Leasing is STUPID for a car you should keep if you just want to keep a car for 2--3 years get a Lexus or Bmw. An S2000 is a car you BUY , PURCHACE, you have complete contol if you buy it. You can put as many miles on it as you want . Intrest rates are low they are giving money away BUY the car remember lease is a fancy word for RENT. Feels good to say you RENT your s2000 doesnt it..... thats what i thought so go takes your $2000 your throwing away on that lease and use it as a downpayment and buy yourself a car you can own

 

G, John,

I agree with you guys, in principle. We even forgot to mention that an owner can mod his/her car, but a lessee probably can't. A prospective owner has to look at the numbers, plain and simple. Always remember that the dealer and finance companies will try to win.

I do want to say that the analogy to "renting" does fall flat a bit because you're paying for a right to buy the car at some fixed price later -- "rent to own" is a more precise analogy. Specifically, I'm wondering about the resale value question we raised earlier. Seems to me, if a car has strong resale value (like the S), leasing may be a smarter option than it might be otherwise...

At the end of a lease period, you have an option to buy at some fixed price. I don't know how often this happens; after all dealers will be cognizant of this -- I'm just saying that there's a possibility that a car could be worth more than that at the end of the lease period. In this case, you have built some value with your lease.

What do you think, guys? Does that ever happen?

 

[QUOTE]Originally posted by Chazmo
[B]G, John,

I agree with you guys, in principle.

 

Matt, congrats on the purchase be sure to visit the NY Metro regional forum to meet some local members.

 

To me, leasing is nothing like "renting". My first lease was a 98 integra ls which I got for 1700 down for $99 a month. 3 years later when the lease was over I sold it for $18,000 (I put some money into it) and the residual was $12,000 so I bought it from american honda for 12 and sold it for 18 and I made a quick $6,000. Two days after that I leased a 2001 Integra type r with $4,000 down and $250 a month. One year later, way before the lease was up, I still owed 16,500 and I sold it (on ebay) for
$22,000. So I paid off american honda again and got my down payment back plus $1500. Then it took me 3 weeks to find a good lease on my S2000, but finally I got one for $3500 down and $306 a month. In three years when this lease is up, I will owe $19,000 on it and as long as I sell it for at least $22,500, I will have gotten my down payment back to take with me to my next lease. So all together in those first two leases I made a total of $5,800 (sale price-residual-original down payment=profit) profit by leasing. And im pretty sure I will sell the s2000 for more than $22,500 so that number will go up.
I look at leasing completely different than most other people. Even dealerships I talk to as me why I wanna lease and until I explain this to them they dont understand, but after I tell them my story and how you can make money like this they look at it a whole new way. I have people all the time ask me how much I pay for my car and when I tell them $306/mo they say "What??", and then I tell them its a lease and they say "oh, so you dont really own it then", then I tell them, "well I can do whatever I want to do. If I want to own it I can. If I want to sell it for more than I owe on it, I can. At anytime durning the lease you can chose to go to your bank and get a loan for it and pay off the lease. Like on my type r, I paid off the lease 2 years befor it was over because I sold it.
Anyways, I just try to get people to understand that in leasing you have multiple options with the car. If something happens and the car is worth $7.00 at the end of the lease, just give it back and your only out your down payment. If it holds its value really good, then sell it and make a few grand off of it. If you decide you love the car, then get a loan and buy it.

 

Oh yeah...also when you lease, there is not "intrest rate". There is a "money factor" which from my experience in my 3 leases is way less than intrest rates, but that differs state-to-state.

 

First - Congrats Matt!

Next, I also lease, and for this reason:

I make payments on another new car, and the 2 payments to purchase over 5 years would have left me with about $1000 a month in car payments. No thank you.

I expect to pay cash for the residual, not take a loan when the car comes up, and I decide to keep the one I have leased.

In my case, the total lease then buy option vs a buy only option equates to under $500 difference. If, I were to take a loan to pay off the residual, then I'd have another 2-3 years of interest, which would make the lease/buy option much more expensive.

I don't think it's 'fair' for people to say leasing is stupid, or shouldn't be an option. I understand its your opinion, and you have the right to that. Just open your eyes a little and realize that not every option is the right one for everyone.

Leasing has advantages and disadvantages, buying has advantages and disadvantages. Its up to each individual to determine what's right for them based on the factors that are important to them, and that's my opinion.

 

[QUOTE]Originally posted by spapdx
[B]To me, leasing is nothing like "renting".

 

i calculated out my lease, and residual....if i lease, then buy out with a loan for that amt...it comes out to the same amt if i buy from the beginning. Diff was 1-2 hundred dollars less if bought from beginning.....not bad i think.

 

Spa,

It's still a form of renting, and I'm not picking on you here, BTW. Let's just take a circumspect view on this. And I apologize in advance for rambling a little bit here...

Your profile of trading cars as you've done seems to be the right "fit" for a leasing program. There's nothing inherently right or wrong with renting... it's simply a matter of control of the object. As far as whether it makes sense from a monetary standpoint, that depends on the numbers. You're right that no one should make a blanket statement about stupidity or otherwise; that has nothing to do with it.

In 3 years (2006), you'll have spent $14,516 on the right to buy your three-year old S for $19,000. That's the bottom line for you on the S. Suppose, optimistically, the car's worth $25,000... Let's call that a $6000 value to your lease. So, OK, you'll have spent $8,516 to drive the car for 3 years. That's not really a correct way to look at this, by the way, since you've lost the use of your initial down payment for 3 years.

When you compare lease payments to loan payments, everyone knows that the first couple of years of car ownership is when you lose horrendous value to your car. The S is far better than some, too (which in my opinion makes it a better car to buy rather than lease). Try buying a Jag or Caddy! Yeesh! (that's why lots of folks do lease those). Those first years of a loan term are also when a large percentage of your payments go toward interest, not principal! Anyway, buying a new car is automatically an invitation to get screwed. It's simple economics that a depreciating asset is a shitty investment

I wish I had my interest calculator here to do a side-by-side here with you. Do you have the numbers from the dealer for a loan??? I'm just curious. Especially with rates so low. It's such a great time to borrow money right now!!

(enough rambles for now )