By accessing this website, you acknowledge that Edmunds and its third party business partners may use cookies, pixels, and similar technologies to collect information about you and your interactions with the website as described in our
Privacy Statement, and you agree that your use of the website is subject to our
Visitor Agreement.
Comments
1) You don't pay interest on the "whole amount". You pay interest on the average of the Cap cost and the residual.. If the Cap cost is $38K and the residual is $24K, the finance portion of the lease is paid on an average of $31K each month.
2) Not the same as an interest only mortgage.. More like "halfway" between an I/O mortgage and a conventional loan.. Because you do pay on principal.. Using the example above, you'd pay off $14K of principal over the life of the lease.
The typical 3 year lease is analogous to taking out an 84 month loan... with a guarantee that the finance company will buy the car back for what you owe on it after 36 months...
regards,
kyfdx
Edmunds Price Checker
Edmunds Lease Calculator
Did you get a good deal? Be sure to come back and share!
Edmunds Moderator
Bought a then new 2002 Honda Civic for $14,500, financed all of it, but the tax at 1.9% APR at $250/month.
At the same time Honda was offering a lease on the Civic for $199/month for 36 months, with $1900 cap cost, which results in $2500 at lease signing (first month, security, aquisition, blah blah) + tax.
Fast forward to 36 months:
I paid $9000 in payments, plus tax.
Leasee would have paid $9664
Advantage - Finance. +$664
I traded my car in at $12,500, while owing $6500 = $6000 net towards new car.
Leasee gets no trade in value, nothing towards new lease.
Had leasee put away the additional $50/month he was saving from the lease he would have $1800 at the lease end, but we all know people lease because they don't have that $50 to pay every month.
Advantage - Finance +$6000 or +$4200
1) Lease money factors usually translate to higher APR's than straight finance ARP%.
2) You get no benefit from the car's residual.
3) You have to start over.
4) Insurance is higher on leases than finance contracts
5) If your situation changes you may go over miles,
6) To terminate lease, you have to come up with all the remaining payments, and not get use of the car.
7) If you like the car, and want to buy it at the end of lease, you are going to pay sales tax again, and you have paid someone to take the depreciation hit, while you are still stuck with the same car.
Finance a car with solid resale values like Honda or Toyota and then trade in every 3-4 years. You will end up on top every time.
With the example you cite of the Civic, the person that leased this car when they could have financed it for less is a moron. One should always do a $0 down lease, even when the advertised lease says you have to put money down. If I had seen this lease and the $2500 down payment, I would have negotiated this lease to be $0 down. Then I would have realized that the payment would have not been $199/month, but instead around $70 more per month ($2500/36 months is $70). That means the payment would have been $270/month, but as you said, financing the car was only $250/month.
Therefore, in this case, financing was cheaper than leasing. Thus, anybody who leased instead of bought with these kinds of terms available was a moron.
I lease my current vehicle (and others that I have leased) because I like having new cars, but also because I find (and make sure) that the cars I am leasing are cheaper to lease than to buy. My current Odyssey lease (EX-L-RES) costs me $350/month for 4 years, while it would cost me over $500/month for 5 years to buy.
You buy for $500 month and I lease for $350 month. It is actually me who could be saving $150 month to put towards something else. In four years when my lease is up and you are sick of your car, we each get something else. In your case, you have paid $24,000 for the van, I have paid $16,800.
According to my paperwork, my van should still be worth around $17,000 at that point, and I have no reason to doubt this because this is my second Odyssey, and the first one I leased was worth more than the calculated residual at the end of its lease. I have also follwed this vehicle since the beginning of its life (1999) and I have been amazed with the rest of the automotive world at its incredibly high resale value, even now with a new version of this vehicle on the market.
