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Thread: Lease vs. Finance at 0%

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    Default Lease vs. Finance at 0%

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    Last edited by kaput; 03-26-2019 at 08:08 PM.

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    First of all, other than domestics, can you tell me who's doing 0% lease?

    First question, no. Whatever term you agree too, you're stuck. Early termination will probably bring penalty or extra fees. That's why there are lease takeover sites out there for people who want to end it early but don't want to pay.

    If leasing is cheaper than financing (never happens), it's better to lease. So you can reduce the risk of depreciation. If buyout is more than car's worth, ditch it.

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    Originally posted by Xtrema
    First of all, other than domestics, can you tell me who's doing 0% lease?

    First question, no. Whatever term you agree too, you're stuck. Early termination will probably bring penalty or extra fees. That's why there are lease takeover sites out there for people who want to end it early but don't want to pay.

    If leasing is cheaper than financing (never happens), it's better to lease. So you can reduce the risk of depreciation. If buyout is more than car's worth, ditch it.
    Ignore the above post, it's wrong information.

    You are free to pay out your remaining lease contract, be it just the amount paid over the term, or the entire buy-out, whenever you please, without penalty.
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    Ford usually has a special where you can take your current lease vehicle back early, and lease a new vehicle with no penalty. I'm not sure if there's a limit to how many months is remaining on your current lease. It's best to go in and talk to a couple different manufactures and see what they're policy is.


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    Originally posted by TorqueDog
    Ignore the above post, it's wrong information.

    You are free to pay out your remaining lease contract, be it just the amount paid over the term, or the entire buy-out, whenever you please, without penalty.
    ^^^

    WERD!

    People take over leases because the payments are lower and all the associated fees are paid up front and in addition sellers are willing to offer a cash incentive.

    Lease=lower payment=less equity in car=higher buyout

    My buddy just unloaded his 2006 330I through leasebusters. I think his buyout was around $58K. No one is going to pay him that but because he's offering a cash incentive, winter tires on his car, and a low monthly payment $800 + low interest rate 1.9%. He sold his car instantly.

    Hope all that makes sense.

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    every deal has different terms as to the early payout structures. there may or may not be a fee, just have to ask at the source. And leasing only makes sense if thats really the only way for you to get into a new vehicle or you have the money to just rent a new car every couple of years. because unless at 0%, leasing is always more in the long run.
    BTW is this just a hypothetical question or did you find a manufacturer leasing at 0%?

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    If you can find the car you want with a really low lease rate, take the lease and lower payment. It generally works out the same however if you go finance as well, just extend the term and the payments work out the same.

    When I bought my roadster, a 36 month lease payment was the same as a 72 month finance payment for example.

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    Originally posted by max_boost
    If you can find the car you want with a really low lease rate, take the lease and lower payment. It generally works out the same however if you go finance as well, just extend the term and the payments work out the same.

    When I bought my roadster, a 36 month lease payment was the same as a 72 month finance payment for example.
    ^ thats true, when some people hear lease they automatically run away and think you're throwing your money away, but then they go ahead and extend their financing to 6 years for .5% lower and they end up paying more in the long run.
    you just have to consider the rate that you're getting+buyout at end of term+actual value at end of term vs. financing. Normally there are fees associated with paying out a financed vehicle early if done through a bank.

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    Last edited by kaput; 03-26-2019 at 08:08 PM.

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    LOL at guy who said leasing was more expensive than financing, obviously leasing is less expensive based on the fact that you are renting the car, rather than paying to own it

    HAHA

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    Well, leasing would be ok if you know you can find a 0% loan for the buy out amount, or of you can save that kinda money up in the time of the lease. I just bought a new ford truck at 0% finance over 60mo. plus the 1000$ cash back (after taxes) and 1000$ in accesories
    Originally posted by rage2

    Just because you're older... doesn't mean you need older women. Nothing wrong with an 18 year old here and there!

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    Originally posted by DepTrotter
    LOL at guy who said leasing was more expensive than financing, obviously leasing is less expensive based on the fact that you are renting the car, rather than paying to own it

    HAHA
    It is more expensive if you are going with the buyout and owning the car.

    Because you pay more back monthly when you finance means you pay less in interest. But @ 0%, there'll be no difference.

    BTW, nobody has said who's offering 0% leasing yet and on what car?

