lease, buy...
April-4th-2002, 09:04 PM
#16
Neighbor of the Beast
Join Date: Oct 2001
Location: Calgary AB
Posts: 305
PLUS your payments are lower as you are only making payments on the difference of what you paid for the car and the residual. Remember... you can still deal on the car(!) only the residual is locked.
(wifes a banker)
Don
(wifes a banker)
Don
April-4th-2002, 11:14 PM
#17
Likwidated
Join Date: Oct 2001
Location: Canada (formerly Yugoslavia)
Posts: 2,159
Don is going to be the MVP on this board, hehe, he knows home theatre systems, and his wife's a banker!!! hehe
But not everybody's got money to buy the car though. I could not afford to be paying 400$ /month for finance, plus the 150$ insurance, plus ~120$ for gas.....
Me too, I'm thinking about leasing another car at the end, depending on where I am financially. I'm already thinking the next generation of Proteges unless they play with the looks, or maybe a Miata
But not everybody's got money to buy the car though. I could not afford to be paying 400$ /month for finance, plus the 150$ insurance, plus ~120$ for gas.....
Me too, I'm thinking about leasing another car at the end, depending on where I am financially. I'm already thinking the next generation of Proteges unless they play with the looks, or maybe a Miata
April-5th-2002, 05:39 AM
#18
Registered User
Join Date: Apr 2002
Location: Buffalo NY
Posts: 336
Originally posted by Makaveli
I'm already thinking the next generation of Proteges unless they play with the looks, or maybe a Miata
I'm already thinking the next generation of Proteges unless they play with the looks, or maybe a Miata
miata......That's what I'm looking to get. What am I talking about, I just got a car. oh wells
April-5th-2002, 11:10 PM
#19
Neighbor of the Beast
Join Date: Oct 2001
Location: Calgary AB
Posts: 305
Thanks Makaveli...
I'll always lease I think... although my exporter buddy had one of his 911's come in from japan this week. '86, 48,000 km., widebody. Wants $36,000 for it! Damn I want that car!!
Don
I'll always lease I think... although my exporter buddy had one of his 911's come in from japan this week. '86, 48,000 km., widebody. Wants $36,000 for it! Damn I want that car!!
Don
April-7th-2002, 12:35 AM
#20
Registered User
Join Date: Feb 2002
Location: central coast calif.
Posts: 260
IMHO if you are the type of person that gets a new car ever couple of years and enjoy making car payments then a lease might be the way to go for you. leases are not smart money wise if you plan on keeping the car. why do you think the dealer want to lease it to you so bad? because they make a ton of money off you and the next person that buys the car after you are done. you make payments on a car for a couple of years, then at the end you can buy the car for more then it is worth and it is all due at that time.
on the other hand if you are like me you enjoy owning the vehicles that you drive, you can elect to buy them. you save your self a considerable amount of money and you own that car. i got lucky money wise (insurance, savings and a new job) and paid off my P5 in three payments. that saved about $2500 in interest alone.
on the other hand if you are like me you enjoy owning the vehicles that you drive, you can elect to buy them. you save your self a considerable amount of money and you own that car. i got lucky money wise (insurance, savings and a new job) and paid off my P5 in three payments. that saved about $2500 in interest alone.
April-7th-2002, 03:21 AM
#21
Neighbor of the Beast
Join Date: Oct 2001
Location: Calgary AB
Posts: 305
Personally I think cars are not a good investment and most investment brokers will tell you the same. Unless of course you buy an exotic, something like a vette or such that will hold its resale value. You should NEVER buy a car after leasing it. Dealers created "personal leases" to re-establish a dwindling used car market. (people were hanging on to cars instead of trading them in and when they did, they were POS. with no resale value). I have many friends in the industry, one who works at a Chrysler makes maybe $200-1000cnd. on a new car... up to $3000 on a used car. Plus the constant service income to the dealer.
I'm not saying buying is bad. I just rather "rent" a car as I need to. Never have to pay for repairs, And invest my money in something else. Something that can loose up to 25-40% by signing a paper and driving it off the lot, is not a good investment.
The fact that I get something new and shiny every few years is just a bonus.
Just my opinion
Don
I'm not saying buying is bad. I just rather "rent" a car as I need to. Never have to pay for repairs, And invest my money in something else. Something that can loose up to 25-40% by signing a paper and driving it off the lot, is not a good investment.
