New Automobile, lease or purchase?

[Felix The Assassin]

Originally Posted by Bungleau Just did some actual research on the lease/buy thing, as opposed to following what I've absorbed over the years. I'm not sure where you come up with "equity". A lease is a rental option... you rent the car for the most expensive years of its life. If a car loses $12,000 in value during the lease period, your lease payments will total $12,000. Pretty amazing. Any "equity" that I can imagine would be along the lines of "pay extra, and get it back at the end". You can get a better return in a CD... and they ain't payin' much. You also skipped a step at the end. Neither the dealer nor the leasing company are going to lose money on this deal. They've been doing this long enough that they know how to ensure they make a profit. Only one person will lose money on this... you.

Thanks for your input B.

Each state is different, and here in the Blue Grass state a lease is not the same as a rental by fine arguments of the law.

What you have found might be true in Michigan and or other areas, but not all areas. Some of it is true and applies, some does not. One barters a lease option just as one would for purchase.

Example 1. Sticker price $64,500. Buy it and trade it next day for $55,500, and even less every day thereafter while you pay $1125 monthly.

Example 2. Sticker price $64,500. Lease it for 36 months at $2500 down, $851 monthly, & DO NOT GO OVER MILEAGE in contract, turn it in, collect $2500 (Don't miss that step) and find another.

They are betting the odds here that you like it so much you want to keep it. Then that $64,500 ends up costing you $2500 +$851 monthly for 36 then; (X) times an additional 3.99% on top of "USED" car finance rate, for remainder of loan usually a $20K profit for leasor. But that is not how I roll. They can earn the interest on my $2500 for 36 months, and I'll pay the 3.2% lease APR and walk away, no loss of capital from depreciation, no long term service contract, no long term maintenance issue, and no high cost preventive maintenance. Granted my old Ford only needed routine oil/filter, fuel/air filter, tires and brakes for 75K. Das VAG auto, on the other hand at 42K miles started costing $1200-2000 annually to maintain, and on two occasions year 5 and year 8 went $3500, and year 10 and 100K went $7500 with a residual value of $8K. I'll suffice it to say, as long as she keeps her Burgundy Passport, she'll keep driving Euro-Sedans! Taking her to Tafel in Da'Ville tomorrow.

[Lord of Alcohol]

In your case it seems lease is better. I have only bought one new vehicle, a 2001 Dodge Dakota. Its still my only transportation, and only 120k miles(though hard miles carrying a lot of contruction material). Its been a great truck, but I will likely never buy new again. I'd like a larger truck but theres no f'ing way I'm paying that much. However I am buying a used house 119k (cash sorry bankers) in an excellent area. Going to put 10-15k in it and sell it.

[Micah Foehammer]

Example 2 (lease): Payments = 30,636$ (851$ x 36 months); Equity at end of lease = 0; Net loss = 30,636$

Extend the existing lease or lease another comparable car for another 2 years : Net loss = 51,060$

Example 1 (purchase): Payments = 71,560$ (2500 down + 1151$ x 60 months); Equity = Depreciated Value after 5 years = 50% of 64,500$ = 32,250$; Net loss = 39,310$

How is that lease better again?

My lease was CONSIDERABLY cheaper than that. I think the lease payments on my Z4 were around 425$ a month.

Felix, if that lease rate of 851$ is on a 2011 SLK 3.5L, or even if it is for a 2012, keep shopping. Skyland Mercedes in Asheville is advertising a 619$ per month lease with 4964$ down for a 2012 SLK 3.5L. That's supposedly a nationwide special offer and NOT just a dealer special. Not sure if the equipment is exact or not. 851$ a month just sounds high to me.

http://www.skylandmercedesbenz.com/s...fers#slk-class

[Felix The Assassin]

