Rumi1

Am considering taking over the remaining 12 months on the lease of a '07 RX350 AWD w/NAV. Has a buy out at $25,000 in Dec. '09 which I will exercise. The car has 20k miles on it. Monthly lease payment is $590.
Appreciate thoughts???

regor60

That suggests to me that implied value of the car is $30-32k. I'd just check whether that is market.

Also, see this thread and the mention of an '09 Pebble Beach model
https://www.clublexus.com/forums/rx3...ighlander.html

Who_Me

Maybe I just don't understand the whole process, but I can't think of any reason to lease a car, unless you are getting a tax write-off for business. It is just like renting a house...the only winner is the owner. If you like the car, I would see what you can purchase it for right now. The current lease option you are being offered, just seems too high for me.

kalvano

A car is a depreciating asset. Leasing makes sense for a lot of people because less cash down, less money every month.

kalvano

The payment is good but it won't be worth anywhere near $25,000 at the end. Not with the 2010 RX coming out.

regor60

So, you could estimate the value now and then estimate the value in Dec 2009 ( not the stipulated residual) and thereby determine what value of the vehicle you are using. You can then, with the lease payment, determine an implied interest rate and judge whether it's a good one.

Another way that is equivalent, is to determine the implied rate based on the stipulated residual. Assuming your estimated value of the vehicle is less than the residual, the implied rate you determine will of course be higher. But then, that is offset by the room to negotiate a better price at the end closer to the lower market value (in this example)

In any event, there is no need to commit yourself to buying at lease end until that moment arrives, is there ?

Who_Me

It may be a depreciating asset, but it is an asset...something you will own. At the end of a lease period, all you own is a shoebox full of receipts. The lower down payment and monthly payment just seems counterintuitive to sound, long term financial management. I am not being critical of you, but, as I said, I just don't understand where leasing would benefit me. I am all about saving a few bucks but when I crunch the numbers, on leasing vs buying, I just can't get a lease to come out in my favor.

kalvano

Leasing is not for everyone, despite what some will tell you.

It's for people who roll over a car every 2 or 3 years.

rklages

Sounds pretty pricey for an 07 - you will have spent $36400 total to own it when you are done if you buy it out - I will sell you my 2009 RX350 everything on it including NAV and Pebble Beach package $38k with 10,000 miles - 2 years newer and half the milage for $1600 bucks more!