Based on my past experience with this van, I would sell it because I am confident that I can sell for more than the residual and make money, therefore effectively reducing even further the $350/month I have paid to lease. It sounds like you would trade it in, and I am pretty sure you would not get a value anywhere near what the residual is; you would probably get in the neighborhood of $15,000
Just for kicks, let's say we both trade in our vans and we both are given $17,000 on trade. You still owe $6000, so you get about $11,000 back into your pocket. I get nothing, but I also don't have to shell out anything for my next vehicle because I do another $0 down lease.
That $11,000 effectively reduces your monthly payments by about $230, making them less than the $350 I was paying. However, for me, I would rather have the extra $150 to use every month that shell it out each month with the anticipation that I will get it back when I sell or trade down the road.
Remember that I was also very generous on your trade-in amount, so you would probably get more like $9,000 back, or around $190/month.
Of course, if you and I were not careful about the type of vehicle we had bought or leased in the first place, it is possible that we could have lost more money.
The moral of the story? Make sure if you lease or buy that you select a vehicle that holds its value and does not depreciate. I suppose this wouldn't matter to someone that buys and then runs it into the ground for 10 years, but I can't convince myself to stick with a vehicle for that long.
A new thing I tried is leasing a used car. In this way, I think I've been able to get the car I wanted and saved money on a 1-yr old car that's already depreciated some. In some ways, it's the worst of both, b/c you are leasing a car and have all the drawbacks of that while you're not getting a truly new car. On the other hand, you can afford an even better used car lease as opposed to what you could afford on a new car, so you get a better vehicle, with less (or slightly less) depreciation, and you get to try something new every few years.
I have a separate comment to make to all the minivan drivers with young kids. On one hand, buying may make more sense so you don't have to worry about excess wear & tear, mileage, etc, leasing means you don't have to try and sell a car with excess wear & tear, and if you get a new minivan every few years, you'll keep getting the new safety features. I think mileage becomes more of an issue with minivans than other cars b/c if you have one, you're probably gonna take it on every family trip, whether it's to another city or to a supermarket.
As far as your minivan comment goes on mileage, I know I am far from normal, but our Odyssey has just over 12k miles, and we are in the 19th month of the lease. I sold our last Odyssey for a profit of about $1500 when we were at about 30k miles near the end of the 3 year lease.
The current Odyssey is an 04 that I began leasing at the end of 03. It is a 4 year lease, but I am confident that it will look more like a 3 year old vehicle when I go to sell it near the end of 07 with around 36k miles on it.
I admit, it's something I just tried once, so it's certainly not "tried and true." I have a 5 year lease on an '04 TL that I took on in Feb '05 - the car had been in service since August '04, I think, and had about 8k mi on it. I went onto a site called link title and input info. Then I contacted internet managers about what I could get on an '05 TL. I have a bad memory when it comes to numbers, but I believe I'm saving almost $200/mo on my used lease. Just enough to make me comfortable with the payments.
I would expect that if I was willing to lease a 2 or 3 year old car, I'd do even better b/c part of the cost is depreciation and a used car depreciates less, and part of the cost is based on interest on the value of the car, and the value of the car would be lower than if it was new.
At this time of year, though, buying can often be a better deal because of large cash incentives on a lot of vehicles that are not available on a lease of the same vehicle.
I know there's a give and take in the car business. 1st thing I do is negotiate the price. If I can't get a good price, I walk away. With my used car I was able to negotiate the price, too. Then I try my best to analyze the other #s (which is, admittedly, difficult for me). Once that's done, I tell them how much I need it reduced to make my monthly payments doable, and I'll let them adjust all the numbers to get it there. That is, once I know all the numbers are fair, I get a total, and ask them to reduce the total by manipulating the #s any way they want. Raise rates, but reduce car price, etc.
I agree with your wholeheartedly. Problem is that most people see the big font in the paper screaming $199/month lease, and go to the dealer set on that. The dealer, then, points out that it has a $2500 downpayment and taxes upfront for a 36 months lease. People balk, dealer counter offers $220/month (or even the same $199/month) BUT on a 48-60 month lease with less money down/or less miles per month, and people bite it. Most people have no clue on how to negotiate on anything, and then there are people like you and I who negotiate everyting.
