Leasing vs. Owning

Jayhawker said:
If you are getting quotes on line, get the "OUT THE DOOR PRICE not the selling price, so you can have a fair comparison when shopping.
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This is exactly how I got a good deal when I bought my Mazda3. I told them to calculate what I would be paying after taxes, fees, and registration and I negotiated based on that number. Once I got the dealership down as low as I thought I could get them, I called around to 2 other dealerships in the area and had them make me an OTD offer. Then I took these numbers back to the 1st dealership and they beat the price. This extra 30 minutes of work knocked an additional $900 of the OTD price of the car. I ended up getting it for about 1200-1300 under invoice.



Of course I wasn't doing a car loan, my granddad gave me the money and said I could pay him back no interest within 5 years after I graduate. The best part was when we finished haggling and they asked me how I would be financing. I said, "do you take checks?"
 
I tend to keep my vehicles for a while, so I've bought both of my trucks. No regrets and having no monthly payments is a joy.
 
IMHO, it depends on the car and the deal you are getting. I don't prefer one over the other. Currently two of my cars are leases and one is a purchase.



My last car was a purchase that I picked up brand new and ended up selling it for more than I paid after 6 months of ownership.



My current toy is a lease that I got for a song. I'm paying a total of 3% depreciation on it over the course of two years. If I had financed it for 4 years the price would have literally been 2.5x as much. So I can sock that money away for the future.
 
To an extent, this guy isn't educated on a lease. He didn't go into detail about leasing or the benefits. He just says "it's the worse way to buy a car"...



ex.-- you can lease an IS250 for $476.24 (this includes tax of 7.8%) for 36 mos with 0.00 down, (12k miles) and this car will have an MSRP of $36,745. OR, you can buy this car car for about $38k "out the door" and with 0 down for 60 months with 5% rate, the payment will be $717.11.



I think statistics show the average car owner keeps a car for 40 months and gets something new. Leasing is a great way of driving a more expensive car for less if you budget a car payment, BUT, you have to know how to negotiate a lease.



YES, leasing is more profitable to the dealership if one doesn't know how leasing works. This guy also touched on "buy rate" but didn't explain it, or didn't understand it.
 
I think his point is don't do either--lease OR buy any new car unless (based on his analogy) you can afford to throw $100 out of the window every week. Buy one to two year old used with cash and if you can't do that, then you can't afford the car, according to him.
 
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