That is a 10 year old car, for 8k that is way to much IMO.
Am I crazy? (Car Question)
- Thread starter Mize
- Start date
That is a 10 year old car, for 8k that is way to much IMO.
Ok, panic time. We just got back from the Nissan dealer and are looking at trading in our leased Murano to lease a 08 Altima 3.5SE coupe and an 08 Versa.
Either that or we go and blow $5,000 on a used car, any input fast would be appreciated. We're supposed to go back to the Nissan dealer in an hour.
I dont get why so many people in america lease. Its a worse deal than buying no matter what..
Not if you want a new car every two years. After two years you are rarely above water on a loan unless it's a 3-year loan and, actually, a huge percent of European cars are leased - most company cars in Europe are leased.
Yes, if you plan to keep a car 5+ years it's always cheaper to buy. If you plan to keep a car only 2-3 and buy on a 5-year note, the lease is cheaper.
Personally , i think changing cars every two years is silly (and largely an american phenomenon) personally i would buy one car for each model generation (buy an car when it comes out, buy a new car once its outdated by the next surpassing model). Not only is it cheaper but if you also buy a better model than the models youd switch every 2 years you got a cooler car, and most likely still better car than what youd get if you keep replacing cars with leases. However, lets not waste any time on that part of the discussion.
The reasons why most company cars are leased is simple, it gives the company a car float thats relatively new and representable at a fixed cost and the company isn't bothered with the cost of reselling old cars, and most importantly company car leasing is a tax writeoff for businesses.
For a private person it makes no sense to lease. You LOOSE money. No matter what calculation you would like to do you loose money.
If you lease a car, you pay for the cars depreciation, plus finance costs plus leasing fees. If you buy a car and finance it with a loan, you pay for the cars depreciation + finance costs. This is obviously cheaper than leasing, as your not paying a third party.
I dont get how some people think leasing cars are a good deal financially. It never is. Your not owning the car, yet your paying for its depreciation costs + finance costs + leasing fees.
The benefits with car leasing is that it allows people to live "above" their ability because the monthly fees of leasing the car would be lower than finance costs on a car loan and that you can conviniently switch cars every 2 years.
Financially you loose, aspecially if you bother to buy a used car (like 2-3 months old, just so initial depresscion is gone, or if you buy the correct brands (Porsche depriciation is tiny).
You're entitled to your opinion, but I own and run a business and cash is king. My disposable income per month is quite high. I could easily afford at 1500/month car payment. I, however, don't want to own every car I have because 1) it's a sinking asset - every minute it's worth less and 2) I can make much better use of my cash than avoiding the slightly higher cost of a lease.
The only sensible way to buy a car is cash; deposit a car payment into an interest bearing account each month until you have enough to buy it outright then do so and continue paying into that "sinking fund" for the next car. This way you pay no interest to anyone and actually earn interest.
Anyway, let's take my Miata:
Purchase with $3k down gives $772/month at 4.99% for a total cost of $30,784 over three years. Net market value at the end is about $14,500 so that's a net asset of $16,284.
Lease with $3k down at $175/month with 23 payments = $7,025 of pocket or $3,513 per year since we're going to have to compare 2 years to 3 years. So let's make that $10,538 over 3 years with no asset at the end...EXCEPT for the $30,784 you DIDN'T spend on the purchase - that's a net of $20,246 you didn't spend on the car, right? That cash is considerably more than the $16,284 asset the buyer has WITHOUT any investment interest.
Granted there are good (subsidized) lease and bad ones, but it's all about math and whether you want to own an asset or a sinking asset.
The only sensible way to buy a car is cash; deposit a car payment into an interest bearing account each month until you have enough to buy it outright then do so and continue paying into that "sinking fund" for the next car. This way you pay no interest to anyone and actually earn interest.
Anyway, let's take my Miata:
Purchase with $3k down gives $772/month at 4.99% for a total cost of $30,784 over three years. Net market value at the end is about $14,500 so that's a net asset of $16,284.
Lease with $3k down at $175/month with 23 payments = $7,025 of pocket or $3,513 per year since we're going to have to compare 2 years to 3 years. So let's make that $10,538 over 3 years with no asset at the end...EXCEPT for the $30,784 you DIDN'T spend on the purchase - that's a net of $20,246 you didn't spend on the car, right? That cash is considerably more than the $16,284 asset the buyer has WITHOUT any investment interest.
