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Smart Shopper Leasing vs. Purchasing
517 messages, Last post on Sep 17, 2009 at 12:47 PM
You are in the Smart Shopper Forum. Your Hosts are kirstie_h & tidester
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Replying to: msindallas (Oct 03, 2007 12:50 am) For the most part, the models ARE wrong. That is a separate issue from whether anthropogenic climate change is real. If you wish to discuss it further head on over to Are automobiles a major cause of global warming?. tidester, host SUVs and Smart Shopper |
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is just an alternate method of financing. For the majority of people that have to finance, they will have a fixed payment if they buy, just like with a lease. The one area though that does work against the lease is the aquisition fee. Paying $500-$700 up front just for the priviledge of paying for the car is unique to leasing. But, if the lease is subvented enough, that might get negated by other savings. Really, other than flexibility on when to get a different car, the only thing different with the lease is you never get to the point of truly owning it (that is, no payments), But, considering how many people take out long term loans and probably don't have any equity after 3 years anyway, it may not really matter! And even though it is generally a (financially) bad idea to get a brand new car every 3 years, if you are going to do it anyway, a lease might be the best way to go. final point. leases do give you one big advantage: cost certainty. If I am buying a car now, and plan to get a new one in 3 years and trade the old one, I know I can turn the lease in. If I buy it, i have no idea what it will be worth. Tell people who bought FS suvs a few years back how it feels to own something the dropped in value like the Titanic going down! At least the leasers were able to turn them in, and make it the banks problem. |
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Replying to: msindallas (Oct 03, 2007 12:50 am) Which lets out 90%+ of car buyers. Most people live paycheck to paycheck and simply can't save enough to buy a car outright. Even people of means,who can buy a car outright rarely do so. The majority of them lease. When you lease a new car,chances are it is going to depreciate more than the total of the lease payments. so, even if you bought the car,and traded it or sold it after 3-4 years, it would cost you less to lease it. The main reason that people of means lease is that they don't want to tie up capital in a car. Lets say you buy a $30,000 car,and for arguments sake,you spend exactly $30,000. That 30k is gone. Can't do anything else with it. If you lease, and you are spending $400/mo for 36 months,you STILL have that 30k to invest or do something else with. It's not tied up in a depreciating item |
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it's interesting to see how one person can completely shut down a board. Leasing isn't nearly so complicated as "msindallas" would lead one to believe. It's more complex (& open to abuse by the dealers) than an outright purchase, but still a good choice under certain conditions. Manufacturers often subsidize leases such that there's no cheaper way to be in possession of the car for the lease term. At the end of that term, it could make sense to buy out the lease, or (most of the time), you're better off letting them have it back while admiring the interest on the money you would have otherwise spent on the purchase. WMMV |
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Hello, a newbie with a question for the group. I friend has a nice Honda Pilot vehicle coming off a lease. If I am interested in purchasing it does, the value my friend can purchase it for play any factor? Should my price just come from edmunds "used" retail listing? Where can I find a "feel" for inventory of this model on the lots? I've never shopped for cars coming off a lease. Is it any different then buying a used car? Thank for your help. M |
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Well, their price (the residual in the lease contract) is important, because that is what they have to pay to buy out the car. But, you should just look at this as any other used car. Figure out what it is worth (Edmunds is a good resourse, and try the "real world trade in value thread" for an expert opinion. So, if the residual is 20K, and you figure it is worth 18K, no point in getting it. If it is worth 22K, then it might be a good idea. Depending on how good of a friend you are, maybe you can just get it for the residual! One thing I don't know is how the taxes work. That might be a question for the finance company, since obviously it will eat up the profits if you have to pay sales tax on it twice.
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Replying to: stickguy (Nov 10, 2007 7:42 am) The only way around this, is to get a dealer to buy it from him, then re-sell it to you for a nominal upcharge ($300?). Assuming the residual is a good buy. '07 Pilots were going for $6500-$7000 off sticker a few months ago. That is bound to hurt the resale value of older units. regards, kyfdx visiting host
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Replying to: kyfdx (Nov 10, 2007 7:45 am) If she remains working her commute will be approx 30 miles each way for 300 miles/week (15000 per year). If she stays home, her mileage will be around town. What has the experience been with paying overages with these leases? Should I just buy or does it make sense to consider a lease?
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Replying to: guelerct (Apr 28, 2008 1:42 pm) I would hold off making any kind of decision on the matter until those uncertainties are resolved. tidester, host SUVs and Smart Shopper |
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