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Old 05-24-06, 01:59 PM   #16
Kermee
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Quote:
Originally Posted by tragic22
The way I'm seeing it is if the money is refundable and it reduces your monthly payments then there is no reason to ever put money down if you can put that as same money as a security deposit. Is that safe to say?
Correct. Just realize that LFS/TMCC is one of the few "banks" which allows a lot of these methods in reducing lease costs including MSD. They're just not very well published.

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Old 05-24-06, 02:49 PM   #17
celica2nv
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Her is my 2 Cents and honestly it is just my opinion....I know you said that right now you can't afford high payments but alter down the road you will. Just curious to your age. I was thinking the same thing when i was like 21 ending college and said hey ill have money cause ill have a job later on....well here i am 3 years later....and im the only Male elementary teacher without a full time job and paying for this car that i no longer want to have( Yes i do love my celica but at 24 a 2 door is not practical) . I will be paying it off for three more years since i chose the 6 year route to lower my monthly costs.....IF you have a car and do not need one...my opinion is dont do it until it is down the road when you have this money that you claim you will have. remember...nothing in life is a gurantee...you cant think that you will have that money down the road. Save your money now so u have more money later. Just my 2 cents and im not telling you what to do with ur money...just sharing a tid bit with you cause ur story sounds the same as mine did three years ago and now im paying for it.
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Old 05-24-06, 02:50 PM   #18
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Quote:
Originally Posted by tragic22
The way I'm seeing it is if the money is refundable and it reduces your monthly payments then there is no reason to ever put money down if you can put that as same money as a security deposit. Is that safe to say?
well, they are two totally different things:

multiple security deposits - that's basically lowering your money factor which means your APR is being reduced, hence why your payments are lower. you are basically fronting a lot of cash in order to "buy" a cheaper rate from the bank (it gives them more confidence in you). if you have some other use for your cash and can make a good return on it, paying multiple deposits may not be for you.

money down - this is reducing your cap cost on the lease at the start of the lease term. basically let's say your lease payments are worth about 20000. you can either pay your lease in 36 months equally, or you reduce the monthly pymt by paying down 5000 first and then calculating the 36 payments.

you can do either. money down isn't money lost. you are just prepaying a part of your lease up front. but yeah, if your ONLY reason to put money down is reduce your monthly payment, AND you have enough cash to front 9x security deposit, then lowering your money factor is not a bad way to go. if you have zero use for your 9x security deposit, then reducing your money factor results in you getting the car for "cheaper".
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Old 05-24-06, 03:14 PM   #19
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Ok as everyone stated there are always good things and bad things with leases. I did exactly what you are looking to do. My lease is as follows:

About 5K down
36mo/ lease
12k / year
$400.00 Even a month.

For me to purchase the car it was closer to 600.00/month

The problem you can run in to with a lease is if you Total the thing. that 5K becomes no more and you have wasted a lot of money. Now the nice thing I noticed with Lexus is they offer a lease purchase payoff amount which is your remaining lease amount + the residual. I just checked and my payoff is Purchase Payoff Amount: $28,622.70*

So for me to finance that at 7.5% going rate would be $573/mo for 60mo. That is 34,380 at the end + the 5K down coming to 39,380 total I spent on the car.

Now lets take the same car and put the 5K down and do a purchase at 7.5%.
Monthly payment $599
Total amount finaced $29875
After the 5 years your payments would have been $35,940 + the 5K down = $40,940

So at this point I could make out pretty nice and even if I wanted to. Its a tough choice, but I would say not to strap yourself as you will end up regretting the car and selling it.
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