giving up the 8
02-01-2005, 11:49 AM
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Originally Posted by StewC625
Joe Paterno:
Considering your mileage and the $3500 in negative equity that you're now paying down in your lease, $500/month isn't too bad. $72.00 of your payment is simply the negative equity - roll finance charges into that and you're more like $100 of your payment is the negative equity. At that point, you're at $400/month for a 17,500 mile lease. That's not that bad. Although, that's probably part of what you paid for with your 1200 down payment.
Riggs:
Well, I trade my cars every 3-4 years. I NEVER keep a car longer than four years - is it the best financial decision? No. But it's a reality. I like new cars.
OK, so that said, in MY situation, leasing makes perfect sense - here's why:
1) Why spend 4 years paying for a car just to trade it in? In other words, why buy the depreciation of the whole when you're only going to use part? I just pay for what I use.
2) I never exceed the mileage restrictions of my leases. I have 20 years of driving habits and leasing history to fall back on. My car is always leased for 12,000 miles/year, my wife's for 15,000 a year. Actually, on my last car lease (a 2001 Acura TL), I didn't use more than 6000 miles, so I actually cheated myself a bit on that.
3) Leasing gives me some financial advantages that I don't have with buying a car. With a car lease, you can deduct the total expenditure of your car - payment, insurance, fuel, etc. at the business use percentage, less reimbursements. With ownership, it isn't a straight deduction, and you have to depreciate the asset, which in my situation yields a lower tax deduction.
4) Leasing protects you from market forces. The first car my dad ever leased was a 1986 Audi 5000S Turbo - a nice $30,000 car (which would be more like a $60,000 car now) that after the 60 Minutes "unintended acceleration" story broke (which was later found to be bunk - the drivers were hitting the gas instead of the brake), was suddenly overnight worth just a few thousand in trade, IF you could find someone to take it. When his 4 year lease on that car ended, the leasing company (VW Credit) BEGGED him to not turn it in and finally offered to let him buy it for $4800 against a residual of more than $17,000. At that price, he bought it, drove the car ANOTHER four years and at that point, the "used up" factor equaled the depressed market value of the car.
An alternate to that story was my most recent Honda Odyssey minivan. At the end of it's four-year lease, the residual ("buy it") value of the car was at least $4000 UNDER the retail market for the car. I bought it from the leasing company, then sold it the next day to a friend for a $2000 profit. He got a car for about $2000 under market (a very well-cared-for minivan at that - I take meticulous care of my cars), and I got a $2000 windfall.
So, leasing isn't bad. But you need to go into a leasing negotiation knowing what the market is for the car.
And some good rules of thumb:
1) NEVER put a down payment on a lease - Cap Cost reductions are simply handing them cash to buy down the starting numbers.
2) NEVER use a lease to result in driving a more expensive car than you can afford. That's a "sales tactic" used by dealers.
3) Never lease a car if you drive more than 15,000 miles a year. Most leasing companies won't write leases for more than that, which means that all you're doing is then buying down the residual and pre-paying the mileage fees at full price (15 cents a mile or more).
4) Always look at EVERY term in a lease - residual, inception costs, cap cost, allowed mileage, per-mile overage charges, etc. All are negotiable items. Negotiate every one of them.
5) NEVER roll negative equity cost into a lease if it is at all avoidable. The finance charges you pay on that negative equity are far more than if you just financed that negative equity on a credit card.
6) Only add items to the car that can be residualized (that is, are considered permanent additions to the car). For example, if you buy a special car off the sales floor that has special wheels and tires, or an aero kit, most of those items cannot be residualized (value considered in the ending value of the lease) and therefore will drive up your payment costs.
The only things that can usually be residualized are factory options.
So, if you lease, lease intelligently, as I have done for 20+ years. Why own a depreciating asset, unless you are going to own it until it has no more value.
