Lexus CT200h Forums banner

1 - 16 of 16 Posts

·
Registered
Joined
·
12 Posts
Discussion Starter #1
I want to know what others have done - buy or lease? - when getting their cars, and why?

I will have to sign the contract to acquire the car on Tues - I am still conflicted about these 2 options. I would like to see what the others on this bulletin board have done, and why? That may help me decide what direction to proceed?
 

·
Registered
Joined
·
391 Posts
I want to know what others have done - buy or lease? - when getting their cars, and why?

I will have to sign the contract to acquire the car on Tues - I am still conflicted about these 2 options. I would like to see what the others on this bulletin board have done, and why? That may help me decide what direction to proceed?
If your rich enough.. and you like to change cars frequently.. Leasing might be acceptable, though generally leasing is a bad idea. Clark Howard gives common sense advice about making good financial decisions. Check his website for some info on this subject.

If you want to be financially successful, retire early, secure a good life in your old age, my thinking is... Get by with a cheap older car that has a history of being relatively trouble free until you can afford to pay CASH for the nice car you really want.

My vote... BUY (for cash if you can)
 

·
Registered
Joined
·
10 Posts
I'll vote for kalo925...buy ( with cash) if not finance...unfortunately I have to lease mine because I want the lowest monthly payment possible. Then i'll try to save up some cash in the mean time and buy up when my lease is up or at least I have more cash down.
 

·
Registered
Joined
·
371 Posts
I'm fortunate that I was able to paid cash for my CT200h. Now that I own the car, I make "car payments" to myself for my next car. So, I always have a car payment, but it's to me with no finance company involved. Great feeling.
 

·
Registered
Joined
·
180 Posts
Up until now, I've always purchased my cars. My new CT is the first car that I've ever leased.

I leased the CT because the lease rates were really low (3.0%), and the buy-back was very high.

If I purchased the car with a $10k down payment, I would be paying $680 per month for 48 months.

I leased the car with a $10k down payment, and I am only paying $334 per month for 48 months. I did have to put a $4500 deposit on the car, but I get that back when I return the car.

The buy-back is nearly $17K. I’ll buy the car back, and trade it in, if it is worth more than $17k after 4 years. :)

 

·
Premium Member
Joined
·
199 Posts
Here is my Personal and Professional Advice:

With a lease you know all the factors but one, what is the car actually going ot be worth at the end of the lease. You will know what your payment is, your buyout is. The lender makes the best guess to figure what the cars residual should be at the end of the term. They actually guarantee it. So for arguement's sake, lets say a $34k CT has a residual of $18k after 48 months and 48,000 miles. Now two years into your lease, your car gets hit while parked and has 8k in body damage. You fix the car and keep it. At the end of the term, you still have your four options:
1: Trade it in and use any equity as money down
2: Sell it and make a profit
3: Keep it, buy it out for the residual amount
4: Walk away, residual is higher than it's worth.

You also get lower payments, a vehicle that is always under warranty ("generally"), and a newer car every few years.

If you 'buy" your vehicle ( payments or cash) your better keep it till it you can't fix it anymore. I would NEVER pay "cash" for a vehicle unless it's a "toy", aka sunday car.
Worst Investment you can ever make !!

When you buy your car, your keeping it longer, so now you have bigger and more expensive maintance costs, ie : tires, brakes, suspension.

So now take the same situation as I mentioned above, two years into you "owning" your car, your vehicle is hit and fixed. Now your family grows, job changes, whatever the case may be, and you need a different vehicle. You go to trade it in. Do you really think a Pre Owned Manager isn't going to "nickel and dime" you for every scratch, dent and a bad Carfax?

Your residual on the lease from Lexus is guarateed protcetion against accidents, gas crisis, recession, and anything else that might decrease the value of the vehicle. Lexus is actually VERY forgiving on their vehicle's coming back in from a lease. Anything a traditional Credit Card can cover is not docked, tires can be all worn down, just not wires sticking out, maintnance light can be on, etc...

If you have any questions, please let me know.
 

