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Originally Posted by JMSinMD
It seems as if Im the only one on this forum pro-lease and that is after selling cars (both new and used). I do not recommend getting a lease longer than the bumper to bumper warranty i.e. 3 yr/36,000 miles. The capitlized cost i.e. sales price is negotiable, make sure to check out carmax.com, edmunds.com, kbb.com and autos.msn.com to make sure she's getting a good deal on the price. And I used to be a cash buyer, i.e. no lease, no financing.
Old Dood,
Just to clarify the term "equity." The only TRUE equity is in an appreciating asset such as a house or land. There are some car's such as the older Ferrari's that appreciate in value and therefore build equity. You are never going to sell a used Toyota for more than you paid for it, agree? Therefore you have NO equity. The only "equity" you create in a car is the money you paid for it.
At the end of my lease of my Highlander, TFS believes the car to be worth $18,000. If in 3 years the market for SUV's has dried up and a 3 year old model (2006) with 36,000 miles is only selling for $15,000 at the dealers, TFS takes the hit. On the other hand if they are selling for $23,000 at the end of my lease, I could sell mine for between 18,500-22,000, pay the residual i.e. $18,000 and walk away with $500-$4000 back.
Lease's are misunderstood. I can actually negotiate moreso on a leased car than a new car because I can throw into the negotiation that I WILL be back within 3 years to get a new car so give me a good deal now and I'll give you a nicely maintained used car to sell.
The average car BUYER keeps their car for 3 years, in that case the lease is MUCH better for them than financing, 3-6 year owner cycle you have to calculate, sometimes its better to lease, sometimes to buy, in my case the numbers broke even, and 6 years + it's DEFINITELY better to buy. Jon. p.s. check out leaseguide.com for a TON of info.
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