View Full Version : Leasing or Financing?
styles-T
06-16-03, 12:58 PM
What do you prefer when buying a new car? Leasing or financing.
My car was totalled when some chick smacked my rear bumper doing 60mph. I was sitting in traffic mind you..She didnt even brake :mad:..
Now Im in the proccess of getting a new car and people are telling me to lease or finance..Im confused as to what to do..I never done this before..which is better to own and resell or to borrow and give back?
Leasing is a scam. Trust me. You seem young or at least new to this. You do not want to lease. If at all possible get a beater car for the time being by taking a small loan and then save and get a better car. Debt is now OUR friend. ;)
Yup, leasing can be bad news. They really sock it to you on the fine print things when the lease is done (for example, if you go over the specified mileage). It's generally not a good idea, unless you work for one of the auto companies and get a deal on it.
We just had to get a new car as well. We ended up with a Mazda 6s. The odd thing was that the finance guy tried to talk us out of our 48 months 0.0% financing and into a 60 month 1.9% financing because our monthly payment would be less. My wife and I (both engineers) scoffed and told 'em that if they didn't shut up and give us 0.0% we'd go pay cash for a bloody Honda. ;)
Buying a new car is the pits, but leasing can be FAR worse!
Cheers,
JND
saturnotaku
06-16-03, 02:02 PM
Leasing is bad, bad news. When it's all said and done, if you decide to buy the car, you can end up paying over $20,000 on a $17,000 car.
If you're not adverse to buying GM cars, most places are offering 0% for 60 months or mega cash back. If you buy a moderately equipped Chevy Cavalier, you can take the cash back, get a loan at the standard rate (usually 6.75%) and end up paying less per month than if you went with the 0% from the car company.
That's what my friend did - he got a nicely equipped, brand new Dodge Neon and is paying about $215/month and that was with a minimal down payment. How much money are you getting from your insurance company for your old car? If it's a decent amount, you can use that as a down payment and then take the cash back or do the 0%.
Also, purchasing/financing a car is the best if you plan to keep your vehicle for a long time. If you're the type that likes to drive cars until they can't be driven any more, financing is the only way to go. Period. Heck, even if you don't do this, financing is still the way to go.
stncttr908
06-16-03, 02:07 PM
With a lease there are also restricitons, IE if you drive a lot over a certain mileage you pay a fee per mile, it's ridiculous.
1stFlight
06-16-03, 02:47 PM
Leasing is the tool of the devil. Not only can they get your for driving over your mileage, not to mention damamges. When you return a vehicle the dealer does an inspection and it's totally subjective. So dings that happen in in parking lots can be counted against you. That and lets say you miss a payment, incremental payments to catch up don't count, it's the full amount or nada( at least with GMAC).
The other point is, what's the point in leasing something that devalues as soon as you drive it off the lot?
I've owned 3 cars and leased 1, by far buying is far less painful.
The other benifit to owning is that once you do, you can sell it. And at least not lose all of your money.
R.Carter
06-16-03, 03:07 PM
To lease or not to lease a car (http://moneycentral.msn.com/articles/smartbuy/car/5101.asp).
Remember, if you go do for the financing option they sometimes will not give you any other incentives/free options.
The incentives/free options might actually be worth more than what you would save with the lower interest rate.
OH!!!
..and don't get that DAMN! extended warenty. What a evil scam that is. It only covers basically the engine block. They suck more money out of you. Some may say it is good but then they like throwing away money. Get a good mechanic and pay for your own up keep.
styles-T
06-16-03, 04:31 PM
thanks..
im getting 5500$ back after the accident..looks like ill use it as a down payment and buy a car..
I guess i was listening to the wrong people..I know 2 friends that are leasing..I was always skeptical of it..
I must agree with everyone who is against leasing. You keep paying for the damn thing and it's never really yours until you buy it out. I would go with financing if those were the only options I had.
And yes, that extended warenty counts for nothing. They always seem to find a way around stuff just to get some cash outa you...
ricercar
06-16-03, 06:18 PM
Regardless how you pay for the car, try using an automobile broker. Automobile brokers are great at finding the exact car you want in the sales lot of a nearby dealer who just wants to move inventory. They can save you big bucks. You can even find brokers online, and never have to speak with a human being, if that's your particular desire.
Two years ago my spouse and I saved almost $5,000---the size of your down payment---by going through our broker (http://www.carsdirect.com). The broker found us dealer overstock on a model with the exact color and accessories we wanted. We paid $19K for an auto with a $24K sticker price, a savings of over 20%!
We never had to negotiate, we never had to quibble or bargain. The broker simply called us a week after we told them what we wanted, and told us where to get exactly what we wanted. We went to the car, and signed papers with no surprises on them. Smooth, simple.
Leasing is bad, bad news. When it's all said and done, if you decide to buy the car, you can end up paying over $20,000 on a $17,000 car.
So how is this different than a loan? :rolleyes: When I was younger and more foolish, my first car loan paid out $18K over 4 years on a $14K sports car. Moral of the story: when dealing with any Auto Dealership (1) RTFP: Read the Fine Print, and (2) remember to keep asking: "does this cost extra?" (3) Until you sign your name, you can just walk away.
Originally posted by !plonk*
thanks..
im getting 5500$ back after the accident..looks like ill use it as a down payment and buy a car..
I guess i was listening to the wrong people..I know 2 friends that are leasing..I was always skeptical of it..
