[hl0m4n]

we had a car deal and everything and last minute my mom changes her mind, and im like wtf. i gave her excel charts, sheets, etc to show her this is the right decision but she just isn't convinced. so i want to ask you guys so i can show her this thread and prove to her im right and others do see my point of view. my mom doesn't mind language so speak freely .

Current Car:
08 Acura RDX
36 month (3 year), 10k annual miles (30k total)

my mom's commute car broke down (toyota) so she has been using the acura as her commuter. in 1.5/3 years of the lease, we put 30k miles. so at the end of the lease (3 years) we are looking at roughly 60k miles.

so we are faced with 3 options:
1. end lease- since our total allowed miles on the lease is 30k and we are looking at about 60k at end. so we are 30k miles over at .20 cents per mile that is $6,000 in fees. paying this is obviously dumb so this option is out.

2. finance- the residual on the car is 20k and will have about 60k miles. to make math easier, if my mom decides to finance the car for 6 years, forget about the monthly payments, the car will have about 180k miles once the finance is finished (60k original+120k from the 6 year finance). now after the car hits 50k miles we have to buy the oem extended warranty to 100k miles which costs $2.5-3k. but my main point is i can barely see this car going with no problems after 130k let alone 150k and 180k?. by the time the finance is up the car is crap and we will have to get another. there is like no value on the car and we can't get anything out of it from dealer trade in or private sale for a new car.

3. trade in- this is the original plan my mom changed her mind on last minute. we were going to trade in the acura for a new 09 jetta se w/ navigation. the terms are $3k down with $455 month for 6 years (72 months). so my logic is this. if we trade the car in now for the new jetta, for starters we don't have to worry about the acura once the lease is up. second if we take the original estimated miles at 1.5/3 years @ 30k the car will have about 120k miles when the finance is finished. the car also has from factory a 60k powertrain warranty. since this car only has 120k miles at the end we will not be having any possible problems from running up to 180k miles like the acura and when we trade the car in for a new car or sell it privitly we can at least get $4-5k for it. we can also buy the oem extended warranty as well if need which is about the same price as the acura.

so i know what your thinking $455 month for 72 months (6 years) on a jetta? but i broke down the numbers and it seems reasonable which is why i believe that option 3 is the best option for us.

total payments: $32,760
down payment: $3,000
car value: $23,500
intrest: $3,500
misc: $5,760 (i guess they want some extra money for taking the lease in as there is 16 months left of the acura lease at $354 month plus the 20k residual).

another big factor is the acura is running premium gas while the jetta runs regular. so if we fill up 3 times a month at 2.50 for premium at 18 gallons that is $135 month for the acura and jetta at 2.00 for regular at 14.5 gallons is $87 with the difference being $48 month, $576 a year. on top of that the jetta gets alot better gas milage than the acura.

so what do you guys think? am i right? speak freely guys . thanks.

i also have one question that might just solve our problems. the current jetta lease numbers of $455 month for 6 years is based on the acura lease being traded in at 30,000 miles with 16 months left on the lease in addition to the residual. if we hold the car for 10 more months the car will have about 50,000 miles with 6 months left on the lease plus residual. if we trade the acura then for the jetta, will my monthly payment be higher or lower based on the same numbers of downpayment, car value, and interest mentioned above?

[themonotron]

I'm having a little trouble with the analysis and the format of your writing, it's probably just me but it took me a couple of glances to even determine what you're trying to state.

Best thing to do is, without me fully understanding your question and the information provided, is to list out the full cost for each option very clearly and concisely (this might take some accounting knowledge). I'm not sure what kind of spreadsheet you showed your mom, but make it very clear for someone who does not understand financial statements or analysis to read, and make sure everything adds up perfectly. Then tell her, if she's at all interested in taking the least costly route, that this is the best option. Make things very easy for her to understand, and if she refuses then your SOL.

[marty_mcfly]

we need to help you STFU your mom

[FStop7]

Pice of mom please, must gauge her MILFiness before I decide to help

[amsfoto]

Originally Posted by FStop7

Pice of mom please, must gauge her MILFiness before I decide to help

+1

Seriously though...if you want to really save money, trade the RDX in for something cheaper than a new Jetta. There are so many dealers offering .9% or lower financing, if saving money is your priority why do you need to be spending that much on a car to replace the one you don't want to pay for now?

[hl0m4n]

Originally Posted by amsfoto

+1

Seriously though...if you want to really save money, trade the RDX in for something cheaper than a new Jetta. There are so many dealers offering .9% or lower financing, if saving money is your priority why do you need to be spending that much on a car to replace the one you don't want to pay for now?

of course i looked at cheaper options, prius and civic. none of the dealers wanted to take a lease trade in and with leather seating it was like $2k more than the jetta and overall the jetta is much better than the two with a $2k difference.

[easyman]

you guys just should just buy another cheap car on the side. Having the Jetta on 6 yr pmts sounds crazy to me.

