for those who leased
12-14-06, 11:48 AM
#76
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Join Date: Jan 2004
Location: Arizona
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Pelucidor, congr on your deal. I would love to duplicate that in the N. Cal area. The Decemeber to Remember lease rate is a little lower 0.00225. And I am looking for IS350/Lux/ML/NAV
Socal,
"Not true, if you should happen to total your IS in an accident, you could lose ALL your security deposits - read the fine print."
Have you done a multiple Deposit lease with Lexus? What you said is not true. Lexus provide gap insurance independent of whether someone did MDS or not (in the event of an accident and car got total, just handle Lexus Financial the insurance check and you are done). I did the 9 MDS for an 02 SC430 and an 02 LS430 and asked this question specifically. I will ask again with the IS but I don't expect any different answer.
I leased 6 Lexus/1 mercedes/1 Honda and purchase other cars during the same time. Lease and purchase are really comparable and they each has advantage and disadvantage. In Dec 03, I lease a 04 Accord coupe for my kids in California and boughy myself an 04 Accord Sedan in Az. It boiled down to in AZ, if I trade in a car, I only pay the difference in tax between the trade in and the new car. It is really that close between leasing and buying.
If one can write off the car, one should lease. One can write off the standard mileage. But if you file schedule C for your tax return, you can deduct a percentage of all car's operation cost (lease payment +gas +....). That is much bigger than standard mileage for any luxury car.
If one can't write off the car, it boil down to tax, finance cost, residaul and which way will save you some money. Once we drive the car off the lot, we are paying for all of them whether we are leasing or buying. The only difference is if the manufacturer subside them or now. For IS in December, Lexus is subsiding the finance cost (0.00225x2400=5.4%). So if you can get a car finance (or even if you pay for the car, the money you can get from CD) lower then 5.4%, leasing is less favorable. In state like California where we pay full tax on buying a car but only tax on payment, one can save roughly 40-50% of tax if one trade the car after 3 year or so (roughly 1400 for a 35000 IS). And remember the gap insurance that Lexus provide 9 (and Honda has 1500 damage allowance at the end of their lease). If one have an accidental in the first 3 or so years of owning a car, how many can walk free without a large deposit? The large deposit become part of the ownership cost. The gap insurance (and Honda's damage allowance) are worth some money if we use them. And the last thing that favor a lease doesn't apply to Lexus very well. It is the residual value. Lexus has done a pretty good job in setting and keeping the residual. So if you trade or sell your car before the lease mature, your payoff to Lexus is almost the same as what you can sell you car for at that moment. But for some car, some manufacturer has set up the residual wrong and has to eat the difference (what they can sell at auction after they get the car back vs what they set up for the customer at the beginning). At the end of the lease, you can always buy the car or dump it back to Lexus depending if you think it is a good deal or not and or if you circumstance change.
Lease also has downside, mainly in the acquistion cost (600-750). When someone buy the car, they don't have to pay the acquisition fee. Also if someone is buying the car at the end of the lease, they would have pay for more sales tax since the pay for tax based on the payment which include depreciation and finance charge during the lease (may be 300-400 total for a 36 months lease with finace charge roughly 120 a month).
Socal,
"Not true, if you should happen to total your IS in an accident, you could lose ALL your security deposits - read the fine print."
Have you done a multiple Deposit lease with Lexus? What you said is not true. Lexus provide gap insurance independent of whether someone did MDS or not (in the event of an accident and car got total, just handle Lexus Financial the insurance check and you are done). I did the 9 MDS for an 02 SC430 and an 02 LS430 and asked this question specifically. I will ask again with the IS but I don't expect any different answer.
I leased 6 Lexus/1 mercedes/1 Honda and purchase other cars during the same time. Lease and purchase are really comparable and they each has advantage and disadvantage. In Dec 03, I lease a 04 Accord coupe for my kids in California and boughy myself an 04 Accord Sedan in Az. It boiled down to in AZ, if I trade in a car, I only pay the difference in tax between the trade in and the new car. It is really that close between leasing and buying.
If one can write off the car, one should lease. One can write off the standard mileage. But if you file schedule C for your tax return, you can deduct a percentage of all car's operation cost (lease payment +gas +....). That is much bigger than standard mileage for any luxury car.
If one can't write off the car, it boil down to tax, finance cost, residaul and which way will save you some money. Once we drive the car off the lot, we are paying for all of them whether we are leasing or buying. The only difference is if the manufacturer subside them or now. For IS in December, Lexus is subsiding the finance cost (0.00225x2400=5.4%). So if you can get a car finance (or even if you pay for the car, the money you can get from CD) lower then 5.4%, leasing is less favorable. In state like California where we pay full tax on buying a car but only tax on payment, one can save roughly 40-50% of tax if one trade the car after 3 year or so (roughly 1400 for a 35000 IS). And remember the gap insurance that Lexus provide 9 (and Honda has 1500 damage allowance at the end of their lease). If one have an accidental in the first 3 or so years of owning a car, how many can walk free without a large deposit? The large deposit become part of the ownership cost. The gap insurance (and Honda's damage allowance) are worth some money if we use them. And the last thing that favor a lease doesn't apply to Lexus very well. It is the residual value. Lexus has done a pretty good job in setting and keeping the residual. So if you trade or sell your car before the lease mature, your payoff to Lexus is almost the same as what you can sell you car for at that moment. But for some car, some manufacturer has set up the residual wrong and has to eat the difference (what they can sell at auction after they get the car back vs what they set up for the customer at the beginning). At the end of the lease, you can always buy the car or dump it back to Lexus depending if you think it is a good deal or not and or if you circumstance change.
Lease also has downside, mainly in the acquistion cost (600-750). When someone buy the car, they don't have to pay the acquisition fee. Also if someone is buying the car at the end of the lease, they would have pay for more sales tax since the pay for tax based on the payment which include depreciation and finance charge during the lease (may be 300-400 total for a 36 months lease with finace charge roughly 120 a month).
12-14-06, 01:56 PM
#77
They offered me a lease... It was a pre-paid lease though... I think they called it "Lexus 1-pay"... Either a 3 or 4 year lease, paid upfront... I forget the exact amount, but it was like $21,600 or exactly $600/mo. But you had to pay upfront the full $21,600... I think they offered it to me because I my beacon was over 800 and I was paying for the car in cash... But who knows, it may have been a December to Remember special... The APR worked out to be like 1.7% or something, I forget what the money factor was...
The MSRP was like $44,700
3-year lease
15k miles
$600/mo
Nothing down
Residual $25,600
The MSRP was like $44,700
3-year lease
15k miles
$600/mo
Nothing down
Residual $25,600
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