·
Registered
Joined
·
115 Posts
the best FINANCIAL decision is to buy it (and run it into the ground) as others have noted before. but not all your reasons for doing things are financially-motivated. if you are planning to "buy" it only to sell it/trade it in in ~4-5 yrs, you are not going to come out much more positive than leasing it (taking all the transaction hassle into account). Either way you are losing money compared to buying it and keeping it for >7+ years. Remember that cars are a depreciating asset. banks/leasing companies make money off the financing which means someone loses money. that someone is typically the consumer.
 

·
Registered
Joined
·
245 Posts
I'm not sure I completely agree with Andy's analysis. I have leased my last three Lexus cars.

Pros:
1) leasing let's you afford a more expensive car with a lower payment
2) Andy's right, if you have an accident it's best to hand your keys in at the end
3) a new car every 3-4 years

Cons:
1) getting that low monthly payment requires a large down which you'll never see again
2) at the end of the lease you've got nothing
3) mileage restriction
4) there is no early trade in (Just like your home loan, the payments at beginning go the interest, not the principal. Your payout is always unbelievably high so you are stuck with that car if you change your mind)

Leasing a car is a great option if you want a new car every 3-4 years and you don't drive over 12k annually.

What has not been discussed is that if you decide to buy that car at the end of the lease, the interest rate on a used car is much higher than a new car. I've looked into this at the end of every lease. Buying that car at lease end, financing it for 4 years results in a note approximately $200 higher than the lease note. Now you are financing that same car for 7-8 years at a much higher combined rate.

If you know you are going to want to buy that car at lease end, better to do it up front.

THIS car is different, IMO. Additional considerations are...where will hybrid technology be in 3-4 years? Will my CT be outdated with 60 mpg the standard for a hybrid? (lease, your car won't be worth so much)
Will Lexus introduce the CT300h with more power or that smaller SUV and I'll want to trade up? (buy or you'll be locked into that lease)

Leasing just isn't a financial decision, it's a lifestyle decision. I like getting that luxury car for less and getting a new one every 3 years.

But, I'm going to buy my car this time. I need more miles than the lease provides, I don't like having the mileage restriction hanging over my head. In this economy, I like the option to pay my car off and continue driving it if I want to.

Just make sure to consider everything when making your decision. The inability to get out of your lease early without taking a hit and the higher interest rate on a used car loan if you decide to buy at lease end are not something you'll discuss when signing that lease.
 

·
Premium Member
Joined
·
875 Posts
+1 for purchase

If your rich enough.. and you like to change cars frequently.. Leasing might be acceptable, though generally leasing is a bad idea. Clark Howard gives common sense advice about making good financial decisions. Check his website for some info on this subject.

If you want to be financially successful, retire early, secure a good life in your old age, my thinking is... Get by with a cheap older car that has a history of being relatively trouble free until you can afford to pay CASH for the nice car you really want.

My vote... BUY (for cash if you can)
Kalo925 -I agree with you and I paid cash :)

Oh and I plan to keep it at least 7 years.

Just going back and forth to my cabin each week will put a couple of hundred miles, plus other miles.

Go Green ..in style!
 

·
Premium Member
Joined
·
199 Posts
I'm not sure I completely agree with Andy's analysis. I have leased my last three Lexus cars.

Pros:
1) leasing let's you afford a more expensive car with a lower payment
2) Andy's right, if you have an accident it's best to hand your keys in at the end
3) a new car every 3-4 years

Cons:
1) getting that low monthly payment requires a large down which you'll never see again
2) at the end of the lease you've got nothing
3) mileage restriction
4) there is no early trade in (Just like your home loan, the payments at beginning go the interest, not the principal. Your payout is always unbelievably high so you are stuck with that car if you change your mind)

Leasing a car is a great option if you want a new car every 3-4 years and you don't drive over 12k annually.

What has not been discussed is that if you decide to buy that car at the end of the lease, the interest rate on a used car is much higher than a new car. I've looked into this at the end of every lease. Buying that car at lease end, financing it for 4 years results in a note approximately $200 higher than the lease note. Now you are financing that same car for 7-8 years at a much higher combined rate.