Considering your mileage and the $3500 in negative equity that you're now paying down in your lease, $500/month isn't too bad. $72.00 of your payment is simply the negative equity - roll finance charges into that and you're more like $100 of your payment is the negative equity. At that point, you're at $400/month for a 17,500 mile lease. That's not that bad. Although, that's probably part of what you paid for with your 1200 down payment.
Riggs:
Well, I trade my cars every 3-4 years. I NEVER keep a car longer than four years - is it the best financial decision? No. But it's a reality. I like new cars.
OK, so that said, in MY situation, leasing makes perfect sense - here's why:
1) Why spend 4 years paying for a car just to trade it in? In other words, why buy the depreciation of the whole when you're only going to use part? I just pay for what I use.
2) I never exceed the mileage restrictions of my leases. I have 20 years of driving habits and leasing history to fall back on. My car is always leased for 12,000 miles/year, my wife's for 15,000 a year. Actually, on my last car lease (a 2001 Acura TL), I didn't use more than 6000 miles, so I actually cheated myself a bit on that.
3) Leasing gives me some financial advantages that I don't have with buying a car. With a car lease, you can deduct the total expenditure of your car - payment, insurance, fuel, etc. at the business use percentage, less reimbursements. With ownership, it isn't a straight deduction, and you have to depreciate the asset, which in my situation yields a lower tax deduction.
4) Leasing protects you from market forces. The first car my dad ever leased was a 1986 Audi 5000S Turbo - a nice $30,000 car (which would be more like a $60,000 car now) that after the 60 Minutes "unintended acceleration" story broke (which was later found to be bunk - the drivers were hitting the gas instead of the brake), was suddenly overnight worth just a few thousand in trade, IF you could find someone to take it. When his 4 year lease on that car ended, the leasing company (VW Credit) BEGGED him to not turn it in and finally offered to let him buy it for $4800 against a residual of more than $17,000. At that price, he bought it, drove the car ANOTHER four years and at that point, the "used up" factor equaled the depressed market value of the car.
An alternate to that story was my most recent Honda Odyssey minivan. At the end of it's four-year lease, the residual ("buy it") value of the car was at least $4000 UNDER the retail market for the car. I bought it from the leasing company, then sold it the next day to a friend for a $2000 profit. He got a car for about $2000 under market (a very well-cared-for minivan at that - I take meticulous care of my cars), and I got a $2000 windfall.
So, leasing isn't bad. But you need to go into a leasing negotiation knowing what the market is for the car.
And some good rules of thumb:
1) NEVER put a down payment on a lease - Cap Cost reductions are simply handing them cash to buy down the starting numbers.
2) NEVER use a lease to result in driving a more expensive car than you can afford. That's a "sales tactic" used by dealers.
3) Never lease a car if you drive more than 15,000 miles a year. Most leasing companies won't write leases for more than that, which means that all you're doing is then buying down the residual and pre-paying the mileage fees at full price (15 cents a mile or more).
4) Always look at EVERY term in a lease - residual, inception costs, cap cost, allowed mileage, per-mile overage charges, etc. All are negotiable items. Negotiate every one of them.
5) NEVER roll negative equity cost into a lease if it is at all avoidable. The finance charges you pay on that negative equity are far more than if you just financed that negative equity on a credit card.
6) Only add items to the car that can be residualized (that is, are considered permanent additions to the car). For example, if you buy a special car off the sales floor that has special wheels and tires, or an aero kit, most of those items cannot be residualized (value considered in the ending value of the lease) and therefore will drive up your payment costs.
The only things that can usually be residualized are factory options.
So, if you lease, lease intelligently, as I have done for 20+ years. Why own a depreciating asset, unless you are going to own it until it has no more value.
02-01-2005, 06:57 PM
#28
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Originally Posted by StewC625
Not sure what you mean by "the payments don't add up in the end"? I'm a 20-year plus veteran of leasing cars. Can I help you understand what you got into? If you're interested, please PM me with the following info:
1) Name of leasing company
2) Type of lease (closed-end, open-end, other)
3) All costs of your lease inception (down payment or "cap cost reduction", fees, taxes, etc.)
