amysmojo

Has anyone here leased their Rx-8? I am wondering if its really any better than just buying. I purchased a new Jetta 2 & 1/2 years ago...& now I am wanting to move on! I am worried if I buy the Rx-8 I will just want to move on again in another 2 & 1/2 years. What do you guys think??? I hear leasing can really screw you over, but...I havent actually heard feed back from peopele who have leased their cars. If its going to lower my monthly payments by $5 bucks then...screw it I'll just buy the 8, but....I need some feed back before I can decide!

Let me know, thanks! :D

Cyclonus

You sound like an excellent candidate for leasing. Leasing will definitely lower your monthly payment... at least $120 a month on an RX-8.

Leasing will turn out to be more expensive in the long run if you're the type of person who likes to drive a car for a long time, and if you're planning to buy the car out at the end of the lease anyway.

But if you tend to get tired of cars and want something new every few years, AND if you don't put a huge number of miles per year on a car, then leasing is an excellent option. It will actually save you money as compared to buying and selling a car every 3 - 4 years. Definitely pursue the leasing option.

amysmojo

thanks Cyclonus!! that answers a lot of my questions Also...I don't put too many miles on my car. I just reached the 20k mark last week.....& I've been driving my car for 2 & 1/2 years lol So...thats not so bad huh? I'll have to check into this leasing thing further....If I want to put dress up my car w/ after market stuff then...maybe leasing isnt what I want?? hmmm

Zeltar

Leasing is a great option for dealers and finance companies. It is not a good option for the consumer. It may appear that you have cheaper payments, but in the end, you take on significant risk, at your expense.

Look at the leasing fundamentals. The finance company is going to hand over to the dealer 100 percent of the sales cost of the car. In order for the finance company to do this, they are going to charge you interest on that full 100 percent. Then, in order for you to have lower monthly payments, the principal you pay will be the difference between the sales price and the residual value (divided by the total months in the lease). The residual value is based on the expected value of the car at the end of your lease.

In reality, this means you are strapped with all the costs of a full loan without the benefit of owning anything. That difference that you save each month in the lease is costing you at trade in time. Because you pay 100 percent of the interest charges in the lease, the remaining asset you would own under a purchase is equivalent putting money in the bank.

Leasing will be a viable option for you under certain conditions, provided events in your life do not change these conditions. Conditions such as you will not experience any family changes that may make ownership of this particular car not feasible; no job changes that may impact your ability to stay within mile limitations; no financial changes that may impact your ability to maintain upkeep on the vehicle; and you are absolutely positive you will give the car up at the end of the lease. You may be able to rationalize these conditions before entering the lease, but trust me, things change over 2, 3, or 5 years. The chances of these conditions happening are high.

Example (Worst case):
Kids moved out of the house, time to trade the family car in for a lease on a Mustang. Whoops! Kid had baby, but no way to care for it. You end up with child. Your Mustang will not even hold a stroller. Your $24,000 Mustang with a great lease payment of $330 a month over 5 years, just cost you $9,000 dollars with just 3500 miles on it at 8 months old. Yes, you got more than 48% residual, but the new Mustangs just came in, and well last-years models are being sold at extreme discounts. You have a used car, buddy. Real cost, $1125 per month, or $2.57 per mile (not including insurance and fuel). This is a true story. But, you can be single and end up in a similar situation. Just try putting that stroller in the RX-8.

Another Example (Common):
Let's say you leased a $30,000 RX-8 with no money down for 5 years. And, let's say the residual value was $14,000 at the term. The lease payment should be about $360. Note, I am assuming the lease amount includes your state tax and forecasted license fees (which leases bundle into the price). So, you just spent $21,600 over 5 years. Assuming no damage to the car, and you get the residual at termination, you either walk away or have no down for your next car. But, often what happens is you do not want to get rid of your car. After all, you can buy this car you know for $14,000 or you can start over with no down on a new car, or you can try and buy an unknown used car for the $14,000. Keeping your car sounds good, so now you finance the $14,000 for another 5 years. This time, it's a purchase, so you are paying 100% of finance charges and principal over the life of the loan. You pay $264 per month, or a total of $15,852. Add this to the $21,600 previously paid, and over 10 years, you now paid $37,452. If you had purchased the car in the beginning, you would have paid $33,968 over 5 years. The lease decision cost you $3,484. This was based on 5% interest.

Good luck with your decision. You know what mine would be.

amysmojo

Thanks Zeltar, yea my friends & family keep telling me that leasing is not the best idea. I will most likely buy!!

Golfer

Since I put on only 10K miles per year and I like to trade cars every 4 years or so I go the lease route. As far as payments go its a function of the purchase price of teh vehicle (yes the dealer will discount to the leasing company), the present interest rate, term of the lease and residual value (a percentage of the list price not purchase price).

The plus side for me is I can easily walk away from the car in 4 years and get into something new.

