Finance car questions

[smoss]

So my 05 lease is ending real soon. I test drove the new spec B and it is nice. It's not so much different that I feel I have to get it, but it is considerably nicer than mine of course. I have leased my last 3 cars and I see the advantages and disadvantages of of leasing and buying. I think leasing a new Spec B must be insane since the residual after 3 years is almost the same as a GT. However, the spec B has further to fall...... So the lease payments must be consideably higher than a Gt from what I have been quoted.

 

So my question:

 

I am thinking of buying a 08 spec B with around 8k miles on it for around 28k. Seem likea good idea vs buying a new one. If I finance for 6 years my payments are failry close to what they are now and I am buying a new car (rather than buying my 05 which is already 3 years old.

 

It is very unlikely that I will keep the Spec B over 3 years. I do get bored with cars. I also take very good care of them (leased or not). So if I sell in 3 years do you guys think I will be able to sell and break even.. and not be in a position where I owe more than its worth?? Any thoughts?

 

By the way, I drive less than 12k miles per year. So in 3 years figure the Spec B will have roughly 36k miles on it.. My gt now has 34k. Anybody can shed some light on this?

 

Ohh, try not to make this a big long thread on leasing vs buying. We have had plenty of those.....

[laz]

From your numbers in three years you would have paid roughly 14K leaving you with half left.

 

Simple math I take it.

 

X

[avi]

Here's my take on it:

 

- if lease payments + lease insurance < buy payments + insurance than go with the lease or else buy the car

 

hopefully that's simple enough for you.

[chenc544]

The only 72-month used car auto loan that I was able to find online is from PenFed at 9%. Most of used car auto loans of 3-5 years are 5-7%. $28k for 6 years at 9% equals ~$500/month. I hope you are not paying $500 a month to lease the '05. Anyway, after 3 years you will owe about $16k according to the online calculator. A 3 year old LGT (MY05) with 44k miles (your 36k miles + 8k on the car right now) goes for about $16-17k now. I'm guess you can sell the spec B for $1-2k more so yes you will owe less than what the car is worth. PenFed has the 5 year loan at 5% and that's a much better deal IMHO than the 6 year at 9%...

[chenc544]

- if lease payments + lease insurance < buy payments + insurance + loan balance - value of the car than go with the lease or else buy the car

 

Fixed.

[smoss]

The only 72-month used car auto loan that I was able to find online is from PenFed at 9%. Most of used car auto loans of 3-5 years are 5-7%. $28k for 6 years at 9% equals ~$500/month. I hope you are not paying $500 a month to lease the '05. Anyway, after 3 years you will owe about $16k according to the online calculator. A 3 year old LGT (MY05) with 44k miles (your 36k miles + 8k on the car right now) goes for about $16-17k now. I'm guess you can sell the spec B for $1-2k more so yes you will owe less than what the car is worth. PenFed has the 5 year loan at 5% and that's a much better deal IMHO than the 6 year at 9%...

 

Thanks. 6 year loan at my credit union is 6.7%. That seems good compared to what you said above. 5 year is 6.2%.

 

I pay $400 a month on my lease now. Was thinking of getting a few thousand knocked off the spec B in a month or so. My buy back on my 05 is less than what you quoted, 34k miles now. I might try to sell it on here or on autotrader since it is in great condition.

[Scooter]

I think the only thing I'd be worried about with a 6 year loan is that you may end up slightly upside-down midway through the loan: the car may be worth a bit less than what you still owe. I think I was borderline with that condition with the 63 month loan I had. Not an issue if you've got some savings in the bank in case of emergency, but if worst came to worst and your car got totalled in 2 years, the insurance payoff *might* not cover what you still owe. The difference wouldn't be huge, but you may want to think about it. A larger down payment will help keep you ahead of the curve, if you can swing it.

[chenc544]

Thanks. 6 year loan at my credit union is 6.7%. That seems good compared to what you said above. 5 year is 6.2%.

 

Just make sure that's the rate for an used car. New car rates are usually a lot lower.

[smoss]

Just make sure that's the rate for an used car. New car rates are usually a lot lower.

 

Yup those are used rates. They list the model years you can apply each term loan to. Only a 7 year loan is new only. A 6 year loan is 2006 to 2008 model years.