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re: Own vs Lease
Posted on 4/21/13 at 4:44 am to foshizzle
Posted on 4/21/13 at 4:44 am to foshizzle
quote:
According to this spreadsheet, the cost of either choice for three years is about 25K. Plus financing, of course. For that price you could buy 2-3 perfectly good used vehicles, drive them for three years, and then blow them up.
First, anyone buying a $50,000 car certainly can afford to buy several used cars. The question is whether he would be caught dead driving one of them.
Second, this comparison is for an MDX with the Advanced package which is almost $10,000 more than the nicely-equipped base model. Buy or lease, you will never come close to recovering the cost of a luxury package. As I pointed out earlier, stick to the manufacturer-sponsored lease and don't try to customize it. The terms for the special-offer lease are much more favorable. From the Acura web site:
quote:
2013 MDX 6 Speed Automatic Featured Special Lease - $0 Due at Lease Signing $0 down payment, $0 down security deposit, $0 first month payment, $0 due at lease signing. $500.00 per month for 35 months thereafter. Excludes taxes, titles and fees. For well-qualified lessees. Closed-end lease for 2013 MDX 6 Speed Automatic vehicles (YD2H2DJNW) available from March 5, 2013 through April 30, 2013, available to customers who qualify for the Acura Financial Services Super Preferred or Preferred credit tier. Not all lessees will qualify. Higher lease rates apply for lessees with lower credit ratings. MSRP $44,175.00 (includes destination, excludes tax, license, title fees, registration, documentation fees, options, insurance and the like). Actual net capitalized cost $41,072.56. Net capitalized cost includes $595 acquisition fee. Dealer contribution may vary and could affect actual lease payment. Total monthly payments $17,500.00. Option to purchase at lease end $24,296.25. Must take new retail delivery on vehicle from dealer stock by April 30, 2013. Lessee responsible for maintenance, excessive wear/tear and 15¢/mile over 10,000 miles/year for vehicles with MSRP less than $30,000, and 20¢/mile over 10,000 miles/year for vehicles with MSRP of $30,000 or more.
4
Posted on 4/21/13 at 11:52 am to Layabout
If the vehicle is going to be used for business purposes, then there are income tax implications to consider as well.
Posted on 4/21/13 at 5:03 pm to Layabout
Transpose genders, and you have:
Exact same concept.
quote:
First, anyone buying a $5,000 Louis Vuitton purse certainly can afford to buy several normal purses. The question is whether she would be caught dead wearing one of them.
Exact same concept.
Posted on 4/21/13 at 5:34 pm to Layabout
quote:
First, anyone buying a $50,000 car certainly can afford to buy several used cars. The question is whether he would be caught dead driving one of them.
Right, that's why I noted that if the OP is in a position to spend that kind of money, fine. But if so, why spend three seconds worrying over lease vs. buy if the difference is only a couple of grand?
If you're already committed to driving the latest model you might as well flip a coin. It's like agonizing over which kind of door handle to get on your Ferrari. At the end of the day, you're driving a Ferrari.
I suspect the only rational answer here is "lease" b/c if you really can afford this then your time is probably worth not having to hassle with negotiating a purchase every three years. Just turn in the older one and get the newer one.
Posted on 4/21/13 at 5:59 pm to Layabout
quote:
Second, this comparison is for an MDX with the Advanced package which is almost $10,000 more than the nicely-equipped base model. Buy or lease, you will never come close to recovering the cost of a luxury package. As I pointed out earlier, stick to the manufacturer-sponsored lease and don't try to customize it. The terms for the special-offer lease are much more favorable.
The only terms that are determined by the manufacturer are the Money Factor and Residual Value. Typically the "specials" are for the base model because it will minimize the "X per Month" in the advertisement. Most manufacturers residualize any additional options/packages at the same rate. Toyota is one exception. In reality, this is actually beneficial to the lease because the manufacturer is giving you credit, where the typical consumer would not value the package as highly (which is what Toyota does). For example, most manufacturers retain the same X% multiplier for any model/package/options. Toyota (and typical used car consumer) will reduce that X% due to the additional packages (effectively, additional packages depreciate faster than the base vehicle).
As for the argument over the "luxury" of the vehicle in question, it's a high example, but indicative of a lease vs buy decision. $3k over 3 years is still significant. We're not talking Bentleys. It's basically a 10% savings in the "cost of ownership", not including insurance/maintenance/etc. It's also worth noting that leasing has a significant savings in monthly cash flow. For this board and the savvy investors here, that could be worth a lot more.
To the OP, do your research and ask/compare the figures. It takes fairly low MFs and high residuals (incentives) to make it advantageous. Leasing is not the "devil" most people make it out to be. Also, understand leasing is just a method of financing. You must still negotiate and haggle the price all the same.
This post was edited on 4/21/13 at 6:02 pm
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