Pro's & Con's for Leasing and Fianancing

[soflyjedi]

Thinking about purchasing a dodge charger 2012 in a month or so...whats the difference form leasing it and financing it. in the middle of payments can i trade it in for a better car if i get bored of it and continue with the payments?

 

[crcballer55]

Leasing= renting
Financing= overpaying with the belief that you're simply making "affordable" monthly payments.

 

[los angeles fresh]

Originally Posted by crcballer55

Leasing= renting
Financing= overpaying with the belief that you're simply making "affordable" monthly payments.

Couldn't have said it better myself

 

[soflyjedi]

is it worth it to finance? how much interest do you really pay?

 

[soflyjedi]

what do you mean by overpaying? with affordable beliefs? now i feel bad for thing it was a good idea to finance. is there anyone peeping into this post that has successfully paid off their financed vehicle? how long did it take you?

 

[dlsilva21]

You can just do the amortization on a calculator then subtract the initial purchase of the payment. Basically if you do the price of the note multiplied by the interest rate that'll give you an annual interest amount to be paid.

Sometimes it's worth it to finance and sometimes it's not. Some leases have mileage limitations. On the other hand, if you finance, you're what's called "upside-down" meaning that your collateral (the car) is worth less that what you have to pay on it for quite some time. So if you want a new car before your payments are less than what the car is worth, the amount that you're upside-down on will just be rolled into your new note if you should wish to get a new car. Shoot out some numbers... that might be more helpful. Leasing is better for some people and financing is better for others.

 

[Betonblck]

Lease if you want to get rid of the car after 3 years and don't plan on driving the car more than 10,000 miles a year.

Buy/Finance if you plan on keeping the car for a long time after it is paid for and may need to drive over 10,000 miles a year.

 

[crcballer55]

Getting a brand new car is about the worth thing you can do for your financial health.  The average new car depreciates in value by about 60-70% in the first five years while you are paying a premium of about $5-10K in interest in order to finance that purchase.

According to Thomas Stanley's book The Millionaire Next Door 70% of millionaires buy their cars used and pay in cash.  The other 30% lease because 1) they can afford to at that point, and 2) they don't want the hassle of selling the car.  Now I know people will say, "but ya, if I had a million dollars, I could pay in cash too".  The logic actually works in reverse here.  Most people got to be millionaires because of their spending habits and this is one of the biggest things keeping people from being financially independent.  Just watch the link above and you'll see how you can eventually drive free cars.

 

[jking0821]

Do yourself a favor.

Don't buy a 2012 charger

Save some money put some money down on a used car and pay it off.  It isn't the sexiest choice.  But i saved up and bought my 2009 corolla in cash.  Best decision i have ever made.  No car payment > any car payment.  Car is paid off it is my asset, i own it, and can do what i please with it.

Unless you have no money issue's.  In that case lease it.  Trade it in after the lease expires and repeat.

 

[luckyluchiano]

Leasing sounds good, but with the stuff I`m trying to do Career wise, I`m going to be driving alot so that is out the question I guess.

 

[rareair45]

Financing does have its benefits even if you have the cash to pay it off initially.
Usually if you are good at investing you can use the money to earn more than your interest would be on the finance deal because of how low the rates are now with car financing.

check out penfed.org
the best rates out there period.

 

[foreveryoung]

Do yourself a favor.

Don't buy a 2012 charger

Save some money put some money down on a used car and pay it off. It isn't the sexiest choice. But i saved up and bought my 2009 corolla in cash. Best decision i have ever made.
No car payment > any car payment. Car is paid off it is my asset, i own it,
and can do what i please with it.

Unless you have no money issue's. In that case lease it. Trade it in after the lease expires and repeat.


Yup. Because you asked what youd do after you get bored of the car it sounds like an impulse buy. Like dude said, do yourself a HUGE long term favor, buy used, save your money.

Im not sayin never buy a nice car, im sayin buy a nice car when youre financially fit enough to not have to worry about how to pay for it. Then excercise your debt options

 

[luckyluchiano]

Originally Posted by rareair45

Financing does have its benefits even if you have the cash to pay it off initially.
Usually if you are good at investing you can use the money to earn more than your interest would be on the finance deal because of how low the rates are now with car financing.

check out penfed.org
the best rates out there period.

