biggd29

buying in nearly almost always better than leasing. but, people can do what ever they want with there money. but it does get anoying when people that lease make it sound like a smart financial idea. they go on about cars being a "depreciable asset". that is just something dumb people say to make themselves sound smart.
my question to them would be this, do you rent or buy your tv, furniture, clothes???

knowledge1213

excellent supporting argument

dean2900

Knowledge,

I peronsally have no debt and have xx amount of money allocated for fun, enjoyment, you know those things that make life better. I could easily get enough credit to buy a 80,000 +car but common sense overrides emotion at a certain threshhold
However, if you seem not to see anyone elses point of view. You are telling everyone that leasing is bad.

I am trying to respect your point of view but it appears you cannot respect anyone elses.

Yes, some people overextend themselves and lease cars to keep their payments down sometimes.

However, some people carefully consider both options and leasing makes more sense in certain cirumstances.

Dean

dean2900

One other point. I was reviewing my numbers. My car retails for 34k. I got them down a great deal, I will be paying approximately 10,000 for the lease over the next thrIee yearst

Lets say I purchased the car for 29.5 and financed it for 48 months. I would have paid off the car in 4 years. The value of the RX-8 has dropped signifcantly in the last 6 months. In 4 years, the car would need to be worth 19k for me to break even on it. I am sorry but I think the car with be worth 15k in 4 years and that is speculation on my part . This means I will be paying more for the car by buying than leasing it. Not to mention that it is listed as my company car which I do decut the payments from.

You just cant say buying is always better than leasing.

knowledge1213

but u will going right back into payments. you guys are missing the point. with that paid for 15k-18k car if u save 4 more yrs with that note....u can have 30k in cash..........i am against payments period. leasing or buying..............but leasing is worst.......i respect opinion just dont agree one bit..........the power is in saving and investing......not payments.....

knowledge1213

leasing is fine if u wanna drive a new car every 3 yrs............and u can stay under the miles.........is wiser than buying........because if u trade in that short time and paid too much and did not put enough money down...u would be upside down........if u read all the posts..........u will see i have said this earlier.............if u want debt be my guest..........

VikingDJ

Very good point. In the case of the rx8, leasing may actually be a good thing. For those who plan on keeping there car long after warranty wears off, naturally leasing an rx8 would be utterly stupid. If you drive 12k miles or less per year, you don't having the buredn of owning a car, and you trade your car in every 3-4 years for a new one, leasing isn't a bad choice at all. I for one am getting a reality check on the value of rx8. It's dropping fast. I am still waiting for subaru to get back to me on trade in. KBB says $27500. They will likely offer me 25k for it. Msrp was 36k, car is 6 months old with only 3100 miles on it, and in new condition. You won't see that with other cars like the s2000, 350z, ect. I do not want to imagine how bad it's going to get when an improved high hp rx8 comes out. If there's ever a good time to lease a car, it's now and it's the rx8. If you bought your rx8 for enjoyment for many years to come, and plan on driving car straight to it's buriel, then you have no worries about the current depreciation of rx8. For dean2900, leasing was about the smartest thing to do. This is why I am tyring to get out now, trade it in for an sti, and cut my losses before they get worse, then wait patiently for the better rx8 to come out. If I didn't care about power, naturally this wouldn't even be a concern. For anyone who is planning to buy an rx8 and trade it in in 4 years, I strongly suggest you check out the leasing deals, because it can ultimately avoid the burden of the rapid declining value of rx8.

Outlaws eXtreme

I didn't lease is because I can afford the car outright. If a new car comes out, and I want it, I'll just buy that car too. Why lease it? It's basically renting someone else's car for 3+ years... then returning it. I'd rather pay a bit more and just keep the darn thing after 3+ years.

Besides, if you buy a car thinking it's an Investment, that's your problem right there. Another thing to note is the fact that you are enjoying the car while you're driving it... how much of a value do you put on that?

15k in 4 years... a 50% drop in value of a car in 4 years with no accidents? I really hope you don't invest in the stock market without some sort of guidance.

And dean2900... you said you were going to pay approx. 10k for the lease over the next three years... what was your down on it? 5k? If you didn't have to put a down, that's about 250-270 each month payment depending on your rate. On top of that, it's a 34k car... which I would assume is the GT Navigation package... so that is obviously BS right there if you didn't have to put a really high down payment to offset the 10k leftover.

heh8me

Ya got me. Clothing depreciates over time. In fact, for the most part, it's worth nothing (in terms of market value) once you take it home.

On the other hand, my jeans cost me $25, while my car cost more than $25,000.

I leased this car instead of buying it because I don't know what these things are going to be worth after 3 years. I don't know if the model will succeed or if it will be a lemon. If I love the car, I'll buy it off the lease for $17.8k. If that happens, I'll have spent $13k on lease payments, bringing the total cost of the car to around $31k. The invoice on the car is $30.3k. So, I make out OK if I decide to buy it. And if I buy it, it will be with cash -- unless banks are still giving away free money. So, I will have bought the car virtually interest-free without having to dish out the cash up front. If I don't like the car after three years, I can walk away from it without having to worry about what I can get for it if it depreciates significantly. Likewise if it depreciates significantly, and I want to buy it, I can cut a deal with my bank for a better buyout than the residual -- because the bank will want to reduce its exposure. Either way, the choice is mine.

heh8me

And I paid $0 out of pocket when I got my lease.

