Leasing?

Post by **Standardshifter** » Fri Jul 20, 2007 12:29 pm

I goofed in a big way. Didn't change residual value for the 36 month lease.

Apologize for adding to the confusion.

Comes out to $537 a month, for a total cost of $19K for 3 years. since residual drops from 71% to 61%.

Put it does prove a good point though, how a small difference is residual value or base cap cost can have a big impact on lease cost on a % basis.

Instead of MSRP price (39395) for the above example, let's say you were able to talk the dealer down to 37000.

Payments end up being $467 a month for a total of 16.8K for three years.

Post by **Standardshifter** » Fri Jul 20, 2007 12:32 pm

And yes, certainly not cheap transportation no matter. Cars themselves with their insurance and fuel costs are expensive to own, no matter how cheap and reliable the car is.

If you really want to save on transportation costs:

are the way to go.

Prodigal Son · Post by **Prodigal Son** » Fri Jul 20, 2007 12:43 pm

Standardshifter wrote:And yes, certainly not cheap transportation no matter. Cars themselves with their insurance and fuel costs are expensive to own, no matter how cheap and reliable the car is.

Very true. I used to commute by foot and bus. With my current client, however, the bus commute is an hour and 20 minutes each way compared to a car commute of 35 minutes each way. 2 hours and 40 minutes vs. 1 hour and 10 minutes means an hour and a half extra per day if I take transit. I'm an independent contractor so I'm paid by the hour and 7.5 hours a week adds up to more than enough to justify the use of the car.

It's unfortunate though, because with a combination of better urban planning and a greater willingness of the general population to use transit, I would not have to commute by myself for that distance every day.

I do make it a principle never to drive anywhere that I can walk in 20 minutes.

papercliprebel · Post by **papercliprebel** » Fri Jul 20, 2007 3:14 pm

i have to add to this. alot of people keep complaining that they hate owning a car that will lose 50% of its value in a few years. what do you think you are paying for when you lease?

the fact of the matter is that your total cost will ALWAYS be less if you own. you will ALWAYS pay more over all in a lease, there is no calculation you can show me that will show otherwise, it doesn't exist.

if you really can't afford the total cost, and you are attracted by lower monthly payments, you really need to reanalyze your financial situation because you have no business getting that car. imo leasing is for suckers.

Post by **Standardshifter** » Fri Jul 20, 2007 5:02 pm

Yes, you pay the depreciation. And that's exactly why I said leasing makes more sense on cars that have low depreciation rates.

Leasing, financing, buying with cash, renting... All for suckers if you can't afford it. Leasing is a very smart vehicle (haha) to go about having a car for certain people and certain cars.

Curious as to why so many are against leasing? Bad experience? Hanging around with folks who remember the Great Depression?

Seems to be consistent on every automotive forum, folks get all up in arms about it.

Prodigal Son · Post by **Prodigal Son** » Fri Jul 20, 2007 5:34 pm

The thing is, people do not use leasing as an alternative way to buy the same car they would otherwise have bought. The use it as a way to lease a much more expensive car for the same monthly payment they would have made to buy a cheaper car. And that, of course, is much more expensive over the long run.

In this sense, comparing lease vs. own scenarios is misleading, even though own will usually, if not always come out ahead. The real comparison people should be making is between the car they can afford to lease and the car they can afford to buy. Make that comparison and you will find you are paying much more in the long run with the lease scenario.

Dealers encourage people to think in terms of payments rather than price. Car ads almost always give the lease payments, not the price, and salesmen will often ask people what payments they can afford rather than what total price they are willing to pay. This allows them to use leasing to talk people into a more expensive car with a higher profit margin.

But the problem with the "what-payments-can-I-afford" approach to life is that you end up with multiple obligations and very little equity. A change in the economy or in you own circumstance can suddenly leave you owing more than you own and heading to bankruptcy court.

Post by **Standardshifter** » Fri Jul 20, 2007 9:12 pm

There will always be stupid people in the world, I don't want my financing options limited because of them.

Look at the housing market... States demanding new rules and regs, grrr.

Anyway, getting back to the topic at hand. I'm always amused with car dealer ads saying a car is only $9999. Then in little print "3500 cash or trade" thrown in. Hell, offer the car for a $1 with "$9998 cash or trade" in little text, hehe.