It's that 90% of the buyers today are "payment buyers" ..... leasing had fallen to it's lowest numbers in years, then all of a sudden with the cheap mortgage rates for homes the band wagon started with: "lets get a new car to go with" .... now, leasing might hit it's highest figures - and thats not good ....
Terry.
In my case I will need another car since my wife will have to commute to work by car from our new place, as before she used public transportation.
traded my car in at $12,500
It's hard for me to imagine that after keeping a car for 3 years, the trade in value was only $2K less than the original price. So then the dealer will sell the car for $13,500? Just seems strange to me.
Anyway, regardless of whether you lease or buy/sell/buy new cars, it can go either way on the cost. If you drive low miles and can turn in a leased vehicle without any penalities, then you may do okay if you can get a good lease deal.
Or if you want to save the most money you'll buy a quality car 2-3 years old low mileage, pay it off in a few years, then drive the paid off car for at least another several years. Most cars don't even need a tune-up until 100,000 miles and will go well over 100,000 miles. Even if you have to put a few hundred into car repairs from time to time, it's still cheaper than the $300-400 car payment each month. I think a lot of people have the perception that it's normal to always have a car payment, so when looking at the most economical thing to do, they're looking at what will give them the lowest montly payment.
But of course if everyone were like me and only buy a car every 10 years then it wouldn't be good for the economy, so keep buying/leasing/making monthly payments for the rest of your lives and don't listen to me
My problem is I have been waiting for 6+ months for a used Civic. Other than wanting a 2 door and needing an automatic transmission and not wanting high mileage, I'm not being too picky. But i NEED the payments around $200. (The less the better..lol) And I noticed leasing has the lowest pricing but I Don't want to take out a new lease. So I was looking into sites like LeaseSwapper.com. But I know nothing about this.
Is taking over a lease really a good way to save money on a lease? What(IF it is) is better about taking over a lease? I"ve read that the other person already had to pay all the fees and whatever else they tack on.
I've seen some cars on there for new leases.. I guess thats the same as going to my local dealer and leasing..?
Is taking over a lease really a good way to save money on a lease?
When you look to take over a lease, you get to see what other people are paying, and can take over their payments. You're not getting a "deal" on the lease, so much as you're able to see who may have negotiated a better lease deal (due to bargaining, credit, incentives, etc) and can take that lease as opposed to another. SOme people will even offer an incentive for you to take on that lease, depending on how badly they need out. Keep in mind that some people are getting out of their lease early b/c they're over-mileage and don't want to get burned when they turn it in. Also, many lease co.s charge a fee to transfer the car. Who pays that fee is negotiable. Also keep in mind that you will be solely responsible (I think) when you turn in the car, so any excess wear and tear from the prior driver should be addressed before taking over the lease.
Keep in mind that right now, you might get an incentive on an '05 Civic to make room for '06s. If you take over a lease on an '04 Civic from someone who bought it in June of '04, if they didn't get a deal, it might be less per mo for you to get a new '06.
What(IF it is) is better about taking over a lease?
IMO, the best part is that the person taking over the lease makes payments as if they'll have the car for 3 or 4 years, even though they may only have the car for 1 or 2. A 2 year lease will have higher pmts than a 4, so if you're not sure if a car will fit your lifestyle long-term, or you like to change cars often, this may be the way to go.
I"ve read that the other person already had to pay all the fees and whatever else they tack on
I guess so, but I'm not sure what you mean. You'll have to pay taxes, too - and you'll need a contract with the leasing co, so you will probably see fees on that, too.
HERE'S ANOTHER OPTION: You can lease a used car. THat's what I ultimately did. I leased a 1-yr old car. From the companies I've seen out there (search for "private lease company" - I went with a broker whose e-mail is something like "racerpete" - he gave me the best rates), the car can't be more than 4 years old, and you're not going to benefit fro any lease incentives, but the car already depreceiated, so it may work out for you.
