Leasing a Scion tC
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I leased mine. 48 month lease. No significant difference, you can still add all the options provided through the dealership. Unfortunately, my FICO score is average at best, so I shall not go into $$$ payments and such. All I'll say is that residual value after 48 months was set to 48% of the car's original value, which is okay by me.
Also, you'll pay tax on whole car's price. Then, when you purchase (if you purchase) at the end of the lease, you'll pay tax again for the residual. That's the only bad thing.
gross capitalized cost = car price*tax + license + title fees + admin fees + etc
depreciation = gross capitalized cost - residual - down payment (if any)
rent charge = (((1+money factor*24)**(months of lease/12))-1) * depreciation
[the '**' is 'to the power of']
amount financed = depreciation + rent charge
monthly payment = amount financed / months of lease
initial payment = monthly payment + any security deposit
The above are to my best recollection/guess. The ETC above is any additional warranties, acquisition fees, etc. Watch out for those items, make sure you understand each. The ETC part is where you can be tricked (although my humble experience was a fair and square deal).
If you decide to purchase at the end, your car's price will be the residual from above. Then plug that into above formulae.
If you return the car, your charge will be any repair costs - security deposit. If that winds up less than 0, you get a check back. If more than 0, you get additional bill.
Cheers.
gross capitalized cost = car price*tax + license + title fees + admin fees + etc
depreciation = gross capitalized cost - residual - down payment (if any)
rent charge = (((1+money factor*24)**(months of lease/12))-1) * depreciation
[the '**' is 'to the power of']
amount financed = depreciation + rent charge
monthly payment = amount financed / months of lease
initial payment = monthly payment + any security deposit
The above are to my best recollection/guess. The ETC above is any additional warranties, acquisition fees, etc. Watch out for those items, make sure you understand each. The ETC part is where you can be tricked (although my humble experience was a fair and square deal).
If you decide to purchase at the end, your car's price will be the residual from above. Then plug that into above formulae.
If you return the car, your charge will be any repair costs - security deposit. If that winds up less than 0, you get a check back. If more than 0, you get additional bill.
Cheers.
Maybe someone can explain this to me.
Why bother leasing/renting a car? You're making payments for the thing for years. You might as well pay a little more and buy the thing. If you don't buy the car in the end, you've thrown your money away.
Maybe I'm wrong, but it just doesn't make sense to me.
- pleBa
Why bother leasing/renting a car? You're making payments for the thing for years. You might as well pay a little more and buy the thing. If you don't buy the car in the end, you've thrown your money away.
Maybe I'm wrong, but it just doesn't make sense to me.
- pleBa
Lease is if you're not sure you'll keep the car, and you know/feel it will have good resale value after lease end. There also a possibility of paying less than car's 3-year worth. Here's an example of that:
I lease a car that costs $20000. Its a new car, and no one knows it's worth after 3 years, so dealer/manufacturer guesses the worth of the car 3 years from now (my lease is for 3 years) -- say, $9500. So, he says 'your residual is $9500, you get to finance $10500 over 3 years'.
'Okay' I say.
3 years passes, and I about to return the car. I check the market price, and find out that my 3-year old car is worth $8000 on the market, according to the Blue Book (NADA). So, I return the car after my lease ends.
If I bought the car, I would've paid $20000, then sold it for $8000. Total expenses: $12000.
Since I leased the car, my total expenses were: $10500.
This example was simplistic, but illustrates the point. Cheers.
I lease a car that costs $20000. Its a new car, and no one knows it's worth after 3 years, so dealer/manufacturer guesses the worth of the car 3 years from now (my lease is for 3 years) -- say, $9500. So, he says 'your residual is $9500, you get to finance $10500 over 3 years'.
'Okay' I say.
3 years passes, and I about to return the car. I check the market price, and find out that my 3-year old car is worth $8000 on the market, according to the Blue Book (NADA). So, I return the car after my lease ends.
If I bought the car, I would've paid $20000, then sold it for $8000. Total expenses: $12000.
Since I leased the car, my total expenses were: $10500.
This example was simplistic, but illustrates the point. Cheers.
You sort of throw money away when you buy as well. After 3 years, you car's value depreciates, so you've "thrown" away $12000 in above example. Just the same.
In any case, for 3 years driving the car, you pay certain amount in car's depreciation. Whether you get to keep it afterwards, or not, is still your choice, even with the lease.
Diff is, with the lease you have a choice of keeping it (and paying the rest of its value), whereas when you buy, its all yours from beginning (and you pay full value). Which is better? Depends a lot on the car, you, and depreciation.
In any case, for 3 years driving the car, you pay certain amount in car's depreciation. Whether you get to keep it afterwards, or not, is still your choice, even with the lease.
Diff is, with the lease you have a choice of keeping it (and paying the rest of its value), whereas when you buy, its all yours from beginning (and you pay full value). Which is better? Depends a lot on the car, you, and depreciation.
Damn you sell cars? Want a job?:lol:bascelik said:
<- taking notes on what bascelik said:lol:
For some people it is better to lease. It depends on your situation. If you know you are going to keep the car for more than 5-6 years than it is smarter to purchase. If you want a new car every 3-4 years it is less expensive overall to lease than to purchase. Now if you get 0% on a new car it's better to purchase.
^ Exactly, if you're the type who wants and gets a new car every 3 years or so then you should lease. My dad is like that. his last 4 cars he hasnt had any for more than 4 years. The 1st 2 he bought, a 944 then a Z3, then he leased a Jag S-type, and is currently leasing an S-type again, just a different color.
In his case I dont really get it, he leases an S-type, then doesnt buy it @ lease end, but goes ahead and ends up leasing Another S-type
In his case I dont really get it, he leases an S-type, then doesnt buy it @ lease end, but goes ahead and ends up leasing Another S-type
It probably wasn't worth the predicted residual value that was set for the car. Which is why leasing works out good on higher end vehicles. in this case the bank who financed the car might take a hit on the car.
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