babeatto Posted February 2, 2005 Share Posted February 2, 2005 Hi Guys, I have to give an answer to my salesman 8 hours from now else I won't be able to pick up my car tmr. I have stayed up till 2am reading posts about leasing vs finance. 1) This question did not come up (salesman brought this up): What if the car purchased ends up in a car accident? If it was a big accident, then the car's value would fall significantly. With leasing, after the lease term, we can simply just walk away and not purchase the car. Whereas, if you finance the car and this tradgedy happens, all you get in the end is a depreciated car. 2) I will definitely be doing mods for my Legacy. BUT I will be keeping all the stock parts in the garage. After the lease term, if I don't want the car, all I have to do is put all the OEM parts back on correct? Thanks guys. Hope I get this figured out. Your input/ opinion is appreciated. Link to comment Share on other sites More sharing options...
graff48 Posted February 2, 2005 Share Posted February 2, 2005 http://forums.vwvortex.com/zerothread?id=1258909 http://forums.vwvortex.com/zerothread?id=1654415 Link to comment Share on other sites More sharing options...
D-2.5-GT Posted February 2, 2005 Share Posted February 2, 2005 1.) This seems like one salesman's pitch really. The flip side is that if you don't drive too much and it has low miles and you don't want it cause their buyout is too high, then they get a cheap vehicle with low miles that they can potentially make a good deal of money on. I wouldn't really be worried about this, but yes, if an accident did happen, and you didn't want to keep the car at the END of the lease, then you just turn it back. However if you finance to buy the car, if the same thing happened and you really wanted to get rid of it, you can sell it as well. 2.) Basically as long as the car is back to the way you bought it when you leased it you should be all set. However, keep in mind that trying to go to the dealer to get work done on warrenty and stuff might be difficult. But essentially it doesn't matter what you do to it, just as long as in the end its the same. Link to comment Share on other sites More sharing options...
PPower Posted February 2, 2005 Share Posted February 2, 2005 Answer to #1. Don't worry so much about that. However, gap insurance is worthwhile to keep you from paying for a car should it get totaled. I see it happen more often than I ever would have believed. If you wreck it, just make sure it's totalled. #2. I'd be concerned about modding a leased car. They could mark your car and then charge you HEAVILY at the end of your lease for "damage" done by the mods. Also keep in mind that you will be charged at the end of the lease for scratches, dents, rips, stains, tire replacement, or anything else the leasing company feels like charging. This doesn't happen all the time, but they can charge you for these things. Combine that with the higher effective interest rate used on most leases (money factor), leases aren't always a great deal. Leases turn you into a payment buyer so that it's easier to get you to pay more for the car. Link to comment Share on other sites More sharing options...
avengador1 Posted February 2, 2005 Share Posted February 2, 2005 When you have a lease, you are paying for the vehicle's depreciation while you have the car. That is why the lease payments are usually lower than your monthly finance charge, if you are buying the car. You should make sure to get gap insurance as mentioned above, it can save you a lot of headaches and money if you are in an accident and the car is totalled. Link to comment Share on other sites More sharing options...
2Simpletons Posted February 2, 2005 Share Posted February 2, 2005 Also, in general leases suck. But if you're gonna do it. Don't do it for more than 3 years. Any more and you might as well get a 60 month note on it and try to make the most of your "investment." I got out of a leasing black hole (as they're called.) I'm so glad I did. It's expensive buying, but it's much better in the long run. It gives you much more flexability/equity if you want to trade/have to trade etc. Not to mention with 2.9% rates, why not? But I am also in a better position now financially-I couldn't afford not to lease a while ago. Just be careful and don't get into LONG leases. Link to comment Share on other sites More sharing options...
sde Posted February 2, 2005 Share Posted February 2, 2005 why would you lease when they are offering such low rates? Link to comment Share on other sites More sharing options...
Guest JessterCPA Posted February 2, 2005 Share Posted February 2, 2005 why would you lease when they are offering such low rates? There are many answers to this. As a business owner, you get better tax treatment in a lease. Personally, I drive a lot, so a lease works better for me. If I finance for 60 mos, I will have a nearly 90,000 mile car thats now mine. Is that want I want? I prefer to lease & let the dealer take my hi milage car & dispose of it. Link to comment Share on other sites More sharing options...
babeatto Posted February 2, 2005 Author Share Posted February 2, 2005 Thanks for the input everyone. I have finally made my decision to go with finance. I figured, I'd be installing/taking many things into/out o the car that they would not like (eg. clearing headlights, drill holes for spoiler). Also, the finance rate is quite low, so I figured this was the best way to go. I won't put much km on the car, so hope all goes well. Link to comment Share on other sites More sharing options...
2Simpletons Posted February 2, 2005 Share Posted February 2, 2005 Good choice-nuthin' like watching your principle go down every payment, hehe. Try an throw an extra $20-$50 on top of your monthly payment and you'll remove some interest and cut down your loan time. Link to comment Share on other sites More sharing options...
sde Posted February 2, 2005 Share Posted February 2, 2005 are 60 month lease payments about the same as a 60mo purchase payment with the same amount down at the low rates? i didn't even look into a lease so i have no idea. if they are though, wouldn't you be able to sell your car for more than the tax benefit after it is paid off in 60 months even with 90k? well, i guess it is a 5 y/o car is a bit aged at that point and i couldn't imagine paying much for a 2000 vehicle with 90k. i see your point. Link to comment Share on other sites More sharing options...
Guest JessterCPA Posted February 2, 2005 Share Posted February 2, 2005 Good choice-nuthin' like watching your principle go down every payment, hehe. Try an throw an extra $20-$50 on top of your monthly payment and you'll remove some interest and cut down your loan time. Great idea! Link to comment Share on other sites More sharing options...
Guest JessterCPA Posted February 2, 2005 Share Posted February 2, 2005 are 60 month lease payments about the same as a 60mo purchase payment with the same amount down at the low rates? i didn't even look into a lease so i have no idea. if they are though, wouldn't you be able to sell your car for more than the tax benefit after it is paid off in 60 months even with 90k? well, i guess it is a 5 y/o car is a bit aged at that point and i couldn't imagine paying much for a 2000 vehicle with 90k. i see your point. I can't see an instance where a 60 month lease works. Theorectically it should. You are paying interest on the depreciation of the car during that period. There is a residual value, which has to be greater than zero. Therefore, you are paying "less" for the car over that period. But dealers are probably onto that, so they increase the lease factor(interest rate) so they do not get screwed. Yes I could go & sell that 90,000 mile car. I do not want to do that. So I admit I will pay a premium for that luxury of not going through that. I also am not a business owner (my boss is though & has leased cars the entire time I have been affiliated with this company) so I do not get the tax effect of a lease. Link to comment Share on other sites More sharing options...
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