Buy or Lease?

[amazin]

Im about to get my car tomorrow. Black SE 07, spoiler, cd/bluetooth, sunroof, rear bumper applique, cargo net. its priced at 23,200. well thats the price i negotiated so what do you guys think i should do.
Buy or Lease? and whats the benefits of both.
I wanted to lease because my payments are lower and i can trade up anytime i want, whereas with buy i get the advantage of owning the car and having equity, and i dont have to worry about payments after my term is up. but if i decide to sell in 3 years the car might have depreciated more than of what i still owe on it by that time and im goin to have to carry the difference to my new vehicle.
last but not least if i lease i cant modify the car and i have to stick the mileage per year.

here are the figures.
lease - 60 month 309/month
buy - 84 months 360/month

if i buy i would have to do 84 month because payment to high wit 60 month.

Please Help. Thanx.

[Gary_602Z]

It is way too easy to get screwed on a lease! At least with buying you will know where you stand.

But seriously 84 months? That is way to long of a term for a car loan. If you can not carry the payments on a 60 month loan then maybe you should wait for a while to get a larger down payment or lower your wants a little.

Gary

[Old Dood]

I agree...anything after 5 years is too much. You will be upside down for a while. 4 years is the Max I like to be at on buying a car.

Is this SE totally Loaded? Why not get a trimmed down XLE for about 25K...or even a LE and then upgrade it toward a SE somewhat. that is what I am doing. This way I still have the better/softer ride and I can still lower my rear seats.

What is the rate they are charging you for the loan? Seems high. I thought there were incentives untill the end of May. It "looks" like you are not puting anything down on it.

[ToyotaToday]

Originally Posted by amazin

Im about to get my car tomorrow. Black SE 07, spoiler, cd/bluetooth, sunroof, rear bumper applique, cargo net. its priced at 23,200. well thats the price i negotiated so what do you guys think i should do.
Buy or Lease? and whats the benefits of both.
I wanted to lease because my payments are lower and i can trade up anytime i want, whereas with buy i get the advantage of owning the car and having equity, and i dont have to worry about payments after my term is up. but if i decide to sell in 3 years the car might have depreciated more than of what i still owe on it by that time and im goin to have to carry the difference to my new vehicle.
last but not least if i lease i cant modify the car and i have to stick the mileage per year.

here are the figures.
lease - 60 month 309/month
buy - 84 months 360/month

if i buy i would have to do 84 month because payment to high wit 60 month.

Please Help. Thanx.

For the longest time, I use to think it's crazy for someone to lease. But through the years I have learned that there are advantages to leasing under the right circumstances. If you have your own business, leasing may make more sense as you can write off your car payments.

You also need to find out what the buy out cost is after your lease. This will help you determine if you are paying too much for your lease. Let's say the car is 20,000. If you have a 3 yr lease and after the 3 years you put in 10,000 but your buy out is 13,000. You would be paying an extra 3000 more to purchase the car.

Another thing you need to calculate is the lease interest rate versus the purchase interest rates.

I'm not an expert but I do know enough now to say it's not as simple as it looks. Leasing sometimes does make sense, especially if you can write off your monthly car payments AND if the lease interest rate is low vs the purchase interest rate.

I know accountants and they know how to crunch out these numbers and sometimes it makes more economical sense to lease.

Me personally, I buy 2 year old cars, which in my opinion is the BEST route to take. You get the best bang for your buck for a 2 year old car.

[islandboy57]

If you have to take a 84 month loan out, then you really can't afford the car.

[kenny1773]

Originally Posted by islandboy57

If you have to take a 84 month loan out, then you really can't afford the car.

I agree completely.

Why don't you pick up a nice used '04? It will probably be more in your price range.


Leasing is for people that can't afford the car

I admit in some business situations there are tax advantages to leasing, for the everyday person, leasing a bad idea about 98% of the time. The only time a lease is a deal is when a company can't sell a model so they produce a super cheap lease just to get them off the lots. Toyota had this problem at one point in time with the corrolla, I remember 2 year $99/month lease deals happening on them. I think Nissan has one out now on the Altima that is super cheap. On an '07 Camry, you are not getting a good deal.

[Old Dood]

Originally Posted by ToyotaToday

Me personally, I buy 2 year old cars, which in my opinion is the BEST route to take. You get the best bang for your buck for a 2 year old car.

This is very true. That is what we did for over 20 years. We always bought cars that were still under the original warranty. Usually a 2 year old car. If you check out the car via CARFAX and I always look at the handwriting of the owner to see if it is an older person(they usually take better care of it) then I will buy it.

I did this with my Park Avenue over a Caddy STS. The Caddy was abused from the CARFAX report and the Park Ave was owned by a older couple. The Park Ave is still running strong and I got it for more then 1/2 of the original price.

The 07 Camry was a treat to buy new for a change however, we had a few dollars to put down on it. ($4500.00) and that made it worth it. I will be right side up in less then 3 years if not sooner.

An 84 month car payment? No way in hell! Even for a reliable Toyota....that is taking a huge risk.

[Camry005man]

If you lease, be careful not to exceed how many KM is allowed within the lease period.