Lastly, keep in mind that while leasing offers a lower downpayment, it's not necessarily cheaper. In fact, I bet if you were to hold onto your Civic for 8 years, it'd be cheaper for you to buy a Civic than to Lease 2 Civics with 4-year lease-terms.
Of course, if the incentives are high enough, it may not make a difference, but it is still worth looking into. To me, there isn't much difference leasing a 1 YO program car and drving it for years 2-4 (all under warranty), vs. a brand new one for years 1-3. In this case, I would be happy to shop payments, and if the used one was noticably cheaper, go that way.
Just MHO of course.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
I don't think I'll end up doing it since it doesn't seem like there is a better price on them compared to leasing a new car. Not much selection on my choices of car anyway and the deals didn't seem that great.
Then they try to justify their choice by thinking up some reason why leasing is better than buying.
That's human nature. We all want to think we are smart.
Then they try to justify their choice by thinking up some reason why leasing is better than buying.
That's human nature. We all want to think we are smart.
That usually isn't the case.... Many reasons to lease particularly expensive cars:
1) Often times are used by business owners who can write-off the lease expenses, including the monthly payment.
2) They are educated enough to realize they only keep their cars for a couple years, so buying will end up costing them more in the long run.
3) If you put high miles (say, 75k+ miles) on a car over 3 years (as many CEO, high-power, business-type, luxury car owners do), and then want to get rid of it, it'll be tough to get rid of a high mileage luxury car and recoup anything close to what you've paid out. If it's leased, then it's the bank's problem. ;-)
Think about it this way - if you take a $60,000 2006 BMW - how much will it be worth in 2010 with 48,000 mi on it? $40,000? (yes, I know I'm assuming a lot) Now take a $20,000 2006 Hyundai. how much will it be worth in 2010 with 48,000 mi on it? $8,000? Definitely more than $0.
1) Leasing is a "zero sum" game. You and the leasing company agree on the rent that you are going to pay for the vehicle and the number of miles that you are buying.
Leasing companies are not stupid. Companies like GE, ARI, Wheels, etc as well as Toyota and the other large OEM-related leasing operations generally don't lose money on leasing a vehicle to you. Oh, occasionally they will overestimate the residual value of the vehicle 24 to 48 months out.
If you put high miles (say, 75k+ miles) on a car over 3 years (as many CEO, high-power, business-type, luxury car owners do), and then want to get rid of it, it'll be tough to get rid of a high mileage luxury car and recoup anything close to what you've paid out.
2) And generally, they have also paid big money for the excess mileage and the ability "to walk away" from the lease.
When you do a true "apples to apples" analysis of the total cost of leasing (that is, focusing on the cost per mile operated), more often than not, leasing is more expensive than an outright purchase of the vehicle.
From my experience, most high-power, business-type CEOs don't really care what their sled costs as the luxury vehicle is part of their compensation package ***AND*** most of them don't have to worry about "getting rid of the vehicle" as they flip me the keys and let me worry about the details.
a) I could pay $74k cash, b) I could finance the $74k over 5 years at who knows what rate, or c) I could lease the vehicle over 3 to 4 years.
With money market accounts yielding 3-4%, a cash purchase might make sense over the financing alternative so long as I cannot obtain a very low financing rate.
But should I lease the vehicle? I drive no more than 10k miles per year. I might keep the car for as little as 3 years or as long as 7 years. I live in LA and I think that it might be difficult to sell a used S class - since people in this town would opt for a new vehicle. Any time that I have attempted to compare leasing vs financing a MB or BMW, the ultimate cost differential does not appear to exceed $1,000 over a 5 year period. I would appreciate any advice regarding the best way to approach this. Thanks!
That said.. How long you keep the car is one of the main factors in whether leasing or buying is the way to go...
