Lease or Finance

[Anonymous]

Anonymous wrote:

Anonymous wrote:The most financially prudent advice is to buy used (ideally 2-4 years) with cash and run into the ground.

If you do not want to tie up the cash, I would recommend taking advantage of falling used car prices and seeing if you can score a deal on a 2014 or 2015 model and then financing it with a credit union or internet lender (they tend to have the lowest rate on used).

For your reference here is what is going on in the used car market (glut of supply) and dealers are supposedly cutting deals:

https://www.edmunds.com/car-news/auto-industry/its-a-buyers-market-for-used-cars-edmunds-report-finds.html

OP here -- it's interesting because our dealership called and asked if we can turn our leased car in now - 4 months before the lease is up) because they said it's in high demand.

Oh, OP. Do you really believe everything someone who is trying to get you to part with thousands of dollars tells you?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just pay cash.

+1

Question for pp who says "pay cash." Do you mean pay for the entire car outright? Why? What is the advantage other than no car payment? I also don't want to part with $25-$29k upfront (unless there is some great financial reason to do so that I'm overlooking). I would rather use extra cash for $529, investment opportunities and paying down my mortgage.

Not PP but the advantage is you save the financing costs: 1) ongoing interest rate - about 2%/year currently; 2) origination fees approximately another 2% upfront.

If you can make better than 2.5% on your cash after tax (more like 4%-5% gross) you should take the financing (or if you don't have an emergency reserve). If you don't think you will consistently make that over the life of the loan then paying cash is better.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Just pay cash.

+1

Question for pp who says "pay cash." Do you mean pay for the entire car outright? Why? What is the advantage other than no car payment? I also don't want to part with $25-$29k upfront (unless there is some great financial reason to do so that I'm overlooking). I would rather use extra cash for $529, investment opportunities and paying down my mortgage.

Yes. The advantage is having no car payment. How is that not a huge advantage? And I don't buy cars that cost more than $25K so I'm not giving up much investment earning. I put money aside regularly in a short term savings instrument to fund my car purchases; it's not like I cash out stocks and pay capital gains in order to buy a car for cash. And to be fair, our mortgage is paid off and our 529 plans are fully funded, but I used cash for cars ten years ago when that wasn't the case.

[Anonymous]

Anonymous wrote:I just looked at a 2014 vs 2017 CRV EX on KBB.com. The 2014 buying from a private party would be around $16k. The 2017 new from a dealer is around $25k. That's a pretty good bargain to drive a new, pretty nice car, for $9k for three years.

Are you comparing KBB which is pretty accurate to MSRP? Bc you can negotiate down on a new car pretty well from MSRP.

Used cars are depressed, but not used SUVs, and Honda/Toyota don't depreciate much so buying a 3 year old car is not necessarily a no-browner unless cash strapped.

[Anonymous]

Leasing is for the stupid

[Anonymous]

Anonymous wrote:Leasing is for the stupid

Or people who want a car outside of their price range.