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Old 07-06-14, 11:15 AM   #16
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Yes exactly. I can finance a car but I prefer to lease because I write off the payment and turn the car in every couple of years. When I retire from my job then I will purchase a car. I have been selling my end of term cars to carmax who gives me more than dealer and that way I am not rolling any other payments/negative equity into my new lease. My leases are all minimum drive off as I don't believe in putting money down on the leased car.
As much as I like my IS, I may go the Carmax route as well when the lease is up. I leased because my other car is 20 years old and I didn't want to buy and end up with a 20 year old car again some time down the road. I looked at the numbers for lease vs. buy and I would lose less if I were to buy, of course, but the lease works for me just fine. I looked at the payment for leasing vs. buying and can do either financially, but if I invest the difference in buy vs. lease, maybe I can make some dough with that. Hasn't panned out so far, but I'll keep you posted.
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Old 07-06-14, 11:22 AM   #17
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Yes exactly. I can finance a car but I prefer to lease because I write off the payment and turn the car in every couple of years. When I retire from my job then I will purchase a car. I have been selling my end of term cars to carmax who gives me more than dealer and that way I am not rolling any other payments/negative equity into my new lease. My leases are all minimum drive off as I don't believe in putting money down on the leased car.
As much as I like my IS, I may go the Carmax route as well when the lease is up. I leased because my other car is 20 years old and I didn't want to buy and end up with a 20 year old car again some time down the road. I looked at the numbers for lease vs. buy and I would lose less if I were to buy, of course, but the lease works for me just fine. I looked at the payment for leasing vs. buying and can do either financially, but if I invest the difference in buy vs. lease, maybe I can make some dough with that. Hasn't panned out so far, but I'll keep you posted.
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Old 07-06-14, 12:55 PM   #18
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If you want to keep your car for a while (maybe 4 years), the best financial sense is to buy it. If you want a new car every couple of years, then lease it.
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I wouldn't put down 12k on a finance either if you can afford the payments. I can easily make more than the overall interest difference keeping it invested in the stock market over the term of the finance term.
The risk calculation for investing money in the stock market is little off. Where can you find same risk as OP's credit rating to invest the money and expect the same return? If you plan to pay off the loan with excellent credit and not go bankrupt, it's more like a risk free investment -- right now risk free investment is going at maybe 0.5% for 2 years. If banks and such can make more money off the stock market than loaning money to you to buy a car, they wouldn't loan money to you.

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Old 07-06-14, 02:03 PM   #19
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If you want to keep your car for a while (maybe 4 years), the best financial sense is to buy it. If you want a new car every couple of years, then lease it.
I'd also add that if you lease, be sure you're willing to put close to the exact mileage the lease allows. More miles or less miles and you're getting raped.
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Old 07-06-14, 02:29 PM   #20
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If you want to keep your car for a while (maybe 4 years), the best financial sense is to buy it. If you want a new car every couple of years, then lease it.
Still makes more sense to finance. When you do the math on both lease and finance over the same time period, let's say the standard lease term of 3 years, you will still lose thousands on a lease as opposed to a finance for 3 years at which point you will have equity in the vehicle whereas on a lease you have no equity and if you intend to release you'll have to cough up, at a minimum, inception fees.

The problem is most people can't do a finance for 3 years on a luxury car b/c the monthly payments would be sky high. This is where leasing seems like a good deal b/c the payments are much lower, but it really isn't a good deal (unless you can write off the payments as a business expense).

Now people will rationalize all this with what they've been mentally conditioned to believe about leasing - you get a new car every few years, car is under the warranty period, yada yada yada. But all those things are applicable if you finance for 3 years and resell it plus you get more value for the money you spent.

If you can't afford to finance it, then you can't really afford it. But that's something most people don't want to hear.
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Old 07-06-14, 05:48 PM   #21
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I like trading new cars every 2 or three years, sometimes sooner. So, leasing works perfect for me. I can afford to finance any of the cars I lease, but I prefer to not finance. I don't like messing around with trying to sell and I never trade. The monitary difference between financing and leasing is negligible to me, so leasing is the way for me to go.
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Old 07-06-14, 06:01 PM   #22
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I strongly suggest to anyone on the fence as to leasing versus financing to please do the math and look at the numbers yourself. Here's a breakdown of a 4 series I was thinking about which I did the calculations on for leasing v. financing over 4 years with numbers straight from BMW's website.

$57,300 MSRP 428xi well equipped

Lease:
$5,000 down
15,000 miles a year
4 year lease - $755 monthly
$36,240 total payments

Finance
$5,000 down
mileage unlimited
4 year finance - $1,130 monthly
$54,240 total payments

Value at trade - $25,785 (55% depreciation, standard)

Total out of pocket
Lease = $41,240
Finance = ($59,240 - $25,785) $33,455

That's almost $8K less on a finance than on a lease when you do a full apples to apples comparison. Leasing is like gambling, the house always wins. That's why dealerships hire financial consultants, in many cases corporate sends these guys to the dealership network, to come in and teach their sales staff how to push leases on customers.
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Old 07-06-14, 06:05 PM   #23
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i personally would buy instead of lease but i mean thats just me.

ive noticed that people lease alot more when it comes to luxury cars
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Old 07-06-14, 07:01 PM   #24
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i personally would buy instead of lease but i mean thats just me. ive noticed that people lease alot more when it comes to luxury cars
Because they don't have the $$$... And yes those will say they prefer to lease for whatever reason - in the end it's about the $$$ - lack of...

There are always rationale exceptions, but for most, it's the shortage of $$$.

Let the arguments begin.

