Ok need help! I have been leasing my car for 14 mo. now and would like to get a loan and purchase
10-16-2003, 01:39 PM
#11
OK, here are the adjusted figures based on your ACTUAL numbers
Here is the recap of your situation (the important factors):
1) You leased for 48 months
2) 14 payments have been made, there are 34 to go
3) your lease payoff right now is $24,593.45+$2,029=$26,622.45.
4) your monthly lease payment is $432
5) your lease residual at the end of the 48 month term is $16,372.50
Given the over the mileage situation you are in turning the car in at the end of the lease term is not even an option with $8k in mileage overage.
I am not going to discuss your current lease terms and figures as they are all water under the bridge and they have no bearing to the solution (including your huge down payment).
Scenario 1: You stay with your lease then do a third party buyout at the end ( no sales tax out of your pocket at the end)
Total cost: 34x$432 + $16,372.50 = $31,060.50
Scenario 2: You refinance now, and sell the car to someone after 34 months.
Your monthly paymets will be $490.17.
You will owe $12,190 ater 34 payments.
Your total cost is: $490.17x34+$12,190=$28,855.78
You can see that from the above figres you would be a lot better off doing a refinance and trying to sell the car on your own than sticking your lease out. Also if you couldn't find a 3rd party to do the buyout at the very end of the lease term you would have to pay sales tax on the $16K making the lease deal even worse. Also with the regular finance you can sell the car any time you want to (you can afford to, meaning willing to take the negative equity hit).
If I were in this situation I would no doubt do a refinance and cut my losses at this point. It is definetely the cheapest and most flexible solution for you.
Note to all the other readers: This is a specific situation with specific numbers, this is an example of a lease that has gone bad (and very expnesive) due to several factors and it is not intended to be used as proof of lease being the ultimate bad. This is proof that lease can be bad for some situations but leasing can make perfect sense for several people.
I am leasing (Premiere Purchasing actually) my A4 Avant that had a sticker price of $32,460 for $415 a month for 39 months with 15k/year miles and I did not leave any money at the dealer when I picked her up. Just did a sign and drive. Now THAT was a good lease/PP deal! Doing 48 month with 15k will guarantee that your warranty will be up before the end of the lease and you should NEVER lease for longer than the warranty term that defeats the whole purpose of leasing. With 39 month/15k I am guaranteed to be within waranty for the entire lease term.
Good luck with your situation, take my advice as you wish!
1) You leased for 48 months
2) 14 payments have been made, there are 34 to go
3) your lease payoff right now is $24,593.45+$2,029=$26,622.45.
4) your monthly lease payment is $432
5) your lease residual at the end of the 48 month term is $16,372.50
Given the over the mileage situation you are in turning the car in at the end of the lease term is not even an option with $8k in mileage overage.
I am not going to discuss your current lease terms and figures as they are all water under the bridge and they have no bearing to the solution (including your huge down payment).
Scenario 1: You stay with your lease then do a third party buyout at the end ( no sales tax out of your pocket at the end)
Total cost: 34x$432 + $16,372.50 = $31,060.50
Scenario 2: You refinance now, and sell the car to someone after 34 months.
Your monthly paymets will be $490.17.
You will owe $12,190 ater 34 payments.
Your total cost is: $490.17x34+$12,190=$28,855.78
You can see that from the above figres you would be a lot better off doing a refinance and trying to sell the car on your own than sticking your lease out. Also if you couldn't find a 3rd party to do the buyout at the very end of the lease term you would have to pay sales tax on the $16K making the lease deal even worse. Also with the regular finance you can sell the car any time you want to (you can afford to, meaning willing to take the negative equity hit).
If I were in this situation I would no doubt do a refinance and cut my losses at this point. It is definetely the cheapest and most flexible solution for you.
Note to all the other readers: This is a specific situation with specific numbers, this is an example of a lease that has gone bad (and very expnesive) due to several factors and it is not intended to be used as proof of lease being the ultimate bad. This is proof that lease can be bad for some situations but leasing can make perfect sense for several people.
I am leasing (Premiere Purchasing actually) my A4 Avant that had a sticker price of $32,460 for $415 a month for 39 months with 15k/year miles and I did not leave any money at the dealer when I picked her up. Just did a sign and drive. Now THAT was a good lease/PP deal! Doing 48 month with 15k will guarantee that your warranty will be up before the end of the lease and you should NEVER lease for longer than the warranty term that defeats the whole purpose of leasing. With 39 month/15k I am guaranteed to be within waranty for the entire lease term.