The fact that I get something new and shiny every few years is just a bonus.
Just my opinion
Don
April-8th-2002, 01:49 PM
#22
Protege Newbie
Join Date: Apr 2002
Posts: 8
Don,
I must disagree with you. Why on earth would you want to always have a car payment? Leasing a car is almost always more expensive than buying it. And you have nothing to show for it once the lease is over. Take some time and total up your lease payments. Figure out exactly how much you are paying each and every year to "borrow" those new cars. Then compare those numbers with what it would cost to buy the car outright, either new or used and keep it for several years.
I'm with Tom Slick on this issue. I have always purchased used cars that are 3-6 years old and look brand new and then keep them in that condition for several years. You can have "looks like new and shiny" every few years without having to lease. I have a 1988 RX-7 turbo that you could not tell from a new car and have no intention of selling it. True, I do not have a warranty and have to pay for repairs on my own but I buy cars that have excellent reliability records and that is not much of an issue. Besides, that car has been paid off for over 5 years now. Thats 5 years with no car payments of any kind - how many repairs would that cover?
Total up what you pay in lease payments over 5 years. Why not invest that money instead? You are certainly correct that buying a car is not a good investment but when you lease you are investing in nothing at all. That money is gone and you have no resale value because you do not own the vehicle. People get enticed into leases because of the lower monthly payments. But look at the actual long-term costs of this versus buying.
I guess it basically comes down to how long one wants to keep their car, whether one can afford the payments to purchase it outright, and whether one can live with the fact that their car is not under warranty.
Everyone's situation is different. I'm just pointing out the other side of the coin. To each his own...
I must disagree with you. Why on earth would you want to always have a car payment? Leasing a car is almost always more expensive than buying it. And you have nothing to show for it once the lease is over. Take some time and total up your lease payments. Figure out exactly how much you are paying each and every year to "borrow" those new cars. Then compare those numbers with what it would cost to buy the car outright, either new or used and keep it for several years.
I'm with Tom Slick on this issue. I have always purchased used cars that are 3-6 years old and look brand new and then keep them in that condition for several years. You can have "looks like new and shiny" every few years without having to lease. I have a 1988 RX-7 turbo that you could not tell from a new car and have no intention of selling it. True, I do not have a warranty and have to pay for repairs on my own but I buy cars that have excellent reliability records and that is not much of an issue. Besides, that car has been paid off for over 5 years now. Thats 5 years with no car payments of any kind - how many repairs would that cover?
Total up what you pay in lease payments over 5 years. Why not invest that money instead? You are certainly correct that buying a car is not a good investment but when you lease you are investing in nothing at all. That money is gone and you have no resale value because you do not own the vehicle. People get enticed into leases because of the lower monthly payments. But look at the actual long-term costs of this versus buying.
I guess it basically comes down to how long one wants to keep their car, whether one can afford the payments to purchase it outright, and whether one can live with the fact that their car is not under warranty.
Everyone's situation is different. I'm just pointing out the other side of the coin. To each his own...
April-8th-2002, 09:42 PM
#23
Neighbor of the Beast
Join Date: Oct 2001
Location: Calgary AB
Posts: 305
All a matter of opinions I guess.
Take the RX7 out of the equation as that would we one of the cars that should hold its value somewhat. (nice car by the way...white 10th anniversary right?)
Lease payments are made up of two parts: a depreciation charge and a finance charge. The depreciation part of each monthly payment compensates the the leasing company for the portion of the vehicle's value that is lost during your lease. The finance part is interest on the money the lease company has tied up in the car while you're driving it.
Loan payments also have two parts: a principal charge and a finance charge, similar to lease payments. The principal pays off the vehicle purchase price, while the finance charge is loan interest.
However, since all vehicles depreciate in value by the same amount regardless of whether they are leased or purchased, part of the principle charge of each loan payment can be considered as a depreciation charge, just like with leasing — it's money you never get back, even if you sell the vehicle in the future.
The remainder of each loan principal payment goes toward equity. It's what remains of your car's original value at the end of the loan after depreciation has taken its toll. Equity is resale value — what you get back if you sell the vehicle. The longer you own and drive a vehicle, the less equity you have.