[amazin]

ok guys here is what i came up with. if i buy im going to get the loan from DCU - Digital Credit Union. Their interest rate for 60 month buy is 6.20%. do u guys think i can get a better interest rate from somewhere else? I keep my credit very clean, currently my score is 725 so i shouldnt have a problem with lenders. I do own my business so ill probably write off my car if i lease the camry. I can pay a higher payment per month since im getting some money from my business now besides my full time job. but i didnt want to hold up so much of my money on a car every month. and i still have to pay insurance and other stuff. My current car 97 Mazda Millenia is giving me lots of problems so i need to get rid of it. I already have a person that i spoke with that is willing to buy it. No disrespect but i never liked the camrys i didnt like thier interior nor the exterior but the new one is just Amazin! there isnt any other car id rather get than this.
Im thinking im better off with a lease since i know im the type of person who would like to get a new car every 4-5 years and i can write it off as part of my business. if i can get a payment lower than 400 a month for 60 months term then ill do it.
i heard this credit union gives one the lowest rates but i could be wrong. Both of my sisters have thier cars financed through them.

[islandboy57]

You say you'll probably write off your payments if you lease. Unless it's a definite yes, leasing probably isn't a good idea. Yeah you'll have a new car every few years but do you really want to pay all that money to essentially rent cars - and end up with nothing in the end?

Believe me, I would LOVE to have a '07 Camry but I can't afford the car nor the associated higher expenses with insurance that go along with it. If I spread it over 84 months I'd certainly be able to buy a '07 but at that point, you know you can't afford it. Interest rates @ 84 months must be relatively high too.

Anyway, if you don't want a previous gen Camry you should look into something a few years old that you DO like. Needs and wants are important, and a car only depreciates so it's not something you should be putting money into if you can't confidently say you'll be secure financially with the purchase. It'd be different if you were say, buying a slightly newer/fancier house - cuz that will only appreciate.

Just my humble opinion
(BTW, I love my '05 Camry..)

[eyeball96]

I leased a car in 88 and swore I'd never do it again!!....but I did! My wife has an 04 Accord Ex thats currently leased. She wanted a nicer car and a low payment. The current 36 mo (I wouldn't think about a longer lease) payment is 259, the final payment is 13K in August 07..we have a 12k per yr milage limit that hasn't been a problem so far to meet.
We're allowed 1500 in damage, door dings, scratches, and such. We can turn the car in, sell it or buy it at lease end! The Honda is maintaining its value, used 04 Ex's in this area are selling from 19 to 21.500, It looks possible now, that I'll beable to sell it for a profit of 4-5K. We'll find out next year!!
By the way this is a Honda lease, through HFC, and I don't have a business!

[Blackhawk3D]

A honda would be one car I would consider leasing, as their depreciation is rediculously low. We bought our CRV for 21,000 I think, it's an EX with everything except leather, it has a moon roof, alloy rims, 6 disk changer etc. We did an online thing, we entered our price and dealers gave us offers. One of the local dealerships, 10 minutes away or so, gave us an offer for what we wanted (We got it for about 500 over invoice). My dad checked the blue book for some insurance quote requests he was filling out, and the dealership value was more than what we payed, and the value for private seller was equal to what we payed for it new. Pretty crazy.

[JMSinMD]

Leasing isn't appreciated because people don't understand it. I used to sell Toyota's and after leaving the dealership I swore I'd never buy a car again. I am currently leasing our Highlander, I could buy a Land Cruiser outright so it's not that I can't afford the Highlander, but I don't want to latch onto a depreciating asset. The money is better spent towards a mortgage or another APPRECIATINIG asset. Interest rates is easy to calculate during a lease. It is commonly referred to as a money factor but it's an easy calculation. Check out leaseguide.com to learn more. I figure at the end of the lease depending on market demand either A)The car is worth less than my residual and TFS eats the loss vs. me, if I were to buy the car and drive it for 3yr/36,000 miles or B)The car is worth more than the residual, I sell it privately, pay off TFS and pocket the additional $$. I love having a car that's always under warranty. Family needs change and in a few years I might need a Sienna. It's easy to not like what you don't understand. The capitlized cost=sales prices, just as negotiable as if you were buying the car, capitlized cost reduction=trade in or down payment to lower aforementioned capitilized cost, etc. People always talk about having equity in a car by buying it, equity only creates itself in an appreciating investment, guess who creates the equity in a depreciating investment? YOU DO!!. I agree with the other guys, 84 months is WAY too long. I also suggest anyone that is not a cash buyer get GAP insurance. Dealerships try to sell it to you to make some back end profit. I bought it through my car insurance and it costs me $18 a year. It'll cover your principal balance vs. depreciated value if the car is totaled, stolen, etc. Don't lease a car beyond the bumper to bumper warranty, i.e. 3/36. Again check out leaseguide.com. My lease rate is like 4.06% and on my 06 Highlander AWD V6, loaded I pay $330 a month. Good luck. Jon.

[JMSinMD]

Check out carmax.com, kbb.com, autos.msn.com and edmunds.com to make sure you really are getting the best price on that Camry. Jon.

[02whiteLE]

I"ve never financed a car over 36 months. It doesn't make sense to do that any longer, in my opinion. Leasing is a never ending cycle. Lease ends, you pretty mcuh have no choice but to get another car, and usually a lease, because you'll be over miles.