malukalu

Ok so honestly dont know that much about how leases work but just started thinking about something last night that made me think leasing a car and then buying it in two years might be better option... but at the same time what im thinking seems to simple so i assume im wrong! Anyways here goes:

So if i decided to lease an 06 G35 from what i understand my monthly payments is basically amount the car will depreciate over the term of the lease plus some finance fees and the pro rated tax. Before signing the lease the lease buyout is set to be the projected depreciated value of the car in X years ( where X years is the length of the lease). If at the end of the lease you decide you want to keep the car you can finance or buy the car outright for the residual value plus tax. So from what i can tell if you planned on buying the vehicle outright from the get go all you are really paying is the extra intrest since you are financing the car for 7 years ( 2 year lease plus 5 year finance) instead of just financing the car for 5 years from the get go.

So for example lets say the car i wanted was 30k and if i were to buy it and have affordable monthly payments i planned on putting down 10k which works out to being around 4k in interest over the 5 years of financing. Now say i lease and ideally put no money down and in two years the buy out is 22k. I then go ahead and finance the car putting down the 10k i saved two years back so im financing 12 k over 5 years which is 2.5k in interest. So in the end im paying the finance amount for the lease plus 2.5k in interest on the remaning 5 year loan. Obviously im ignoring sale tax and what not here but i think for the sake of argument we can included that in the car cost. Now what im trying to wrap my head around is say the additonal interest i pay for leasing then financing is 2k.. then overall im paying 4.5k for the lease+finance instead of the 4k for the finance only.... so if this is the case isnt it a question of opportunity cost? if i keep my 10k and lease the car and invest the 10k somewhere else and make more than 500 bucks in two years wouldnt it be a good idea to lease then buy? Or in the least if im ok with the additional interst i pay over 7 years because i have more money in my pocket monthly but less longer term? Are there site out there where i can figure this out? Again i dont know much about all this ... im just trying to figure if i want to put down 10k+ right now and buy the car or lease and use that money for something that can actually appreciate in value.... thanks in advance guys

ANXIOUZ

iTrader: (13)

My take is this. If you are leasing a car, it's kinda dumb to buy it outright once the lease is over. The first year of a car has the highest depreciation. By leasing you are basically taking the depreciation hit for the dealer. And you're paying them additional money (finance charges) to do this.

If you know you will want the car more than 2 years, you should just buy so that you won't have mileage stipulations and the other lease-related crap to deal with. I have a friend who was leasing a car and he went past his 12k miles per year agreement. It was like $0.50 per mile over and he was a few k over so it was a ridiculously expensive penalty.

If you have $10k to put down and you will want the car more than 2 years, buy. If you get bored easily and will want something else in 2 years, lease.

My 2 cents.

6swhite350z

how much is the lease on these puppies..

Dialn24

I am using a enthusiast model as a comparison here. Sticker is $30,730. According to cars.com, the residual value at the 2 year mark is 59% (I don't know what it is with Nissan). They list the residual value around $18350 at that point. This doesn't take tax or fees into the equation either.

For 24 months, based on 2.5K down (say you bought it for 2.5K less then sticker), the monthly payments are roughly $500 or $12,000 total spent on the car at this point without taxes and fees).

At that point, you would have to finance $18,350 to keep the car. With 0 down at that point, you are looking at roughly $360 for 5 years or $21,600 approximately. This is with 0 down, you mentioned putting 10K down. This would make the payments roughly $165 for 5 years or $9.900 (obviously, payments will change with how long you go).

So, with that in mind you have spent a total of 12,000 on the lease, 10,000 down, and 9,900 for the payments to keep the car. This totals $31,900 and took 7 years to own it in this scenario. I am also unsure what Nissan upfront fees on their leases are, but that would be in addition to this amount also.

Now, say you buy it right now at a selling price of $28,230. Payments before TTL are going to be $564.60 with no money down. In your scenario, you put 10K down, so payments are $364.60 (using the rough $20 per $1,000 financed at 60 months). You spent $31,876 total to get your car, and didn't have to pay any upfront fees (security deposit, etc.). The other difference is, you own it in 5 years instead of 7 in this scenario.

My advice, I would definitely buy if you plan on keeping the car. You won't have any mileage parameters, wear and tear, and you will own it 2 years earlier.

Now, as someone else mentioned, if you think you would change your mind and get rid of it in 2 years, then I might consider leasing.

6swhite350z

a dealer in texas wanted $0 down, $349 a month for leasing a 2006 350z. not sure of how many months.. but good deal huh ?

Dialn24

Can't say yes or no. A 24 month lease is typical going to be pretty high due to the first year depreciation. That payment doesn't sound bad, but it really depends on how long, what model, etc.

6swhite350z

i have a 24 month lease on an altima for $89 a month.. hehe

PoWeRtRiP

if you plan on buying the car do not lease it. unless they have some great special for leasing it will not work out in your favor.

Dialn24

and how much money/equity did you have in a trade to get there?

Dialn24

I don't really expect you to answer this question as it's personal, but I would guess there definitely had to be some there either way.

6swhite350z

i put $2900 as a down payments.. $89 a month for 24 months, 12k miles a year... this is an AWESOME deal considering every other nissan dealer couldnt give it to me for less than about $185 a month with a $2900 down

at the same time, we leased ANOTHER 2.5s for my mom.. hers was $0 down, $247 a month for 24 months/12 k miles a year.. also a fantastic deal cuz a diff dealership was saying $409 a month with $0 down for the same 24 months

bottom line is i got a great deal.. but im tried of the stupid altima already after a mere 6 months and 6000 miles.. so i wanna lease a 350z, but i just need a good deal on it.

6swhite350z

oh and i dont plan on keeping the 350z after the lease is over.

i have a 2005 rx8 which is leased, but my brother is driving it now since he crashed his other car

ANXIOUZ

iTrader: (13)

So basically that averages out to a bit over $200 a month to use the car. That ain't bad at all.

6swhite350z

yep if you know of any 350z lease specials, please let me know

Dialn24

That's sounds pretty decent. You paid over 50% of the lease cost up front on that car, so it sounds like you did pretty well.

Are you going to trade the Altima?

6swhite350z

thats the plan.. i wanna trade in the altima which we put $0 down on, so my $2900 wont go to waste.. u know?

Beer Goggles

iTrader: (2)

Always negotiate with ZERO OUT OF POCKET FOR A LEASE.

Also do some research. There's a lease calc that's pretty handy if you just google "lease calculator"

DO NOT TAKE THEIR DEALS. You negotiate a lease like you would buy the car. Get it for invoice and that lowers the payment. I'm not buying any more new cars after the Z.

Dialn24

Have you gotten any bids on the car you want to trade yet?

Dialn24

Please elaborate on the ZERO OUT OF POCKET COMMENT on a lease. Why is that?

6swhite350z

bids? i dont get ur question. my last lease was just traded in. it was a 3 year, i traded it in after 2 years, power nissan paid it off and gave me the altima.