In general, the S-class value will drop like a rock over the first few years... If you feel fairly certain that you will sell it in three years, then a lease may protect you on the downside (unless the residual reflects reality, in which case it might not help much). However, if you think you'll keep the car for 4.5-7 years, you'll be much better off financing or paying cash.
I'd assume that if you have the ability to pay cash, you could probably finance around 5% APR for 60 months..
If you are interested in the money factors and residuals, you could ask Car_man for them, here:
Mercedes-Benz S-Class: Lease Questions
One last question: Is this a used car? $18K seems like an awfully big discount...
regards,
kyfdx
Host-Prices Paid Forums
Edmunds Price Checker
Edmunds Lease Calculator
Did you get a good deal? Be sure to come back and share!
Edmunds Moderator
I keep cars in very good shape and I do not put excess mileage on them. If the car is reliable, I would be willing to keep it for 5+ years. I am a little afraid to keep it beyond 7 years since an extended warranty might not extend beyond that point in time.
If I could obtain a 5% APR for 60 months and I am willing to keep the car for 5 years, financing would be the best option. Do you agree?
Thank you.
Edmunds Price Checker
Edmunds Lease Calculator
Did you get a good deal? Be sure to come back and share!
Edmunds Moderator
Bingo ...!
Terry.
Keep in mind, most buyers in the market have limited or close to no money down on the upcoming transaction .... so what happens next.? .. they see the smaller payments, they assume the best and never figure in changes in life that may occur in the next 20/30 months - they forget they're "renting" a vehicle ....
There is nothing wrong with leasing if you understand the commitment ... you don't own it, you lose your ability to be the master of your own destiny, you have to follow the mileage restraints and the vehicle has to be in "market" condition when you turn it back in ...
The biggest reason why folks lease today - payments ... In 21 years, this is the 3rd cycle when leasing has become "popular" (again) ... in the 1987/90 is was the hot item, *until* alot of them brought them back in 91/93 and had some big checks to write, then things kinda cooled down .. then in 95/97 it kinda started again and in 99/01 they remembered why they didn't want to lease ... as the 3rd cycle get's going, we'll hear the same thing - the boards are filled with them ...l.o.l......
For those that step back, look at their driving habits and have a pretty good grip on their short term future, then it will work out ....
In your case .. I wouldn't worry about the new body style, the "7" series BMW is a perfect example .. everyone thought the new one would kill the old one, well that never happened ..l.o.l.. and the new style is colder than a January night in Butte Montana ....
The used market is Huuuge in your neck of the woods, especially for the Luxomatics - (everyone wants to be a movie star in Kalifurnia) ... dealers are paying the the strong $35/$36 range for clean 02 S500's, that means they're seeing the $40ish range down Retail Rd, and the 03's are seeing the $45ish zipcode and dealers are seeing the $50ish range on the retail side ..... just make sure you get the 100k factory warranty so the sale in 4/5 years will go smooooothly ....
If you keep it nice, keep it serviced and take care if this bad boy, then it will make for a good purchase and a easy sale down the road.
Terry.
...an '06 S500 with a $92k+ MSRP for $74k
1stly, "MSRP" is meaningless for determining how good a value you're getting. What does Edmunds say people are paying for this car? What is invoice?
...pay $74k cash...finance the $74k over 5 years...or...lease the vehicle over 3 to 4 years...I might keep the car for as little as 3 years or as long as 7 years.
Based on your last statement, in particular, buying would be better than leasing, since you won't be required to renegotiate or change cars after 3 or 4 years. Also, I'm not clear on how MB would determine the residual value - if it's based on a percentage of the actual sale price ($74k), then the discount won't be worth as much in a lease; however, if it's based on MSRP, or it's a flat figure (worth $X in 3 years, $Y in 4 years, etc), then the discount is significant.
I live in LA and I think that it might be difficult to sell a used S class - since people in this town would opt for a new vehicle.
