ironmedic

well i had fun owning my rx8 but this summer, its gonna be given up. i made a mistake on my lease and i dont like how it turned out. in the end, i learned my lesson about leases and i can probably negotiate better. i am gonna be heading to the "sandbox" for around 3-4 months. i will come back with enough cash to end my lease and look towards getting something else cheaper. my wife and i are considering a used WRX or even a Mazda 6. I know we can get a turbo WRX for around 15k or so (2002 or 2003) used. we will see how things go by this summer.

VikingDJ

Sorry about your failed lease. Best of luck on your new purchase. A WRX would be a nice choice.

NgoRX8

iTrader: (1)

Sorry about the lease. Good luck on your next car, and I hope things work out.

ironmedic

yeah, i can make the payments cuz my wife and i work but the payments just dont add up in the end. i personally dont know why i agreed to the lease but oh well. i wont make that mistake again.

cgrx

screw the cars man. Good luck in the "sandbox"

ironmedic

lol at least someone knows what i meant i wont be going to the main sandbox, just a smaller one a bit further down from it. still gonna be a hot sandbox though!

rx8wannahave

Sorry to hear about the fate of your 8, but you always have to do what's best for the family. Be careful out there...(I gather the sand box is the middle east some place...)

StewC625

Not sure what you mean by "the payments don't add up in the end"? I'm a 20-year plus veteran of leasing cars. Can I help you understand what you got into? If you're interested, please PM me with the following info:

1) Name of leasing company
2) Type of lease (closed-end, open-end, other)
3) All costs of your lease inception (down payment or "cap cost reduction", fees, taxes, etc.)
4) Lease term (months)
5) Monthly payment
6) If you know it, final capitalized cost of the lease.
7) If you know it, residual value of the car at lease term ending.
8) Allowed annual mileage

Perhaps with some better knowledge it may make more sense to keep the car. Terminating leases early is godawfully expensive and you're just tossing the money away. Can i help?

For example, my case:

Leasing company: US Bank Auto Lease
Term: 48 months
Lease inception costs: $952 - first month's payment, security deposit, plates - covered by a $1000 coupon offer from Ford, so I actually didn't pay them anything, and got $48 back in credit.
Payment: 48 x $372.40/month
Residual : Don't know off the top of my head.
Capitalized cost: $28,778 (that's a sticker price of $33,400 (approx), reduced to $26,250 (approx) plus sales tax))
Annual Mileage: 12,000/year

I drive the car for 48 months, which takes me to July 2008. At the end of the term, I give the car back. I'm RENTING the car from them - the cost of which, is about half or less than if I purchased the car. If I choose to purchase the car (which I won't), I can buy it for the residual value which, if memory serves was about 61% of the capitalized cost, or about $18,000.

Let me help you. Perhaps you can keep it.

budebaker

61% is very good. My residual is much lower, less than 50%.

Mazdax605

61% on a 48 month lease sounds fishy to me.I got 65% on my 24 month lease at 12K per year.I am putting half the miles you are and only retaining 4% more than your value.My residual on a base 6 speed is $17680 of a car that had a window sticker of $27200.I am guessing the real residual is more in the 50%ish range for your lease,but I have been wrong before.At the time I leased they told me the 6 speeds had a 65% res,and the autos had a 63% residual on 2 year leases.That was August of 04,when Mazda was offering $4250 in lease incentives for 2 year leases.The MF is a bit high(.00305 or 7.32%)on mine,but it was the best Mazda was offering at the time with the highest credit teir.

To the original poster.Good luck in what ever you chose to do,and thanks for your service in protecting our way of life.

Air Force RX8

Good luck in the sandbox...sounds like you will be "Doin the Deid" or somewhere close to there. If it is the Deid enjoy your 3-a-day!

StewC625

It could well be more like 50% ... I haven't taken the time to look. I seem to remember the residual being in the low 18's however. That could be against sticker, not against Cap Cost ...

The payment, the term, the mileage and the inception costs are what it's all about anyway. And in my case, it's a nice low payment for not a dime handed to them to pick up the keys. Just sign and drive!

They weren't too happy when I popped that $1000 Ford thing on them. Sucks to be them! :p

djgiron

Yeah good luck out there, I just got back from there in April, going back as a contractor in a couple weeks to make some good money (and be able to purchase my new Rx8 outright!!) this time (E-6 doesnt pay all that well compared to KBR's 10k/month)

Nemesis8

iTrader: (3)

Did stewc625 help you out?

Good Luck Man in whatever your final outcome is...

PS: Ironmedic's Winning Blue is forever immortalized in the Mount Saint Helen's Run movie I made. It would be a shame to see it go.

ironmedic

well i did some homework on a new evo 8 and wrx and i can afford that more than a damn rx8 payment im making right now. thats how bad i screwed myself.

Nemesis8

iTrader: (3)

Yeah, I remember you being bummed about it. Get the new car and well do St. Helens again!

ironmedic

yes! and i can actually keep up with u guys if i get an evo or WRX! :D

Overport

that sucks you have to get rid of the rx8. go looking for your '96 cobra!

LoveMy8

Hey IronMedic, if you don't mind me asking, how much are you paying a month for the lease? Also, how long did you lease for? I want to know if I got screwed somehow.

The sticker price on my 8 was $34,000. I pay $350.00 a month for 2 1/2 years. I put $1200.00 out of my pocket. Along with Mazda's incentives. Somehow I think I got the car down to $28000.00 with tax. I have the paperwork on it but I am too lazy to double check. Either way, I wouldn't trade my 8 in for any other car! :D I think I did pretty good???