Another option is to do a baloon payment...very similar mohtly payments as a lease but it is titles in your name so if you decide to buy the vehicle at the end of the term you dont have to pay sales tax on it again. The balloon amount is a residual factor based on list price and mileage. Plus you can walk away at the end of the term similar to a lease

MMGDC

I've done several leases over the years but went ahead and bought my RX-8. As another poster said, leases can make sense, but only in certain circumstances. If you're the type of person who gets tired of cars every few years, has a pretty good idea of how many miles you're going to put on the car, don't plan on making any modifications to the car, and take good care of your car (lenders will often beat you up on wear and tear at the end of your lease), then leasing is probably a better option for you.

Unexpected events can really mess up a lease as well. For example, on my last lease, I wound up going from a 35 mile two way daily commute to a 110 mile commute. In 6 months, I went from being slightly under my alloted miles to owing over $1000 when I returned the car, just on excess mileage alone.

FYI, the difference between a lease and a purchase on the RX-8 came to around $90 a month for me. Made the decision a no-brainer, but then, I put a LOT of miles on my cars.

amysmojo

Hmmm, it sounds like I will want to go ahead & purchase then. I will want to do some things to the 8 & I like to DRIVE my cars, I dont want to drive it in the slow lane & swerve around pot holes lol jk....I just dont want be dinged for wear & tear @ the end of the lease. I have a possible buyer for my car who needs it THIS week, as long as that all works out then I will be in my new Rx-8 by next week! The dealer has the exact one I want right now at this very moment! ahhH! I hope they dont sell it

Zeltar

What ever you do, do not let the dealer know this. It's better if they think you're comparison shopping. If you're ordering your car, that would be another story - then it's okay to want the exact one as the dealer knows you have the patience to wait it out.

amysmojo

okay! I wont giev it away! I am kinda looking for who has the best deal anyway, if they dont have it they will get it!!! So...I shouldnt Rush, Im just excited! thanks for the tip!

eccles

Check out the large amounts of useful information, calculators, etc, at http://www.leaseguide.com/ before you make a decision.

DViOuS

Actually I've leased the RX8 for 3 year, mainly for a few reasons.
1. Lower payments
2. Reliability of the new Renesis Rotary is still unknown
3. Known Residual value of the car at the end (kinda ties in with pt 2)
4. Manufacturers standard warranttee runs out in 4yrs, if things break, i dont want to go spending $xxx to go fix them - tho this is not confirmed will be required, just personally I dont want to deal with this if it comes up. I just want to zoom-zoom.

Point 2 and 3 is something you should really look at since the RX-8 is a new car and hasnt proven itself reliably, especially some of the 1st batches. So I would be more comfortable knowing that in the end Mazda will take the car back with a certain residual value (58% - 56% i recall for 3yr lease). Worst thing that can happen is that the engine is a dud after a few years with people finding problems with it, your residual values is gonna plummet and you may take a bigger lost if you try to sell it, especially if nobody wants to buy the car - hopefully not but yeah maybe, stranger things have happened.

Also, an advantage I see with leasing is, in the end, if your cars KBB/market value is higher than the agreed residual value you set with your dealer, buy the car back and sell it on the open market and get some equity back or keep it. Eitherway, lease is like a little insurance for knowing what your car is "atleast" worth at the end of the 3 yrs.

Final plus (which is minor) is you get free gap coverage with lease - what this means is if you total your car, or someone does, or gets stolen, mazda will not hunt you down for the difference you owe them and what the insurance company is willing to pay for it - tho some people say this cost is already included in the lease cost, which it is. But it saves me extra $x/mth on my insurance bill.

Also, last note on mazda gonna get you on fees for wear and tear, I doubt that, assessment is done by independ valuators and you get this neat guide from Mazda 2 weeks after you get your lease telling you what is "normal" and what is "excessive" wear. They even give you a clear oval-like plastic you can use to assess damages yourself. And I'd have to say its pretty reasonable, i think its like 2" x 1" for dents/dings and a maximum of 3 dings/dents per panel and a 1/8th of the tread remainin on the tires.

Anyways, check out
http://www.carbuyingtips.com/lease.htm
before leasing, they tell you all the scams and tricks and jargon they put in leases.

Hope this helps.

Speed_racer

Anyone out there lease there 8? If so, could you post the lease terms (ie. residual, APR etc).

Thanks a lot.

eccles

Several of us have previously done so in an earlier thread. The search function is your friend.

boothguy

Zeltar's excellent post left out one scenario that speaks strongly in favor of leasing: a business-related lease. If you're a salesperson who needs a car to cover your territory, for example, you can lease the car personally and the miles can be a tax deduction. Or the company can lease the car and you as an employee get to drive it.

The latter is my situation and is frankly one of the few executive perks that the IRS hasn't stepped in and mucked-up. Yet.

Please note that I am not a tax expert. I build trade show exhibits. Talk to your own tax advisor before embarking on any tax-saving program (disclaimer mode off).

i3man

Actually the IRS has stepped-in and mucked up but most guys just don't know it and do it wrong...until they get caught. Section 280(F) of the Internal Revenue Code has a "lease inclusion amount" that is an add back to income meaning you pick up income based on the value of the vehicle if you're a business.

boothguy

Thanks for adding the detail info I left out, i3man... Quite right about he added income side, and my accountant does add it every April.

