give the car back and move on to the next latest and greatest.
Yes, I have a never ending string of car payments, but like I said, I am never happy keeping a car very long anyway. Leasing is not for everyone, but it works for me very nicely."
"I've heard many "financial advisors" say, "never lease a car"; quite frankly, I am surprised an "Edmunds guy" would lease
a car (since Edmunds is kind-of a consumer-advocacy group).
What am I missing, Edmundsguy? Does the "never lease a car"
adage only apply to cars with poor residuals (i.e, NOT Acura)?
Not trying to sound insulting, just trying to better understand your
perspective -- since you do work on the inside of the business. "
--------------------------------------------------------------------------------
"Actually, most financial advisers recommend buying things that appreciate (like homes) and leasing things that depreciate (like cars).
Now, leasing is always best with cars with either high residuals or low money factors (interest rates). At it happens, Acura has some of the best residuals in the industry.
For me, I like to get a new car every three years (yes, I like to drive the best and newest out there), I don't mod my cars, I like to always have a car under warranty and I would rather have my money elsewhere, rather than tied up in a rapidly depreciating object.
I am assuming that the TSX will have similar residuals as the TL has. If this is the case, I should be able to lease one for about $350/mo for 36 months (12K miles/year). This assumes an MSRP around $25K and a selling price of $24K. Now, let's say you buy the car. Take that same $24K selling price, add in sales tax (6% in my case) and you have a final selling price of about $25.5K. Let's say you can finance at 5.9% for 60 months, you would have to put down almost $7300 to get the same payment. I would much rather use that money to make home improvements, pay down my mortgage faster, invest or go on a nice vacation. When the lease is up, I don't have to worry about trying to sell the car for a certain amount or arguing over trade in values. I simply give the car back and move on to the next latest and greatest.
Yes, I have a never ending string of car payments, but like I said, I am never happy keeping a car very long anyway. Leasing is not for everyone, but it works for me very nicely."
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