pabloarchitect

I posted a different thread about how "kid friendly" the 8 was and got a lot of good advice...

So I test drove an '05 Shinka 6spd today and loved it. Easily fits with what I want to do with a car more than the sedans I've been considering (S4, older M3, G35 or 330i). Anyway, I've always purchased 1 or 2 year old cars (except Miata) and kept them for more than 5 years, but now I'm trying to figure out the best way to deal for the 8.

The salesman keeps pushing a 24 month lease and says to refinance should I want to keep the car at that point.

I've never considered leasing and have always heard (right or wrong) that's not a good way to get a vehicle if you're planning on keeping it beyond the traditional lease period. This salesman (without showing me numbers) says that in the long run I'll save money this way.

Anyone know if this is true.

The sales price is $33k. I would be trading in a used mercedes for about $1500.

Thanks.

fredw1

In previous threads, I and others have discussed the pros and cons of leasing versus buying. There is no right answer for everyone in every case. Your first goal should be to get the lowest price in the car, and $33K is not it. Your next goal should be to get total costs (car cost plus interest or lease fees) as low as possible. Figure out what your total costs would be with 1) outright buy, 2) lease 2 years plus buy, and 3) lease 4 years plus buy. Realize that refinancing after a two-year lease may net you a higher interest rate (who knows where they will be in two years?) than what the money factor yields on a 4-year lease. Search for my previous posts.

The dealer will give you a low monthly payment on a lease and try to convince you that you are "saving money". You need to do the math yourself, since no dealer has the goal of saving you money. Their goal is to make money at your expense, plain and simple.

dwynne

I agree with your salesman (man, that is a first!). Unless you have cash to buy the car or a really low loan rate, the 24 month lease deal is the best way to go. You need to be around invoice or less for ANY RX-8 these days, then take off the $1k or $2k in MAC finance/lease money. Some dealers treat the Shinka as a "special, we have to make tons of money" model. Either find abother dealer, or get a non-Shinka car if you want a better deal.

I ran the numbers in this post last month:

https://www.rx8club.com/showthread.p...499#post940499

Keep in mind the deal changed a little of for July - the residual is down but so is the lease rate.

Dennis

Tremor

I may be misinformed but I thought that when leasing a vehicle the insurance was typically higher that if you were purchasing it? Correct me if I am wrong, I have never leased a vehicle.

Tremor

dwynne

Could be right or wrong, depending on how much coverage you carry. Most lease banks require you to carry 100k/300k of liability if you lease from them. I carry that much anyway, no matter if I own the car outright, have it financed, or do a lease. So to me leasing insurance costs no more.

If you are driving around with less liability then it would cost you more to lease - and I also hope you never hit anyone with an expensive car, your liability will run out quick.

Dennis

Hyperborea

If you're older than 18 (and so don't have dad's insurance) and have a family, a home and some savings then carrying less than $100K/$300K these days is financial suicide. Depending on where you live and the value of the home/savings then either umbrella insurance or even higher coverage levels would be advisable too.

KYLiquid

in respect to the insurance talk. I had a 99 miata that I owned but still carryed the 100K/300K full coverage on, with a $500 deductable, I carryed the same coverage to the RX8 just droped the miata (trade-in) and added the 8, my insurance went up 24 dollars (i pay 6 months at a time) I have a 2005 RX8 6speed Touring with Progressive, its the only car on my policy I am 21 never any accidents, never any claims, no points on my licence.

Dinhx8

nice post, i agree with this....Salesman always say "how much do you want to pay a month" in order to confuse you, but ultimately, you should always be concerned with how much your'e paying for the car. I never answer this question when posed to me by a seller, and simply go with the notion that the total price is right, then the monthly payments should follow.

It all does depend on what you want..i think a generalization is that leases are for people that don't mind having car payments, in which case a lease allows you to get in a car you may not be able to buy, as the payments are less. But at the end of it you still have nothing. For some thats okay, cause they don't mind car payments. But if you enjoy ownership (which if you say you keep cars for more than 5 years seems like you do) i'd stay away from leasing personally.

Design1stCode2nd

I have never leased but was thinking of doing it myself. Seems to me lease would be the way to go if you like the newest of the new and like to change cars every 2-3 years. If you like to hold them for a while 5+ years then buying seems best.

If you can go with a 1-2 year old car (say get a 2004 rx8) you can get it for about 5-6k under invoice. I will probably go with a used RX-8 myself if possible but think I might have a hard time finding one with the options I want.