JoePaterno

Hey ironmedic, I feel your pain. I am in the same position you are in. I am paying way too much for my lease. Everyday I kick myself for agreeing with that slimeball salesman. I lease an 8 for 500/month for 48 months. It sound bad, but there are some other factors involved. The car was 33 thousand and change. I was 3500$ in the hole on the car I traded in. I owed 13,500 and it was worth 10,000. I also get 17,500 miles a year, as compared to most of you who only get 12,000. I bought the car in January 04. I didn't put anything down. So now I want to trade in the 8 just so I can get a bettrer deal on something else and not have this feeling like " I am an idiot." I love zipping around in the 8 though, and this car cuts down my commute time. So what do you guys think about my lease? Is it really that bad?

Riggs

Just my own personal opinion:

You should NEVER lease a car. Lease's are a cash cow for the dealers. The only good thing about a lease is that it allows someone to drive a car that they would not normally be able to afford to purchase.

Always purchase.

slavearm

I don't know about that... they are a cash cow, but I don't know that you are losing anything in a closed end lease. As long as the value is somwhere near where it should be, you should be too bad off.

That being said, I ALWAYS buy my cars. I just like knowing that in 3 more years the damn bank wont have any stake in my car.

StewC625

Joe Paterno:

Considering your mileage and the $3500 in negative equity that you're now paying down in your lease, $500/month isn't too bad. $72.00 of your payment is simply the negative equity - roll finance charges into that and you're more like $100 of your payment is the negative equity. At that point, you're at $400/month for a 17,500 mile lease. That's not that bad. Although, that's probably part of what you paid for with your 1200 down payment.

Riggs:

Well, I trade my cars every 3-4 years. I NEVER keep a car longer than four years - is it the best financial decision? No. But it's a reality. I like new cars.

OK, so that said, in MY situation, leasing makes perfect sense - here's why:

1) Why spend 4 years paying for a car just to trade it in? In other words, why buy the depreciation of the whole when you're only going to use part? I just pay for what I use.

2) I never exceed the mileage restrictions of my leases. I have 20 years of driving habits and leasing history to fall back on. My car is always leased for 12,000 miles/year, my wife's for 15,000 a year. Actually, on my last car lease (a 2001 Acura TL), I didn't use more than 6000 miles, so I actually cheated myself a bit on that.

3) Leasing gives me some financial advantages that I don't have with buying a car. With a car lease, you can deduct the total expenditure of your car - payment, insurance, fuel, etc. at the business use percentage, less reimbursements. With ownership, it isn't a straight deduction, and you have to depreciate the asset, which in my situation yields a lower tax deduction.

4) Leasing protects you from market forces. The first car my dad ever leased was a 1986 Audi 5000S Turbo - a nice $30,000 car (which would be more like a $60,000 car now) that after the 60 Minutes "unintended acceleration" story broke (which was later found to be bunk - the drivers were hitting the gas instead of the brake), was suddenly overnight worth just a few thousand in trade, IF you could find someone to take it. When his 4 year lease on that car ended, the leasing company (VW Credit) BEGGED him to not turn it in and finally offered to let him buy it for $4800 against a residual of more than $17,000. At that price, he bought it, drove the car ANOTHER four years and at that point, the "used up" factor equaled the depressed market value of the car.

An alternate to that story was my most recent Honda Odyssey minivan. At the end of it's four-year lease, the residual ("buy it") value of the car was at least $4000 UNDER the retail market for the car. I bought it from the leasing company, then sold it the next day to a friend for a $2000 profit. He got a car for about $2000 under market (a very well-cared-for minivan at that - I take meticulous care of my cars), and I got a $2000 windfall.

So, leasing isn't bad. But you need to go into a leasing negotiation knowing what the market is for the car.

And some good rules of thumb:

1) NEVER put a down payment on a lease - Cap Cost reductions are simply handing them cash to buy down the starting numbers.

2) NEVER use a lease to result in driving a more expensive car than you can afford. That's a "sales tactic" used by dealers.

3) Never lease a car if you drive more than 15,000 miles a year. Most leasing companies won't write leases for more than that, which means that all you're doing is then buying down the residual and pre-paying the mileage fees at full price (15 cents a mile or more).

4) Always look at EVERY term in a lease - residual, inception costs, cap cost, allowed mileage, per-mile overage charges, etc. All are negotiable items. Negotiate every one of them.

5) NEVER roll negative equity cost into a lease if it is at all avoidable. The finance charges you pay on that negative equity are far more than if you just financed that negative equity on a credit card.

6) Only add items to the car that can be residualized (that is, are considered permanent additions to the car). For example, if you buy a special car off the sales floor that has special wheels and tires, or an aero kit, most of those items cannot be residualized (value considered in the ending value of the lease) and therefore will drive up your payment costs.

The only things that can usually be residualized are factory options.

So, if you lease, lease intelligently, as I have done for 20+ years. Why own a depreciating asset, unless you are going to own it until it has no more value.

Riggs

StewC625

Thanks for the really great information. You have certainly provided me a greater eduacation on the leasing system.

Even though I stated it was just my opinion, it was admittedly a blanket statement which obviously does not apply to some people, such as yourself.

And you gave me an idea for a new thread...

JoePaterno

People that make statements like this are just plain ignorant and STUPID. Never lease? WTF are you talking about? It is simple math you moron. I don't feel like explaining the entire thing, but if you have a brain, all you have to do is a little math, and you will see that leasing can be just as good as buying. WAKE UP PEOPLE. This isn't brain surgery.