G70 Lease Comparisons and Discussion (USA)

[Brock Samson]

Am I the only one who thinks that buying can be less expensive overall, by paying things off early (ie no more than 1 year of payments) and avoiding the majority of the interest? Maybe I'm living in the past.

I've got a good chunk of money saved to pay things off very early.

Also, I'm comfortable selling cars privately in case trade-ins don't live up to what they should be (which they never do, let's be honest).

Lastly, I suppose it matters that I'm gonna be doing a lot of work on my next car, which probably wouldnt be okay for the lease terms.

I just don't like having unnecessary payments. I also feel like leasing kind of loses the ownership experience of having a car, and you kind of care less about it and lose interest faster.

These are just ideas I've wondered about. Not statements of fact. Let me know what you guys think.

I generally agree with you. Investing the money might earn you slightly more but it's usually not that much after you factor the rate differences and cash back bonuses, not to mention the low but ever-present risk in investing. Something more valuable than that small difference is my time and peace of mind. I don't have to worry about how many miles I put on it, I can modify it how I want, I don't have to worry about missing a payment or them not deducting or stopping the auto-payments correctly, and I don't have to spend hours of time (worth more than the amount extra that I would have gained by investing) on the phone trying to explain to some inept or powerless customer service agent for the 8th time how their company made some mistake somewhere along the way.

 

[EdP]

The reason why I lease? Because i can't stand a car for more than three years. I always want to have the last technology on the car I drive. I can't imagine driving today something w/o rearview camera, automatic brake with pedestrian detection, smart cruise control, lane keep assistance, etc.

I buy for the same reason.. I can sell or trade and buy another with no restrictions. I did that after two years mostly because I wanted a different color. Now, I agree that may not be the most sensible thing, but is what I wanted. If we were sensible about car buying, this forum would not exist and we would all be driving something equal to an eight year old Corolla.

 

[ACCHRM]

As someone that works in car sales, reading your replies hurts my soul, because you guys are the worst customers ever, but then again, I know I'll do the exact same thing when I'm getting the car!
The job is hard, so at least treat the sales guy nicely, it goes a looooong way!

 

[danygenesis]

I hear you there and feel your excitement! But have you ever looked into buying your car with a loan and payment of whatever fits your budget, then at the 3-year mark, put it up for sale and sell it yourself while at the same time negotiating your next deal? With the proceeds, payoff your loan (assuming it still has a balance). I'd be curious how much you'd save doing this over the lease method. Yeah, it's more work, but the payoff could be big in comparison! Easier than this would be to buy your next car first, then sell the old car, but this takes more resources and garage space of course...

IMHO that deppends on the car depreciation. If you are planning to get a Lexus, Toyota or Honda, buying and selling could be your best choice because those car retain their value a lot and but I don't think that will be the same with a German or South Korean luxury car like the Genesis where the depreciation is huge and when trying to sell them at just 3 years old you'll find that you are still wayyy upside-down in your loan

 

[Toddasaurus]

IMHO that deppends on the car depreciation. If you are planning to get a Lexus, Toyota or Honda, buying and selling could be your best choice because those car retain their value a lot and but I don't think that will be the same with a German or South Korean luxury car like the Genesis where the depreciation is huge and when trying to sell them at just 3 years old you'll find that you are still wayyy upside-down in your loan

You're right, but you must not forget that by leasing you're effectively paying for at least 3 years worth of interest by the time you're ready to bring it back in. By continuing to lease you're not going to keep all the capital you are trying to build with those monthly payments.

 

[Tonester]

IMHO that deppends on the car depreciation. If you are planning to get a Lexus, Toyota or Honda, buying and selling could be your best choice because those car retain their value a lot and but I don't think that will be the same with a German or South Korean luxury car like the Genesis where the depreciation is huge and when trying to sell them at just 3 years old you'll find that you are still wayyy upside-down in your loan

It seems like you're saying car companies are more likely to make a mistake when calculating a car's residual value for a particular lease term if the car is a Genesis (unknown depreciation), but they'd get it right for a Lexus (car that is known for holding its value).

From what I've read, they'd like the residual value to be high enough to keep payments lower (to make it attractive) and making it more likely you won't buy the car when the lease ends (they really would prefer you turn the car in). They want the residual value to be low enough so they can receive higher payments and not lose too much profit when reselling it after you turn the car in.

If a car's depreciation ends up being huge (more than what was expected when the lease started), then the car company made a big mistake because they let you 'rent' the car for less than it actually cost them. Seems like they wouldn't do that very often before their business would be seriously at risk regardless of whether it's a Lexus or a Genesis.

 

[dengen]

For you guys buying and selling a car every 2 years - don't the taxes just eat at you for this? Are you deducting them somehow?

 

[EdP]

For you guys buying and selling a car every 2 years - don't the taxes just eat at you for this? Are you deducting them somehow?

Just part of the cost of ownership. I had a neighbor that bought a new car every year. He had his new one usually the first day the new models were on sale. I know people that keep cars for a dozen years too. I had one for 15 years. After about four years it became the second car for my wife.

 

[Edmguy]

I have paid cash for my last 7 vehicles and 3 RV's. Most of the time I find you can get a better price by paying cash and for the people that will argue "think of what the money could do invested" my comment is that I like to sleep at night. It is maybe because I am an accountant and so am somewhat conservative by nature, but I like knowing that if my wife and I both lost our jobs today, I have no payments coming out of the bank account, no bank or finance company can take away any of our vehicles. Worst case, I won't be upgrading for a while. And because as soon as I buy one vehicle I start saving for the next, I always have a decent amount of money set aside for emergencies.

