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- 07 CX7 GT AWD W/Tech Pkg; 03.5 Mazdaspeed Protege
definitely something to think about on that...
Finance or Lease
- Thread starter Int3grity
- Start date
lisevolution said:
What do you mean nothing to show for it? You will have a cx-7 to show for it. Then when you are done with the car you can just walk away from it. Get into the new car.... and so on. You are just paying for the portion of the car you use.
If you are a car hopper then leasing is the only way to go. Financing and then selling in 2 or 3 years just doesn't make any sense unless you can get a 0% or maybe 1.9% loan.
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- 07 CX7 GT AWD W/Tech Pkg; 03.5 Mazdaspeed Protege
I'm mean it like this: figure $420/month 36 months= $15,120. After I spend that much $ I don't have a car to show for it since I either have to pay the rest or give it back. Believe me I understand the merrits of leasing a car, and it is definitely something I'm going to consider doing since it would give me a higher level of financial flexibility vs. financing since the payments are nearly half, I was just raised by parents who are old-school in thought and always bought cars outright. It's a hard habit to shake!
lisevolution said:
My parents also always bought cars outright too. My point was that for the 36 months previous you had something to show for it and theoretically you'll walk into another lease and continue to have something to show for your money. Don't be so fixated on the last day of the lease.
And if you like to get new cars all the time leasing makes even more sense. Let's take a look at some numbers. I leased so I have those numbers. And loan rates at the time were around 7%. And I can get the payments and payoff amounts using a calculator at bankrate.com
So I got a $33,000 car for 27 months with no money down for $441 per month. Total payments are $11907 and my cx-7 will have a residual value of ~$23,040 (this means nothing unless I want to buy it, but will be used below).
If I had financed at 7% for 72 months with no down payment, my payments would have been $563 per month.
Now lets say I decide in 27 months to trade in my cx-7. I will have paid out $15201 over that time and I'll still owe $22210. Now for arguments sake lets say the lease above is right and the cx-7 will be worth $23,040. (This is extremely unlikely. More likely the trade in offer will be a couple thousand less.) So I'll get $830 back making my net payments for the cx-7 $14371.
So I guess I'd say at the end of the lease I have $2464 to show for it. And that number climbs higher as the trade-in offer goes lower.
Whether you finance the purchase or lease, you will likely have nothing to show for the cost. Most purchases are upside down and represent negative equity. So, not only do you not have anything to show, you still owe. Leasing, however, takes some of that risk by setting a fixed value (residual) of the vehicle after a preset usage parameter (ie. 27 months, 12K per year). In essence, you are only financing the depreciation of the vehicle versus financing the entire purchase price.
For those who hate payments, you can also pay the entire lease amount up front. I checked this option, and for some strange reason, it was more than the monthly payment. Odd.
For my personal example, I leased a CX-7 AWD GT with Bose/moonroof and Homelink for $194 per month for 27 months at 12K per year. I drive about 9K. I put some money down to reduce capital cost (actual purchase price) as well as reduce the money factor conversion rate (lease term for interest). So, total payments out of pocket are $5238.81 plus a $4400 cap cost reduction and $595 lease transfer fee for a total of $10,235. I can also choose to purchase the car for the $19,900 residual at the lease end if I feel so inclined.
For those who hate payments, you can also pay the entire lease amount up front. I checked this option, and for some strange reason, it was more than the monthly payment. Odd.
For my personal example, I leased a CX-7 AWD GT with Bose/moonroof and Homelink for $194 per month for 27 months at 12K per year. I drive about 9K. I put some money down to reduce capital cost (actual purchase price) as well as reduce the money factor conversion rate (lease term for interest). So, total payments out of pocket are $5238.81 plus a $4400 cap cost reduction and $595 lease transfer fee for a total of $10,235. I can also choose to purchase the car for the $19,900 residual at the lease end if I feel so inclined.
Last edited:
spike blue
Member
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- 2007 mazda CX-7,Kia sephia 2006 Audi A4 Sline
vbbuilt01 said:
lol mine has 28k miles since augost 6
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- 07 CX7 GT AWD W/Tech Pkg; 03.5 Mazdaspeed Protege
Those numbers are definitely holding merit in my eyes. I'm going to sit with the dealer on Saturday to figure out how we're going to do it. If the lease makes sense then that's the way I'm gonna go. My biggest issue is my c-d level credit... the best 0 down finance rate I was able to get independently was 10%, I haven't had Mazda run the credit for me yet to see if they can do better so it'll be a question of which way works out the best for me. If the lease #'s and buyout cost = less than what I would pay for financing the car at 10% then I'm gonna go that route. I'm not concerned about the mileage because I'm gonna have a second car no matter what whether it be a station car, or my MSP and the CX7 as the daily/station car. We'll see what happens and I'm going with whatever works out the best for me in both the short and long-term
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- 07 CX7 GT AWD W/Tech Pkg; 03.5 Mazdaspeed Protege
yeah i'm anxious at this point, just gotta get the GF's opinion involved also...