4) Lease term (months)
5) Monthly payment
6) If you know it, final capitalized cost of the lease.
7) If you know it, residual value of the car at lease term ending.
8) Allowed annual mileage
Perhaps with some better knowledge it may make more sense to keep the car. Terminating leases early is godawfully expensive and you're just tossing the money away. Can i help?
For example, my case:
Leasing company: US Bank Auto Lease
Term: 48 months
Lease inception costs: $952 - first month's payment, security deposit, plates - covered by a $1000 coupon offer from Ford, so I actually didn't pay them anything, and got $48 back in credit.
Payment: 48 x $372.40/month
Residual : Don't know off the top of my head.
Capitalized cost: $28,778 (that's a sticker price of $33,400 (approx), reduced to $26,250 (approx) plus sales tax))
Annual Mileage: 12,000/year
I drive the car for 48 months, which takes me to July 2008. At the end of the term, I give the car back. I'm RENTING the car from them - the cost of which, is about half or less than if I purchased the car. If I choose to purchase the car (which I won't), I can buy it for the residual value which, if memory serves was about 61% of the capitalized cost, or about $18,000.
Let me help you. Perhaps you can keep it.
1) Name of leasing company
2) Type of lease (closed-end, open-end, other)
3) All costs of your lease inception (down payment or "cap cost reduction", fees, taxes, etc.)
4) Lease term (months)
5) Monthly payment
6) If you know it, final capitalized cost of the lease.
7) If you know it, residual value of the car at lease term ending.
8) Allowed annual mileage
Perhaps with some better knowledge it may make more sense to keep the car. Terminating leases early is godawfully expensive and you're just tossing the money away. Can i help?
For example, my case:
Leasing company: US Bank Auto Lease
Term: 48 months
Lease inception costs: $952 - first month's payment, security deposit, plates - covered by a $1000 coupon offer from Ford, so I actually didn't pay them anything, and got $48 back in credit.
Payment: 48 x $372.40/month
Residual : Don't know off the top of my head.
Capitalized cost: $28,778 (that's a sticker price of $33,400 (approx), reduced to $26,250 (approx) plus sales tax))
Annual Mileage: 12,000/year
I drive the car for 48 months, which takes me to July 2008. At the end of the term, I give the car back. I'm RENTING the car from them - the cost of which, is about half or less than if I purchased the car. If I choose to purchase the car (which I won't), I can buy it for the residual value which, if memory serves was about 61% of the capitalized cost, or about $18,000.
Let me help you. Perhaps you can keep it.
02-01-2005, 10:46 PM
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well my payment tops all of yours and im just plain out screwed. im gonna go work on getting rid of this thing rather quickly. i feel leases are for certain people but not all.
how do you determine the current value of a car during the early termination process?
do they go for the resale value based off a book or something? i know u have to get the car appraised by someone and have mazda accept it.
my car has very low miles cuz i keep most of my cars that way. i only put on 9k miles on it in 1 year.
how do you determine the current value of a car during the early termination process?
do they go for the resale value based off a book or something? i know u have to get the car appraised by someone and have mazda accept it.
my car has very low miles cuz i keep most of my cars that way. i only put on 9k miles on it in 1 year.
02-02-2005, 09:39 AM
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I inquired with mazda about an early termination. They told me that I could turn the car in if i payed, get this, the 16,000 that I still owe on the lease. So basically, there is no early termination. My buyout price is something like 26,000 at this point. Kelley Blue Book value is only like 24,000, even though sticker was 34,000 when I bought it one year ago. Your best bet will be to trade in the car and the dealership will buy it from mazda and you will take a hit of a few thousand dollars on your next purchase. So basically, you are screwed either way you go. A lease can be a great thing, but obviously not if you agree to bad terms.