P'raps I should have made my point more clearly that leasing is a more clear-cut advantage in a business situation than it is for an individual.

i3man

But from a business standpoint it still makes a lot of sense to lease. Even with the lease inclusion you still come out ahead.

Now if you want to talk about loopholes, how about the SUV loophole in the tax law? Any vehicle weighing over 6000 lbs escapes the definition of a passenger auto and can be depreciated like regular equipment.

If you buy a $60,000 Hummer you can expense the whole darn caboodle in one crack....WOOT!!!

Congress be closing up this loophole real soon me thinks.

Cyclonus

Sorry man, but your analysis of leasing just isn't correct. Based on what you're saying, it certainly sounds like leasing is not a good option for you... but that doesn't mean the same is true for other people in different circumstances. It sounds like the whole angle you're coming from here is that it's more expensive to buy out a car at the end of a lease than it is to just purchase it. Which is indeed true. If you know right up front that you want to own a vehicle for a great many years, just buy it... leasing and then buying out the lease doesn't make any sense in that case. However, if you want a potential escape route after 3 - 4 years, then leasing gives you a tailor-made route, whereas financing does not.

Indeed, major changes in lifestyle or miles driven per year can also screw up a lease, so if you think that's a realistic possibility, don't lease. However, if you do get tired of cars every few years, then you will definitely make life easier and more straightforward for yourself by taking out a 3 - 4 year lease, carrying it out to term, then getting another lease afterwards, as opposed to taking out a 5 - 6 year loan and constantly trying to get out of it early, because you ALWAYS get hosed when you try to get out of a loan early. For someone who wants a new car every few years, there is simply no viable case for constantly taking out a 5 - 6 year loan and trying to get out early.

Also, a lot of people make the argument that you are "left with nothing" at the end of a lease. That's not really looking at the big picture ... it seems to me that you're left with quite a lot if you spent $420 a month for 48 months as opposed to spending $560 a month for 60 months. Put that money in the bank every month, and you've saved a good deal of money.

S3/P3/E2

Yes, but that's only true if #1 - you got the lease in the first place to actually save money and #2 - if you actually saved/invested that money. Often times people looking at doing that simply have more liquid cash available now and spend without considering putting it away. It also only affects those that have that money in the first place. If someone is looking to lease a more expensive car because they can't afford to buy it, when the lease ends they really don't have anything to show for it. I've got almost a year and half left on my present loan but am going to come out $3000 on top for a trade-in down payment. Had I leased solely because I couldn't have afforded a loan payment I'd have nothing in return.

Cyclonus, you are most definitely correct though - if you're the type to run through a car every few years and don't mind always having a payment (albeit lower), then leasing may be what you're looking for. Otherwise, if you intend to have the car for an extended period of time (and beyond the lease/loan), then the loan would do you better.

boothguy

You're right about the "big vehicle" loophole, i3man. My accountant was tickled pink when I bought the company a new pickup this year -- I think in part because he doesn't think that exemption will last much longer either.

For clarification, I believe the ruling is for GVWR (gross vehicle weight rating), meaning the weight of the vehicle fully laden, over 6,000#. Buy one of those, new or used, and the business can take a straight one-year deduction for the whole amount, rather than having to amortize it over five years - even if you paid cash.

Imagine the effect on new car sales if they broadened that rule to passenger vehicles...

starbucks

Just wondering if anyone knows if you will need to replace the tires just before the lease is up?

I know it depends on driving style, but regardless what the stock tires rated for, would you expect them to last, say 42k with 1/8" of tread left?

It would be bad if you had to spring for $800+ for tires just before the lease ended.

DViOuS

There is no way to squeeze 42K miles outta the stock OEM summer tires... You would most likely replace them between 12-20K mi.

Read the reviews for the stock tires (Potenza RE040) at
http://www.tirerack.com/survey/Surve...ommentStatus=P

starbucks

Ouch!

Thanks for the info, Dvious.

CatchMe

No disrespect, but Zeltars numbers are a little off.
For one, I have never seen a lease run more than 48 months.
2, the residual on the 8 after 36 months is 14000, not after 60 months.
Granted, if you plan to buy the car at the end anyways, you might just as well buy it, but , generally, if you cant afford to make payments high enough on a finance to keep up with, or surpass depreciation, you might as well lease, and have the option to walk away after 3 years.
Heres my scenario. I want to drive a 31000 car. I have to finance for at least 66 months to get the payment even remotlely close to where I want to be. Now, I buy the car, and 3 years down the road, I want to get a different car, I cant because without a huge amount down at the time of purchase, I owe more than its worth.
Now, I go lease. My payment is 100 dollars less than the finance would have been on 66 months, AND, I can now walk away in 36 months, without having to worry about negative equity.
Frankly, leasing allows me to drive a car I cant really afford...Just my .02