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- 07 CX7 GT AWD W/Tech Pkg; 03.5 Mazdaspeed Protege
So I finally did it! Ended up leasing one today Copper Red Mica GT AWD W/Tech aftermarket BT, Sirius, Roof Rack, down was just first month and tags. I think total will be just under $600 for the down. Monthly is $480 for 36/12K. Not bad if you ask me considering the add-ons I did.
Interesting thread
Did you know that most people who lease a car never lease another?
Leasing makes sense for only a very select group:
1. They lease for a term no longer than the factory warranty.
2. They have an assured income stream that is predictable and not at risk.
3. They may have leased for business so they can deduct the expense.
4. Their wealth is invested and is returning a rate much greater than the leased money factor.
Most people do not fit the group. Most people are just trying to attain a new car with the minimum payment. The problem is that you build no equity and you carry a very big risk of having a lease payment due without the income needed to make that payment.
If I were in your situation, I'd buy a used car and pay it off as soon as possible.
I know you won't listen to me, but this is just my 2 cents.
(rlaugh)
Did you know that most people who lease a car never lease another?
Leasing makes sense for only a very select group:
1. They lease for a term no longer than the factory warranty.
2. They have an assured income stream that is predictable and not at risk.
3. They may have leased for business so they can deduct the expense.
4. Their wealth is invested and is returning a rate much greater than the leased money factor.
Most people do not fit the group. Most people are just trying to attain a new car with the minimum payment. The problem is that you build no equity and you carry a very big risk of having a lease payment due without the income needed to make that payment.
If I were in your situation, I'd buy a used car and pay it off as soon as possible.
I know you won't listen to me, but this is just my 2 cents.
(rlaugh)
What is the difference between having a lease payment due with no income and having a loan payment due with no income?
And don't tell me that you could just sell the "owned car" but are stuck with the leased car. Leases are just as easy to get out of as loans. I've gone through getting out of a lease early before.
And don't tell me that you could just sell the "owned car" but are stuck with the leased car. Leases are just as easy to get out of as loans. I've gone through getting out of a lease early before.
Vision67 said:
Out of the last 5 vehicles for me have purchased, leased, purchased, purchased, leased. Both of my wifes vehicles since we have been married ( 3 1/2 years) have been leases. Naturally I've never leased past the factory warranty period.
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- '04 RX8
I like reading these threads. I read alot about buying used, buying new, leasing, long payment plans, etc. but since the majority of this thread is against my economic view I won't start any siht lol
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- 07 CX7 GT AWD W/Tech Pkg; 03.5 Mazdaspeed Protege
I looked at the lease vs. buy situation as this. I'm pretty confident in my income stream being where it is today or better over the course of the next 3 yrs. I was looking at 5-6 yr loans and who knows at that point where I'll be or if I'll even want to keep the CX7. 3yrs was a safe enough investment for me and I can see where I'm at with the car and financially at that point. If I love it like I think I will, then I"ll buy it when the lease is up, if not than I cut bait and go for something different.
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- '04 RX8
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- 07 CX7 GT AWD W/Tech Pkg; 03.5 Mazdaspeed Protege
That graph is all relative to the interest rates available at the time on both sides of the fence. Also the 5yr cost shouldn't really apply to a lease since most are 3yrs or less and that doesn't factor in the negotiation of the buy out price with the dealer who is going to want you to buy the car from them so they don't have another used on sitting on the lot...
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- '04 RX8
I am pretty sure the dealer is going to **** either you or the next owner of the vehicle. Original prices of the car minus payments (minus interest) you have made towards leasing it = what you pay to buy it. That's the formula I would apply as a dealer especially since I know the car is worth less in 3 years then what you have been paying towards it minus my profits. Dealer wins both times any way.
that graph doesn't take into consideration the people who don't want the same car for 5 (or 6) years.
If you are the type to always want the newest, hottest car, then leasing makes more sense than buying, because the money factor is normally quite a bit less than the APR.
If you are the type to always want the newest, hottest car, then leasing makes more sense than buying, because the money factor is normally quite a bit less than the APR.
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