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This topic comprises 2 pages: 1 2
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Author
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Topic: Lease or purchase a new vehicle?
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Scott Norwood
Film God
Posts: 8146
From: Boston, MA. USA (1774.21 miles northeast of Dallas)
Registered: Jun 99
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posted 04-30-2008 09:01 AM
From what I can tell, leasing only makes sense for those who want/need a new car every few years, but who are not high-mileage drivers. For those who use the car exclusively for business, it makes the tax paperwork easier.
Ultimately, the economics depend on how long you plan to keep the car. Watch for add-on fees and hidden costs, as well as possible insurance implications.
I hate car dealers, too, and prefer to avoid dealing with them. In general, it seems that the best "deal" is to buy a car that is a few years old and keep it until repairs become frequent and/or uneconomical. Obviously, this only works if you don't care about having a "new" car, and don't mind having to sell/trade the old car when it is time to replace it.
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Barry Floyd
Phenomenal Film Handler
Posts: 1079
From: Lebanon, Tennessee, USA
Registered: Mar 2000
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posted 04-30-2008 09:19 AM
From strickly a "math" point of view, leasing a vehicle is only good for the dealer. It's much like renting a car. You still have the payments, usually an up-front down payment, the rebates usually always go to the dealer - not to you, and because you will go over the mileage... (trust me, you will), you'll get tagged with overage penalties at the end of the lease, and you still have to give it back.
Me personally... I don't do car payments period. I can't justify huge monthly payments on an asset that only goes down in value. My wife drives a '01 minivan that we paid cash for, I drive a '96 F150 that we paid cash for back in '98 (it was a lease turn in vehicle), and I alternate my truck with an ugly '97 Buick Regal we keep as a spare. I have another "toy" car that I keep in parents basement (on jack stands under cover), but it needs a little engine work, and it's definetely not a daily driver.
If you don't have the cash on hand to buy the vehicle outright, I'd only opt for the used vehicle at the fixed rate from the credit union.
[ 04-30-2008, 03:17 PM: Message edited by: Barry Floyd ]
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Tim Rectanus
Film Handler
Posts: 51
From: Raleigh, NC, USA
Registered: Jul 2005
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posted 04-30-2008 02:44 PM
If I were Mark, I don't know what I would do but I wouldn't let that Orman article sway me in either direction.
1. Her main point is about not leasing a car you can't afford. This doesn't pertain to Mark b/c he said he is buying the car if he doesn't lease it, which I assume means he can afford it, I could be wrong there but knowing absolutely nothing about Mark other than his posts, he doesn't seem like the type.
2. The article is not for a Lease vs Buy scenario, it is Lease vs Buy USED idea! BTW, you can lease used cars too but that is another story. She doesn't think anyone should buy a new car, which is fine but it isn't fair to mask that opinion into a Lease vs Buy article.
For me, if you are going to have it for over 3 years, I would buy it. Although it should be noted that you don't own the car until it is paid off, you rent it from the bank, granted you have more options than a lease but it isn't that unsimilar.
24 months with extra miles built in to the deal from the beginning makes sense to me for a lease b/c at the end of the lease term, you would likely be upside down (owe more than it is worth)in the car if you bought it in the first place and were trying to sell it. Some people just want a different car every couple of years so leasing can make a lot of sense for them.
I sold cars for a while and saw advantages for leasing and buying depending on the person and use of the vehicle. Granted, I ended up leaving after 5 months because it was super slow at the store I was in and the hours were a killer but there are a lot of misconceptions about the car salesman, at least from when I did it. The biggest two, I did fine in the business without ever lying to a customer so those guys are out there. And, the guy you are talking to doesn't have anything to do with what they will sell you the car for, the Manager does all that. The Salesman's job is to report what he thinks you are eventually willing to pay and the manager decides whether that is good enough for the dealership based on a bunch of things including sales numbers for the month, then sends the salesman back to see if you will go higher.
One sure thing in car sales, The end of the month is by far the best time to buy a car!! Of course that doesn't matter if you are dealing with a place that doesn't haggle, I think Saturn is like that. So I guess I should change that to, the best time to haggle over price is the end of the month.
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Monte L Fullmer
Film God
Posts: 8367
From: Nampa, Idaho, USA
Registered: Nov 2004
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posted 04-30-2008 04:05 PM
Heard that, if one is gonna do leases, do a closed end lease. That way, when the contract comes up, you turn the vehicle in and can walk away - as long as one can stay under the mileage/year condition in the length of the contract - since leases are just like an interest only mortgage: you're only paying on estimated depreciation and nothing on the principal.
Others call it "flushing the toilet for 36 months" The vehicle will never be yours esp when you repeat the 'flushing' with another new car and start the cycle over again.
Granted, leases are totally easy to get into - both closed and open end leases - so you can get the vehicle you want without little or no money down, but the thill of ownership has really taken a nosedive (plus, with leasing, it keeps the factories at top form making expensive vehicles and huge profits for both the factories and the dealers... turning customers into lemmings falling over the cliff with these leasing tactics)
Good luck Mark in your search for an answer.
-Monte
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Joe Redifer
You need a beating today
Posts: 12859
From: Denver, Colorado
Registered: May 99
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posted 04-30-2008 05:02 PM
Definitely purchase. You can get the dealer to bend over and take it in the ass if they think they will lose a sale. The best way is to go in and be legitimately interested in one of their cars. Now you won't be able to talk them down to 10 bucks or anything, but you can make sure you don't get one with those lame "add-ons". A few months ago when I went to purchase a new car all of them had this retarded "clear bra" already attached, along with the dealer logo on the back. The clear bra added $300 I think. Not only is that way too much, but it looks extraordinarily tacky. At first they were willing to split the cost in half so I only paid $150 extra. I said no, see ya. Then they offered it for free. Nope, see ya. Then they finally informed me of a new car coming off the truck the next day which will not have that nonsense applied. That's really what I wanted. The next day they showed me the car, but it had already gone through the preamble that dealerships do (removing he plastic from the seats, detailing, etc) and it had the GO HONDA logo applied on the back. They were not paying me to advertise for them. I saw that and said "That needs to go" and they said "You're right!", ran and got one of their guys and peeled and washed it off right there leaving no residue.
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