I like having zero stress about money and I also like the flexibility you have by owning where I can sell at any time and don't have to worry about lease restrictions or even just having to deal with a banks lien on my vehicle. Plus I like to take care of my vehicles more than the average person and that isn't rewarded in a lease. 3M and tint on a lease? Money wasted. But if you own it, it typically helps your resale.

 

[Brock Samson]

I have paid cash for my last 7 vehicles and 3 RV's. Most of the time I find you can get a better price by paying cash and for the people that will argue "think of what the money could do invested" my comment is that I like to sleep at night. It is maybe because I am an accountant and so am somewhat conservative by nature, but I like knowing that if my wife and I both lost our jobs today, I have no payments coming out of the bank account, no bank or finance company can take away any of our vehicles. Worst case, I won't be upgrading for a while. And because as soon as I buy one vehicle I start saving for the next, I always have a decent amount of money set aside for emergencies.

I like having zero stress about money and I also like the flexibility you have by owning where I can sell at any time and don't have to worry about lease restrictions or even just having to deal with a banks lien on my vehicle. Plus I like to take care of my vehicles more than the average person and that isn't rewarded in a lease. 3M and tint on a lease? Money wasted. But if you own it, it typically helps your resale.

Agreed. Peace of mind is worth a lot. I also lile to buy for these reasons.

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[Tonester]

For you guys buying and selling a car every 2 years - don't the taxes just eat at you for this? Are you deducting them somehow?

I sure wish the states would re-evaluate collecting tax on vehicles (yeah, some don't have sales tax). Think about it... every other consumer item we buy is typically used only by the original purchaser and as such, full taxation is appropriate. But a vehicle changes many hands in its lifetime and the states have their hand out for each transaction! Great revenue for states, but a ripoff for consumers! Makes me want to move to a state without sales tax. RANT OFF

 

[EdP]

I sure wish the states would re-evaluate collecting tax on vehicles (yeah, some don't have sales tax). Think about it... every other consumer item we buy is typically used only by the original purchaser and as such, full taxation is appropriate. But a vehicle changes many hands in its lifetime and the states have their hand out for each transaction! Great revenue for states, but a ripoff for consumers! Makes me want to move to a state without sales tax. RANT OFF

Be careful which one you move to. NH does not have sales tax but property tax is more than enough to make up for it. To register my car in Nashua is about $1000 for a year.

Here is CT registration is cheap but I pay property tax on my G80 of about $500 and it will go down every year. Paid sales tax when I bought it too. They are taking your advice and reviewing the sales tax on cars. They want to increase it.

 

[Toddasaurus]

I sure wish the states would re-evaluate collecting tax on vehicles (yeah, some don't have sales tax). Think about it... every other consumer item we buy is typically used only by the original purchaser and as such, full taxation is appropriate. But a vehicle changes many hands in its lifetime and the states have their hand out for each transaction! Great revenue for states, but a ripoff for consumers! Makes me want to move to a state without sales tax. RANT OFF

This!

Also, no sales tax in Oregon.

 

[TurtleBoy]

But have you ever looked into buying your car with a loan and payment of whatever fits your budget, then at the 3-year mark, put it up for sale and sell it yourself while at the same time negotiating your next deal? .

In general it will always be more expensive doing it this way rather than leasing due to sales taxes. When you lease you only pay the taxes on the depreciation amount monthly rather than the entire amount. There is some differences in state tax laws regarding payment and recoup but the large majority of times you will be better off leasing for just a short period of time.

 

[Beefer]

[QUOTE="Tonester, post: 278993, member: 23426" But have you ever looked into buying your car with a loan and payment of whatever fits your budget, then at the 3-year mark, put it up for sale and sell it yourself while at the same time negotiating your next deal? .

In general it will always be more expensive doing it this way rather than leasing due to sales taxes. When you lease you only pay the taxes on the depreciation amount monthly rather than the entire amount. There is some differences in state tax laws regarding payment and recoup but the large majority of times you will be better off leasing for just a short period of time.

Not true...some States require tax on full amount of capitalized cost. So in VA...4.15% on the whole thing

 

[Electrode]

In Pennsylvania, the sales tax is due only on the net amount owed after the trade in. If you're leasing, the sales tax rate jumps from 6% to 9%. Pittsburgh is 1% higher and Philadelphia is 2% higher on top of that.

 

[TurtleBoy]

Not true...some States require tax on full amount of capitalized cost. So in VA...4.15% on the whole thing

No, it is true. I said there are differences in state laws hence the majority of the times.

 

[Tonester]

Not true...some States require tax on full amount of capitalized cost. So in VA...4.15% on the whole thing

You think that's bad? My county in CA has a 9.25% sales tax rate. That's almost $5K for this car, just for sales tax, ouch!!

 

[Beefer]

You think that's bad? My county in CA has a 9.25% sales tax rate. That's almost $5K for this car, just for taxes, ouch!!

Cunucks pay 15%...or did that change?

 

[JayceM]

Now that these vehicles are actually for sale, there should be lease numbers. Anyone seen them yet? Interested to what a payment would come out to.