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Old 05-20-2014, 08:59 PM
 
Location: Southern California
38,661 posts, read 22,656,121 times
Reputation: 59922

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Quote:
Originally Posted by duster1979 View Post
I think his point is that if he perpetually rolls 3 year leases he'll always have a car under warranty whereas if he were to buy and finance he'd either be out of warranty before the car is paid off or would continually be upside-down on his car loan.

If always driving a late-model car is a priority, leasing will pretty much always be less expensive than buying and trading every three years.

Having gone both routes, I personally find the benefit of having no car payment preferable to the benefit of driving a newer car, but to each his own.
I agree! The best car payment is ZERO.
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Old 05-21-2014, 07:48 AM
 
Location: Texas
44,256 posts, read 64,109,235 times
Reputation: 73914
Quote:
Originally Posted by Dennis P View Post
I agree! The best car payment is ZERO.
What is the difference between one large lump sum payment and several small payments over time if it all winds up being the same amount of $$?

Oh, yes...the lump sum guy loses the money he could have earned in the market.
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Old 05-21-2014, 08:05 AM
 
Location: new yawk zoo
8,621 posts, read 10,996,451 times
Reputation: 6290
Quote:
Originally Posted by mrwibble View Post
So it was a bad deal. A few points;


3. Who cares was the lease end buyout is?

matters for 2 reasons.

1. If the person wants to buy the car.

2. Its a tool how easy to get rid of your leased car into another car (purchase or another lease).

2A. I had one lease which had a cheap buyout price...meaning with 4 months left the car was worth 21 grand and my buy out was 17 grand. Which means the dealer knows they can make an easy 4 grand even with 4 months of payment left. So they took my old vehicle and gave me a sweetheart deal on the new one.....even cheaper and higher trim line for the same make!

2b. Car was worth 22 grand and buy out was 23 grand with 2 months to go. So it a loss.....No dealers really want my lease. So finally with some negotiation I paid 1 months and the dealer paid one month to close the deal. The dealer needed to move their new cars out of the lot. I know the dealer will hold my car for 2 months & give it back to the leasing agent bc the leased vehicle is a loss if the dealer bought it out.
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Old 05-21-2014, 08:12 AM
 
865 posts, read 2,147,953 times
Reputation: 953
Quote:
Originally Posted by stan4 View Post
What is the difference between one large lump sum payment and several small payments over time if it all winds up being the same amount of $$?

Oh, yes...the lump sum guy loses the money he could have earned in the market.
Chasing 1 or 2% in the market while paying 5% on a car loan plus a nice finance charge doesn't really make sense to me.
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Old 05-21-2014, 08:32 AM
 
11,768 posts, read 10,218,534 times
Reputation: 3444
Quote:
Originally Posted by Miller88 View Post
Chasing 1 or 2% in the market while paying 5% on a car loan plus a nice finance charge doesn't really make sense to me.
Where do you get 1-2%? Even the bond market pays more than that.

The S&P returned 15% over the past year and DJIA was right around 30%... Come to think of it, if someone is getting 2% they are probably using CD's and not investing.
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Old 05-21-2014, 08:45 AM
 
Location: Montgomery County, PA
16,568 posts, read 15,139,225 times
Reputation: 14589
Quote:
Originally Posted by Dennis P View Post
I agree! The best car payment is ZERO.
For how long? You eventually have to buy a car and having gotten used to no car payment you'll be in no shape to afford a new car, or a recent used one. I am my self not leasing now but I can see the logic of a perpetual lease payment much like a utility bill or real estate tax that you will pay until death.
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Old 05-21-2014, 10:35 AM
 
5,481 posts, read 8,513,851 times
Reputation: 8284
Quote:
Originally Posted by HappyRider View Post
For how long? You eventually have to buy a car and having gotten used to no car payment you'll be in no shape to afford a new car, or a recent used one. I am my self not leasing now but I can see the logic of a perpetual lease payment much like a utility bill or real estate tax that you will pay until death.
My perpetual lease payment is actually cheaper than my family plan cell phone bill. As you put it, I see leasing much like a utility bill which I don't mind paying as long as I have the convenience of having a car on hand when I need it and the peace of mind of knowing that it will always be covered under warranty in the event a major transmission or engine problem were to occur. I can't imagine having to come out of pocket thousands of dollars for repairs on a car out of warranty while still making payments on a finance.
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Old 05-21-2014, 10:41 AM
 
Location: Sector 001
15,932 posts, read 12,197,869 times
Reputation: 16097
I can see how leasing would work for some people. It would not work for me. My current car is 14 years old and every year I keep and maintain it now is like free money.. these are the years this car really pays off...

however not everyone can handle keeping the same vehicle that long.. some people get bored, and life is short. Others don't want to have to worry about car upkeep, they want the peace of mind of having a warranty at all times.

Others might get really good deals on leases so in the end they fare off far better than I might realize. Myself I've learned enough about the internals of cars along the way to feel confident driving what I drive.. the day the head gasket blows or transmission dies I'll simply have it towed to a junkyard and buy another vehicle within a couple of weeks, probably a used, out of lease honda civic or something.
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Old 05-21-2014, 10:44 AM
 
Location: Sector 001
15,932 posts, read 12,197,869 times
Reputation: 16097
Quote:
Originally Posted by lycos679 View Post
Where do you get 1-2%? Even the bond market pays more than that.

The S&P returned 15% over the past year and DJIA was right around 30%... Come to think of it, if someone is getting 2% they are probably using CD's and not investing.
If buying a new car these days, there are zero percent financing offers pretty regularly and I find you really don't save much paying in cash... if a person actually saved a solid 10% off the purchase paying cash I'd recommend it, but I find it's more like saving $500. People who think they saved a big chunk of money could have saved it anyways, and still got the financing. Dealers get kickbacks from any financing they offer even zero percent deals by the automakers. Better off bringing in competing offers from internet dealers, striking a good deal, and taking the financing and letting inflation work for you, so you can pay off those last couple years with cheaper money.

When your job provides a solid 2% or more yearly raise as mine does, taking long term loans at lower interest rates can make real financial sense... if you are mechanically inclined it's still cheaper to troll craigslist and buy private party used.
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Old 05-21-2014, 12:14 PM
 
Location: Texas
44,256 posts, read 64,109,235 times
Reputation: 73914
Quote:
Originally Posted by Miller88 View Post
Chasing 1 or 2% in the market while paying 5% on a car loan plus a nice finance charge doesn't really make sense to me.
Um.

What terrible market and ridiculous loans are you involved with?

Last year, market gave me >20%.
Over last 9 years, above 15%.

My highest loan ever was 2.9%. Current rate is 0.9%.
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