By the way, while we're talking about financial common sense, how many of you paid the extra grand or so beyond the price of the touring package for the grand touring packages leather seats?

We pay the money because it's fun to drive these cars. If I want to drive something different in a few years, I don't want to have to worry about my trade-in. I love my car, but I think the market value of these things in 3 years will be a lot less than the lease residuals. The 2004's will always have the stigma of being first year cars, and they will ultimately have less power than subsequent models.

heh8me

FYI: The capital cost of my lease was $3000 below invoice because of dealer incentives. The best deal I was able to negotiate on a purchase was $500 below invoice.

So, leasing got a big head start.

VikingDJ

Of course buying a car is not an investment. However, for people who trade their cars in every 4 years, which there are MANY MANY people who do, it's smart to research the depreciation of a car if you care about how much you lose. I was too niave to realize that the edmunds chart showing the rx8 to hold more of it's value was not accurate, because car wasn't out long enough. I thought that buying car outright was a smart move because I'd still have a decent value when trading car in in 4 years. it was afterall rated one of the best in resale value. My how things have changed FAST. Now suddenly I see the car dropping like a mitsubishi eclipse, and I'm gonna end up paying a ton more for a new car in four years. I guess this is the residual effect of getting these at invoice or under invoice deals, and a massively produced first year car. This would not be a problem if the rx8 could compete performance wise with it's competitors, and they didn't overproduce the car to a point where there was no demand for it. This car is getting me by until a much better rx8 comes out. Trading it in now may be better if the trend of mass production continues by mazda, and the car gets better. The STI will be an easy car to sell in three years rather then trade it in. It's a very limited production car, so people will be hunting for it in the used car market. Maybe the rx8 will level off and have a demand, but I find it very unlikely. I guessit's bittersweet. It's nice to see Mazda going all out with the rotary, trying to push it into a common market and make it popular. At same time, it's sad to see what was once a rare rx series turned into a dime a dozen car that will plummet in demand and value.

cortc

The solution is make lots of money save some and have fun with the rest... Don't worry about what the RX8 will be worth in a few years drive it and enjoy it...

Outlaws eXtreme

Ok you are saying you are getting your car worth 30.3k invoice for lease at about 13k with $0 down. Later on, after the 3 years you would need to only pay 17.8k and buy it off the lease. Making the total 31k.

How you managed that is beyond me. Did you check your interest % on this car regarding your payment? You sure it's 17.8k, to just pay off the rest of the car AFTER the 3 year lease? If ALL Leases were like this, I'm sure EVERYONE would just lease their car.

Total Value invoice : 30.3k
Would have made payments after 3 years on Lease : 13k
Would only have to pay after 3 years Lease remainder to own car : 17.8k

Total at the END of the 3 years IF you choose to buy : Only 30.8k? Uhhh..

Outlaws eXtreme

"MANY MANY people...." You sure about this? The only people I've known to lease are... 1) People can't afford the car, so they lease. 2) People who will drive the car very little... more of a weekend or joy ride car.

If you want the "Rare" STi like you said, come to California, here at the local dealership there are 22 on the lot, all colors, and it's ranging from 29k-33k sticker price. Or you could buy used ones for 24-26k depending on the mileage. For a car supposedly only suppose to have a 300 Per month limit, my dealership here has 22 on the lot. 14 new ones.

If you were to get a JDM 2002 STi it would be about 15k-17k.

I suppose if you are worried about how much you would want to sell the car back after 3-4 years... you can go with the limited 2004 STi.

heh8me

I didn't include tax on either the lease or purchase to simplify things. Aside from that, you have my lease. The remainder of the numbers are exactly correct per the terms of my lease agreement.

Outlaw, do you understand what you are paying on a lease? You are paying the difference between the sales price of the car and the estimated value of the end of the lease period or residual. In other words, you are paying for the car's projected depreciation over ther term of the lease plus a finance charge based on a money factor (variation of interest rate). The narrower the spread between sales price and residual, the lower the lease payment because you are showing less depreciation.

Why is my lease payment so low? Reasonable money factor, great lease incentive and a decent residual. The residual is based on a percent of the MSRP, not the sales price. In my case the residual on an RX-8 with GT and navy is $17,800, based off of a MSRP of $32,800. However, the sales price of my leased car is $3000 below invoice. I negotiated a sales price of $500 below invoice. In addition, Mazda had another $2500 in incentives, bringing my lease price to $3000 below. As a result, my sales price (capital cost) was in the mid-$27k area, leaving me less than $10,000 in car to depreciate over the 36 month period. This incentive was only available for leases, not purchases. The numbers check out.

I am a 44-year-old IT pro/financial analyst who brokers car deals part time, and I know how to read and negotiate a lease.

