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  #37  
Old 03-08-2013, 07:00 PM
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Re: 2014 Overland ordered, look at this money factor

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Originally Posted by SW03ES View Post
I don't think he's trying to screw you over, but he IS wrong.



Lets think about this here. If you lease it and put nothing down, your payment would be $668.62.

If you financed at 72 months @ 1.99% with nothing down your payments would be $727.54

So leasing only saves you $58.92 per month.

Bear in mind that Ally charges you a fee if you buy out the lease, I want to say its like $2,000. Ally is the only lender that charges such a fee. So, your buy option is not $26.091, its really $28,091.

The total of your lease payments over 3 years is $24,070.32.

if you buy the car after the lease, the payment goes up to $798.36. (total of $28,740 over 3 years)

If you add the cost of leasing the car to buying the car afterwards, total cost to purchase is $52,811.28.

Had you simply bought the car from the get go your total cost to own would be $52,382.88

So leasing and buying here costs you about $500 more, BUT some states will make you pay sales tax and registration on the car again when you buy out the lease, so that makes it worse.

Bear in mind though, had there not been that $2k Ally fee, you would have actually come out ahead leasing and then buying, thats pretty rare and because of your incredible money factor.

Hope that helps!
Thanks for all of that. So the difference from six years from now is $500, lol. I was really hoping one way would have destroyed the other.
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  #38  
Old 03-08-2013, 08:10 PM
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Re: 2014 Overland ordered, look at this money factor

I leased my Patriot in 2011. This time around, when I bought my WK2 a couple of weeks ago, I financed instead. I was lucky enough to get out of there with a good deal that ended my lease early. I don't like being left without any assets at the end of the lease. And yes, the down payment thing too. If you do lease, don't put a payment down.
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  #39  
Old 03-08-2013, 08:18 PM
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Re: 2014 Overland ordered, look at this money factor

I haven't worked the numbers but a lease with a low residual can be a great deal if you plan to purchase it. This is dependent on 2 other factors: the money factor on the lease (which, in this case, is great) and the negotiated selling price. You could do better on that front. Also make sure that the discounts are counted as cap cost reductions and not MSRP reductions. This is *very* important.

Finally, while interest rates today are dirt cheap, they may not be so low in 3 years. Keep that in mind.
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Old 03-08-2013, 08:25 PM
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Re: 2014 Overland ordered, look at this money factor

Quote:
Originally Posted by SW03ES View Post
I don't think he's trying to screw you over, but he IS wrong.



Lets think about this here. If you lease it and put nothing down, your payment would be $668.62.

If you financed at 72 months @ 1.99% with nothing down your payments would be $727.54

So leasing only saves you $58.92 per month.

Bear in mind that Ally charges you a fee if you buy out the lease, I want to say its like $2,000. Ally is the only lender that charges such a fee. So, your buy option is not $26.091, its really $28,091.

The total of your lease payments over 3 years is $24,070.32.

if you buy the car after the lease, the payment goes up to $798.36. (total of $28,740 over 3 years)

If you add the cost of leasing the car to buying the car afterwards, total cost to purchase is $52,811.28.

Had you simply bought the car from the get go your total cost to own would be $52,382.88

So leasing and buying here costs you about $500 more, BUT some states will make you pay sales tax and registration on the car again when you buy out the lease, so that makes it worse.

Bear in mind though, had there not been that $2k Ally fee, you would have actually come out ahead leasing and then buying, thats pretty rare and because of your incredible money factor.

Hope that helps!
This is a great post and all true. Keep in mind that if you lease, and after 3 years you decide you want out, you can simply wash your hands of it and not worry about it's resale value. So for $500 you've bought an option essentially.
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  #41  
Old 03-08-2013, 09:40 PM
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I didn't read every post so not sure if this has been mentioned. I leased a car once, years ago. At that time, I was required to carry more insurance - higher levels of liability - because it was leased. I'm not sure if that still holds true, but with the numbers being so close higher premiums could tilt the decision..
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  #42  
Old 03-08-2013, 11:18 PM
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Re: 2014 Overland ordered, look at this money factor

Quote:
Originally Posted by jerkylips View Post
I didn't read every post so not sure if this has been mentioned. I leased a car once, years ago. At that time, I was required to carry more insurance - higher levels of liability - because it was leased. I'm not sure if that still holds true, but with the numbers being so close higher premiums could tilt the decision..
Thats true only if you only carry state minimums. I carry better insurance coverage than that anyways.

Quote:
Originally Posted by torifile
I haven't worked the numbers but a lease with a low residual can be a great deal if you plan to purchase it. This is dependent on 2 other factors: the money factor on the lease (which, in this case, is great) and the negotiated selling price. You could do better on that front. Also make sure that the discounts are counted as cap cost reductions and not MSRP reductions. This is *very* important.
Very true, and you can see how if it weren't for the Ally lease buyout fee he would have been ahead in this lease because of the low money factor.

I have a colleague who, like me, can write a vehicle off for business. What she does is lease a car with the lowest residual possible for 3 years, she wants the payment to be huge and the buyout to be very low. She then gets the maximum tax benefit in the lease payment, then buys it at the end for way less than the market value.

Quote:
Originally Posted by satori
This is a great post and all true. Keep in mind that if you lease, and after 3 years you decide you want out, you can simply wash your hands of it and not worry about it's resale value. So for $500 you've bought an option essentially.
Good way of looking at it. As another poster said though, the unknown quantity here are interest rates, what will rates be like in 3 years? We don't know.
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  #43  
Old 03-11-2013, 12:03 AM
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Re: 2014 Overland ordered, look at this money factor

Quote:
Originally Posted by jerkylips View Post
I didn't read every post so not sure if this has been mentioned. I leased a car once, years ago. At that time, I was required to carry more insurance - higher levels of liability - because it was leased. I'm not sure if that still holds true, but with the numbers being so close higher premiums could tilt the decision..
As mentioned before, I'd wonder if it was previously below the state limit too, however I'm pretty sure insurance companies won't write policies that are below the state-mandated liability prescriptions. I do know that lessors will ask you to lower your deductibles if they feel they are unreasonably high and you wouldn't be able to pay it in the event of a loss. Liability limits really shouldn't bother the lessor like first-party coverages.
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