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Smart Shopper Leasing vs. Purchasing
517 messages, Last post on Sep 17, 2009 at 12:47 PM
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Replying to: qbrozen (Nov 04, 2008 2:51 pm) Excellent point. I never thought of it that way. I guess I can't really go wrong. I will have to post my info in the Flex lease discussion to see get people's opinions on the numbers. Thanks |
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Ok so heres my question. I'm looking at buying a new altima and was wondering if it makes more sense to lease it (to have lower monthly payments) and then after 3 years just buy it outright? I'm not totally sure how leases work but to me it seems like a good way to pay less for a car upfront and then buy a depreciated car for less. If I was to buy it from the start I'd pay 2-3 times more a month wouldn't I? Yes after 5 years I'd own it but I also paid full price for a car that isn't worth that now. Like I said i'm not too sure what the advantages to leasing and then buying at the end of a lease are, most info on edmunds concerns leasing and then releasing at the end. PLEASE help me with any info you can.
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Replying to: cheeseplz (Mar 08, 2009 7:08 pm) If you were to lease for 3 years, then finance for another 2-3 years, I am pretty sure you will expend more cash than if you were to purchase. You are right that there would be less front end cash - but in the long haul it may cost you far more. To lease then finance often does not make good economic sense due to the following: 1. The residual value of the vehicle (the purchase price at lease end) is a crap shoot and rarely is less than FMV. I think the manufacturers overstate these slightly to keep lease payments attractive and claim their vehicles hold their value. So bottom line you may find out that your buy out price is $1,000 - $3,000++ greater than FMV at the end of the lease. On the other hand, if you are lucky and the car holds it value you can experience a nice windfall. 2. The interest rates on a new vehicle are preferential to that of a used vehicle. You will get a better interest rate financing a new vehicle for 60 months than you would get 3 years down the road financing a used vehicle. So the cost of money is better in the long run. I am not sure what is going on at Nissan, but lease rates these days are not that much more attractive than purchase rates for those with good credit. |
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Replying to: cheeseplz (Mar 08, 2009 7:08 pm) For example, 2 years ago my brother-in-law wanted a Mazda3. At the time, they were offering an outstanding 27-mo lease program. He was insistent that he wanted to purchase, but after running the numbers, I showed him that he would actually save money by leasing and buying it at the end. This was ONLY true because of the low money factor, however. If the manufacturer had been offering a low finance rate at the time, that probably would have been the way to go. As it turns out, he doesn't want to keep the car, though, and will be turning it back in at the end of the lease. Had he purchased, he wouldn't have that choice now. So that's always something to consider. |
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Lease/buy out is like making your payments now and down payment (a large one!) at the end. QB is right though that you get the option to walk away at lease end. Flip side, it can be harder (more expensive) to get out of a lease early, and there are fees (origination, turn in) with a lease that you don't have with a buy. |
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My exsisting lease ends soon and i will not be purchasing the 2006 Mazda5. I liked it so much i want a 2009 (same model) The dealer made this offer on a 2009 Maxda 5 touring edition: The sticker price $21,640, He says his price is $20,563. and he will give to me  $200. over that? = 20,763 My trade T/A (second car-2000 Mercury Gr Marq. 60,000 miles, good condition) He'll give $3,500. In either scenerio I pay $300. down. He'll also payoff exsisting lease approx. $400. and absorb 2000 extra mileage $0.15 LEASE: 3 years 45,000 mi $295. mo. residual $9,738 PURCHASE: w/ Mazda rebate of $500. = $16,763 60 mo 2.9% $313.mo Which would you choose? By the way, Mazda is pushing their Mazda3 now, do you think they'll have better deals on th Mazda5 in the near future?
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Replying to: robertlong2 (Apr 09, 2009 1:35 am) Only thing I would do differently is sell the Grand Marquis privately. For an '00 with 60k miles, I'd imagine you could ask $5,995 and get $5k for it. BTW, your purchase price at that rate for 60 months should be $300.48. I assume tax is driving you up to $313? Is the lease payment with or without tax?
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Replying to: robertlong2 (Apr 09, 2009 1:35 am) Even if you want out in 3 yrs,you should be able to trade it in and be ok if you keep the miles right. |
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Replying to: qbrozen (Apr 09, 2009 8:55 am) Bob |
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I’m thinking of leasing a 2009 Toyota Prius - $268/mo on a 3-year lease. Buyout stated up-front by Toyota $14,634; dealer says that because this car holds its value, the buyout cost will likely be less than its Blue Book value. Because the next generation of Prius is coming out soon, the dealer claims this is a really good deal being offered by Toyota to try and attract customers who otherwise might wait for the new models. Money factor – which I only sort of understand – is stated at 0.00017. Same car, cost to purchase outright is $23,469. Other part of this picture is that my personal finances are a little uncertain right now, but will be more stable in 2 or 3 years. That is, for the immediate future, the low monthly payments on a lease are attractive; 3 years from now (when I probably would purchase the vehicle rather than turn it in for another lease) the higher monthly payments are less likely to be the problem they are now. Help! Some unbiased thoughts from someone experienced with leasing would be much appreciated!!! |
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