Even with 0% interest?Originally Posted by bassfisher444
Even with 0% interest?
There is a lot of half knowledge in this thread and a lot of mixed messages based on different types of leases.
The post above and the one it referenced are both correct.
As long as you are in the correct type of lease (do your research on that) the only two downsides are the interest rate may be higher (but not much right now) and you may take longer to pay it off (which may not be bad in your situation).
The point about being able to walk away if the vehicle is worth less than the residual is true and in your advantage. If you are dealing with a good dealer the math is simple, you are paying for a set % of the purchase price during the lease and have the option to buy the rest (and finance it) at the end of the lease.
Are the payments cheaper? Completely depends on the interest rates on lease vs finance, the terms available and the residual value of the specific vehicle you are looking at.
Maybe, as long as you have enough down payment, and don't finance it for so long that you end up owing more than what its worth.
There is a huge difference between personal financial philosophy and good math.
Lots of people swear by very conservative philosophy's that make no sense logically or mathematically but keep them out of trouble. Many preach them as well.
We low mileage leased for 20 years, my truck and family car, but the first thing I did was learn how to calculate lease payments and that did not go well with the salesmen, one of whom became the sales manager at out Volvo dealer and amazing how things changed when he accepted that I knew what he was doing. It sometimes got testy when my number was a lot lower than their number. In 2006, at the end of the three year Ranger lease I bought it for the residual, which was really low, then called Ford in Dearborn, Mi and bought an extended warranty for a whole lot less than the dealer wanted. The dealer's response, he had never heard of such a thing as getting an extended warranty directly from the manufacturer. When the Volvo 3-year lease was up on our 2008 XC70 we had very low mileage on it so we bought it for the residual value. As of today it has 19,500 miles on it. I would say the advantage in leasing is driving really nice cars for a lot less each month. If that is not your cup of tea, don't lease.
That 0% will always get ya.
I hate paying 0% interest
I refuse to have a car payment. I'll drive a beater before I make a payment for a car. I can't stand feeling like I'm throwing money away.
How are you throwing money away at 0% interest? The total cost is the same as paying cash but you are using someone else's money for free?
Paying cash is conservative and will keep you out of trouble so if that is your concern, don't change, but your math doesn't make sense.
Maybe with 0% interest...if it is 0.0%. I wasn't talking about the 0% interest. I was just making a general statement. It was not directed towards you.
I bought my son a car last year at 0% interest. I assumed I would have to put down a certain percent but didn’t. I was back with the finance guy and asked what my minimum down payment was and he asked me why I would put down money on a 0% loan. He did try to get me to buy the gap insurance to cover the difference between what I might owe and the cars value. It wasn’t too much but I declined. I know it could be more cost effective if the car was totaled but I didn’t get the gap insurance.
Fair enough.
It's an interesting business as there are certainly dealers that have taken advantage of people in the past and created bad impressions but if there is transparency and clean transactions the deals are often more fair and customer favourable than people think.
I wouldn't ever lease. But my wife just got a new 4Runner limited a few months ago. It's a 2020 model. It's bad a$$!
Still capital involved either way.
Usually 0% comes at the expense of giving up some factory cash incentives. If you have good enough credit you can usually take the incentive money and get a very low finance rate too. I always try to take the incentive money as my thought is its better to owe a couple thousand less on a vehicle than save a few bucks in the monthly payment. It works out much better if you change vehicles often as you owe less when you trade in.
It can, but not always.
When it does, you listed some very important questions to ask yourself. Also the amount of the cash incentive and the alternative interest rate are huge factors as well as the amount to finance. Haven't even gotten into personal financial situations like access to money and other debts, lots of factors to consider.
If you are paying 0% interest, you are paying too much for the vehicle. I’d rather buy a car with 3-5% interest, get the rebates and discounts, and pay it off when I get home. You’ll be a lot better off.
Thats 100 percent the way to go. Act like a normal buyer, finance through the dealer to get all the discounts and then pay it off immediately.
2020 Nitro Z20 Pro Package
What if there are no cash rebates?
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