Why not buy a car that will equal $5500? Then you won't have to finance. No bills!!! Save your money for a better car later on. Don't put to much stock in a fancy car. I might be old fashion but I have no need for a fancy car. My truck is paid for. It is 10 years old but it runs great and I have no bills!:D
styles-T
06-16-03, 09:00 PM
Originally posted by ricercar
Regardless how you pay for the car, try using an automobile broker. Automobile brokers are great at finding the exact car you want in the sales lot of a nearby dealer who just wants to move inventory. They can save you big bucks. You can even find brokers online, and never have to speak with a human being, if that's your particular desire.
Two years ago my spouse and I saved almost $5,000---the size of your down payment---by going through our broker (http://www.carsdirect.com). The broker found us dealer overstock on a model with the exact color and accessories we wanted. We paid $19K for an auto with a $24K sticker price, a savings of over 20%!
We never had to negotiate, we never had to quibble or bargain. The broker simply called us a week after we told them what we wanted, and told us where to get exactly what we wanted. We went to the car, and signed papers with no surprises on them. Smooth, simple.
So how is this different than a loan? :rolleyes: When I was younger and more foolish, my first car loan paid out $18K over 4 years on a $14K sports car. Moral of the story: when dealing with any Auto Dealership (1) RTFP: Read the Fine Print, and (2) remember to keep asking: "does this cost extra?" (3) Until you sign your name, you can just walk away.
The Broker actually found you a car within your hometown or another state? Thats interesting I never heard that before..will look into it..
styles-T
06-16-03, 09:02 PM
Originally posted by UDawg71
Why not buy a car that will equal $5500? Then you won't have to finance. No bills!!! Save your money for a better car later on. Don't put to much stock in a fancy car. I might be old fashion but I have no need for a fancy car. My truck is paid for. It is 10 years old but it runs great and I have no bills!:D
Cause I figure this car will last me the next 10 years..:lol:
Originally posted by UDawg71
OH!!!
..and don't get that DAMN! extended warenty. What a evil scam that is. It only covers basically the engine block. They suck more money out of you. Some may say it is good but then they like throwing away money. Get a good mechanic and pay for your own up keep.
no need to buy extended warranty when you get the car... I agree...
it is far better to extend the warranty when your current one comes close to expiring... and trust me... it is a LOT better to have warranty than to spend ridiculous oodles of cash on minor upgrades
/me so lucky he has mechanic friend and a keen eye to learn else I would easily be out of around 2g's this year :D
ricercar
06-16-03, 09:41 PM
Originally posted by !plonk*
The Broker actually found you a car within your hometown or another state? Thats interesting I never heard that before..will look into it..
Within my home state. We had to drive from Santa Clara to South San Francisco, ~30 miles. Yet I've also had a someone find a car in New Orleans and ship it (free) to Santa Clara for pickup at a dealership a mile from my home.
BTW the biggest advantage of leasing is lower monthly payments. Once when I could not afford a $400 car payment on a new car, a lease provided me with the same car for $250/month.
Originally posted by ricercar
Within my home state. We had to drive from Santa Clara to South San Francisco, ~30 miles. Yet I've also had a someone find a car in New Orleans and ship it (free) to Santa Clara for pickup at a dealership a mile from my home.
BTW the biggest advantage of leasing is lower monthly payments. Once when I could not afford a $400 car payment on a new car, a lease provided me with the same car for $250/month.
that reminds me..
NEVER buy a used car from san francisco if you can help it..
if you see the way those cars are abused in stop and go traffic downtown you would feel sry for the poor bastids engines..
Originally posted by !plonk*
Cause I figure this car will last me the next 10 years..:lol:
Don't get me wrong. If you want then go for it. I was just suggesting another option but I know how it feels to get the car you really want.;)
saturnotaku
06-16-03, 10:32 PM
Originally posted by ricercar
So how is this different than a loan? :rolleyes: When I was younger and more foolish, my first car loan paid out $18K over 4 years on a $14K sports car. Moral of the story: when dealing with any Auto Dealership (1) RTFP: Read the Fine Print, and (2) remember to keep asking: "does this cost extra?" (3) Until you sign your name, you can just walk away.
Because an honest dealership/bank/financier won't charge you nearly 30% interest on something that really should have been around 6-7%.
If you can scrounge up some more money in addition to the $5500 you're getting from the insurance company, make sure to use include that with your down payment. The more money you can put up front, the lower your payments will be and the better credit risk you'll be. Heck, if you come up with enough money (including any and all cash incentives) you may be able to negotiate your financing rate if you're not doing it through the automaker's financing company.
As I said in a previous post, my friend who had a much smaller down payment than you was able to get an excellent rate once all the incentives and so forth were added in. As a matter of fact, the dealer he bought the car from was good enough to where his payments are about $40 less per month than at other dealerships.
digitalwanderer
06-16-03, 11:13 PM
What about the "pay in cash" option? :eek2:
Originally posted by digitalwanderer
What about the "pay in cash" option? :eek2:
That is what I was trying to get at. ;) It flew like a lead pigeon. :p
Originally posted by digitalwanderer
What about the "pay in cash" option? :eek2:
that normally gets ruled out by the "lack of cash" dilemma most of the time :)
digitalwanderer
06-17-03, 01:01 AM
Originally posted by Sazar
that normally gets ruled out by the "lack of cash" dilemma most of the time :)
Piece-o-wisdom from a guy who's been there: There ain't a damned thing wrong with trying to live within your means, it makes life a WHOLE lot simpler! ;)
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