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Old 07-06-14, 07:11 PM   #25
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I never go over a 24-30 month lease..... You are right about a majority of people who lease instead of finance because they cannot afford the monthly payments, but I am not one of those people. At the risk of sounding like I am bragging (I am not), but I bought my 02 BMW M3 in 03 and 06 Evo IX in 07 straight off the lot with cash. Because I trade cars all the time, I loose more money as I get rid of them before I earn equity into them. So, it's either cash or lease for me, so lease it is.
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Old 07-07-14, 12:01 AM   #26
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I see it this way:

I lease the car for 27-36 months. I pay how much it will lose its value (information you already know blah blah blah). Let's say that number is $15k (could be better). In my case, for the 36 months I'm leasing it, only paying of about ~$500 in lease interest and that would be divided up to 36 payments. I didn't put a down payment towards the car because that's a risk I'm not willing to take. So I pay 1/2 to 2/3 the amount of monthly payments vs financing it I'm assuming. Having a new car every 3 years, it's just how I am.

If I know I'm someone who changes cars a lot, I would lose a lot of money financing cars if I decide to buy and sell all the time vs just leasing. I understand that I don't own any equity on the car, but who does when you finance it anyways? It's still under the name of the lender and if you couldn't pay anymore, they'll just take your car (I assume) and your "equity" never really mattered.

I see more and more people leasing. My financial adviser leases all his cars not because it's more advantageous but because it's just a decision we make due to what we think is right fr us. Everyone's different and one way of getting a car is not better than the other.
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Old 07-07-14, 02:38 AM   #27
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I see it this way:

I lease the car for 27-36 months. I pay how much it will lose its value (information you already know blah blah blah). Let's say that number is $15k (could be better). In my case, for the 36 months I'm leasing it, only paying of about ~$500 in lease interest and that would be divided up to 36 payments. I didn't put a down payment towards the car because that's a risk I'm not willing to take. So I pay 1/2 to 2/3 the amount of monthly payments vs financing it I'm assuming. Having a new car every 3 years, it's just how I am.

If I know I'm someone who changes cars a lot, I would lose a lot of money financing cars if I decide to buy and sell all the time vs just leasing. I understand that I don't own any equity on the car, but who does when you finance it anyways? It's still under the name of the lender and if you couldn't pay anymore, they'll just take your car (I assume) and your "equity" never really mattered.

I see more and more people leasing. My financial adviser leases all his cars not because it's more advantageous but because it's just a decision we make due to what we think is right fr us. Everyone's different and one way of getting a car is not better than the other.
I would never lease but I also would never hire a financial adviser.
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Old 07-07-14, 07:40 AM   #28
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My first Lexus, we purchased and put $10,000 down and 4 months later some punk takes the whole side side off of the car and we lost all of that equity. We now lease, not because we can't afford to buy but because if it gets damaged you fix it under insurance and turn it in at the end of the lease, not to mention I get a new car every few years.

Only you can decide what works best for your situation.
I'm confused here -- I've never heard of an insurance policy being responsible only for the payoff amount of a car. We pay premiums based on the cost to fix or replacement value. If the car is worth $30k and you owe $15k, and the car is totaled -- which insurance companies pay off only the $15k to the lender and never write you a check for the difference? I need to know their names for when I call my attorney and form the class action suit.
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Old 07-07-14, 07:56 AM   #29
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I'm confused here -- I've never heard of an insurance policy being responsible only for the payoff amount of a car. We pay premiums based on the cost to fix or replacement value. If the car is worth $30k and you owe $15k, and the car is totaled -- which insurance companies pay off only the $15k to the lender and never write you a check for the difference? I need to know their names for when I call my attorney and form the class action suit.
There was no payoff, they repaired my car, it should have been totaled IMO but it wasn't. In my state you are not protected as far as getting diminished value, I argued for it and got a paltry amount, not really even worth the trouble.

Also it was obvious to any idiot it had frame damage and extensive repair, all you had to do was look at the fender well weld to see so I couldn't lie about it. Lost a lot of money on that car, people can tell me I am making a bad decision to lease but the last car I purchased cost me a heap of money.
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Old 07-07-14, 08:03 AM   #30
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There was no payoff, they repaired my car, it should have been totaled IMO but it wasn't. In my state you are not protected as far as getting diminished value, I argued for it and got a paltry amount, not really even worth the trouble.

Also it was obvious to any idiot it had frame damage and extensive repair, all you had to do was look at the fender well weld to see so I couldn't lie about it. Lost a lot of money on that car, people can tell me I am making a bad decision to lease but the last car I purchased cost me a heap of money.
Ok, I understand. Yes, diminished value is a pain, but that's not the same as losing the equity of your down payment.

Here's the solution to that (assumes you want to replace wrecked Lexus with new one): In the event of an accident, allow your Lexus dealer to handle it all, top to bottom (they may use a preferred outside shop to do the work). Then after repairs are made, trade the car in to your Lexus dealer. They will try to ding you because there's a Carfax report or whatever, but the bottom line is THEY WERE ON THE HOOK FOR FIXING IT RIGHT, so if there is diminished value is their fault, and they need to absorb the difference on the trade-in. Normally if a car is fixed properly, the only problem should be the presence of a Carfax report which one could reasonably say reduces the value by a couple of grand maybe. But you're saying it was never repaired properly and/or had frame damage, which meant you had both the insurance company and the repair shop right where you wanted them in the transaction but missed an opportunity. Doing the repairs through the dealer helps insure they get done right, and if not gives you a lot of leverage on trade-in because ultimately you could sue either them or the insurance company for not totaling the car and not fixing it right.

I know it's too late to fix your previous mishap, but this might help going forward.
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