Should I lease or buy

Mannyp93

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Going Friday to get an EX no sensing. My question is should i lease or finance. I know ultimately it comes down to my decision but seeing how many issues these cars are having i am having second thoughts now about having this car for 6 or 7+ years down the road. Financially i am able to make both commitments. I know leasing will yield lower payments but then i feel like i can't really make the car "mine" because i have to give it back at the end or buy it out. Any opinions would help i would just like to see and hear opinions to see different angles of it.
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MuGeN PoWeR

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I am in the same fix. Whether I should lease or finance. Can't you just finance the same car when the lease is over??
 

bhorn

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I am in the same fix. Whether I should lease or finance. Can't you just finance the same car when the lease is over??
Yes, the dealerships love when you do that, because you are paying twice for the depreciation!
 

bhorn

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So this means it's not recommended.
Totally up to you. It might make sense for some people. Maybe right now you are in school with a part time job, and so leasing keeps your payment low. You know that when you graduate, you'll be able to afford a higher payment, so after the lease is up, you finance the (now three-year old) car. The problem is the finance company that leased the car basically gets to tell you how much the car is worth. So you could end up spending more for *this* 3 yo car than if you just picked another one off the lot.
 


MuGeN PoWeR

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Totally up to you. It might make sense for some people. Maybe right now you are in school with a part time job, and so leasing keeps your payment low. You know that when you graduate, you'll be able to afford a higher payment, so after the lease is up, you finance the (now three-year old) car. The problem is the finance company that leased the car basically gets to tell you how much the car is worth. So you could end up spending more for *this* 3 yo car than if you just picked another one off the lot.

Ok. That makes sense. I thought you can refinance the car at the same price which is stated in the lease.
 
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Mannyp93

Mannyp93

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Residual Value for an EX is $14,000 after 39 months of paying $189 plus the money due at signing
If you finance an EX for lets say $22,000 OTD for 72 months zero money down you're looking at $305 before interest is added in. So $305 x 39 months= $11,895
22,000-11,895= $10,105. if you'd finance for that same period. You're saving around $116 a month but over the course of 39 months that $116 equals 4,524 which when added to the $10,105 you'd owe if you financed gives you $14,629. Basically the residual value of leasing. So in a way it is kind of the same thing. If you don't have enough to do the monthly lease and then buy it out. However a big piece that is missing from my math is the APR interest rate.
 

Mllcb42

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Fire up an excel spreadsheet, compare the total out of pocket costs of both options, and decide what makes the most sense financially. The total out of cost expenses aren't very different with current lease rates.
 

CivicTouring

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I recommend finance. The reason is you never know what your situation is going to be down the road, so if you lease and things are not going so well when your lease is up you have to turn in the car or take out a loan for 36 to 48 months to keep the car with the drag of the payments.

If you finance and say things start to get rough and you have six months left you can scratch by for the six months and end up with a paid off car and still have transportation.

Do not what ever you do take out these 72 month or 84 month loans that are now being offered. If you can don't even do a 60 month loan, I recommend no more than 48 months and if possible 36 months. If you absolutely have to do more than 48 months never do more than 60 months.

60 months increases the amount of interest you have to pay back with the loan while the 72 and 84 month loans just bury you in interest and keep you under water on the car for several years.
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