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we're debating whether the total costs of driving a luxury car is only incrementally more than driving an econobox because this argument is made by many. Why drive a Corolla when you can spend only $100 more and drive a Mercedes... well, my thoughts were that you cannot. It would cost hundreds of $$ more a month to drive even the cheapest Merc over the most expensive Toyota Corolla.
Here is a simplistic example, keeping all else equal.
Lets take a $22K Corolla, and a $35K Entry level Luxury car. 5 year loans. No interest. The Corolla will be $367 a month, the Entry Lux $583. $216 per month difference, all else equal.
Even in a lease, these purchase price differences will have to be made up somewhere. Whether it is in monthly rate, larger down payment, less favorable terms, or somewhere.
Here is a simplistic example, keeping all else equal.
Lets take a $22K Corolla, and a $35K Entry level Luxury car. 5 year loans. No interest. The Corolla will be $367 a month, the Entry Lux $583. $216 per month difference, all else equal.
Even in a lease, these purchase price differences will have to be made up somewhere. Whether it is in monthly rate, larger down payment, less favorable terms, or somewhere.
Also not exactly what the OP asked, which was specifically regarding the monthly payments. The thread has kind of spun into a different question from there since the answer wasn't what the OP was looking for. Leasing a luxury car isn't really any more expensive than buying a Corolla unless you're stretching the payments out for seven years or something. Of course, it's also a perfect example of why the advice to not negotiate on monthly payments is so appropriate. Even though the monthly budget may not be higher, the cost is.
Also not exactly what the OP asked, which was specifically regarding the monthly payments. The thread has kind of spun into a different question from there since the answer wasn't what the OP was looking for. Leasing a luxury car isn't really any more expensive than buying a Corolla unless you're stretching the payments out for seven years or something. Of course, it's also a perfect example of why the advice to not negotiate on monthly payments is so appropriate. Even though the monthly budget may not be higher, the cost is.
True, you can get the lease payment down a lot on a lux car, and it may appear that the per month cost is about the same. Problem is, then your comparing owning a car vs leasing, and you incur a ton of costs having to lease/buy two or three years later too, where as with the Corolla you have a car already and potentially have some equity in it. The added cost of luxury (or any more expensive car) will catch up.
Ummm sorry but you cannot compare a MB to a Corolla..Really???
Now that you can lease a similar size FWD MB for $299/mo, yes, yes you can.
A $20K Corolla with 20% down on a 5 year loan is just as 'affordable' as the lease on a CLA, payment wise.
Quote:
Originally Posted by Checkered24
True, you can get the lease payment down a lot on a lux car, and it may appear that the per month cost is about the same. Problem is, then your comparing owning a car vs leasing, and you incur a ton of costs having to lease/buy two or three years later too, where as with the Corolla you have a car already and potentially have some equity in it. The added cost of luxury (or any more expensive car) will catch up.
Or it might not. After 3 years of ownership, the CLA buyer will have $0 in equity, the corolla owner will probably have a few grand in equity assuming they didn't wreck the car. True, it's something, but whether it's significant to an individual depends on a lot of other factors, not just the car purchase.
Now that you can lease a similar size FWD MB for $299/mo, yes, yes you can.
A $20K Corolla with 20% down on a 5 year loan is just as 'affordable' as the lease on a CLA, payment wise.
Or it might not. After 3 years of ownership, the CLA buyer will have $0 in equity, the corolla owner will probably have a few grand in equity assuming they didn't wreck the car. True, it's something, but whether it's significant to an individual depends on a lot of other factors, not just the car purchase.
Too many variables.
When the Mazda was about 3 1/2 years old, I started getting bored with it. The Mazda/VW dealer offered me I think $12k on trade. So, yeah, that's $12k in equity there plus I hadn't had payments in a year and a half.
Apples to apples, leasing doesn't really cost much more than buying for 3 years and selling. If you don't drive many miles and are going to go through a car every 2-3 years anyway, no real harm.
Corolla leases for like $150/mo. They hold their value better than luxury cars do. I drive way too much to ever consider a lease. I'd pay more in mileage charges than lease payments.
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