Opinion about Financing vs Leasing?

leeeeoon

I am very interested in getting the 2015 Acura TLX FWD with Tech package. My friend is a car salesmen who offered me the following quote:

Leasing
Tlx v4 technology package
36 months, 12k miles a year
$2,000 down, $364/month
36 months, 15k miles a year
$2,000 down, $388/month

Financing
$7,000 down, $496.71/month for 60 months at 1.9% APR

Would this be a good deal? MSRP is $36,420. He is selling at $32,347. I live in central Jersey.

What would be the wiser financial decision? Thanks for all your help!

Michaell

leeeeoon said:

I am very interested in getting the 2015 Acura TLX FWD with Tech package. My friend is a car salesmen who offered me the following quote:

Leasing
Tlx v4 technology package
36 months, 12k miles a year
$2,000 down, $364/month
36 months, 15k miles a year
$2,000 down, $388/month

Financing
$7,000 down, $496.71/month for 60 months at 1.9% APR

Would this be a good deal? MSRP is $36,420. He is selling at $32,347. I live in central Jersey.

What would be the wiser financial decision? Thanks for all your help!

I suppose it depends on your driving habits and how long you plan to keep the car.

Leasing is a fancy way of saying "renting" - you pay only for what you use. You have mileage restrictions and you have to take better than average care of the car.

If you like swapping out cars every few years, leasing makes sense, but you'll always have a payment.

If you plan to keep the car for many years, buying it may be a better option.

The lease payments seem to be pretty good.

leeeeoon

Hi Michael,

Thanks for the quick response! If you will allow me to give a better background; I am a fairly recent college graduate (pharmacist) and I have saved up for the past 2 years. I have no debt and have been driving a 2005 Toyota Avalon XLE every since I got my driver's license. I have always loved the look and feel of the TL.

As this is a big first step for me, I want to know what other people think about the price my friend quoted me. If I plan on switching cars every 5 years or so (I am neat and take great care of my car,) would leasing suit me better or financing and trading in?

Is the financing price reasonable? Would the average consumer "jump" at the opportunity to finance this car?

stever

TMV is $34,273, invoice is a little bit less than that (TMV includes destination). So it sounds like your friend's price is okay (sometimes "friends" don't always give you a the best deal ). But you may want to get a few discrete email quotes. Not sure about Acura, but parts of New Jersey have some aggressive deals on Hondas.

Putting money down on a lease isn't recommended since you'll be out that two grand if the car is wrecked or stolen (stolen cars aren't an in issue in Jersey, right? ).

I'd rather make the payments and own something at the end but I drive them forever. Interest rates are still cheap right now.

The wiser financial decision would be to keep driving the Avalon but that's no fun. Flipping the TLX in 5 years means that you'll always have a payment, so you really may be a better candidate for leasing.

And congrats on graduating, and getting there debt free is a real achievement!

Michaell

stever said:

TMV is $34,273, invoice is a little bit less than that (TMV includes destination). So it sounds like your friend's price is okay (sometimes "friends" don't always give you a the best deal ). But you may want to get a few discrete email quotes. Not sure about Acura, but parts of New Jersey have some aggressive deals on Hondas.

Putting money down on a lease isn't recommended since you'll be out that two grand if the car is wrecked or stolen (stolen cars aren't an in issue in Jersey, right? ).

I'd rather make the payments and own something at the end but I drive them forever. Interest rates are still cheap right now.

The wiser financial decision would be to keep driving the Avalon but that's no fun. Flipping the TLX in 5 years means that you'll always have a payment, so you really may be a better candidate for leasing.

And congrats on graduating, and getting there debt free is a real achievement!

All good points, but one clarification - I assume the $2k for the lease takes care of the bank fee, dealer fee, first payment and the taxes. NJ collects the taxes on a lease up front and many people choose to not roll them into the cap cost.

stever

Thanks - another reason I don't lease. Too complicated.

leeeeoon

You two are awesome. I really appreciate your inputs. Right now I am battling very hard between leasing this car or buying the 2016 Ford Fusion Hybrid Titanium (30.8K) as this may be a good time to get a cheap hybrid.

I do believe leasing fits me better at this point in my life.