8_wannabe

and back to Redfusion's original question... One thing you didn't mention is the mileage allowance they are offering. This is huge, cuz if you exceed the permitted mileage the cost is a killer when you return the car. I'm guessing they're giving you 10-12K miles/year, right? Look at your driving habits (and future driving habits.) Will this be sufficient?

Outlaws eXtreme

I couldn't have said it better. I never said I'm INVESTING in my RX-8. Why did I drop 20k now? Only because at the time I got a great rate to finance just 10k... 1.95% So I decided not to pay off the car.

Outlaws eXtreme

Btw, 20k isn't all that. By investing 20k right now in the market, I would actually lose money. You make it seem like 20k is impossible to make or something. If you actually invested in stocks, bonds, savings/CDs, you would know 20k will not get you much in the long run. I would rather 'invest' my money in something else.

All I'm saying is that if you have the money to buy the car, just buy it. The ONLY reasons you would ever lease is if you don't drive much (limited to the mileage they offer you), want a new car every 3 years and don't care, or you just don't have the money to buy the car.

For this reason, I knew I would drive the car a lot.. more than the 12k-15k they give you per year. I had the money ready to put a large down payment. I can just buy another new car later if I felt like there is going to be something worth buying.

BIMMER5&RX8

Let me put it this way. Buying a car, the manufacturer and the dealership make money off you. Leasing a car, you must also let the leasing company to make some money off you.

The more money people make off you the worst off you are.

gusmahler

No one really know what the market will do. Your $20k may make nothing in the stock market. Or it could make 20% per year.

I agree. But some people make it seem like leasing is proper in ZERO cases, while you've pointed out situations where leasing does make sense. As long as a potential buyer/leaser keeps their mind open and well informed, they should be able to make a decision appropriate to their situation.

My situation is different from yours. I have nearly no money to put down, but making payments will be no problem. If I stay in my current dwelling, leasing would be the proper choice because of low mileage, but if I move farther away from work, leasing will be stupid.

ABG

That' s not necessarily true. The manufacturer and dealer will be paid off no matter how you fund the car. The leasing company will make money off your lease and (hopefully) make money from the person who buys the car when your lease is over. In the late 90%, leasing companies serious over estimate the residual values of a lot of cars. Unfortunately, when the lease ended, the residual values of the car were much higher than the market price. Hence, a lot of leasing companies had to eat the mistake.

For example, in August 1999, I lease a Boxster. The MSRP was $47K and the residual at the end of the lease (August 2004) was $28K. The market value of a 1999 Boxster is probably low $20K. Trade-in vaules probably around $15 to $18K. The lender is going to loss a lot of money when I turn in the car. I'm also glad I didn't buy considering the depreciation. And it's not just the Boxster, 911 and even Turbos have taken heavy depreciation hits.

My only regret is being stupid and going with a 5 year lease. From 2001 to 2003, I've been trying to get out of it. So, I've learn a lot from this experience. Leasing is like an amusement park ride. Once your in, you can't get out till its over. So: 1) never lease longer than you want to keep the car; 2) don't lease longer than the warranty.

As for what to do with the $20,000 scenario. I don't see why you couldn't make money longer term by investing most of it in stock. Sure the economy's not so good right now, but when would you want to buy stock - when the price is already hight? If you're money factor or interest rates were like 10%, 15%, or $18%, then it would really make more sent to just pay the car in full. But if we're talking a like 3% or 4% from a credit union, then investing a chunk of the $20K MAY be a good way to go. Problem is, there's too many variable here to make a generalized assumption about leasing v. buying.

The only two exceptions are if you plan on driving over the lease miles or you really want to keep the car for a long time. I'd have a very hard time justifying leasing in those scenarios.


Gesh. Sorry my post is so long.

Outlaws eXtreme

I was a daytrader for 4 years while I attened college, and during that time I've learned from experience that as of right now, as Bush is screwing us in the rear, it's one of the worst times to invest. The % gain is pretty lousy, and the risk is high. I'm planning to reinvest right before the election, because miraculously, Bush's administration will have found Osama and arrest him... just like how they just caught Saddam right before X-mas.

Ok I just noticed gun lives in Silicone Valley, wait a second, that place has a new millionaire everyday... that place is expensive to live. :P

BIMMER5&RX8

ABG,

Do you really think leasing companies are in the business to lose money? While I don't doubt that they over-estimated the residuals in some cases, they are mostly profitable enterprises at the expenses of the leasees like you. In your case, they might still have mde money out of the money factor since the interest rates were much higher in 1999. They just needed to re-finance the loan and make money from the difference. And although the interests rate dropped drastically you are stuck with the same payments.

BTW, why are the things you don'tike about the Boxter? I thought that is a really nice car.

ABG

Oh I'm sure the leasor made money of the deal. I didn't really know much about leasing back then. Also, I think leasing company have readjusted residuals now-a-day but offset the price increase because of lower money factors. And yes, lease is more complicated than financing and straight purchases.

As for the Boxster, the only thing I don't like about it is it doesn't have enough torque. The S model is just adequate. But the handling feedback, just like the RX8, is beautiful.

Outlaws eXtreme

I'm lost here... I never said leasing companies are in the business to lose money? Can you please reread the entire thread before you make another comment. I didn't lease my car... I bought it. Also I didn't make a comment about the Boxter, that was someone else.

8_wannabe

amen to that. I'm glad someone else sees through his thin charade. The only miracle is that so many other people are falling for it.

Redfusion3

iTrader: (2)

Um...

Maybe we should start a seperate thread for this? Lol

Anyways, My dealer told me that if I would have went through Mazda and took the 1500 incentive it would have actually been more.

and also my commute to work and school isnt that bad 8 min both ways and its not like I am going to be taking big road trips with this...I just have to manage and I will.

Also I have this car for 39 months not 36 months but I still only have 36000 miles which means I also have to squeeze 3 months in I didnt realize this. I still havent actually signed the lease yet either.

BIMMER5&RX8

Sorry Outlaw,

I was replying to ABG.

Outlaws eXtreme

See, this is a good case to lease the car then... low mileage. :P Just becareful not to exceed it too much, my mother's ML420 already exceeded by 2k miles this past year based on the average.. she now regrets going with the lease instead of just buying.

Outlaws eXtreme

Np, you just scared me there, I know I was tired/sleepy when I was replying before, but then you mentioned Boxter, I was like.. hmmm did I write that? I even had to go back and read it.. hahaha.

gusmahler

Correction, when buying a car, the finance company also makes money off of you. Still 3 entities making money from you.

BIMMER5&RX8

Not if you pay cash. But you are right if you finance the car.