lasstss

I forgot about GAP insurance. Last time I leased in NJ there was no gap insurance. Also, When I turned it in (early) it cost me $2000 to get out from under it.

Still dont like paying a 3 year lease and having nothing but paper at the end. To each his own! Its nice to have someone pay off the car and you still have it to re lease or sell.

okcook

It's all a question of equity.

app. price new $20,000
principle paid on loan (3 yrs) - 11,000 approx. (remember, you're paying interest too.)
----------
loan payoff 9,000

resale value 13,000 aprox.
- 9,000 to pay off loan
-----------
Total equity gained 4,000

Lease equity gained after three years of payments = $0

But.....a lease is no hassle. Carry GAP coverage and full insurance, drive less than the agreed upon mileage and in three years you've got a new car. You're paying for the convenience of it, with the money down, money due at turn in, and monthly payments, but you get nothing back at the end.

Also, the ease of selling a car is different depending on where you live. I sold my WRX, 2007 16K miles here for $18.5K, but if I lived in the PNW, I could have gotten $21K easy. I might have gotten more here, but I could have had to wait for 6+ months to sell it, and I was driving it the whole time. Mileage, condition, market value, and vehicle demand all play a part in resale value.

Yes, but if my air conditioner craps out, my roof caves in, or the siding blows off my apartment in a wind storm, I don't have to pay to fix any of it. I don't think you would have any problems not covered by warranty in the three years of a lease. Another perk to think about.

That being said, I opted to buy. I can't just give someone money and have nothing to show for it at the end. I'm also buying my house.

memebag

Sure you do. Your landlord isn't going to lose money to pay for those things. He's going to pass the cost on to you.

The xB holds its value too well to even think about leasing. Try to buy a used one and you'll see.

R3k

Thanks for the replys, especially those in length.

I guess the popular opinion is to buy, heh.

But, I still haven't made up my mind though, unfortunately.

I do not currently mind un-ending car payments, at least not for now, and look forward to having something different in a few years... Ive gone from an 89 civic 5 door to a 95 Jetta Sedan to a 05 BWM 325CI with S package to..... well, to an XB.... might wanna try a performance coupe or something in a few..... so after 3 years Ill be left with nothing to show for my money, Equity or no, the numbers I ran seem pretty even (after interest).

I guess another good reason to buy is that if my financial situation goes down in the next couple of years, Ill be wishing that Id bought it and not leased it...

Im going to check out how much I can write off on a lease, vs buying, as some people I know say to works to your favour as a tax break.

If my GF wants to keep the car though, then Ill buy it outright and hold on to it.

Thanks, you comments help.



Cheers!

xFistsClenchedx

Buy one slightly used if you can, that way it doesn't depreciate immediately like a new one would.

Invertalon

I leased my xB.

For me at the time, the low payments were needed. The thing is, I am not LOOSING money by doing it. Due to the excellent resale, my xB is valued at 11k or so at the end of my three year lease. If the xB should be worth less, then nothing happens. If more, I get money returned to me. Also, if i choose, I can purchase the vehicle for that 11k regardless of what it's worth at the end of the lease (If worth more, I get that back).b Which by then I could probably pay most of that up front and have it paid off in the three years.

Lease to buy isn't a bad option if you need lower payments or keeping for a shorter time. It isn't as "waste of money" as most people think it is, especially with the better financing today. Sometimes, it is better depending on your situation.

As an idea, I put down 3000$ when I bought the xB and my car payments are 189/mo.

xFistsClenchedx

I build equity in my car. When I sell it, I will get back more money than the downpayment was when I initially bought it. I will get my money back plus some extra money (in the case of my WRX - $1500 more than the downpayment) and I will have low monthly payments. The $10,000 down payment I put into that WRX when I bought it is now my down payment on my Scion xB. That, with my 5.75% interest rate and 72 month term netted me a $138 per month payment. Granted I could have built equity faster by choosing less months, but I need low payments as well at the moment.

R3k

Thanks Again!

