mgtarheels

Yea, because you represent the entire bulk of house owners. Shut up and stop generalizing. There are entire towns being forced to foreclose. And by entire towns, I mean 2/3 homes.

OPen Class

YES! you make my point exactly. Why are they foreclosing? because the idiots went for the jumbo loans, the Arms, and the other "special Financing" to get into t house that they could not afford...hence they are losing it!

No one wants to be accountable any more. That's fine, because I get to buy the leased cars for a fraction of the cost and I get to flip the houses that get foreclosed.

mgtarheels

That is not the reason we are facing recession and companies are being forced to downsize. **** happens, and unfortunately MANY advisors are recommending to rent as opposed to buy right now.You're in a generous situation. Put that equity to work and build be a wing onto the house

OPen Class

Yes, and what ever are they going to do with the 36mo car lease they have? If they were buying the car they could sell it, but with a lease they do what? pay the penalty for breaking it? just stuck with it for 30+ more months?

Losing your job is exactly why you want equity in your car and home, so you have the option to sell and come out a head and not be stuck upside down.

Of course there is always bankruptcy right?

keep digging.

mgtarheels

So then tell me, how long does it take to build equity?

bdlhome

Agreed, I was using it to make a point. I also have ZERO balance on my card every month and my point was credit cards don't have to be bad or evil and neither does leasing.

After reading my post can you honestly say that I am not capable of making an informed decision? It certainly isn't the only way I could drive a 40K car, I've bought cars for 40K+ and have paid cash when it made sense and always after making an informed decision.

Agreed again, if you read my posts I have consistently said that people do agree to bad leases, just as people pay MSRP when they could have negotiated close to invoice. Leasing is a little more complicated (although not much) and that leaves an uniformed leaser vulnerable.

Agreed, I never consider my cars anything other than an expense. I consider my cars a hobby and paying for them just like a golf membership. I doubt anyone on this board would say that their G37 was the most cost effective means of transport either.

You mentioned that you deal with leasing at work and you mentioned your buddies above, out of interest is it related to cars? The reason I said that I didn't think you totally understood car leasing was based on a couple of posts to this forum one specifically about invoice price or negotiated price not being a factor with a lease. Other than that comment I've tried not to make this personal in any way just stating facts as I see them or observations that I've made along the way.

I do look at TCO, in fact one thing a lease does do is make it really clear what you are paying to drive the car. When people buy cars they sometimes kid themselves that they are making an investment and never actually do the TCO calculation.

Real example:

G37S MSRP 42,825 Invoice 39,129 Negotiated price (buy or lease) Invoice+500
24 month term (I'm hoping that the GTR lives up to the hype and they aren't going for 20K+ over MSRP in 24 months time)
Lease $507/month
Purchase 1,802/month (at Infiniti's best rate) 1.9% (Yes I'm tier 1 as well)

So pay the lease at 507/month and invest the delta (1802-507)=1295 every month and guess what:
With a lease you hand the car back after 24 months and you would have 32,312 in the bank at a modest 4% interest (even at 0% it would be 31,090)
With a purchase you would have a car worth 31,691 (I'm not convinced that the car would be worth that much but with the lease that is their problem, they estimated that car will be worth 74% of the MSRP so $31,691)

I would rather have the $32K+ in the bank than a car that I hope is going to be worth $31K+, but that is just me.

Now your buddies may ask how can that be. Well one reason is that on the purchase (at 7% tax rate) $2774 tax would have been paid were as with the lease only $795 would have been paid.

I agree there is an element of gamble or risk, what happens it I lose my job? Well because I'm not stretching myself in any way that is not a problem, it wouldn't be the best deal but neither would needing to sell a car after 6 months. What if I need to move abroad (happened before) my company would pay any out of pocket costs. What if the car is worth more than $31,691 and I leased, well then you can normally unlock that value by effectively trading in the car.

I have owned more cars than I've leased but when I've leased it has worked for me.

I don't think we are ever going to agree on everything but I do think we have one thing in common; both of us don't like seeing people doing bad deals or making uniformed decisions. The reason for my posts including the leasecalc was to help people make more informed decision.

The part it doesn't appear we will agree on is my statement that leasing doesn't have to be bad and can be advantageous in some circumstances.

OPen Class

It took me 5 years of making smart decisions that enabled me to then own a home and purchase nice vehicles.

My first nice car was was the 330i and I bought it 2 years old from a lease return. Before then I bought cars I could afford and when it came time I sold the previous car, took the equity and added the 10K I saved over several years and put it down on the 330i. Drove it for several years untl it was paid off and sold it for 17k and THAT was my down payment on the G, after negotiating a good price.

So it took about 5 years to get to the used 300i and another 3 years to get to the new G37. Now I am at the 45K+ mark on my cars and every 5+ years I can take the equity in the car and the saved money (from low monthly payments) and buy at or up from where I am currently at.

AND with the equity and keeping my monthly payment low, I remove the risk associated with being out of work. I can either make the payment, or sell the car.

OPen Class

I owe you an apology as you clearly fall into the minority with respect to making informed decisions...I apologize.

And you are also correct in you example below when you factor in the investing the difference of purchase vs. lease. This is true with renting vs. buying.

My angst and frustration in communicating with others on this forum is that THEY do not invest the difference nor do they understand that by not doing so they do not have the ability to come out even or a head.

I should have included that point in my original posts as you and I do in fact see the lease for what it is and can assess it's value against financial prudence for a given situation.

Thanks for the clarity along the way.

vrb747

BTW the buyout after a 39 month lease is more like 25xxxx not 31xxxx if u take 41xxxx as MSRP.

My deal (actually negotiated for a friend, shopped several dealers)

G37 Journey with Premium Package (no NAV), Pearl White with Stone Interior

12K miles per year

MSRP 38915

Invoice 35656

Cap Cost 36250 (Invoice -500 + 595 bank fee + 500 dealer fees to include registration)

Residual (24 months) 75%

Money factor 0.0021 (know this is higher than the 0.002 bas rate)

Tax rate 6 % (????, not too sure about this one)

Monthly payment $458 (including taxes, zero out of pocket)

So basically zero down, sign and drive, monthly payment $458 inclusive of taxes (no NAV package, just the Premium)

I concentrated my negotiations on the price and fees since the dealer cannot change the residual and the money facter he quoted us was only slightly above the base rate offered by IFS.

I concluded that if u haggle hard enough u can get Invoice+595 inclusive of ALL fees (tag transfer included). I think this was made possible by the fact that I chose a color and package combo that was on the dealer's lot and was not the most popular combo. Everyone wants the NAV package, my friend did not.

I will be in the market for a G37 coupe or the 335i coupe in a few months, hopefully deals like this will still be available

Go get em!!!!

ampm24

I forget the name of the famous wealth person for which the quote comes from. But I think it says "Rent that which depreaciates, own that which appreaciates" I own the 3 cars I have now outright. As well as my home and rental apartment, but I plan on leasing my G37 too. It's funny, the person where I work that does the corporate car leases told me the same thing as Open. He said i'm nuts for leasing, but when I put the numbers in front of him, and the fact that i'm doing so under a business name, it works in my favor. I could buy the car outright, but it would be a very poor decision. So much better things I can do with 40K cash that would net me some very nice returns. More property for one thing. Now is the time to buy it up.