[JeepJeep]

Originally Posted by hl0m4n

total payments: $32,760
down payment: $3,000
car value: $23,500
intrest: $3,500
misc: $5,760 (i guess they want some extra money for taking the lease in as there is 16 months left of the acura lease at $354 month plus the 20k residual).

wat

6k in overage miles is < 9k in lease payments over the value of the car, and you dont even get the car in the end...

Or am I not noticing something?

[yomama69]

Why the fuck would you lease if you can't deduct the vehicle's expense? Does anyone not listen to Warren Buffett?

[jaiman]

Originally Posted by yomama69

Why the fuck would you lease if you can't deduct the vehicle's expense? Does anyone not listen to Warren Buffett?

God, not this old debate. Suffice to say, some people look at the numbers and find leasing is better for them. Yes, even with out deducting the interest.

[yomama69]

Originally Posted by jaiman

God, not this old debate. Suffice to say, some people look at the numbers and find leasing is better for them. Yes, even with out deducting the interest.

You know what that's called? Wanting to drive something you really can't afford.

[cougfan335]

^+1, or I know people that lease becuase they have too much money and get new cars every 2-3 years and just couldn't seem to handle selling the car. Best option would be to get another car and just use the Acura as originally intended (which is quite sparingly now). There are some awesome deals on used cars out there!

[jaiman]

Originally Posted by yomama69

You know what that's called? Wanting to drive something you really can't afford.

^^And that's called not knowing what the f*ck you are talking about. Lets say you want a car that costs 50k. interest rates are 4% and in 4 years you are going to get rid of the car. You have three options, cash, lease or finance. Financing the car gets a monthly payment of $1128.95, leasing is $665. The difference is $463.95. You take that difference and invest it each month and achieve the long run equity market average of 10% per year. After 4 years you have $27,244.46 in you investment account. You return the car, which we'll say is worth the residual of $24,000. So you have $27,224.46 and have driven a car for 4 years. Then you have the car that was financed which you sell for $24,000. You monthly payment was the same over the entire term (comparing investment and lease with finance cost) and yet you came out ahead by $3,224.26 by leasing and investing the difference.

And as for paying cash upfront? You'd be much better off leasing and investing the cash. If you leased in that scenario and invested the 50k you'd have $73,205 after 4 years and would have paid $31,920 for your lease.

All of this assumes a lease with fairly standard terms right now and doesn't take into account some of the amazing deals you could get on a lease (as an example, last year BMW had 8 or 9k off on M3s in Canada, but the residual value on the lease was based on the price before the discount)


I hate getting sucked in to this argument, but the sanctamonious tone of the anti-leasers gets me everytime.

[jlstyle]

All your options are very bad.
Trading in your leased vehicle (especially yours) to finance a car is the worst. Definate lose/lose on that.

Either keep the RDX until the lease end and try to negociate buy out price and have it financed under 36 months or return it with fines and lease another one at discounted price.
Whatever you do now, you are losing it.

[yomama69]

Originally Posted by jaiman

^^And that's called not knowing what the f*ck you are talking about. Lets say you want a car that costs 50k. interest rates are 4% and in 4 years you are going to get rid of the car. You have three options, cash, lease or finance. Financing the car gets a monthly payment of $1128.95, leasing is $665. The difference is $463.95. You take that difference and invest it each month and achieve the long run equity market average of 10% per year. After 4 years you have $27,244.46 in you investment account. You return the car, which we'll say is worth the residual of $24,000. So you have $27,224.46 and have driven a car for 4 years. Then you have the car that was financed which you sell for $24,000. You monthly payment was the same over the entire term (comparing investment and lease with finance cost) and yet you came out ahead by $3,224.26 by leasing and investing the difference.

And as for paying cash upfront? You'd be much better off leasing and investing the cash. If you leased in that scenario and invested the 50k you'd have $73,205 after 4 years and would have paid $31,920 for your lease.

All of this assumes a lease with fairly standard terms right now and doesn't take into account some of the amazing deals you could get on a lease (as an example, last year BMW had 8 or 9k off on M3s in Canada, but the residual value on the lease was based on the price before the discount)


I hate getting sucked in to this argument, but the sanctamonious tone of the anti-leasers gets me everytime.

You know damn well that 99% of people who lease do not invest the difference between lease and purchase. Furthermore, after you are done paying overmileage (which most people do) and replacing tires because there are minimum tread depth requirements on the lease, and paying for dings and scratches, where did that 3K saved go now?

I"m not going to say that I don't mean to be cynical, because I do, because leasing is not a good financial option for individuals (not talking businesses) 99% of the time. The only people who come out with a good situation on a lease is the person who makes money selling the car after you turn it in.

[yomama69]

Originally Posted by jlstyle

All your options are very bad.
Trading in your leased vehicle (especially yours) to finance a car is the worst. Definate lose/lose on that.