If you know you are going to want to buy that car at lease end, better to do it up front.

THIS car is different, IMO. Additional considerations are...where will hybrid technology be in 3-4 years? Will my CT be outdated with 60 mpg the standard for a hybrid? (lease, your car won't be worth so much)
Will Lexus introduce the CT300h with more power or that smaller SUV and I'll want to trade up? (buy or you'll be locked into that lease)

Leasing just isn't a financial decision, it's a lifestyle decision. I like getting that luxury car for less and getting a new one every 3 years.

But, I'm going to buy my car this time. I need more miles than the lease provides, I don't like having the mileage restriction hanging over my head. In this economy, I like the option to pay my car off and continue driving it if I want to.

Just make sure to consider everything when making your decision. The inability to get out of your lease early without taking a hit and the higher interest rate on a used car loan if you decide to buy at lease end are not something you'll discuss when signing that lease.

Actually, you can always trade in early, just like if you financed it. There is a payoff amount every month, just like when you finance your vehicle. There are no mileage restrictions, since you can set the lease to whatever mileage you want/need.
 

·
Registered
Joined
·
245 Posts
Early payoff on a lease is prohibitive. Always more than the car is worth.
 

·
Registered
Joined
·
371 Posts
IMHO If you can, I think it's better to buy your car instead of leasing... it's pride of ownership. Otherwise, it's just a rental car that you have to take extremly good care of until your lease is up. It's also a way to live within your means -- if you can't afford it, you shouldn't be driving it.
 

·
Registered
Joined
·
1 Posts
It's simple...

If you can only afford very long term financing (read, you are always upside-down) AND you are wanting a new car often enough that you are selling or trading before it is paid off...then leasing is for you. This method you will never own anything but as you will always have a payment, the payment will be lower if you lease.

On the other hand if you pay the car off and continue to drive it, then BUY IT!

Either way, when it is time for a change DO NOT trade your car in if you value your money. You can always do better selling it on your own, a little work goes a long way. Nothing wrong with car dealers, but they are a business and will always pay you less than your car is worth. If your trade is new enough and fits the dealer's demographic they may sell it, in that case they must pay you a low enough amount to clean it up, fix any issues, advertise it and sell it at a profit. If it is not new enough or does not meet your dealer's demographic they will sell it at auction. Either way, sell it on auto trader and you will do much better.
 

·
Registered
Joined
·
12 Posts
Discussion Starter #14
My dealer in Ottawa has convinced me that if I lease (with a minimum down payment of about $18,000 resulting in a 3% APR), the total cost of leasing followed by the purchase back option will cost less (by about $1000) than the purchase option upfront.

So, I am leasing.

This option lets me lease, or buy at the end of the lease.
 

·
Registered
Joined
·
115 Posts
My dealer in Ottawa has convinced me that if I lease (with a minimum down payment of about $18,000 resulting in a 3% APR), the total cost of leasing followed by the purchase back option will cost less (by about $1000) than the purchase option upfront.

So, I am leasing.

This option lets me lease, or buy at the end of the lease.
the dealer must be very persuasive to convince you that paying 3% APR will save you more than not paying 3% APR. obviously something more than just math involved here.
 

·
Registered
Joined
·
18 Posts
I decided to lease mine. As much as I'd like to think that I will keep a car long enough to pay it off, I never do. By year 2 ( Mid 30ish thousand miles) I usually get bit by the new car bug and by 45k (somewhere in year 3) the car is replaced with something new. Fortunately, I always been able to sell my cars privately and walk away clean and usually with a little extra to get goodies for the new car.

It would be nice if I could pay cash for a vehicle. If I was to save 30+k, the last thing I would want to do is give it away. True, car cost more when you don't but having a car paid cash isn't going to be useful if I need that cash. I guess everyone has their own way of doing things. Thats why there are so many options :rolleyes:
 
1 - 16 of 16 Posts
Top