02-02-2005, 12:16 PM
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uh.....
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Originally Posted by JoePaterno
People that make statements like this are just plain ignorant and STUPID. Never lease? WTF are you talking about? It is simple math you moron. I don't feel like explaining the entire thing, but if you have a brain, all you have to do is a little math, and you will see that leasing can be just as good as buying. WAKE UP PEOPLE. This isn't brain surgery.
Originally Posted by JoePaterno
I inquired with mazda about an early termination. They told me that I could turn the car in if i payed, get this, the 16,000 that I still owe on the lease. So basically, there is no early termination. My buyout price is something like 26,000 at this point. Kelley Blue Book value is only like 24,000, even though sticker was 34,000 when I bought it one year ago. Your best bet will be to trade in the car and the dealership will buy it from mazda and you will take a hit of a few thousand dollars on your next purchase. So basically, you are screwed either way you go. A lease can be a great thing, but obviously not if you agree to bad terms.
SELF Owned.
I did the math. You are getting screwed.
If you cannot afford to buy it, don't. Leasing is good ONLY of you can write it off. Leasing is just like renting a car. It only makes good financial sense to the dealers, they can sell the car twice.
Originally Posted by JoePaterno
Your best bet will be to trade in the car and the dealership will buy it from mazda and you will take a hit of a few thousand dollars on your next purchase.
Did you take basic math in High School? Do you realize that if you do this, you are financing a financed amount and you still paying for a car that you no longer have?
Keep your day job and please stop giving out **** poor advice.
02-02-2005, 12:25 PM
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Originally Posted by JoePaterno
Hey ironmedic, I feel your pain. I am in the same position you are in. I am paying way too much for my lease. Everyday I kick myself for agreeing with that slimeball salesman. I lease an 8 for 500/month for 48 months. It sound bad, but there are some other factors involved. The car was 33 thousand and change. I was 3500$ in the hole on the car I traded in. I owed 13,500 and it was worth 10,000. I also get 17,500 miles a year, as compared to most of you who only get 12,000. I bought the car in January 04. I didn't put anything down. So now I want to trade in the 8 just so I can get a bettrer deal on something else and not have this feeling like " I am an idiot." I love zipping around in the 8 though, and this car cuts down my commute time. So what do you guys think about my lease? Is it really that bad?
Looking back.
You are not telling us something...again.
$500 x 48 = $24000.00
You claim nothing down and you had a upside down amount of $3500.00 and you had a milage extension from 12k to 17.5k
If the car was 33k + $3500, you would be financing 36.5k with no money down which is $760.41 per month.
If your payment is $500 per month, then you are paying $24000 over 4 years to RENT a car with nothing to show for it.
what a waste of money.
and you are lying.
02-02-2005, 12:58 PM
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Please somebody explain leasing to this clown Samsonite. I pay 20,500 over 4 years (2400-3500) and trade a car in with 70,000 miles on it. What don't you understand. If I would have financed, i would have paid alot more money, and in the end, be left with a car that is not worth much. HEY MORON CARS DEPRECIATE. You obviously aren't too smart. It almost comes out the same in the long run, trust me. Aren't you a municipal court traffic lawyer? What did you get on your SATS old man?
02-02-2005, 01:13 PM
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Originally Posted by samsonite1
BWAHHHH!!!!!
SELF Owned.
I did the math. You are getting screwed.
If you cannot afford to buy it, don't. Leasing is good ONLY of you can write it off. Leasing is just like renting a car. It only makes good financial sense to the dealers, they can sell the car twice.
Did you take basic math in High School? Do you realize that if you do this, you are financing a financed amount and you still paying for a car that you no longer have?
Keep your day job and please stop giving out **** poor advice.
SELF Owned.
I did the math. You are getting screwed.
If you cannot afford to buy it, don't. Leasing is good ONLY of you can write it off. Leasing is just like renting a car. It only makes good financial sense to the dealers, they can sell the car twice.