Granted there are good (subsidized) lease and bad ones, but it's all about math and whether you want to own an asset or a sinking asset.
So can I get in on your cocaine and hookers operation?
That's crazy. Let's say you get a 0% interest loan or 0.9% or even 1.9% - that's so far below the cost of money you'd be crazy not to take it. Put that money in a frickin' bank account and pay the loan from it and you'll earn net interest!
Now if you're looking a 3.9% or higher, sure, buy it outright, but I never refuse no or absurdly low interest. It's free money. I got 0% on my Chrysler and 0% on another company car for a salesman a couple years ago. Free money.
That is fine as long as there are no origination fees and other fees tagged onto it. I suppose I should have said that. If it is below what you can put it in a CD for then it is allright.
A check, then? I consider a check cash when it comes to buying as opposed to credit.
Hell no. Not if it's your own cash. Your own argument should point you in the right direction. There are many forms of leverage, but the way to counter depreciation is deductability. Make the tax man pay it for you. Better yet, have it fully subsidised...
Amen brother.
digitalwanderer
Legend
The 02 Sentra SE-R is hail damaged.
Gonna go out with the wife tomorrow and probably just buy one. We've been hunting the net and have found a number local that are intriguing....
Gonna go out with the wife tomorrow and probably just buy one. We've been hunting the net and have found a number local that are intriguing....
This requires it be a business expense. Two of our four cars are company cars, but the other two are personal. One is paid for the other is the miata lease. Bought the A3 (company) but leased the CX-9 (company) because of the outrageously low lease payment.
about americans leasing, it makes sense as the average american car only lasts 2 years
Most american's don't lease American cars as the residuals are too low for a low lease payment.
about americans leasing, it makes sense as the average american car only lasts 2 years
Booooo!
I've been pleasantly surprised and even impressed with the build quality on my '04 Saturn Ion. Granted, it still has the cheesy typical plasticy American car interior, but it's in excellent condition despite having almost 95k *hard* miles on it already.
The only complaint I have is the car has a faulty ignition sensor which fails to start during cold weather. Really common problem on these cars too, I can't believe there hasn't been a class action suit prompting a recall yet...
digitalwanderer
Legend
Just snuck a peak at me wife's browsing history... (It's a terribly rude thing to do that I don't normally do, but I'm weak this time. )
It seems she's moved the money up to $10k for a used car and she has an awful lot of Jeep Wranglers, Sebring convertibles, and Xterras up.
The Sebring convertible is sort of cute, she has a 6cyl 2000 marked that looks intriguing at $7500.
)It seems she's moved the money up to $10k for a used car and she has an awful lot of Jeep Wranglers, Sebring convertibles, and Xterras up.
The Sebring convertible is sort of cute, she has a 6cyl 2000 marked that looks intriguing at $7500.
Digi, you need to think about what you want.
There is no reason for an SUV unless you have 4wd, or tow.
If not those a minivan is the same, but cheaper, and better mpg.
An xterra and sebring are completely different.
BTW what is wrong with hail damage? If you can get a car cheap with dimples in the roof who cares? I would do it in a heart beat, better than a wreck, or flooding or some such. It won't mess up the real integrity of the car, it will just have hail damage
There is no reason for an SUV unless you have 4wd, or tow.
If not those a minivan is the same, but cheaper, and better mpg.
An xterra and sebring are completely different.
BTW what is wrong with hail damage? If you can get a car cheap with dimples in the roof who cares? I would do it in a heart beat, better than a wreck, or flooding or some such. It won't mess up the real integrity of the car, it will just have hail damage
digitalwanderer
Legend
Nothing wrong with hail damage Sxotty, but my wife was just looking for any excuse not to get that one and that gives her one. My wife wants this Jeep Wrangler:
It just went thru dealer's mechanics and they're gonna give me a call back about it.
EDITED BITS: New pads/rotors and sway bar link, and air filter. Tinley Park, IL. There's no carpeting in the front, but there is in back otherwise the interior is supposedly perfect.
It just went thru dealer's mechanics and they're gonna give me a call back about it.
EDITED BITS: New pads/rotors and sway bar link, and air filter. Tinley Park, IL. There's no carpeting in the front, but there is in back otherwise the interior is supposedly perfect.
digitalwanderer
Legend