People in your neighborhood might only consider new cars, but I am sure there are many people in LA who want your car, but can't afford it. Also, for what it's worht, I've never met a banker who drives a new car - it just doesn't make financial sense.
Any time that I have attempted to compare leasing vs financing...the ultimate cost differential does not appear to exceed $1,000 over a 5 year period.
I think you might not be doing the right comparison - aside from the payments made over the 5-year period, you need to include the purchase of your next car. After 5 years, if your $74k car is worth $25k, that's $25k that'll go towards the purchase of your next car. With a lease, you'll have $0 going to that future purchase.
All-in-all, you would be better off purchasing your car. That being said, if you do decide to lease, and you are confident that you won't exceed 10k mi/yr, you can probably get a reduced lease with that milage. Most lease quotes are based on a standard 12k mi/yr.
In connection with Edmunds, the invoice is approx $86k and the TMV is approx $84k for this S class with the options offered to me.
My previous buy vs lease comparison related to a vehicle with a price of $66k and a resale value after 3 years of $33k (assuming 50% depreciation for an MB). If I had leased that vehicle, the monthly lease payments would have been $1,044 with an initial cash outlay of $2,400.
My calculation was as follows: In year 1, I would have made $14,928 in total payments, in year 2, I would have made $12,528 in total payments and in the final year, I would have made $11,484 in total payments for an aggregate of $38,940.
However, I would have earned interest on the cash in my pocket (the $66k minus my payments). These amounts are $1,532 in year 1, $1,202 in year 2 and 1,296 in year 3 (assuming a 3% interest rate) for a total of $4,030 of interest earned. That reduces the total cost of leasing to $31,090, alittle bit less than a $2k difference assuming that I could really sell a 3 year old MB (I think it was an E 500) for $33k.
Am I missing something in my calculation?
In addition, if I purchase an S class and plan to keep it for 5 to 7 years, does the extended warranty make sense?
I appreciate your response. Thank you again!
The used market is Huuuge in your neck of the woods, especially for the Luxomatics - (everyone wants to be a movie star in Kalifurnia) ... dealers are paying the the strong $35/$36 range for clean 02 S500's, that means they're seeing the $40ish range down Retail Rd, and the 03's are seeing the $45ish zipcode and dealers are seeing the $50ish range on the retail side ..... just make sure you get the 100k factory warranty so the sale in 4/5 years will go smooooothly ....
If you keep it nice, keep it serviced and take care if this bad boy, then it will make for a good purchase and a easy sale down the road.
Terry.
I am considering getting out of an almost new car (long story) for something different (a VW). Depending on the facts/figures, I may decide to lease the new one.
My preference is to trade in my current car (a Scion tC), for conveneience and also due to the sales tax credit on a trade (worth about $800 on a purchase).
I am in NJ, and my question is, will I get any use of the sales tax credit if I trade it in against a lease? I won't put any $$ down (so the dealer would have to cut me a check), but would I at least save having to pay tax on my monthly payment?
The payments would be less than the value of the trade, so I might not get all of it, but something is better than nothing.
Just want to have it straight before I end up discussing options with a dealer.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
It seems to me that, aside from the acquisition fee, and the fact that the finance charge might be very slightly more when leasing, it's the same. In the case of a BMW 330i, which I'm going to buy or lease, for example, the residual is 64%. So, for the first three years, I'll be paying for 36% of the car, and then, if I decide to buy at the end of the lease, I'll pay for the rest (64%). Why does that come out higher? What am I missing?
Thanks for any insights.
Jim
but the short answer is, it's probably going to cost you a lot to get outta that lease, much more than you'll save in leasing the Civic.
MODERATOR /ADMINISTRATOR
Find me at kirstie_h@edmunds.com - or send a private message by clicking on my name.