Don't suppose there is a way to get the factory nav installed after the fact is there? Don't know if Kenwood or others have one that fits the Rx-8.

Apophis

I'd say that if you fully intend to buy, you should just do so from the start. If you think you're PROBABLY going to buy but you aren't sure, you might just want to lease it as a hedge. That hedge will cost you a little bit of money but it may prove to be worth it for you.

dwynne

I already posted the numbers (for June, when I ran them) and it is cheaper to do the Mazda lease then buy than to just buy the car right now. Of course, it all depends on the rate you use - if you had a super credit union that would give you some cheap rate then it might end up costing a little less - but with the extra $1k in MAC money and the cheaper than going rate money factor it is the same or less to lease.

The advantage is you don't care how bad the resale gets, you can turn it in and walk away if you don't like it. If they suddenly get popular and hold more value, you can buy off the end of the lease and sell it to someone else and pocket the difference (going through a dealer to avoid a double tax). Finally, you can just buy it at lease end. Even if you paid the current residual you would come out OK. But I would think that MAC faced with all the turn ins will be offering either discount buy out financing or discounts off of the residual - or both - to keep from getting the cars back.

When the new MS turbo 8 comes out in a year or two it would be nice to turn in the lease car and get one - and not worry that the dealer is only allowing $10k in trade in for a used 8 :D

Dennis

Design1stCode2nd

Well if anyone is trading in an 8 and only getting 10k, you let me know. No how much the wife complains 10k I can do.

From what I've seen most 2 year old 8's are running about 6k below invoice. Been looking at GT versions with and without nav.

Hyperborea

Yeah, I agree with that. I was going to buy mine outright (pay cash) and have never leased before but with the lease cash back from Mazda ($2K minus lease fees of ~$500) it was cheaper to lease. The cost of the interest on the lease is no more than I can make on the purchase money after taxes in a CD/money market account/muni bond fund so it's neutral there. Add in the flexibilty to get rid of the car in two years if it has "problems" or the possibility of knocking some more money off the buy-out cost and it's really a no-brainer.

dwynne

If you can find a new 8 left over, you can get it for $4,500-5,000 under invoice - for a new car. So a used 8 with miles on it is going to have to be a good bit less than that before I would consider it. I posted in another thread where all the 04 8s where that I knew about, but I am sure there are others around in SOME parts of the country. The the 04s going to be 2 model years old in a month or two, the price will drop further - and the discounting on the 05s will get deeper.

What I was saying - in a year or two from now if the trade in value of the 8 is even farther in the tank, those that lease will be immune to this if they decide to get rid or the car (either for something else or a newer 8). Those that purchase will take more of a beating trying to sell/trade.

Dennis

Dinhx8

again, the above notion is true only if you intend on replacing your car in said years...if you want to keep it, if you buy it now at a good rate (as suggested, maybe an 04), you'll be halway to owning the thing at a good rate in a few years. Those that purchase only take more of a beating,if they trade in a few years yes, but if they don't they don't take any beating. Figure out if you want to keep the car for a while, if you do, I'd recommend buying now...If you don't and enjoy the switching, then leasing works....

fredw1

A lease-buy can actually cost less than an outright buy if the lease incentives are there. So even if you know you want the car for 5 or more years, it still might be less expensive to lease for 3 or 4 years and then buy. If you know you want a new car in 4 years, then by all means lease. As was said above, then you can decide whether to buy or not at that time.

dwynne

You are wrong.

There is an extra $1k in rebate available if you lease and they are doing a 2.5% lease rate. Get it? Also, if you bring your own cheap rate to the dealership you don't get EITHER of the $1k rebates - so you pay $2k more than I would with a lease. If you take the MAC rate, and it is over what you can get elsewhere you do get the $1k rebate, but have a high rate and have to try to refinance.

If you finance now you pay a higher rate and DON'T get the extra MAC money. Combine the two and it is as cheap or cheaper to lease, then buy than it is to buy. In that case, you have your cake and eat it too. You enjoy a lower payment with little out of pocket then you have the OPTION and lease end to take the car for a set price (or less) or just turn it in.

Nissan was running a 24/24k lease on Altimas earlier this year with a rate less than 0.5%, Honda was doing less than 1% on Accords. Compared to the finance rates available from the captive lease banks OR other sources there deals were MUCH better. Lease, then buy was a good bit cheaper than buying on time.

