Yeah leasing is much better if you like throwing money away. At the end of the lease you have nothing to show for all those payments you have made, its just like renting an apartment writing a check each month but you own nothing at the end. I dont care if it depreciates or not you can still sell the car in five years and make something on it to put towards a new car. You cant sway me on the issue that leasing is the better way to go.

 

wow some people are just plain ignorant.
What if some people dont care about keeping the car for 5yrs. Most leases are set up around 3 yr mark. Even if you buy and sell after 3yrs you can still end up loosing money it all depends on how much money you put down.

for like the 10th time. it all depends on situation.

As far as your comparison to buying a house. Well thats just stupid. People who rent apartment and would like to buy a house would need a significant down payment. If you pay does not allow you to do that, then no mater how pissing and moaning you do... it just aint gonna happen. If you living where a good portion of your paycheck goes to cover the bills, then saving for downpayment is going to be really hard. I'm sure if you ask most apartment owners, they would tell you they would like to own a house. Me being one of those people. But if I dont have 10% or 20% for down payment then i just cant do it.

 

If it rolls, flies or floats, lease it. None of the above is a better statement. I lease, why? Because I like to change cars often. The only real difference, because of depreciation, is that with leasing, the down payment comes at the end. When you buy, the downpayment comes up front. Let's face it, unless it's a Ferrari, cars don't exactly appreciate in value. In fact there are the worst in depreciation.

 

Basically it all boils down to being whatever the person's fancy is buy or lease.....Benbo5 I don't think anyone is trying sway you into leasing....If buying works for you then go for it...that's your choice...for me and other people here like to lease as it is our choice....and believe me i've had this arguement with a lot of my co-workers say "WTF you leased?!?!" but when i told them i still had 11K in my pocket for a rainy day and still saving up whereas they didn't have $hit and they owned their vehicle AND paying more than me.....I think i got the better deal....That about a year ago...Since then i've added more money to my "pocket" ...And by the way i do own a house as well...MyGspot is right you are ignorant....

 

^^ thanks

I think if you rally want to keep the car its absolutly better to buy. My friends family loves Benz's they bought a brand new SLK 320 kompressor last year. the car is almost 1.5 yrs old and oly has 2k miles on it. It never seen rain and never been in the snow. Its a perfect garage queen. For his situation it would be completly stupid to lease. Because he is keeping this car for a long long time. I mean car hasnt even been broken in.

 

another advantage of leasing is your are almost always guaranteed to be under factory warranty.

after 4 years, the maintenance on your car is totally out of your own pocket.

i don't think it's extremely obvious which is better quite honestly. in some cases financing a car is a better option and vice versa. personally, i choose not to lease because i tend to keep my cars for a long time. thus it makes a lot more financial sense to own a vehicle rather than leasing. also, i don't like to pay hefty monthly payments. although i'm very aware that a larger downpayment on a leasing plan can lower your monthy payments, when you begin to drop $$$ on a down payment for a lease, you may as well finance it. at that point the benefit of a lease greatly diminishes because you lose a lot of leverage.

 

it all depends on the situation whats with this arguining

 

In the two times I looked at leasing it wasn't even close from a financial perspective. Can you provide an example of where leasing is superior to purchasing? Even a hypothetical example will do. Please only provide an example where a buyer has the financial wherewithal to do either. Obviously leasing is superior if a guy wants to drive a specific model but can't afford to come up with sufficient funds to purchase it.

 

^^ youve just mentioned a type of situtation where leasing is superior in some cases yourself, i myself purchased mine, i believe put crap loads of mods, and be able to drive as much as i want, and not worrying but dealer haggling me for scratches is good enough, but some people dont have money down, or cant afford big payment and lease, but i dont think leasing is good a for a car like G35, i do believe its good for german luxury cars since they cost alot and depreciated really quick

 

you don't want to lease a car that depreciates too quickly.

the reason why a lot of ppl lease bimmers is because when the warranty runs out, so does the lease. so whenever you lease, you are always covered under the factory warranty. maintenance on those vehicles is very high.

leasing really only makes sense when you don't have much to put as a down payment and you wish to switch cars every 3 or so years.

i like to think of leasing like leveraging. leasing allows you to drive a nice car without forcing you to immediately pay a huge premium. i.e. i can drive a 40k car with almost zero down intially. Provided i can pay my monthly amortization/depreciation + interest premium of the vehicle, i can continue to drive the car with close to no principle.

