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  #13  
Old 11-05-2010, 01:20 PM
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Re: Buy vs Lease

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Originally Posted by MSCA View Post
Leasing doesn't make any sense for me. I'm a low-mileage driver because I work three miles from my house. I only drive about 7000 miles per year. Plus I like to keep my vehicles for longer than a typical 2 or 3 year lease. I pay cash for my cars and keep them for 8 to 10 years. That's much cheaper than leasing over and over again.
My circumstances are very similar. I don't drive to work and on average drive 5,000 miles per year. I also kept my previous car for 10 years (and would keep it more if it weren't totaled in an accident).

Is there a "math" that shows what is the most optimal duration to keep the car in such circumstances? Obviously the longer you keep it the less is your "annual cost" but one needs to keep in mind that over the time repairs will be needed more often and it will cost less as a trade-in. I think it is common knowledge (correct me if I am wrong) that car loses most of its value in 2 years but other than that I haven't seen any information.
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  #14  
Old 11-05-2010, 05:37 PM
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Re: Buy vs Lease

I have 2 months left on my 2007 WK lease and was shopping for 2011 WK2's and the lease deals just aren't what they used to be. My payment would be higher to lease right now than to buy.

To the people that say leasing is never better, I just did a hindsight comparison of buying vs leasing on my 2007 and I think I saved a couple thousand by leasing.

My vehicle:
2007 Grand Cherokee Laredo X w/ 4.7 and Nav
MSRP $35,500
Negotiated Price $30,000

My lease:
$0 down, $450/mo for 39 months, 17k miles per year
Total cost to drive vehicle for 39 months = $17,550

Hypothetical if I had purchased:
$0 down, Borrow $30,000 @ 5% APR for 39 months = $893/mo payment
$893 x 39 = $34,827
Total cost to drive vehicle for 39 months = $34,827 less current trade-in value of $15,000 = $19,827

$19,827 less $17,550 = Savings of $2,277
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  #15  
Old 11-05-2010, 05:50 PM
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Re: Buy vs Lease

Even if I drove 12K per year I wouldn't lease. I only leased one car and I will never do it again. Your paying tons of money for a car that you don't truly own. With a buy, you can drive unlimited miles, don't have to worry about damage (to a point) don't have to worry about the "wear and tear" surcharges.
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  #16  
Old 11-05-2010, 06:27 PM
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Re: Buy vs Lease

Sometimes a lease works out, I just ended my 39 month lease on a 2008 JGC Limited . My 08 lease was MSRP of $44,300 neog down to $40,700 $3000 rebate and $3000 in trade. Amount leased around $35,000 with nothing out of pocket, $447 a month for 39 month, residual was $19,600. The dealer bought my 08 JGC at the end of the lease. I was given $25000 for it, $19,600 went to to Chrysler Financial to pay off residual lease and $5,400 went toward the lease of my new Overland.MSRP on my new Overland was $44,000 and change. I Used Treadlighty.com to get invoice -%1 and a $1500 in loyalty rebates and the $5400 trade toward the lease. Again I leased for around $35,000 payment at $490 a month for 36 months, residual will $21,200 when done. My payments are $40 higher, (3 months shorter lease and a higher interest rate now then in 2008), but look at what we are getting compared to a 2008 model so I am happy to pay the extra $40. I do like to drive a new car every few years and this is my second lease.I will continue to lease if I get deals like this. Also the dealer now has my trade on their lot asking $29,999
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Old 11-06-2010, 08:40 PM
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Re: Buy vs Lease

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Originally Posted by JoeSchmoe007 View Post
My circumstances are very similar. I don't drive to work and on average drive 5,000 miles per year. I also kept my previous car for 10 years (and would keep it more if it weren't totaled in an accident).

Is there a "math" that shows what is the most optimal duration to keep the car in such circumstances? Obviously the longer you keep it the less is your "annual cost" but one needs to keep in mind that over the time repairs will be needed more often and it will cost less as a trade-in. I think it is common knowledge (correct me if I am wrong) that car loses most of its value in 2 years but other than that I haven't seen any information.
Think about it this way....if you drive 5,000 miles per year, you're looking at putting 50,000 miles on your vehicle after 10 years. If you buy a new vehicle after ten years, I really doubt you'll have to worry about any expensive repairs. My current vehicle (Toyota 4Runner) is now 7 years old and has been virtually trouble-free. I'm quite sure I can get another 3 years out of it without worrying about any repairs. I really like the WK2, so I might just buy a 2012 if the reliability turns out to be good.

But anyway, if you think about it like that, you're definitely better off keeping your low-mileage vehicle for at least 10 years. Leasing is a terrible deal for someone like me. It's true that most vehicles depreciate the most in the first 2 or 3 years. After that, the rate of depreciation drops off considerably.
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Old 11-07-2010, 01:32 AM
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Re: Buy vs Lease

Quote:
Originally Posted by granto3k View Post
I have 2 months left on my 2007 WK lease and was shopping for 2011 WK2's and the lease deals just aren't what they used to be. My payment would be higher to lease right now than to buy.

To the people that say leasing is never better, I just did a hindsight comparison of buying vs leasing on my 2007 and I think I saved a couple thousand by leasing.

My vehicle:
2007 Grand Cherokee Laredo X w/ 4.7 and Nav
MSRP $35,500
Negotiated Price $30,000

My lease:
$0 down, $450/mo for 39 months, 17k miles per year
Total cost to drive vehicle for 39 months = $17,550

Hypothetical if I had purchased:
$0 down, Borrow $30,000 @ 5% APR for 39 months = $893/mo payment
$893 x 39 = $34,827
Total cost to drive vehicle for 39 months = $34,827 less current trade-in value of $15,000 = $19,827

$19,827 less $17,550 = Savings of $2,277
My math shows $835/mo payment if financing $30,000 @ 5% for 39mo. After 39mo you would OWN the vehicle for $32,565 (plus whatever sales tax you have to pay).

When you lease you are only paying for the depreciated use (calculated depreciation) of the vehicle value, not the whole value of the vehicle; that's why the lease payment is less but then you own nothing afterward. With a $15,000 trade-in value you are about even in total paid out: $17,550 in lease payments vs $17,565 when subtracting the $15,000 trade value from the $32,565 paid to purchase. There is no significant savings other than maybe feeling better by keeping monthly payments low and getting new vehicles every 3yrs.
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Old 11-07-2010, 01:37 AM
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Re: Buy vs Lease

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Originally Posted by Bmwister View Post
[B]There is no significant savings other than maybe feeling better by keeping monthly payments low and getting new vehicles every 3yrs.
That right there, ladies and gentlemen ARE THE ONLY ADVANTAGES OF LEASING. Period.

.... assuming you don't go over miles. I drive 30k/yr, so um, yeah, that's a guarantee, NOT a maybe.
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  #20  
Old 11-07-2010, 06:26 AM
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Re: Buy vs Lease

Leasing is fine and can be to your advantage IF you only keep vehicles 2-3 years. If you like to keep your vehicles longer, it will not work for you because generally the first 2-3 years depending on the length of your financing, you are paying for the interest rate and the depreciation value anyways. So if you financed and are going to sell a car after 2-3 years, you might not be ahead by buying. So the real answer is, it DEPENDS...
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