Last post on Feb 03, 2012 at 1:40 PM
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Car Financing, Car Leasing
#540 of 545 keep the money?
Jan 15, 2012 (5:03 pm)
I'm thinking about selling my 2006 Acura TL. I should get about 14K for it. Right now I have a '95 Subie with 218,000 as well as the Acura. I know the Subie isn't going to last that much longer and I need a more versatile car.
Also, I don't want to get to the point that my car needs expensive repairs. The Subaru has been very good to me. But I know repairs/maintenance on the Acura won't be cheap.
I had originally planned to use the money from the Acura for a down payment on another car which I'd probably keep another five years. (My logic is that I'd always have a down payment in the value of my old car.) But now I'm wondering whether I'd be better off putting that $14K in the bank/cd/?? and leasing a car for three years. I've owned many cars, so the buying process is not new to me. But I have no clue about leasing.
I drive about 16K miles a year. Have two dogs (planning on wagon/suv with them NOT on the seats) that would go in it very occasionally and two grandkids that I tote around once in a while. I want a car that is close to the top of the line. Don't know how that factors into the equation.
#541 of 545 Re: keep the money? [carteach]
Jan 15, 2012 (5:33 pm)
the miles you put on are going to hurt you.
just from a surface look you seem like a better candidate to just buy something.
#542 of 545 Re: keep the money? [stickguy]
Jan 15, 2012 (8:47 pm)
the used car market is at an all-time high. that has to work itself into residual values, I'd think.
there are cars that it makes sense to lease, even with 1k/yr over the typical 15k allotment. i couldn't tell you which ones, though.
as always, you have to run the numbers.
i've never leased, being too much of a control freak, but i think it's an attractive option.
#543 of 545 Re: keep the money? [carteach]
Jan 16, 2012 (12:03 pm)
Way too many factors to explain them all in one message
Basically it all depends on the lease money factor and residual compared to the loan rate (if financing) for a particular model. If your goal is to own the car (eventually) then buying is always cheaper. To get x years of use of it, then that depends on a lot of stuff.
Loan money is cheap right now (my CU is doing 1.9% to 3.49% on car purchases) so in order for a lease to be a great deal you need a discounted lease rate and / or an inflated residual. Captive lease banks (e.g BMW Financial Services) can set rates and values that reflect how bad the company wants to move a model - not based on real world values. If you want something they need to move when they are pretty desperate to move it and you can get quite a deal. I have leased at < 1% effective rate before a few times and under 2% quite a few times. On the other hand, with money so cheap you can't make much socking your cash away most places. Typical leases are written for 12k or 15k per year, but you should be able to get a lease written for more miles (or factor in the over mile charges into the equation). I would decide what you want to get, then we can compare captive loan and lease offers and what 3rd party lease and loans are available and get a better answer.
#545 of 545 financing?
by steve_ HOST
Feb 03, 2012 (1:40 pm)
A reporter is hoping to find someone who recently bought a new car and took out a car loan for the first time in a few years.
Please respond to predmunds.com by Tuesday, February 7, 2012 with your daytime contact information and a few words about your experience.