Originally Posted by Micah Foehammer Example 2 (lease): Payments = 30,636$ (851$ x 36 months); Equity at end of lease = 0; Net loss = 30,636$ Extend the existing lease or lease another comparable car for another 2 years : Net loss = 51,060$ Example 1 (purchase): Payments = 71,560$ (2500 down + 1151$ x 60 months); Equity = Depreciated Value after 5 years = 50% of 64,500$ = 32,250$; Net loss = 39,310$ How is that lease better again? My lease was CONSIDERABLY cheaper than that. I think the lease payments on my Z4 were around 425$ a month. Felix, if that lease rate of 851$ is on a 2011 SLK 3.5L, or even if it is for a 2012, keep shopping. Skyland Mercedes in Asheville is advertising a 619$ per month lease with 4964$ down for a 2012 SLK 3.5L. That's supposedly a nationwide special offer and NOT just a dealer special. Not sure if the equipment is exact or not. 851$ a month just sounds high to me. http://www.skylandmercedesbenz.com/s...fers#slk-class

Because I'm bailing at the end. <-Period. And don't forget the $2500 coming back, that is not lost money.

I would never purchase such an auto, that is why the thread to begin with. AND, I really am putting all this good info into the tool box!

Yes, it's the SLK 3.5L. I saw the ad on TV you mentioned this evening. Will bounce that at Tafel tomorrow. They seem to have a special on the M class as well.

[Micah Foehammer]

Originally Posted by Felix The Assassin Because I'm bailing at the end. <-Period. And don't forget the $2500 coming back, that is not lost money. I would never purchase such an auto, that is why the thread to begin with. AND, I really am putting all this good info into the tool box! Yes, it's the SLK 3.5L. I saw the ad on TV you mentioned this evening. Will bounce that at Tafel tomorrow. They seem to have a special on the M class as well.

I didn't forget the $2500, but it's a wash in terms of profit/loss.

If you find out what the reason is for the difference in Tafel's payments vs the numbers I had let me know.

The SLK is sweet. Post a pic when you get it.

[Felix The Assassin]

Things did not work out. Somebody is not going to drive that 'kiddie car'!

I'm guessing V-Coupe!

[Timber Loftis]

Lease vs. Purchase is a wash, for the most part. If you want to pay $500/mo. to own a luxury car you can do that be either leasing and trading in or buying and trading in at 5 yrs. In either case you've decided that you'll front $500/mo. to have a car.

What I prefer to do is buy used at a discount and then own until the thing falls apart. Many of those years will be "rent-free" so to speak, so long as maintenance and repairs don't kill the deal.

Either way, it's a gamble. My wife's X3 has been a bitch, and is now not under warranty. My E46 3 series on the other hand has been great. I guess it's luck of the draw.

I'll tell you this, having a car salesman as a brother-in-law: the dealers F'n LOVE leasees.

[Bungleau]

Bottom line for me: With the length of time leases have been out (easily 20 years), there is no way that dealers are risking a loss when you bail at the end of the lease. They are making a profit no matter what. You are the one paying for that first-few-year depreciation.

[Felix The Assassin]

Thanks for the info everybody.

@ Micah,
That Nationwide deal was a base model for that 'exact' lease. Tafel's inventory did not include any models that met the Nationwide criteria, therefore the price they quoted via the net was correlated to 'current' inventory.

[Gabrielles blades]

leasing/purchasing a new car is too expensive

Consider used
I got my 1995 dodge neon highline in 2000 for 3500$, since then it ran for 5 years only needing standard maintinance. past that it needed a part each year min - so far its 2 radiators, 1 alternator, 1 starter, 1 transmission, 1 fuel pump. For an added cost of DIY + parts around 1200$. Obviously if i used a mechanic this figure would be exponentially higher, but i didnt so 1200/6 years = 200$ more a year in cost vs when it was a young car with no issues - still a good deal, and if i continue to keep it then i know i need a new engine in a year or two, not going to be a fun install - probably get it from the junkyard like i got the transmission so itll be cheap atleast.