 

K, I'm a newbie here to this site but I used to lease my 03 RSX type S. I own a home so I had both options available to me. I paid around $23k for my car and the lease was for 36 months at $300/mo. If I bought it I would have paid about $100 more per month. I just sold my car for $19k which was a little over what I owed on my payoff (because you can sell a leased vehicle). The way I look at it is at the time I had $0 down, lower monthly payments, and after two years I still made a little dough. Yes, I did mods. Rims/Tires, Hondata 4 reflash, tein ss susp, hotchkis sways, all that stuff because I knew at the end I would sell it anyway. I pulled it all off prior to selling and the dealer never said anything to me. Now, here's the kicker. I paid $100/mo less than I would have if I bought the car. If I bought the car I would have paid $100 more per month and since the beginning of your loan is almost all interest I would have probably owed money on the car when I sold it. So, not sure if this makes sense to anybody else but it sure does to me. I'm getting ready to lease a G35 next month and I plan on doing the same thing. Infinite1 is right, it depends on each person and their situation but I will lease. I keep my cars super clean and don't put hella miles on em. Anyway, thanks for letting put in my .02.

 

Here's my specific example:
When I leased a year ago, I had $20K cash in hand and a tier 1 credit rating. The finance rates were so-so (4-5%). I had them run lease numbers for 24, 36, 42, and 48 months. With them in a table with the duration, rent charge, residual, and payment, it was easy to see the "Best deal." They gave me a 55% residual and ~$3000 rent charge at 48 months. Even then (2004) I was aware the likely redesign was due in 2008, so 55% seemed higher than was likely, and fine by me.

So, with the 20K earning a solid 5%, rather than nothing, or worse paying interest, and a rent charge for 4 years that is comparable to the interest I would pay in 4 years of financing, it made a lot of sense (Superior in my situation).

The bottom line is, if you really have both options when you go in the door, you have the best possible leverage. Don't be afraid to drag out the purchase process and have them detail every option. Bring a calculator if you must, and know what all the numbers are. Also, get "Pre-approved" for a loan from the bank of your choosing to get a less tainted idea of where you're at credit-wise. A lease will offer the lowest monthly payment, but perhaps not the "Best deal." It all depends on what YOUR definition is. Good luck.

 

Questions:
1. Where did you get the 5% return on your money? Wherever it was since it's far more than banks or money markets pay, there must be risk to losing some of your principal.
2. What interest rate did you pay on your lease? I have to believe it's substantially higher than 5%.


Keep in mind that there's a nominal rate of return and the actual rate after Federal, State, and local income taxes. Most of us will lose at least 40% of the 5% after taxes, so that leaves you with 3% net, and in order to get that you have to expose your $20K to some risk.

 

i leased my car as well, in my opinion, its a better deal, since i am already kicking myself for not waiting longer for the 06 model

 

For those that haven't leased, despite the attempts by the stealers to complicate the process, in reality it's not that complex. Here's a generic example:

Let's say that a vehicle has a sticker price of $23,000. You have negotiated the price down to $20,000. We'll also assume that the interest rate is 9 percent and the residual value is 57 percent. What are the monthly payments on a three-year lease?

The first step is to find out how much of the car's value you will use. In other words, down the road three years, what will it be worth? In this example, the MSRP of $23,000 is multiplied by the residual value of 57 percent.

$23,000 X .57 = $13,110

The car will be worth $13,110 at the end of the 36-month lease. Since the car was worth $20,000 (after you negotiated it down) and it will be worth $13,110, you will be using $6,890 of the car's value.

$20,000 - $13,110 = $6,890

The $6,890 is then broken into 36-monthly payments of $191.39.

Remember that this figure doesn't include interest or tax. Finding the interest amount is the second half of the calculation. Interest on a lease in computed in a weird way. You add the negotiated price of the car to the residual value and multiply this by the money factor.

($20,000 + $13,110) X .0037 = $122.50

Finally, these two figures are added together to give you the approximate bottom line monthly lease payment.

$191.39 + $122.50 = $313.89

Remember, this figure does not include taxes or fees, and it's all of those fees that give me heartburn. There's a fee for initiating a lease and there's a car disposal fee, and for all I know there's a dealer holding your hand fee.