The Chad

Okay, so 10% down on $45,000 USD is $4500.00. A quick check at Bankrate.com , with financing $40,500 would result in, on a 3 year loan, a montly cost of $1195.72. Yes, you'll on the car in 3 years, but how would paying more than DOUBLE what you're assumed payment on a lease make your money more accessible for other investments?

Yes, most "rich" people would pay cash for a car, but there are people out there who either want a nicer car than what getting a loan would net them, or it's fiscally as smart to lease. I lease the S2000 I currently drive, and the residule after 5 years is 16 grand. 5 year old S2000s are selling for close to $20,000 in my region, so I could turn around, buy the car out (and probably get the residule even lower) and resell the car and have cash in my pocket. Would it be enough to have made leasing better than buying for me? I don't know, but it's not as horrible.

What I don't understand is that because some people out there wish to buy a car with more options or "waste" money in your eyes, do you need to degrade them for their decision. Every person on this board, no matter the age, if they are paying for the car themselves they'll look at all the options and detirmine what's best for them.

Sorry for such a rude first post, but I've been lurking around here for awhile and felt that I need to chime in on the subject.

Another thing, if you rent where you live and don't own, that's throwing your money away. It's a better investment to own your own house then rent from someone else, and a house generally goes up in value, whereas a car does not. Does that make everyone who rents dumb for throwing their money away?

Link to amortization table of 3 year loan at 4% http://www.bankrate.com/brm/auto-loa...Oct+20%2C+2008

shesells

I think all of you lost sight of the original question: What are the new IS 350's leasing for?

based on an MSRP of 44,900 (with Navigation/ Mark Lev pkg) roughly $700 mo

umpalumpa

I've been thinking that since i read the first post a couple of days ago! LOL! It sort of morphed into a lease/buy argument. I was wondering why no one has been posting the friggin deals they have gotten - as thats what i came to this topic for originally! So maybe some people want to talk about the deal they made, huh? Especially the LEASE Deals! Dont forget to inlude options, price, miles and payments. BACK ON TOPIC - That post about rich people buying cars was a bunch of crap BTW, sounds like others chimed in though.

INHOCJP

You seem to make a lot of comments about lexuslover's garage...a wee bit jealous?


That statement would be true if you inserted an IMO to your sentence.


Yeah, but we can all agree, a terrible investment.

tqlla3k

iTrader: (1)

You guys seem to know about leasing... is there something wrong with my math? It looks like leasing will only end up costing just a smidge more than buying... I would lease if my math holds up.

According to my math, if you leased the IS for $37500 for 3 years and bought the car at the end with a 3 year loan@4.75, you would end up paying 42867 total

If you buy the car 60mo@4.75 you pay 42180... which isnt a big difference at all.

Example lease
Lease Price 37500/Term 36 months/12000mi
Buy out(62%) = 22196: Payment =484
36*484 + 1584 + 22196 = 41204
If you finance the 22196 over 36 months

Total after 6 years =(662.75*36)+(36*484)+1584 = 42867

Car loan =37,500
Loan @ 4.75*60 +1584 down= 673.67
total payment after 5 years =(673.67*60) +1584= 42004

topgun04

I think your comparison is not quite valid. In your lease, you have a 3 yr lease and then finance it for 3 year. At the end of your finance, your car will still worth something (your residual), so you have to add it back as a reduction. In the same token, in your buying calculation, you also has the residual of the car after you pay off the load. Also your lease payment is much lower than the finance payment, how much money can you make with the difference. It is getting real complicate very fast if you want to get precise.

I think it may be easier to look at it from a different angle. You negotiate the car the same way, so you have the same cap cost (unless there is lease cash that manufacturer give it to the dealer and pass it on to you). However lease has some fee that buying don't have (the major one is the acquisition fee. I think lexus charge $550 or so). The interest rate that you can get is going to be different between buying and renting. If you can get a home equity loan to pay for the car (purchase), you are going to be mile ahead in the finance category. When you buy you have to pay for the sales tax up front for the whole car. Depending on the state that you are in, you may or may not be able to get part of the sales tax back when you trade in your car. In lease, your sales tax include the finance charge also. In your example, sales tax for purchasing would be for the $37,500 amount, the sales tax for the lease portion would be 484*36. Then finally the monthly payment that you save can make you some money and you have to assign what you think you can do with the money.

A general rule is that if you can write it off for tax (business use), you should lease always. If you cannot write it off then decide how long you want to keep the car. If it is forever, then buy it. If you are like me, keeping the car only for 3 - 4 years, then you are in murky territory. You can try to shop the best deal for lease vs purchase for both the finance and cap cost and decide e.g. BMW has a 05 Z4 special running in the last few month for a 2 years lease, their money factor is 0.0001 (or about 2.4%) and have lease cash of 2500 to 3000 or so for dealer vs there is nothing for buying the Z4 out right. A couple thing that is in lease favor is the guarantee residual. In your case, you quote IS has 62% residual after 3 years. Three years from now there is a fair chance that the residual may be not quite 62%. in this case, you are doing better by lease. By the way if the residual is higher, you can always buy it after the lease end. Also Lexus give you a gap insurance for free if you lease. If you total your car during the lease, you hand Lexus the insurance check and you are done. If you buy the car, the insurance check may or may not be enough to cover your loan balance and you have to come up with the difference.

lexuslover

generally with leasing you don't *intend* to keep it afterwards (i haven't kept any), otherwise your math holds up and it would end up costing a bit more, especially if you continue to finance the purchase instead of make a balloon payment.

sometimes people end up keeping the cars b/c they haven't racked up close to the miles allowed, so the value is higher than the residual in the contract. there are other reasons why you might buy it back, but i think most lessees look forward to getting into another new car!

topgun04

P.S.I went through the actual calculation a couple years ago when I get 2 different Accords within 1 months. I purchased a 04 Accord EX V6 Sedan myself and lease a 04 EX V6 couple for my kids in December 03 and Jan 04. The diffenence is that I have a trade in for my sedan. In Arizona, I can deduct the sales tax when I have a car to trade in and it save me about $1500. But if I lease, I won't get that benefit. Hope that help.

lexuslover

you did get the "deduction" indirectly while leasing, because they don't charge the sales tax on the full price of the car. you only get taxed on the diff between the negotiated price and the residual. AZ laws are better than CA. in CA you can't get trade in deduction for sales tax at all.

Jcjacob21

Just leased a IS350 with premium and summer wheels.. MSRP $38,234
$4,900 down
$498 a month
15K miles/year
36 Months

Residual $23,700

97Soarer

iTrader: (2)

12K miles a year = 62% residual
Money Factory for 730+ FICO = .00235
Available to get it slightly below MSRP = wait 1-2 weeks


This is the information that I got when I visited the dealer yesterday. I drove an IS350 with Navi but w/o HID which I felt was a oxymoron sort to speak. Can't believe a higher trimmed Lexus doesn't have this as a std feature. Furthermore, they are saying a Sport Package IS350 is going to be hard to find. Did Lexus alienate itself from the sport luxury sedan group? This is definitely not the b@lls-out first gen IS.

cashu2

Based on those figures it sounds like you paid about $2000 over MSRP, did you get some kind of add ons?

Mrbig

When leasing best bet is not to put money down because its lost money, so far i got a deal of $650.00 a month with $2000.00 total out of pocket 12k a year 36 months loaded which isn't to bad !!!

Threxx

So if I pay all the money up front on a lease do I get to bypass the money factor? Is that the main benefit or what? Like in other words, there's no interest?