I really had it in my head to go with a lease, but my girlfriend (along with most of you) finally convinced me to get a loan and buy it..

Ill be going into the Hollywood dealership today, and picking up a barebones automatic 09 silver.

Thanks again, Ill post pics once I start adding some interesting accessories.

Cheers!
R3k

CarbonXe

iTrader: (1)

Leasing is the same thing as throwing money out the window.

Invertalon

Have YOU ever leased before? I mean, cause honestly you have no idea what you are even talking about.

Leasing my xB, they figured out what the xB will be worth (estimated) at the end of my three year lease, which is around 11,500 or so. So, they took the price that you would buy it for, split it up into 36 payments and basically I am paying off that difference up until my lease expires. When it does, I can purchase my car for that 11,500... I am not paying ANYMORE then somebody who buys it outright. And, there is even a chance that if the xB is worth more (say 12,500), I will get $1,000 back to put as a payment if I keep the xB, or for the new car I would lease/buy. But NEVER can it be lower then the amount they wrote on the contract.

Get your facts straight before you defend something that is not true. It is a great option for people who:

A.) Want to make sure they like and enjoy the car
B.) Need lower monthly payments (I pay $189 versus what, $400?)
C.) Ability to get a newer model or switch cars if not happy.

If you choose C you will be loosing money, but really not much more if at all then somebody who bought an xB, had it for three years and did a trade in for a newer model...

Both options are great, especially for the xB... You end up paying the same money in the end, at least for our Scions. (I am not sure how other leases and stuff may work).

Dumbledore

The arguments between leasing and buying can go on forever. there are pro's and cons to both. However, you also have to take into consideration that these car companies are out to make a profit. Leasing does seem to have allot more traps in it than buying, but again it depends on your ability to uphold your part of the lease. And lets face it, you can't control things like accidents or acts of God. Anyways, just becareful when a dealer works out the "math" for you for either payment plans. When dealers want to overvalue a car they use Kelley blue book, but when they want to undervalue a car, the use some kind of indusrty black book. Again, they are out to make money, and the nice thing about leasing is that very few can actually abide by the terms of a lease and bring a car back in perfect condition that no additional fee's would apply.

CarbonXe

iTrader: (1)

I have never leased a car because it's a waste. My parents have always leased vehicles until a few years ago. They bought a Jeep and a Jetta. Now they have 0 payments and about $35,000 sitting in the driveway. Now tell me how your low monthly payment is less than having equity? Enlighten me.

Also, my sister leased a Mazda6s 3 years ago. The lease ended May of this year. At this point, she wanted a new car since she hated the Mazda. She was going to lease either a tC or an Accord, until I talked her out of it. With the Mazda, she ended up owing about $1300 when she gave it back, because the bumper had some scratches, it needed new tires, and she had to make one or two more payments. At this point, instead of owning the car, she's forced to turn over money for a car she will never see again AND has nothing for a trade in. Now that she bought the tC, her payments are slightly higher, but in 3-4 years, she will have $12,000 worth her next car. Lets say she buys another car like the tC. $18,000 for the tC, minus $12,000 = $6,000. $125 a month, sounds to me like thats cheaper than leasing.

Leasing in the long run is a complete waste. The only time leasing is better than buying, is if you plan on getting an American car that loses value like theres on tomorrow.

Invertalon

They strictly told me that I needed to have new tires on upon the return of the vehicle that the OEM tires cannot be on or I will be charged. Did they ever tell your sister that? If they dealer puts new ones on they will rape you for sure! I plan to basically put on cheaper tires a few months before I return (If I decide to get new model or whatever), if not I will get good ones or just not buy them yet if I don't need to and plan to keep my car.

I figure:

By leasing if I pay my $9500 which is what I will have paid total in three years and then buy the new xB or some other car at $19,000, it will come out to $28,500 total money spent on the two vehicles basically.