One reason more people don't get great lease deals is that don't understand where a lease payment comes from. As a result, the lease process becomes a black box and they take what they think is a good deal from the salesman. On my last lease (an Audi A6), the sales manager came in because I was giving my salesman too much resistence on price. So, the manager comes in and charitably offers to knock another $5/month off the lease payment. I looked at my salesman and asked him if he knew how to calculate a lease price with a pen and a calculator. He said no, and I told him that I would show him. I showed them that their lease price was based on a sales price of 7% over invoice. I told him that I would give him 1% over invoice, and refigured the lease equation to show that the new price would knock around $80/month off of the lease payment. We settled at a payment based on 2.2% over invoice (Audi's usually go for 4-6% over invoice).

My point is not to show you how clever I am, but to say that most of you understand how to negotiate a purchase, but don't understand where the lease numbers come from. Your salesman certainly don't know where they come from. So, if you learn how to derive the number (go to edmunds.com), you can be in a better posistion to negotiate a good lease deal. If you don't take the sales price listed in the paper, why would you take the offered lease payment.

Anyway, the numbers in my previous post are correct. I was shocked when I saw what Mazda was offering, and that's why I grabbed the deal. It was too cheap not to.

heh8me

And my lease allows me 15k miles per year. So, I'm not joy riding. And I could have afforded the purchase. It was simply better for me to lease because of the incentives that were offered and the fact that I like the car, but am very concerned about what it might be worth in three years. If it holds value well and I still like it, I can buy it out for the residual amount.

heh8me

Finally, big lease incentives are frequently offered to unload excess inventory when cars aren't selling. Like the end of the model year on an over-produced car. Subaru isn't offering lease deals on the STI, VW isn't on the R32 (my second place car), and Audi sure as hell isn't on the S4 (the car I would have loved to have drived).

However, if Mazda hadn't offered this great deal, I would have bought a 2001 or 2002 S4. You know, the 2-3 year-old car that has weathered its big depreciation hit.

VikingDJ

You didn't read correctly. Many many people trade their cars in within a 4 year period. That's purchasing alone. Combine all the leases, and it makes up a massive majority of all new car owners. Ask any dealer, they will confirm it. Then again, it's common knowledge, so why try and argue it. Lots of people who just buy, put 40-60k miles on it, then don't want to do maintanence and take easy way out. Hell my entire neighborhood does it. Every 3 to 4 years they have a new car. it's the costly, yet easy way out.
As for rarity of sti, for 05 they may have produced alot due to it's success. If you compare it to the rx8, it's not even close. Here, the sti is rare for whatever reason. Each dealer only has 2 to 3 in stock. Maybe it's because they are selling well here. I don't know. The rx8 dealer I went to had over 90 rx8s in stock when I got mine. It was INSANE. Even now they still have over 50 soon to be leftover 04s that are selling below invoice. I'm sure at these current prices they are selling fast. I bet if you walk into a dealership interested in an rx8, they'll beg you not to leave.

Outlaws eXtreme

Welps Viking, you convinced yourself to get the STi... good luck on that lease, purchase or however you end up getting the car.

I'm sure the dealership here has more available simply because it is California,... Los Angeles area... Home of the Import Showoff of the nation.

heh8me, I guess I don't mind the Lease vs Purchase debate because I got my car for 28k GT Silver. For a car I knew I would be driving well over the 12k-15k per year, I went for buying the car. Besides it's only 28k + tax and license. I'll potentially look into Leasing the 2005 NSX, but most likely I'll just buy that car too. I haven't stayed under 25k per year miles on a car, so leasing wouldn't even be feasible.

VikingDJ

Yes and No. I want the sti over the rx8 until a better rx8 comes out, but it is out of my hands. I refuse to take too big of a hit. In fact my magic number on this trade is low. I got a quote of $31500 on an 05 sti with all the additional goodies. Now, the dealer needs to give me 27k on a trade in (kbb is $27500), making my total cost $4500 plus my used rx8 to get sti. Do you actually think that is happening? Unlikely, but that is my criteria, and if it doesn't meet that I walk. The sti would only be a temprary fix until mazda can make this rx8 compete with the other cars in it's class. I have a feeling they will, so I'll just wait it out, either with my current rx8, or with an sti. NO big deal to me, so if dealer bites, great, if not, I'll keep my rx8 until the improved rx8 arrives.

cortc

STIs are not selling well, after the initial boom they are dead in the water and many are for sale used... Our dealership has to give them away at this point...

heh8me

I test drove the STI and didn't like it. The ride is too unforgiving. And in terms of design, no matter how you dress it up, it's still an Impreza.

Outlaw, if you or anyone is planning on driving more than 15k per year, you should definitely buy. Depreciation and lease payments increase significantly when you go from 15k to 18k miles per year.

cortc

Actually most lease mileage limits are 10k 12k or 15k if you go over that you need to buy... The lower the mileage the better the rate, and don't go over or you will take a big hit at the end of the lease...

heh8me

You can lease for almost any term. They may not advertise it, but they can get it for you. But if you go long, you had better be prepared to pay.

Going from 12k to 15k per year added about $9/month onto the lease. Going from 15k to 18k would have added $44/month.