Either keep the RDX until the lease end and try to negociate buy out price and have it financed under 36 months or return it with fines and lease another one at discounted price.
Whatever you do now, you are losing it.

+1.

[Tondtar]

Originally Posted by yomama69

You know damn well that 99% of people who lease do not invest the difference between lease and purchase. Furthermore, after you are done paying overmileage (which most people do) and replacing tires because there are minimum tread depth requirements on the lease, and paying for dings and scratches, where did that 3K saved go now?

I"m not going to say that I don't mean to be cynical, because I do, because leasing is not a good financial option for individuals (not talking businesses) 99% of the time. The only people who come out with a good situation on a lease is the person who makes money selling the car after you turn it in.

Listen to yomama

[Dmitriy@AUTOcouture]

Originally Posted by yomama69

You know damn well that 99% of people who lease do not invest the difference between lease and purchase. Furthermore, after you are done paying overmileage (which most people do) and replacing tires because there are minimum tread depth requirements on the lease, and paying for dings and scratches, where did that 3K saved go now?

I"m not going to say that I don't mean to be cynical, because I do, because leasing is not a good financial option for individuals (not talking businesses) 99% of the time. The only people who come out with a good situation on a lease is the person who makes money selling the car after you turn it in.

So basically what you are saying is that in order for a lease to make sense, you must not lose money when giving it up... correct?

Well let's see if you are correct, and lets break it down mathematically (as if you were to give the car up in 3 years, just like a lease):

You finance a car:

Price: $50,000
Depreciation: 32%
Monthly payment (assuming a decent rate): $1,100.00
Selling Price: $30,000 (you knock $4k off to attract some people)
Minor Repairs: ~$2,300 (dings/scratches/tires, etc.)
Time spent selling the car: 1/2 months in a good economy, 3/4 in a bad one.

At this point you are out $2,300 to sell the car.

You lease a car:

Price: $50,000
Depreciation: 32%
Monthly payment (assuming a decent rate/MF/good deal): $700
Minor Repairs: ~$2,300 (dings/scratches/tires, etc.)
Time spent selling the car: NONE.

At this point you are out the same $2,300 to fix it up BUT you spent $400 less a month on the car! That's $14,400 over 3 years!

Yes, you do get the difference between what you sold your car for and what you actually owe when you finance, but you just spent $14k more on the car itself. So deduct that from what you sold the car for.

Sorry man, I'd rather take the second route.

[jaiman]

Originally Posted by yomama69

You know damn well that 99% of people who lease do not invest the difference between lease and purchase. Furthermore, after you are done paying overmileage (which most people do) and replacing tires because there are minimum tread depth requirements on the lease, and paying for dings and scratches, where did that 3K saved go now?

I"m not going to say that I don't mean to be cynical, because I do, because leasing is not a good financial option for individuals (not talking businesses) 99% of the time. The only people who come out with a good situation on a lease is the person who makes money selling the car after you turn it in.

What 99% of people do is of no concern to me. I try to make decisions that are best for me. And if I find something that works, I try to let other people know.

I've leased every car I've had, I've invested the difference and I've never gone over mileage. Yes I've purchased tires but I would have needed to if I owned the car.


If you think of it, really, a 5 year mortgage with a 30 year amortization is just an open ended lease. And I bet you have one of those.

[jaiman]

Originally Posted by shpuntik

So basically what you are saying is that in order for a lease to make sense, you must not lose money when giving it up... correct?

Well let's see if you are correct, and lets break it down mathematically (as if you were to give the car up in 3 years, just like a lease):

You finance a car:

Price: $50,000
Depreciation: 32%
Monthly payment (assuming a decent rate): $1,100.00
Selling Price: $30,000 (you knock $4k off to attract some people)
Minor Repairs: ~$2,300 (dings/scratches/tires, etc.)
Time spent selling the car: 1/2 months in a good economy, 3/4 in a bad one.

At this point you are out $2,300 to sell the car.

You lease a car:

Price: $50,000
Depreciation: 32%
Monthly payment (assuming a decent rate/MF/good deal): $700
Minor Repairs: ~$2,300 (dings/scratches/tires, etc.)
Time spent selling the car: NONE.

At this point you are out the same $2,300 to fix it up BUT you spent $400 less a month on the car! That's $14,400 over 3 years!

Yes, you do get the difference between what you sold your car for and what you actually owe when you finance, but you just spent $14k more on the car itself. So deduct that from what you sold the car for.

Sorry man, I'd rather take the second route.

Of course it is dependent on the residual you get. Thats why you actually need to calculate what makes more sense and you can't say that one option is always better than another.

[Dmitriy@AUTOcouture]

Originally Posted by jaiman

Of course it is dependent on the residual you get. Thats why you actually need to calculate what makes more sense and you can't say that one option is always better than another.

Agreed. Definitely can't blanket these kind of scenarios.

[solefald]

pics of mom or GTFO.