So financing with a bank/credit union is the best way to go opposed to going with the dealer?

 

[hankmoody]

If you get da Charger, you better get da Hemi. Das all I'm going to say.

 

[lalph rauren]

pros u switch cars every 3 years

cons u stuck with a car u payed triple the amount u gonna sell for

 

[rareair45]

Originally Posted by LuckyLuchiano

Originally Posted by rareair45

Financing does have its benefits even if you have the cash to pay it off initially.
Usually if you are good at investing you can use the money to earn more than your interest would be on the finance deal because of how low the rates are now with car financing.

check out penfed.org
the best rates out there period.

So financing with a bank/credit union is the best way to go opposed to going with the dealer?

Car companies have had very competitive financing rates as low as .9% just depending on the car your looking to buy and how good your credit is. Penfed is a great place to finance because of the low rate no matter what vehicle it is including used vehicles.

 

[soflyjedi]

thanks all for your replies... here's the situation, i have $5,000 someone is selling their dodge magnum white 2005 to me for $5,000. only problem it needs about $400-$800 worth of work because it was in an accident and the side is dented in, and it has 90,000 mile on it. should i get it or just put that $5,000 towards a new charger and pay down on it. or buy the magnum fix the dent and trade it in for the dodge charger and pay down, how much do you think the dealer will take a 2005 magnum with 90,000 miles on it??

 

[mr j 858]

Originally Posted by soflyjedi

thanks all for your replies... here's the situation, i have $5,000 someone is selling their dodge magnum white 2005 to me for $5,000. only problem it needs about $400-$800 worth of work because it was in an accident and the side is dented in, and it has 90,000 mile on it. should i get it or just put that $5,000 towards a new charger and pay down on it. or buy the magnum fix the dent and trade it in for the dodge charger and pay down, how much do you think the dealer will take a 2005 magnum with 90,000 miles on it??

Don't mess with that used car. Especially an Amercian made used car that's being privately sold.

If you buy that used car your just asking for headaches.

Go with with the brand new Dodge Charger.

 

[rfx45]

Don't buy and trade especially if the car has been in an accident. It'll show up in the record that it's been in an accident and been repaired and dealers will lowball you on it. Just use that $5k as a down payment on a used one.

 

[mr j 858]

Also when negotiating for that new Charger your looking at getting.

Hold off and mention last how much $$$ your willing to put down. Start low like at $2000 and see what interest rates you can get and what your monthly payments will be at.

 

[The_Isomotion31]

So are you planning on keeping the car for a while? Or are you one of those want to get a new car every few years?(Not that there is anything wrong.)

 

[aztec06jr]

I leased a 2012 Acura...0 down, $340 a month. 3 year lease.

Pros: It's a brand new car, 0 down payment, car will be under warranty for the duration of the lease

Cons: Mileage is capped, I have to give up the car after 3 years.

I did this because I wanted a nicer car and didn't want to put anything down. I just graduated from college so I didn't want to commit to 5-6 years of payments and possibly end up with a car that I didn't want anymore. No matter what you decide to do, keeping up with a car payment can be a !@#!@# so just make sure it falls within your budget and don't forget about gas, insurance, etc... If you REALLY need a car, look at something lower end....For what I use my car for, I probably should have just gotten a Honda, Toyota, or even a Hyundai. But obviously, you only live once.

 

[soflyjedi]

i plan on owning this charger 2012 for at least three years and maybe switch up, JUST maybe....what do you guys think? any other tips you guys have when i approach the dealer?

 

[mr j 858]

Originally Posted by soflyjedi

i plan on owning this charger 2012 for at least three years and maybe switch up, JUST maybe....what do you guys think? any other tips you guys have when i approach the dealer?

If you can shoot emails to that car dealers internet car sales associate saying your interested in which ever car and whatever options you want on it.
The normal guys who work on the car lots are crooks and will be looking to make a sale and get their sales commission's cut. 

 

[soflyjedi]

^^^ shooting emails is a very good idea..they're coming from a safe place...i like that thanks