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Why Not Own?
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01-19-2010, 10:00 PM | #1 |
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Why Not Own?
Hey guys i been reading this forum for a long time and i noticed that alot of you guys lease the vehicles and then turn them back for a new car. Why not just buy the car out? If you end up leasing another car the money you spent you could have paid off the first car. im not really up on how these things work so it would be great to know. i was planning on buying out my 2008 335xi at the end of the lease but the way you guys do it here make it seem like its a bad idea.
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01-19-2010, 10:33 PM | #2 |
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I highly doubt you'd "pay off" that financed car in 2-3 years which is a regular lease term. It provides the option of getting out of a car after your term is up at no penalty and into a new one.
Is it like renting a car? Sort of but if you financed a car for 60 months and bought a new car every 3-4 years, that's pretty much the same as "renting". You'll always have a car payment until you stick to 1 car.
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01-19-2010, 10:35 PM | #3 |
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There are quite a few reasons that make leasing an attractive option to many. First, the usage of the car during the lease term is tax deductible if you own your own company. This drops the car payment nicely. Another reason could be maintenance/warranty issues. Some hate the idea of owning the car without warranty. Finally, what's not to like about a new car every 2-3 years. I'm sure there are other points i missed but these are the general points.
Nothing wrong with buying a used car. I definitely would not call it a 'bad idea'
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01-19-2010, 10:36 PM | #4 | |
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01-20-2010, 11:07 AM | #5 | |
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01-21-2010, 07:57 AM | #6 |
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I lease because I like a new car every 2 to 3 years. Plus from what i've seen most car problems kick in after 3 or 4 years and I really do not have the patience for that, so I lease. However, the biggest mistake ive done was putting down alot on a lease, never again. I learned my lesson.
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01-21-2010, 09:52 AM | #7 |
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I tend to change cars every 4-5 years max so leasing makes more sense for me. Leasing allows me to get into a new car every couple of years without me dealing with the hassle of trying to sell my current one or have to worry about fixing a car out of warranty. I use to have a lot more time wrenching my car in the garage all weekend long but my time is more valuable now (lack of free time) so the last thing i want to do is spend the only two days i have off under a hood. If you change cars every 4-5 years right when you are about done paying it off....its sorta the same thing as leasing. Either way you will still have a monthly payment to be made.
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01-21-2010, 10:02 AM | #8 |
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It all depends on your situation. Due to my previous job, if I leased the car, I would be over my mileage all the time, and paying penalty's. So it made sense to finance.
I still plan on getting a new car in 3 years, but at the end of the day between leasing or financing in 3 years, with the excess mileage charge turned out to almost break even. So I rather own the car, mod it, do what I want cause its my car, instead of worrying about sticking to the terms of a lease, mileage restrictions, keeping the car factory etc Its all preference and based on the situation at hand, there isnt really a "wrong answer". Some people who lease run into situations where they term is up, but they want to keep the car, and they get raped on the buy out. similarly, they may run into financially difficulties with their credit and cant get into a similar car anymore and you end up with a peguot or something LOL Where as you might have just wanted to keep up with payments and atleast stay in your nice. Pros and cons each way. Just need to weigh out what is important to you. I couldnt justify spending excess of $27,000 in 3 years , and have so many restrictions of a lease term. I pay same amount for my finance in 3 years and I own the car. (its just how the deal worked out for me). |
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01-21-2010, 10:11 AM | #9 | |
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Anyway, I'm planning to keep my car for a long time so I'm buying but now I wonder when temptation will creep in on those new models |
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01-21-2010, 11:18 AM | #10 | |
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no i feel like i got screwed by my dealer or maybe i didnt ( i dont know) . when i was ordering my car my credit score was like 734. which seems pretty high to me.when i tried to finance the car i was told that i didnt qualify but i was able to lease. maybe its my lack of knowledge but it doesnt make any since to me. so the salesmen told me that i had to lease the car first to see i could make the payments and then after that i would be able to buy the car at the end of the contract. i really feel like i got played for some reason. i understand how you couldnt spend 27k in 3 years and not be able to mod. but me myself i dont do any heavey modding anyway (i guess because i cant afford to do all that) but the salesman other excuse was that because i went from a car that i had payments of $415 and now i pay almost $800 that they weren't sure about that also. so my next question did i get screwed over or am i paranoid? i was tol that i would still owe. 32k atthe end of my lease which back then didnt seem bad. |
