Hi,
I am leasing my 01 s2000 now and i love it. It gives me a smile everyday when i drive it. So, i am deciding to buy it. Is it too early?

My lease ends 3 yrs later and i got the car for 6months. I just got a payoff quote of $32,000 from America Honda Finance Corp.

Here's my situation: I have 2 cars. I commute with the Nissan daily for 85miles/day(no smile when driving) and the S2000 is for pleasure driving... So, i am not putting lots of miles on the S2000, that's why i leased it.

Now, i am in love with the stook and want to sell my Nissan to pay as the down payment on the stook and finance the rest. Is it a good idea?? Since i'll be financing the car, so mileage will not be a problem; at least there's no penalty on exceeded mileage.

So, can anyone give me some suggestions?

Thanks.

 

If you want to keep the car, then bye it now. Not only will you pay less on insurance with a purchase, but you will start to build equity in the car (something you can't do with a leas). Leasing is a way to get into more car then you can afford, if you can afford it then bye it. JMO

 

If you finance the payments will be higher. Since it's a lease that allows you to buy at the end, why not just keep it as is and buy it three years down the line and sell it when you want? You might lose a little money. Big deal. You didn't buy a car as an investment.

 

I agree that the finance monthly payment will be higher... but i am thinking of selling my Nissan, so that the monthly payment won't be as high. Is it stupid to do it this way?? or it's better to keep 2 cars?

 

I'm leasing mine also, i put 5 k down and my payments are 475 a month for 36 months, then i will purchase the car at the end of the lease, i drive my Hybrid civic( still smile with that bad boy) as a daily driver....and that way i can't modify my S2k for at least 3 years..think of it as a nice little investment...

 

se-r

alot depends upon how your lease is written and whether you are more concerned with building "equity" in a car or keeping your monthly payments low.

i don't have your lease, so you're going to have to read it thoroughly. most good leases don't charge you any early breakage fees. if you have a close ended lease you will know exactly what you need to pay at the end of the lease to buy it then. sometimes, not often you have to pay an additional fee for buying out the car. these types of things you will need to investigate.

many people tell you that leasing is a bad idea because you never build "equity" in a car. this is only somewhat true.

cars are depreciating assets. very few cars (collectibles and rare one offs) are exceptions to this rule. many feel that one day the S2K will be a collector car and a good investment. i'm not getting into that hornet's nest here but if, and it's a big if, that party is correct their idea is pure speculation right now.

if you buy you're s2k you will build ownership in the car. your payments will be higher and it sounds like you will have to sell an asset that you have equity in as a down payment.

the question is, what's the best use of your money? are you better served tying your money up in a depreciating asset or investing it elsewhere?

on the other hand, do you intend to modify your car substantially. if so, and you chose not to buy your car at the end of the lease you are in essence giving that investment to honda gratis.

in most cases, the financially prudent thing to do is to buy a car and keep it for at least five years. i'm a finance guy and i know this is the case. i can build financial models up the ying yang to prove this. but... i leased my s2k.

here's why
1) use of my capital. i put nearly nothing down on my car. my money factor is tiny so my effecitve interest rate is very low. i get a better return on my money investing it in my money market or cd ladders than i get charged by honda.
2) reliability. i have owned a bunch of honda/acura cars and motorcycles. i think they're phenomenal products. our cars aren't the average hondas. i was and still am a little concerned about the long-term reliability of the s2k. i have had quite a few small problems with mine and if this continues i will walk from the car at the end of the lease. let honda deal with it. if not, i'll buy a known commodity at a greatly depreciated price.
3) accidents. god forbid i have a accident with this car. it'll be fixed under insurance. but... will it every be right? i think insurance companies are far too conservative in their approach to writing off cars. if the frame is bent, i am not going to want it back because i know it'll never be right again. if the car is leased, no worries i hand the keys back at the end of the lease. if i own it, and try to sell it i have to disclose that and my "equity" in my car suffers.

hopefully this helps.

ps - as far as the insurance is concerned think about that carefully. if you lease the car you have to write your coverages higher than the minimums. however, if you own your own property you're foolish not to write your insurance to that level or higher anyways so you're really not saving anything there.

 

[QUOTE]Originally posted by not_a_z3
[B]If you want to keep the car, then bye it now.

 

So, you guys suggest me to keep the Nissan and continue the lease of the S2000??

But i probably won't buy the car after the lease because the residual is like $22k... i paid $3300 down and $520/month on my lease for 42months... that adds up to about $45k for a $32k car....

I'll highly likely bring the s2000 to track couple times per year. I guess i'll keep leasing the car and return the "tweaked" chassis to Honda after the lease.

 

se-r

i think you're missing an important piece in your decision making process. interest.

if you were, for the sake of argument, purchase your car today for $33,000 and finance the entire balance (assume 8.0% and 60 payments) your total cost of the car is a little more than $40,000.

unless you're paying cash for the car, you're not really paying $33K.

i wasn't trying to influence you one way or the other, i just hoped to bring some items that you might not have considered to the table.

 

Did I get a good deal or did you guys get ripped off? I am leasing my s2k too but put down 4000 out of pocket and pay 379 a month for 36mo.