If you buy a stock xB at $17,360, plus 7% tax and financing for 60 months at 6.55%, you will pay, overall, $21,840 by the time you finish payments *if* you go by the books and pay the minimum. If you trade in in three years, get $12,000 for it and use that to buy a new xB at $19,000 or whatever, you will end up paying, overall, $28,840.

If you compare it that way, its fairly close both ways... I mean yes it will depend on your financing, how much you pay when, condition of the vehicles, etc... Buying *may* be a small margin cheaper but really in the big scope of things, it really is not that big of a difference.

Pro's and Con's both ways, just pick whichever floats your boat! But really, no need to bash the other boats nearby...

CarbonXe

iTrader: (1)

I'm not even going to bother continuing because I can't word it out, but Mazda said the tires needed 3/16" on them.

Invertalon

So the tires did have more then 3/16" on them and they still raped you? Sucks...

I see what your saying man don't get me wrong... Buying will probably end up a bit cheaper but it just depends. Usually, it will.

I probably will end up buying my xB when the lease is up anyway, pay the remaining $11,000 and pay it off (in full if possible).

Then once the new redesigns come out decide what I want to do ;)

Dumbledore

If you do buy your car, that will be the day you wished you bought your car in the first place.

Invertalon

Why?

Like I said before... I will owe $11,000 if I buy it at the end of my lease. It cannot be more then that, but *could* be less, in which they would reimburse me.

I don't see why I would wish anything... explain yourself.

Dumbledore

No

CIONIDE

iTrader: (1)

I've been trying to stay out of this discussion, but knowledge prevents me. I'm a former sales and leasing consultant.

Open ended leases many years ago used to look at the value of your car when it was turned in (not when you leased it); the residual value was not established at the beginning of the lease. They don't do that anymore, because too many buyers got screwed when they turned it in. The best example was people who bought Dodge/Chrysler mini-vans early on when they were all the rage. Then the SUV craze took over, and mini-vans were trashed on resale value when turned in at lease-end. I had a friend who had to pay $7000 to get out of her lease or buy the vehicle, which was then not worth anywhere close to what the buyout was.

There is no possibility that your buyout at the end of the lease could be less than the contractual residual, if in fact you were given a fixed residual upon lease signing. The only benefit there would be to purchase the vehicle at its residual value, then sell it privately if it is worth more than the residual.

The good news is that you bought a Toyota product. Toyota and Honda vehicles maintain some of the highest residual values in the automotive industry. What that means is that you are getting the best bang for your leasing buck. A higher residual value at lease inception means a lower monthly lease payment. Conversely that also means a higher buyout (residual value) at the end of the lease.

Leases are done for 2 main reasons: 1) to buy more car than you are comfortably willing to pay for each month, and 2) because it is a business write-off that is tax deductible and that you don't have any headaches with when the lease is over.

In the end if you buy out a leased vehicle you can never, by mathematical definition be as well off as purchasing the vehicle up front, because you always have something called a "rent charge" included in each monthly lease payment. This is the portion of each monthly lease payment that goes to the leasing company as their small profit for leasing you the vehicle to begin with. Keep in mind that nobody is in business to break even. Also keep in mind that in addition to the residual buyout value, you are also responsible for the additional sales tax on the residual value that has not yet been charged or paid for, which could be almost $900 more on a car with an $11,000 residual value.

As I said, you maintain the highest value with Toyota and Honda, so you are in the best shape if you decide to buy out the vehicle at the end of the lease because it is still worth a lot. If you turn it in, you are still in great shape, because you had a relatively low lease payment (compared to other makes) because of the high residual value established at the beginning of the lease.

With all that said, if you were not sure that you planned on keeping the xB at the end of the lease, you will have only payed the leasing company a small amount (vs. purchasing the car) to have the flexibility of just turning it in, or deciding to buy it.

For someone who knows that they want to buy the car at the end of the lease, leasing is stupid, it's equivalent to paying a lot more interest on the loan. (Unless it's the ONLY way to afford the car you want to drive.)

I hope this clears up some of the differing viewpoints. Most of them were correct, just not succinctly stated.