Lease, Finance, or Buy-Out a car?

[Nitron88]

Couldn't find any threads here on this.

Please share if you lease, finance, or bought out your new vehicle in full.

Also comment on the advantages of your choice or your personal recommendations, and the dealership you ended up buying from

A) Lease
B) Finance
C) Buy-out

[JRSC00LUDE]

Personal or business?

[Xtrema]

All in general terms, there may be exceptions:

A) Lease, lower payment but more in interest charge. Any loss in value due to accident would be manufacturer/dealer's problem. May have to deal with inspection and over-mileage on return but probably easier to deal with when you jump immediately into another new car. Depends on your job, there will be tax write off opportunity here but the rules are strict. Basically if you work a 9-5 job and limited to 1 to 2 work locations, it's will be hard to write this off.

B) Finance, traditional has higher payment but there are also other type that can bring payment down. You own the car out right so whatever happen to your car, you will still own the lender the $.

C) Buyout, end of lease value which IMO is usually $3K to $10K below market for the vehicle unless you get them to raise the buyout as term of contract. Most cases, it's advantageous to buyout and do a quick flip then just give it back to dealer @ end of lease.

[ExtraSlow]

Paid cash. There are lots of people who will say it's smarter to take the finance, and invest that money, but I hate having monthly payments, so I was happy to do it this way. Also makes for a very simple negotiation with the dealership.

[woodywoodford]

I own outright, but or my next vehicle will be leasing.

a) no need to resell - I'm a terrible seller and always lowball myself
b) always have a warrantied late model car

Financially it might make sense to finance/buy, but I have no plans on getting a new car until I that 4-500/month is chump change anyway.

[CapnCrunch]

It depends on what the lease/finance rates and cash discount are. I wouldn't be able to give an answer until I knew that info.

[Xtrema]

Originally posted by ExtraSlow
Paid cash. There are lots of people who will say it's smarter to take the finance, and invest that money, but I hate having monthly payments, so I was happy to do it this way. Also makes for a very simple negotiation with the dealership.

Again, it up to personal preference and how you make the numbers work.

My S4 was $70K. Paying cash, I would have lost $12K per year in asset value. But investing on varies things, I made ~$16K per year average off that $70K. IMO, I'm basically driving a S4 for free by leasing.

And if Audi release a respectable SQ5 (Sportdiff/DCT are missing), I would jump into that next and probably won't have to look at the Macan.

[Canmorite]

Originally posted by Xtrema


Again, it up to personal preference and how you make the numbers work.

My S4 was $70K. Paying cash, I would have lost $12K per year in asset value. But investing on varies things, I made ~$16K per year average off that $70K. IMO, I'm basically driving a S4 for free by leasing.


Have to be somewhat investor savvy to make ~23% on your $70K, which is definitely not attainable by all. But a great way to look at it if you have the know-how :thumbsup:

[ExtraSlow]

One other factor for me is my track record in investing is pretty poor. I've had a few great successes, but a few big failures too. At this point in my life, I really like the sure-thing rather than riskier leverage.

[CapnCrunch]

Originally posted by Canmorite


Have to be somewhat investor savvy to make ~23% on your $70K, which is definitely not attainable by all. But a great way to look at it if you have the know-how :thumbsup:

If I could make 23% year after year, I'd own a car dealership by now lol.

[rage2]

Search link to this:

http://forums.beyond.ca/showthread.php?threadid=377922

Which links to this:

http://forums.beyond.ca/showthread.php?threadid=339018

[Mibz]

Geez, I don't even remember posting that thread.

[max_boost]

Unless you are free and clear of your debt obligations, notably a massive mortgage lol you are just shifting it from one pile to the next.

[Xtrema]

Originally posted by Canmorite


Have to be somewhat investor savvy to make ~23% on your $70K, which is definitely not attainable by all. But a great way to look at it if you have the know-how :thumbsup:

That's average out. Most of that didn't materialize til 2012/2013. Heck even crap US Index funds did 25% in 2013.

So yeah, even on cash flow perspective, losing $10K the minute you drive out the lot vs $1K per month on lease is a lot more palatable.


Originally posted by max_boost
Unless you are free and clear of your debt obligations, notably a massive mortgage lol you are just shifting it from one pile to the next.

QFT

[max_boost]

Originally posted by Xtrema


That's average out. Most of that didn't materialize til 2012/2013. Heck even crap US Index funds did 25% in 2013.

So yeah, even on cash flow perspective, losing $10K the minute you drive out the lot vs $1K per month on lease is a lot more palatable.



QFT

Well said and well done Stanford. That's my attitude too and that's why I lease. Cash flow ftw. $500 to drive a BMW. :drool: The rest of the money doesn't go to investments, it goes to paying shit off ASAP. 3.5% guaranteed dumping it into the HELOC. lol :rofl:

[Manhattan]

Originally posted by Xtrema
My S4 was $70K. Paying cash, I would have lost $12K per year in asset value. But investing on varies things, I made ~$16K per year average off that $70K. IMO, I'm basically driving a S4 for free by leasing.

:eek: What are you investing in? Almost impossible to do that year after year. If you could do that every year the difference between financing and cash would be chump change.

[Xtrema]

Originally posted by Manhattan


:eek: What are you investing in? Almost impossible to do that year after year. If you could do that every year the difference between financing and cash would be chump change.

I'm averaging. But if you remember the last 5 years, we are coming off the bottom of real estate. Stock market is doing good in Canada up to 2012 and US has been stellar for 2013.

Again, being the pessimist that I'm am, I'm sure a adjustment will burn me soon. But no regret on leasing my first car. Better than paying cash.

[icky2unk]

Are there cash incentives and what is the cost of the car?

I mean would I lease an 80k car with small cash incentive, probably.

Would I lease a 40k car with cash incentive, probably not.

Personal preference I guess.