Leasing Car with intent to buy

[travelover]

Quote:

Originally Posted by ziggy29 ............. Another trend I've noticed is that cars seem to depreciate in more of a straight line than they used to. The conventional wisdom says that new cars lose 20-30% of value when you drive them off the lot. When was the last time you were able to get an ultra-low mileage used for 20-30% below new car price -- especially Hondas or Toyotas? That strategy worked so well that too many people started doing it, and the demand for "almost new" cars rose to the point where they sold for very nearly the same price as new. By all means, if you can find a nice 1-2 years old car for at least 30% below new car price, go for it. I suspect you'll come up empty-handed.

I'm not sure how much the depreciation curve has changed for Toyotas and Hondas, but it still seems to be steep for American cars. Here in the rust belt, where everyone gets a new car discount, one can get used Detroit iron for a song.

Because the quality gap has closed so much, you may find good value in a used American car.

[FinanceDude]

Quote:

Originally Posted by travelover I'm not sure how much the depreciation curve has changed for Toyotas and Hondas, but it still seems to be steep for American cars. Here in the rust belt, where everyone gets a new car discount, one can get used Detroit iron for a song. Because the quality gap has closed so much, you may find good value in a used American car.

Used GM products are way cheap.........

[bright eyed]

Quote:

Originally Posted by ziggy29 About the only time a lease really ends well for an average consumer is if the car is worth more than the lease payoff amount at the end of the lease. If the lessee has an option to buy for $12K and the car is worth $15K, that can work to your advantage. (If, on the other hand, it's worth $9K, send it back.) .

That is the case for us. We chose to lease a new honda pilot. The lease is up in Jan of 2009. We pay $317/month with taxes...the purchase price is $16k on the lease contract.

So at the end of the contract we will have paid $13,400 (including $2k up front). If we purchase at the time, we will pay the $16k - which means we pretty much paid sticker price (which isn't the best thing) but we could turn around and sell it for about $19-20k at that time since it will be a 3 year old holda with less than 40k miles on it. For example, 2004 pilots with 40-50k miles are selling above $20k now.

We did it because we didn't want to commit to a car yet and thought there would be better options in 3 years (and looks like there will be) and the resale of honda is great so it didn't hurt us too much in the end. Also, we got low monthly payments (the diff went into my Roth!), vs higher monthly w/ a purchase...it still seems like a reasonable decision.

[FinanceDude]

Quote:

Originally Posted by bright eyed That is the case for us. We chose to lease a new honda pilot. The lease is up in Jan of 2009. We pay $317/month with taxes...the purchase price is $16k on the lease contract. So at the end of the contract we will have paid $13,400 (including $2k up front). If we purchase at the time, we will pay the $16k - which means we pretty much paid sticker price (which isn't the best thing) but we could turn around and sell it for about $19-20k at that time since it will be a 3 year old holda with less than 40k miles on it. For example, 2004 pilots with 40-50k miles are selling above $20k now. We did it because we didn't want to commit to a car yet and thought there would be better options in 3 years (and looks like there will be) and the resale of honda is great so it didn't hurt us too much in the end. Also, we got low monthly payments (the diff went into my Roth!), vs higher monthly w/ a purchase...it still seems like a reasonable decision.

You did ok on yours. However, you still have to sell your own car, and then what will you drive? Leasing is a guaranteed way for car manufacturers to sell a bunch of new cars every 3-4 years..........

[bright eyed]

I know, I know...you know i second guessed letting this crowd know i leased! haha

but my SO works for a dealership so we have options on stand in cars if we need one...

[FinanceDude]

Quote:

Originally Posted by bright eyed I know, I know...you know i second guessed letting this crowd know i leased! haha but my SO works for a dealership so we have options on stand in cars if we need one...

No worries, when I worked in the auto arena a long time ago I was able to buy lease new cars cheap, get free service, etc, so I did the same thing........