as much as i love the s2k, i will be selling it in about 3-4 years. it will be my second car and not my daily driver. because i cant really track an s2k that is 3 years old(1999 model) i am not sure how much it will depreciate.
i can get a lease for about 350 a month on an 01 model for 36 months, approx. or 400 a month on an 02 model. bank fees and security deposit down.
if i buy, i can get the car for 30k, plus 1800 tax, and about 4k in interest, totalling approx 36k for the whole car over a 60 month term.
with a lease its about 12,600 out of my pocket.
im trying to consider if i sell the car in 3-4 years what i would get for it with low miles.after selling it would the difference be greater than 12,600 or less than?
any ideas?

 

I am kinda confused. You say with the buy option that your looking at 4k in interest over 60 months. To me this doesn't sound like buying/purchasing the car. Sounds like someone else will still own it. Am I right?

 

I've recently changed my financial strategy with respect to owning cars.

I've never leased a car before now. Over the years I've developed elaborate financing schemes involving balloon payments, home equity guarantees for tax deductions, etc. and always thought I was winning. I've recently realized that as long as I have any amount of equity in a car, I'm loosing my money's earning power and, in fact, loosing equity through depreciation!

Some vehicles have very high residual rates and can yield unbelievably low monthly lease payments. However, vehicles with low residual rates can have higher monthly lease payments than higher priced vehicles.

Given that you plan to be in a different car in 3 years, my advise is to lease and put the difference in payments to work for you!

 

$400 mo for 36 months = $14,000

Residual = 21,000*

$610 payment (5.9 %i) for 60 months

Value of car @ 5 yr assuming 12,000 miles a year $16,000*

Now take the $210 a month and invest it for 5 years @ 8 %i (assuming you can find 8 %i)= $15,533

$16,000* vehicle equity vs. $15,533 payment savings.

It's a wash...

* Depends on vehicle location

Things to consider:

1. Buying leaves you with 2 yrs out of warranty maintenance
2. New and Improve model could drive equity down
3. Discontinued S2000 could drive equity up.
4. Leasing leaves you a 2 year window for future lease
5. Leasing has better tax implications

When you factor the above considerations, leasing shows some advantages.

But to each his own.

 

Buy Buy Buy, unless you don't put many miles on the car. I leased once and will never lease again. At the end of a lease you have nothing. When you buy you still have a car you can sell or trade. People say you can have more money up front if you lease, meaning you can spend it, save it, or invest it. Who the hell does that? If I have extra cash I just go and spend more. Buying may cost more upfront and every month, but it helps you budget money you can pawn off when you sell the car.

Sam

 

im just trying to see why buy if i will sell in 3-4 years?
the amount i lose on a buy, will it be around the same as i pay for a lease?that is what i am trying to consider.

 

If you lease, you will never have freedom from a car payment. What if you need to hold on to your car for a few years to free up an extra $600 for a year or two. You can't do that with a lease. Besides, who invests all the extra money they save anyway?