Good luck with your situation, take my advice as you wish!
10-16-2003, 01:49 PM
#12
One more point for the sake of completeness!
If for some magical reasons your driving habits would change for the next 34 months and you could keep your driving under 1,100 miles a month making your total mileage at the time of lease turn-in 67,900, you could actually walk from the car and pay the $1,975 in mileage penalty which would be the same amount as what you would pay in the higher montly payment on the loan for the 34 months. In this case I would recommend keeping the lease and let the bank take the risk of the used car sale (another benefit of leasing in general). However I HIGHLY doubt that you can go from driving 2100 miles a month to 1100 miles a month.
This was just added for the sake of completeness...
This was just added for the sake of completeness...
10-16-2003, 02:07 PM
#13
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uhh are you a finance manager some where? -more
First off thank you for your help you have spent more time talking to me and helping me understand than anyone else has. I appreciate it greatly. I cannot understand how you were able to get your vehicle at that price for that monthly lease payment. I came in willing to put up to $3k hoping to get a lease of like 450 or less. But had to put 5+ just to get away with 432 a month. I don't understand.
10-16-2003, 02:10 PM
#14
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I though that besides the lease payout, you had to pay ...
Any other fee or penalty imposed by AoA as "administratives" dues... Do they add to this mix? or Are you free to buy out your own lease whenever you want? (independently if it's a bad or good deal)
This conversation is definitively on my top 10 interesting Treads list.
This conversation is definitively on my top 10 interesting Treads list.
10-16-2003, 02:19 PM
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Indeed.. for my next car.. -more-
I'd rather invest $1000 on GTakacs than a bigger downpayment.
That's a deal!, give him round trip tickets, accomodations and, food and let him do the talk at the dealer. Then use $$ he can potentially save you and go out to celebrate.
Jeezz...
That's a deal!, give him round trip tickets, accomodations and, food and let him do the talk at the dealer. Then use $$ he can potentially save you and go out to celebrate.
Jeezz...
10-16-2003, 04:46 PM
#19
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Buy a cheap 2nd car and put the miles on that one...
If you work it right, you might be able to buy a reliable, high mileage car, drive that for a while and sell it for approx the same price. Keep repeating until your lease is over.
10-16-2003, 05:51 PM
#20
Well.....
Actually at the end of the lease term it is cheaper to buy the car than turning it in. If you decide to buy it you just have to pay the residual and you're good to go. If you decide to turn it in, you have to pay a "disposition fee" which is around $250-$300. You also have to worry about the final inspection and making sure that your car is in mint condition and nothing beyond normal wear ot tear, otherwise you can pay for those scratches on the paint, the burnt upholstery, the worn tires etc. dearly.
To get out of your lease early, in theory you have to pay all the remaining payments at that point as you were in a contract with the finance company. Some companies do not impose this and allow you to pay whatever is the residual value at that point plus some penalty that they will use making interest on you. This varies by state statute limitations and finance companies. The best bet is to read your lease agreement to figure your specific contrat terms out.
To get out of a lease early sometimes it is cheaper to transfer the lease to a 3rd party. Generally there is a lease transfer fee that can be about $500 but it's usually the buying party who is liable for that one. However there is a catch with lease transfers, even if the 3rd party qualifies (they have to qualify for credit in most if not all cases) the initial lessor is still liable for the payments, so if the new lessor defauts he/she can ruin the original lessors credit. Places like <A HREF="http://www.leasetrader.com">http://www.leasetrader.com</A> specialize in helping people to transfer leases.
I hope that answer covered all the angles :-).
To get out of your lease early, in theory you have to pay all the remaining payments at that point as you were in a contract with the finance company. Some companies do not impose this and allow you to pay whatever is the residual value at that point plus some penalty that they will use making interest on you. This varies by state statute limitations and finance companies. The best bet is to read your lease agreement to figure your specific contrat terms out.
To get out of a lease early sometimes it is cheaper to transfer the lease to a 3rd party. Generally there is a lease transfer fee that can be about $500 but it's usually the buying party who is liable for that one. However there is a catch with lease transfers, even if the 3rd party qualifies (they have to qualify for credit in most if not all cases) the initial lessor is still liable for the payments, so if the new lessor defauts he/she can ruin the original lessors credit. Places like <A HREF="http://www.leasetrader.com">http://www.leasetrader.com</A> specialize in helping people to transfer leases.
I hope that answer covered all the angles :-).