Did you take basic math in High School? Do you realize that if you do this, you are financing a financed amount and you still paying for a car that you no longer have?
Keep your day job and please stop giving out **** poor advice.
02-02-2005, 08:47 PM
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we all make mistakes in life. in my situation, i can afford the car and payments. i have made my insane payments for almost a year now without missing them. i am also living comfortably with enough cash left over. my wife and i arent spendy and we save our cash as we go. i personally feel that if i am gonna have a 30k car, it should have a turbo or something. i could have bought an 04 cobra or an evo/wrx but i settled with an rx8 cuz that is what my wife wanted.
my wife and i saved over 14k in 1 year being stationed in england together. when i get back this summer, i should have over 14k in my bank account so ending this lease is no problem. i plan on selling the lease to the dealership and pay off the excess to clean my slate. or i will pay off 50-75% off of the excess and just take a 25% hit on my next car. i have nothing against rx8's but owning an automatic 8 just takes away all the fun in owning a sports car. this is the last time i listen to my wife when it comes to buying a sports car.
i am looking to get an evo8 for around 30k and at least i will have more leg room and a factory turbo. im sure someone is gonna flame this post but who cares. it is what i want to do and what i want in life.
my wife and i saved over 14k in 1 year being stationed in england together. when i get back this summer, i should have over 14k in my bank account so ending this lease is no problem. i plan on selling the lease to the dealership and pay off the excess to clean my slate. or i will pay off 50-75% off of the excess and just take a 25% hit on my next car. i have nothing against rx8's but owning an automatic 8 just takes away all the fun in owning a sports car. this is the last time i listen to my wife when it comes to buying a sports car.
i am looking to get an evo8 for around 30k and at least i will have more leg room and a factory turbo. im sure someone is gonna flame this post but who cares. it is what i want to do and what i want in life.
02-02-2005, 08:50 PM
#41
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No car is worth sacrificing your financial stability. Get your house in order, then make a plan to get the things you want. There are probably a lot of people making $80K a year with worse finances than the guy working at McD's down the street because they make senseless decisions with their $$$.
02-02-2005, 08:57 PM
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I agree with Iron Medic. I guess I get what I deserve for getting an A/T 8 but my past cars worked great with Tiptronic. Aside from not having enough power, I think having four gears really hurts. Most of my city driving isn't that fast, so the tall 2nd gear is, I believe, part of the issue.
With all the money I'm spending on the car, and all the gas, it just feels like it should have more power. It's a shame because it handles and looks great and is fairly comfortable.
I was considering trading in for a used 6speed version. Or perhaps, I can try my hand at a Z again or... just go the more econ route and do the Mazda 3. I hear that's a fun little car to drive.
With all the money I'm spending on the car, and all the gas, it just feels like it should have more power. It's a shame because it handles and looks great and is fairly comfortable.
I was considering trading in for a used 6speed version. Or perhaps, I can try my hand at a Z again or... just go the more econ route and do the Mazda 3. I hear that's a fun little car to drive.
02-02-2005, 09:00 PM
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Without reading this whole thread I think some really need to read this
http://www.edmunds.com/advice/buying...2/article.html
I paid 24,600 for my 04 sport package with spoiler, spare tire and 6 cd changer brand new. Once I received the best price after working with 5 dealers i then presented my trade and ended up financing 19,100. Seems some are paying much more then they really have to. I am not trying to come off as an expert by any means but the price some have paid is mindboggling to me. Did some even pay sticker?
http://www.edmunds.com/advice/buying...2/article.html
I paid 24,600 for my 04 sport package with spoiler, spare tire and 6 cd changer brand new. Once I received the best price after working with 5 dealers i then presented my trade and ended up financing 19,100. Seems some are paying much more then they really have to. I am not trying to come off as an expert by any means but the price some have paid is mindboggling to me. Did some even pay sticker?