Prodigal Son · Post by **Prodigal Son** » Fri Jul 20, 2007 10:08 pm

Standardshifter wrote:There will always be stupid people in the world, I don't want my financing options limited because of them.

Not suggesting they should be limited. Not even suggesting the dealers should not try to dupe stupid people. Just saying there are good reasons to be wary of the lure of the lease.

hockeystyx16 · Post by **hockeystyx16** » Sat Jul 21, 2007 1:15 am

by now i think we can clearly draw a conclusion that leasing is stupid

Post by **Standardshifter** » Sat Jul 21, 2007 1:45 am

Leasing is not stupid under the right conditions.

Why do you think it is?

hockeystyx16 · Post by **hockeystyx16** » Sat Jul 21, 2007 2:22 am

right conditions as is being rich, getting bored of cars easy, having money to burn, etc.

im not rich, leasing aint for me. OP doesnt really sound like a millionaire either, otherwise he wouldnt be driving a saturn.

Prodigal Son · Post by **Prodigal Son** » Sat Jul 21, 2007 10:46 am

hockeystyx16 wrote:im not rich, leasing aint for me. OP doesnt really sound like a millionaire either, otherwise he wouldnt be driving a saturn.

Actually, studies show that millionaires tend to drive domestic cars and keep them for quite a few years. The people driving flashy cars are living on credit and tend to have much lower net worth.

This does not apply to the really rich, of course. But there are a lot of people with a net worth over a million living in ordinary suburban streets and driving ordinary domestic cars. The reason they have high net worth is that they are frugal in their spending.

Sypher · Post by **Sypher** » Sat Jul 21, 2007 1:53 pm

hockeystyx16 wrote:right conditions as is being rich, getting bored of cars easy, having money to burn, etc.

im not rich, leasing aint for me. OP doesnt really sound like a millionaire either, otherwise he wouldnt be driving a saturn.

actually, alot of peopel with an average income who wants to drive flashy cars will lease... If they have the money to pay the bills, all the more power to them...

eaglecatcher · Post by **eaglecatcher** » Sun Jul 22, 2007 8:10 pm

Prodigal Son wrote:
hockeystyx16 wrote:im not rich, leasing aint for me. OP doesnt really sound like a millionaire either, otherwise he wouldnt be driving a saturn.
Actually, studies show that millionaires tend to drive domestic cars and keep them for quite a few years. The people driving flashy cars are living on credit and tend to have much lower net worth.

This does not apply to the really rich, of course. But there are a lot of people with a net worth over a million living in ordinary suburban streets and driving ordinary domestic cars. The reason they have high net worth is that they are frugal in their spending.

you are quite right with that. I konw two families where the dad is a doctor, and the mom does not work. One of them, drives a beat up, stick shift, 80's corolla. They don't go on big vacations, they don't have a super fancy house, they bought their oldest son a beat up chevy ranger with 198k miles on it, it was lke a 89 or 90 or so. That guy must be worth a fortune.

The other family I know, don't spend their money crazy either. I happened to hear from a conversation between my parents that he and his partner sold their practice, and each got 14million, as well as getting to keep their jobs. So he still keeps his job, but now hes working just for fun. 14 million is enough for anyone to retire on, IMO. He just kept workign because he loves it, and you know what he did with that 14 million? Put his kids thorugh college, and bought an Audi A8. They also remodeled their home, but I don't know many people who could have 14 million thrust upon them, and only do the above.

Thats just something I've noticed from observing the people my parents know.

stick5 · Post by **stick5** » Tue Aug 21, 2007 12:32 pm

I'm back to this thread, people! Please add to the thread.

I will lease or finance as I don't have any preferences.

But, my situation is as such. Unfortunately, I don't have much saved up so I can't currently shop around for a used car and pay cash. I wanted to finance or lease. At my current job, I like to think I can afford monthly payments.

I want the option of choosing an import Toyota or Honda but I am not sure I can quality for the best OAC. I had some credit probs but I'm trying to improve them. I need to think about getting something soon since I had a collision with my current car. I'm trying to collect rather than go through insurance as it's their fault. I'm concerned this car doesn't have much of a life line left (at over 200K k).

Anyway, please suggest ideas and advise. I would appreciate it.