So, buying a car with a loan is essentially like putting money into a declining-value savings account — you never get out as much as you put in. A portion of every payment you make is lost to depreciation. A terrible investment by any measure.
Leasing, then, is similar to buying, but without the "savings account." You only pay for what you use. It's true that you'll own nothing at the end of a lease, but what you don't own is the same part of the car — the depreciated part — that a buyer does own at the end of his loan.
With leasing, you at least have the option of putting your monthly payment savings into more productive investments, such as mutual funds or stocks that have the possibility of increasing in value. In fact, many experts encourage this practice as one of the benefits of leasing, though most people will typically find other uses for the money they save by leasing — such as paying the rent or buying groceries.
The overall cost of leasing compared to buying, over the same lease/loan term, is approximately the same, more or less, assuming the buyer sells his vehicle at the end of the loan. Comparisons sometimes show buying to cost a little less than leasing due to fewer fees and the assumption that a purchased vehicle will return full market value if it is sold or traded at the end of the loan (often a bad assumption). However, if you factor in the benefits of wisely investing your monthly lease savings, the net cost of leasing can easily be less than buying.
(some info my wife had)
Over the long term, if you plan on keeping the car for 10yrs. buying works.
Again, just my opinion.
Don
Take the RX7 out of the equation as that would we one of the cars that should hold its value somewhat. (nice car by the way...white 10th anniversary right?)
Lease payments are made up of two parts: a depreciation charge and a finance charge. The depreciation part of each monthly payment compensates the the leasing company for the portion of the vehicle's value that is lost during your lease. The finance part is interest on the money the lease company has tied up in the car while you're driving it.
Loan payments also have two parts: a principal charge and a finance charge, similar to lease payments. The principal pays off the vehicle purchase price, while the finance charge is loan interest.
However, since all vehicles depreciate in value by the same amount regardless of whether they are leased or purchased, part of the principle charge of each loan payment can be considered as a depreciation charge, just like with leasing — it's money you never get back, even if you sell the vehicle in the future.
The remainder of each loan principal payment goes toward equity. It's what remains of your car's original value at the end of the loan after depreciation has taken its toll. Equity is resale value — what you get back if you sell the vehicle. The longer you own and drive a vehicle, the less equity you have.
So, buying a car with a loan is essentially like putting money into a declining-value savings account — you never get out as much as you put in. A portion of every payment you make is lost to depreciation. A terrible investment by any measure.
Leasing, then, is similar to buying, but without the "savings account." You only pay for what you use. It's true that you'll own nothing at the end of a lease, but what you don't own is the same part of the car — the depreciated part — that a buyer does own at the end of his loan.
With leasing, you at least have the option of putting your monthly payment savings into more productive investments, such as mutual funds or stocks that have the possibility of increasing in value. In fact, many experts encourage this practice as one of the benefits of leasing, though most people will typically find other uses for the money they save by leasing — such as paying the rent or buying groceries.
The overall cost of leasing compared to buying, over the same lease/loan term, is approximately the same, more or less, assuming the buyer sells his vehicle at the end of the loan. Comparisons sometimes show buying to cost a little less than leasing due to fewer fees and the assumption that a purchased vehicle will return full market value if it is sold or traded at the end of the loan (often a bad assumption). However, if you factor in the benefits of wisely investing your monthly lease savings, the net cost of leasing can easily be less than buying.
(some info my wife had)
Over the long term, if you plan on keeping the car for 10yrs. buying works.
Again, just my opinion.
Don
April-9th-2002, 11:51 AM
#25
Registered User
Join Date: Feb 2002
Location: central coast calif.
Posts: 260
I guess i should add that i buy cars and drive them until they wear out and get all my money's worth out of them.
my other 2 vehicles are an 88 grand am with 185,000 mi as my commuter and an 85 toyota 4x4 with 306,000 mi. i plan on owning my paid off P5 for 10 years or so.
like i said before, if you like having a new car all the time, and you enjoy car payments then leasing is probably the way to go for you. dealers are only in business to make money, if leases really were cheaper then the dealer wouldn't have them.
my other 2 vehicles are an 88 grand am with 185,000 mi as my commuter and an 85 toyota 4x4 with 306,000 mi. i plan on owning my paid off P5 for 10 years or so.
like i said before, if you like having a new car all the time, and you enjoy car payments then leasing is probably the way to go for you. dealers are only in business to make money, if leases really were cheaper then the dealer wouldn't have them.