02-02-2005, 09:19 PM
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dude lets start the "i hate a/t sport car club" LOL! having an auto is great for stop and go traffic. its just not fun for me anymore. when i went on the mt. st helens cruise, i felt rather left out cuz i had an auto. i was at the back of the line and couldnt keep up with the others. it was fun but just not what i wanted.
if i am gonna spend 30k, im just gonna get a nice evo with a turbo. or even a wrx!
if i am gonna spend 30k, im just gonna get a nice evo with a turbo. or even a wrx!
Originally Posted by budebaker
I agree with Iron Medic. I guess I get what I deserve for getting an A/T 8 but my past cars worked great with Tiptronic. Aside from not having enough power, I think having four gears really hurts. Most of my city driving isn't that fast, so the tall 2nd gear is, I believe, part of the issue.
With all the money I'm spending on the car, and all the gas, it just feels like it should have more power. It's a shame because it handles and looks great and is fairly comfortable.
I was considering trading in for a used 6speed version. Or perhaps, I can try my hand at a Z again or... just go the more econ route and do the Mazda 3. I hear that's a fun little car to drive.
With all the money I'm spending on the car, and all the gas, it just feels like it should have more power. It's a shame because it handles and looks great and is fairly comfortable.
I was considering trading in for a used 6speed version. Or perhaps, I can try my hand at a Z again or... just go the more econ route and do the Mazda 3. I hear that's a fun little car to drive.
02-03-2005, 10:20 AM
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Originally Posted by bmcc49er
Without reading this whole thread I think some really need to read this
http://www.edmunds.com/advice/buying...2/article.html
I paid 24,600 for my 04 sport package with spoiler, spare tire and 6 cd changer brand new. Once I received the best price after working with 5 dealers i then presented my trade and ended up financing 19,100. Seems some are paying much more then they really have to. I am not trying to come off as an expert by any means but the price some have paid is mindboggling to me. Did some even pay sticker?
http://www.edmunds.com/advice/buying...2/article.html
I paid 24,600 for my 04 sport package with spoiler, spare tire and 6 cd changer brand new. Once I received the best price after working with 5 dealers i then presented my trade and ended up financing 19,100. Seems some are paying much more then they really have to. I am not trying to come off as an expert by any means but the price some have paid is mindboggling to me. Did some even pay sticker?
02-03-2005, 10:37 AM
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mine was picked up in april 04. i think i understand my lease just a little bit more after reading. the only thing that made it harder were the other financial stuff placed in there.
im doing my homework on either a used or new evo8 right now and ill work from there. im gonna do it right and get it financed and get all my homework done. im gonna go talk to the dealerships today and let em fight over me LOL! mitsubishi has some financing options of their own but im gonna talk to the evo drivers and get their opinions. the majority of the evo guys get like 4% interest rates for their cars which isnt too bad in my opinion. the highest i saw was like 8% (bleah!)
im doing my homework on either a used or new evo8 right now and ill work from there. im gonna do it right and get it financed and get all my homework done. im gonna go talk to the dealerships today and let em fight over me LOL! mitsubishi has some financing options of their own but im gonna talk to the evo drivers and get their opinions. the majority of the evo guys get like 4% interest rates for their cars which isnt too bad in my opinion. the highest i saw was like 8% (bleah!)
02-03-2005, 12:35 PM
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Originally Posted by JoePaterno
Both Ironmedic and myself know we got bead deals. That doesn't mean that leasing is a bad idea. You can negotiate a bad purchase just like you can negotiate a bad lease. Also, when did you buy your car? Like I said earlier, I got mine in January 04. After that they started having good deals. And what is the price difference between sport and grand touring?
I don't recall me saying a lease was a bad deal.
02-03-2005, 12:38 PM
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Why get an evo? If you are worried about going fast from the line just get a motorcycle. You will smoke every cheesy evo out there. But I do understand wanting to get rid of an automatic. The benefits of the rotary can only be enjoyed with a manual.