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01-21-2010, 11:25 AM | #11 | |
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You did get played it sounds like. Not just on the car pricing, but that whole you dont qualify for finance but you can for leasing. I think it is 750+ credit that guarantees most approvals for credit. Maybe you didnt qualify for BMW financial, so you could have went to a bank of your choice for a loan. However they tried that crap with me, then said I had an 800+ credit score. So im like yea thats funny, give me the loan A -Holes. However we would need more details. List price of the car? Down payment? did you pay taxes up front. Lot of factors. $800 lease payments? WTF? Also what was the money factor of the lease? More I think about it, sounds like they took the traditional money factor to calculate your lease, and raised it their advantage. Or you just didnt put that much down on the car. |
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01-21-2010, 11:43 AM | #12 |
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It all depends on what you want. I looked at it from a financial standpoint, the car is a depreciating asset, why would I want to own an asset that is losing money. I lease, I stay under my miles, turn it back in, and in 3 years I get a new car. I will pay about $21k over three years, that car is going to lose that or more in value in that time, therefore I'm paying that loss over three years and thats it.
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01-21-2010, 11:44 AM | #13 | |
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well for the lease the ytold me i didnt have to put anything down. i just pay the deposit for the ordering of te car. the car came out to $50k even. all i ppaid was $1300 down just for ordering the car thats it. do you think i should refinance? i heard that can work in some people favor sometimes. i didnt think about any other banks. i was young and dumb at the time. im still kind of dumb now. lol |
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01-21-2010, 11:57 AM | #14 | |
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What that means is, lets say the car is 40K. You can lease it with X down for $600 a month. Now, lets say you get a Lexus, its 40K too, you put the same down, and it might only be $550 a month. These are just arbitrary numbers to get the point across that you can lease a similarly priced vehicle, with the same down, for totally different prices. With financing, its straight up, how much is the loan, how much is the interest, how much did you put down, and that is how much your paying. No gimmiks, no money factors, no tiers( BMW doesnt use tiers BTW usually japanese cars). ETC I was able to order my car and get $3k+ taken off the sticker price though. At the end of the day you need to do the math. can you re-finance a car you never financed though? I think you answered your own question. Another reason I dont like leasing, your stuck in the lease and less you can find someone to take it over. So now your potentially stuck in this lease and you rather buy the car outright? but cant? IDK... best bet is to call the dealer and find out what you can work out if anything. Financing a car, I can get rid of it 3 hours after I bought it. (take a huge loss yes) but just the fact that I can do what I want is what I look for. |
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01-21-2010, 12:34 PM | #15 |
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+1. I like to enjoy my car without having to think about limitations on mileage.
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01-21-2010, 12:39 PM | #16 | |
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However, that just goes to show, things change, financially, geographically, economically, etc So you need to factor those into your deciscion. We can only make the best deciscions using the given information we have at the time.... |
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01-21-2010, 07:05 PM | #17 | |
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Lease depreciating assets, buy appreciating assets.
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01-21-2010, 07:46 PM | #18 |
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well because i knew i was gonna go over miles i already knew i was gonna buy the car. and the salesmen said thats ok. go figure right lol. but man i feel like an ass. i wish i would have knew more about this stuff before buying my. well my wife bought it as a christmas gift. but yea we should have done more research. shame on us. live and learn right
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01-21-2010, 08:35 PM | #19 | |
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01-21-2010, 09:16 PM | #20 |
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Owner here. I've owned every car I bought and keep it for a long time. I enjoy owning more than 1 car at all times, but more than anything else there's a certain sense of satisfaction about ownership and being able to tell people your possessions are paid for. If it breaks down, and all cars do eventually, repairment expense usually doesn't run higher than the monthly lease payment anyway and cars don't break down every month, so over the long run you still win from a financial standpoint.
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