April-9th-2002, 12:00 PM
#26
Master of All Things :{D
Join Date: Feb 2002
Location: southeast texas, near houston
Posts: 4,118
Hey Tom Slick!!!
okay Tom...I just saw your post there...and I actually made a reference to you in anther forum..... so I just gotta ask...
do you still have your THUNDERBOLT GREASE SLAPPER in the garage?
do you still have your THUNDERBOLT GREASE SLAPPER in the garage?
April-9th-2002, 10:17 PM
#27
Neighbor of the Beast
Join Date: Oct 2001
Location: Calgary AB
Posts: 305
Originally posted by Tom Slick
I guess i should add that i buy cars and drive them until they wear out and get all my money's worth out of them.
my other 2 vehicles are an 88 grand am with 185,000 mi as my commuter and an 85 toyota 4x4 with 306,000 mi. i plan on owning my paid off P5 for 10 years or so.
like i said before, if you like having a new car all the time, and you enjoy car payments then leasing is probably the way to go for you. dealers are only in business to make money, if leases really were cheaper then the dealer wouldn't have them.
I guess i should add that i buy cars and drive them until they wear out and get all my money's worth out of them.
my other 2 vehicles are an 88 grand am with 185,000 mi as my commuter and an 85 toyota 4x4 with 306,000 mi. i plan on owning my paid off P5 for 10 years or so.
like i said before, if you like having a new car all the time, and you enjoy car payments then leasing is probably the way to go for you. dealers are only in business to make money, if leases really were cheaper then the dealer wouldn't have them.
Dont get me wrong, theres nothing wrong with buying. Especially if you plan to keep it like you. And yes a dealer will make more money probably... just not off you. He'll make the most when he takes your 3yr. leased car and sell it off the used car lot.
Don
Last edited by don668; April-9th-2002 at 10:20 PM.
April-10th-2002, 07:36 AM
#28
Protege Enthusiast
Join Date: Feb 2002
Location: London, Ontario
Posts: 112
Originally posted by don668
Dont get me wrong, theres nothing wrong with buying. Especially if you plan to keep it like you. And yes a dealer will make more money probably... just not off you. He'll make the most when he takes your 3yr. leased car and sell it off the used car lot.
Dont get me wrong, theres nothing wrong with buying. Especially if you plan to keep it like you. And yes a dealer will make more money probably... just not off you. He'll make the most when he takes your 3yr. leased car and sell it off the used car lot.
April-10th-2002, 07:41 PM
#29
Protege Enthusiast
Join Date: Sep 2001
Location: Toronto, Ontario
Posts: 105
One way a lease can screw you...... early termination.
Lets say for some reason you had to give up the car. You must either transfer it to someone (they have to go through the dealer credit-check, and all the paperwork all over again), OR buy it out and sell it (and face early termination charges in most cases)... OR the dealer will take it back..... for $2,000 to $3,000 canadian dollars. Happened to a friend of mine. He got a job overseas and had to return the leased car.... almost $3,000 it cost him. You owe the difference between the depreciation in market value and what you have paid so far for the lease. Ouch.
Much easier to sell the car and pay off the loan with the proceeds of the sale.
Just a different viewpoint.
Lets say for some reason you had to give up the car. You must either transfer it to someone (they have to go through the dealer credit-check, and all the paperwork all over again), OR buy it out and sell it (and face early termination charges in most cases)... OR the dealer will take it back..... for $2,000 to $3,000 canadian dollars. Happened to a friend of mine. He got a job overseas and had to return the leased car.... almost $3,000 it cost him. You owe the difference between the depreciation in market value and what you have paid so far for the lease. Ouch.
Much easier to sell the car and pay off the loan with the proceeds of the sale.
Just a different viewpoint.
April-11th-2002, 07:32 AM
#30
Protege Enthusiast
Join Date: Feb 2002
Location: London, Ontario
Posts: 112
Actually, there's never an early termination penalty no matter when you buy the car out and unless you're really desperate, terminating the lease and paying a large penalty is a last resort. It's relatively easy to transfer your lease to another person and there are services that help you do it. In any event, you could be in the same situation trying to sell your financed car while you're still upside-down on the loan, so financing is no guarantee you won't lose money either if you have to give the car up before you planned to.