2015 Kia Soul, 2021 Subaru Forester (kirstie_h), 2024 GMC Sierra 1500 (mr. kirstie_h)
Review your vehicle
You need to be lookin' at drivin' that Volvo for awhile ... right now (depending on the color, options and mileage) you're about $5,000 flipped in that lease deal .... unless you're puttin' a ton of money down (which would make absolutely no sense) that payment ain't comin' down ---- enjoy the Volvo ...
Terry.
Why does this sound so familiar?
Why does this sound so familiar?
Yeah... and doing it to "save some $". Right... saving a lot with all that negative equity.
not likely, and fees/overhead would have to be paid again, but if you can make the numbers work, you might save a few $$ per month. Won't have as much car of course, but C'est la vie!
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
If Terry is accurate in his number (and he usually is) and the original poster has $5000 in negative equity, then that's $150/mo right there in a best case scenario. Yeah, you might be able to get a payment between $400-$450... but is it really worth flushing at least $5k down the toilet to maybe save a few bucks in your monthly budget? A pretty bad "investment", indeed.
I'm just doing this hypothetically of course. I have no idea if it would work in the real work. But if it did, the real decision becomes, would you pay $50 to drive the volvo instead of the Civic?
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
I didn't mean that the money is "gone" as in "disappeared"... I meant that it was wasted. No, that money is not gone... The situation here is that she is trading in a leased car. You don't pay down a principle like you do on a loan. Therefore, getting a "buy" trade-in figure on a leased car will almost always set you back more than on a loan. Am I explaining myself clearly? :confuse:
Also, the longer she goes into the lease, the closer to a break-even she would be (in most cases). If she waits a year, then she'll likely have less negative equity. If she instead only waited 2 weeks after getting the car to trade, then she'd have more negative equity. Time is also a factor here, and it relates directly to the money involved.
Let's work with real numbers. (I'll just use nice even numbers.) The price of the new Volvo was $30,000 plus tax, tags, etc, and you currently owe $30,000. On a trade, they're giving $25,000. Right there, the value has dropped $5000 and that's money completely wasted. When you say that the $5000 was already "built into the payment", it's not exactly accurate, since you certainly haven't used $5000 worth of the car (plus what you've already paid out of pocket!) over the past few months of having the car. However, you still have to pay that $5000 on top of the cost of the use of the Civic.
All in all, any way you slice it, trading a car with negative equity is a poor financial decision (unless it's an extreme situation like the car died or something).
" I want to downsize"
About the scariest words we can hear!
There is only one scenario I can think of to get out of a lease early and that has to do with blowing the miles so much so that it would actually be cheaper to get out than continue to rackup "quarters" for every additional mile.
Land Rover recently changed our leasing programs completely and one of the things they changed was the cents per mile charge. The charge used to be 18 cents at the start and 20 cents if you went over.
Now it is 20 cents at the start and 25 cents if you go over for vehicles in a certain MSRP.
Vehicles in another MSRP range are 30 and 35 cents.
35 cents a mile is painful.
I've tried to follow a model get into a car I can pay off in 4 years and drive for 6 years. Then stash away the car payments for two years and use that money and any equity on the trade-in for the next car. Eventually, you should see you will be able to get into a vehicle you can pay off in 3,2,1 years etc...
I really think Leasing should be left for business reasons and perpetual renters...YMMV *shrugs*
I would almost say Leasing is perfect for a real estate agent cause you really need to be in a new car every couple of years but they just put too many miles on a car normaly.
Oh yeah, I didn't even think of the advance! Trying to finance/lease, say, 130% of the price of the new car? Forget it... most banks won't do that. If you want to make it happen, then you'll need to put enough money down to finance/lease 100%-110% (depending on the bank and/or credit rating).
1. Do I get any trade in value if I bring it into a dealer or is it worth nothing at the end of the lease?
2. Since I am a realtor and drive 15K miles or more a month should I buy or lease my next vehicle.
I am trying to keep my payments around 400 or less.
Any suggestions on cars or what to do?