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    Originally posted by Xtrema


    It is more expensive if you are going with the buyout and owning the car.

    Because you pay more back monthly when you finance means you pay less in interest. But @ 0%, there'll be no difference.

    BTW, nobody has said who's offering 0% leasing yet and on what car?
    Mazda offers 0% lease, Nissan as low as 1% financing, Hyundai has 0%, Subaru has some pretty low rates as well. So it's not just the domestics that have low rates.

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    I also have a question about leasing. My question is regarding the interest calculation, is the interest rate calculated on the entire balance or just the leased amount? For example, if I buy a car that is $20K and the residual is $8K on a 60 month lease(assuming $0 down) and the interest rate is 5%, am I paying interest on the $12K or on the full $20K? Thanks.

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    Last edited by kaput; 03-26-2019 at 08:07 PM.

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    This is ONLY my opinion, so take it for what it's worth, but I don't really understand why people compared leasing vs. buying and say one is more/less expensive. Leasing isn't more expensive than buying a new car every couple years(apples to apples). It's more expensive than buying a car once and driving it for the next 10 years, but how is that the same thing? For 6 (or whatever) of those 10 years you're going to have an older car with no warranty.

    Which brings me to the next part I don't really understand. Everyone knows new cars depreciate a lot, and when you buy a new one you are paying the premium for things like the warranty, but people who buy a new car and then drive it for 20 years seem to be making the implicit choice that they're willing to pay the premium right now for the benefits, but they don't need those benefits 10 years from now. In other words, "I need a NEW car (warranty)right now, and I'll pay for it, but in 5 years I'm OK with just driving a 5 year old car."

    Do these people expect to be poorer in 5 years, and they want to buy now before their money runs away or something? I expect myself to be making more money in the future, not less, if I'm willing to pay the premium for a new car now, why not in 2-3 years? And with that given, why would I bother to buy a car instead of leasing it? To put it another way, if I tell myself: "Self, 4 years from now, I'm going to be driving a 4 year old car out of warranty and I'm OK with it", why wouldn't I be OK with a 4 year old car right now that I can buy for 1/2 the price?

    I mean, for some people it might make sense (i.e. I gotta impress the girlfriend RIGHT NOW, and 4 years later when she has three of my children she'll be too busy to worry about my shitty car, or I know my car is going to be in the next FnF movie and will actually appreciate in value) but does every person who buys a new car actually think like that?
    Last edited by tentacles; 03-26-2007 at 08:38 AM.

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    Forgot to add, I went to the Ford dealer downtown and sked them the question, but they weren't very helpful at all.

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    Originally posted by Euro838
    I also have a question about leasing. My question is regarding the interest calculation, is the interest rate calculated on the entire balance or just the leased amount? For example, if I buy a car that is $20K and the residual is $8K on a 60 month lease(assuming $0 down) and the interest rate is 5%, am I paying interest on the $12K or on the full $20K? Thanks.
    The interest is mostly on the part you pay down, but you also pay a certain portion of the buyout.

    The reason is because the leasing company technically lends you the money to pay the dealer.

    For instance, you can usually lower your interest rate by putting down multiple security deposits. What this does is lower the amount of buyout you are borrowing and thus you don't pay as much interest.

    Does that make sense?

    On a 0% lease, they usually screw with the number so that you buyout is lower and thus your monthly payment is higher (offsetting the lack of interest).

    Leasing companies are in the business to lose money. Typically they are the only part of the Big 3 that make money. i.e. Ford Credit and GMAC are what keeps those companies afloat.

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    This is a response to the post by Tentacles.

    I think you have over simplified everything, there are endless reasons why people would lease vs purchase. For example, the way you treat your car the first five years will determine how it will treat you for the next 5. There are tradeoffs in every scenario and it comes back to your tolerance for risk. I believe the OP is trying to determine the financing costs for a Lease vs. Finance at 0%.

    I do agree the cost owning a new car is greater but at the same time, it is very difficult these days to find a good used car. Also, I forgot to mention the fact that with leasing a vehicle, a lot of people do it for business because the payments are written off whereas a purchased vehicle would fall under the depreciation area.

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    i cant seem to keep the same car for more than a year and a half so leasing to me makes the most sense.

    but not all are like me so financing may be the better option for some and lease the better for the others. i think it boils down to whatt you need and want out of your car.
    Last edited by spec c; 03-26-2007 at 01:40 PM.

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