Now if you can pay cash, then you normally would be better to do so. But with the extra MAC discount ($2k VS paying cash) that is available now AND the low AND the no risk "turn it in after 2 years" then it would probably be a better deal to lease an 8 now that to pay CASH for it.

The 04 would not lease well since it is now a used car. The 8 in general is a TERRIBLE lease car due to poor residual and resale value, but for this lease deal that is MACs problem

You just can't make statements like "if you are going to keep the car you are better off to buy" - since in this case it just not true.

Dennis

Dinhx8

"ooooh". Funny how you say I can't make statements like..... then say something so blatant as "you are wrong". This coming from someone endorsing leasing as a whole, based on what, 2 lease plans? the first post was inquiring about leasing in general. My point, made in a non condescending tone unlike yours, was that the buyer doesn't always lose out after 3 years, cause sometimes the buyer keeps the car and doesn't trade in. I was responding in general, that's all. You're talking about one lease. period. I made a general statement saying, figure out if you want to buy, and its total price. You can skip around town saying how great this lease is, my point is this: if you plan to keep the car, figure out what the total price is for this 'magical lease'. Whatever it is, you can most likely match that offer in a buy by negotiating, and shopping at various dealers, a power you lose out on often when you lease. I was talking in general here...


the last line of my post was : Figure out if you want to keep the car for a while, if you do, I'd recommend buying now...If you don't and enjoy the switching, then leasing works....


You were saying if the car dumps in resale value if you buy you're losing out. Your statement implied that all buyers suffer from resale loss. That my friend is wrong. Cause some buyers keep their car and don't resell it. They don't in 3 years all of a sudden lose money out of pocket, cause they don't resell it. Of course car's lose value, sure, but if you're not planning to get rid of it, than its not a direct loss. I was pointing out that you can't suffer from resale loss if you don't resell your car.

Lets not forget stuff like you can only drive a certain amount of miles, can't do a damn thing to your car other than wash it. To some this is fine, which i mentioned. My point was, simple, if you figure out whether you prefer keeping or gettting rid of the car, thatll be the most important. Cause if you do keep (which the original poster does), it may be better to buy as it could be cheaper, as i just explained when you factor in everything.

The thing is your original argument was centered around the concept that 'if you buy you'll have trouble selling it cause of resale value, and if you lease its better cause you can get rid of it" all i was saying is, that's great, but if you don't get rid of it, buying can be appealing.

Saying leasing is better cause you don't suffer from resale value is like sayhing renting a car is better cause you can drop it off in 3 days. Well, some people don't want to do that, and not all people enjoy dropping their car off in x years....so for those people, (and I thought the original poster was kind of like this) maybe leasing isn't the best option, in general

YOu say i can't make statements like that- all I was doing was generalizing in a neutral tone. Then, you go on to preach leasing is the best thign to do, but base your PRO lease argument on one lease in particular.....that to me is wrong.

pabloarchitect

Dinhx8 and Dwynne, thanks for the information. I get both of your points. Dinhx8 has me pegged.

I'm an architect and really get into the minute details of my projects and other (important) issues that come up in life I just don't care about even when I should (like am I going to waste money on a car that could be better used in a different way for my family). So, eventhough the MAC deal could be a cost saving measure in this case...I would probably work towards the best purchase deal because I don't wanna constantly be worried about my miles, what rates will be like in a couple of years, should I keep or move on, and so on (not to mention I'd probably be interested in Autocross).

So after reading all your posts, my comfort level is still with purchasing but you've given me ammunition to use in trying to get the best purchase price. The dealer I've been dealing with is just really pushy about the lease. I'll let you know how this works out.

Paul

Dinhx8

good luck Paul, -Dwynne please don't take disrpect to my comments, I was just pointing out that there is no right or "wrong", i often feel the more important decision is judging one's tendencies and preferences before getting caught up in the percentages and those same preferences ultimately determine what is best or cheapest .....good luck to all

mattzen

So my question is....at the current lease special on a standard MT with no options....what is the actual price of the car? should i negotiate the price of the car first and then ask about the lease? thanks in advance?

dsmdriver

iTrader: (3)

Yes, negotiate your best price first and then work out the lease. The $2K is off whatever price you negotiated with your dealer. You can use it on any RX8 with any options. Don't let them do the monthly payments trick and hide the actual purchase price.

I actually had a guy try and charge me *over* MSRP last weekend with the lease payments ploy.

mattzen

thanks dsmdriver. it's what i'm doing but still curious about what the actual price of the car would be given the lease special.... anyone?