Quote:
Originally Posted by Delgar
Originally Posted by TimSJ 
the thing that you are forgettting though is that you still have the first option to purchase the car at the end of the lease if it is worth more than the buyout. Think of it as a loss protection.. If the market bottom falls off and the car is worth less than the residual at the term then you turn it back to the leasing company.. If it is worth more you can excercise your option to buy it then sell it and get the equity out.
Again I can't agree. In the recent market cars have depreciated in Canada quickly only because the Canadian dollar became so strong, so fast, that US imports started rolling in, which devalued Canadian cars on lease returns. The auto manufacturers and dealers couldn't react that quickly, but they're catching up now.
This is a phenomenon that we haven't seen in Canada since.... well, since I've been old enough to understand it.
Look at it from the big picture, and you'll spend more money leasing over the course of your lifetime.
There is no way that a dealer is going to lease you a car where they actually expect you "make money" by not buying. They pre-estimate the residual value, based on their own forecasts, and if the price of the used car tanks in that time, the lessee has made money relative to the dealer (lessor). They plan to make money on it, and they're experts on car prices. The dealer doesn't plan for the bottom to fall out of the market, and instead builds enough "leeway" in so they're secure regardless.
If you bought in Canada a few months ago up to a year or so ago, you'd probably have been better off leasing, unless at the time you bought you took advantage of a cross-border purchase. But this is the exception. |
you seem pretty smart about #'s ..
how do you not see that spending 25k on a car and is not more expensive than spending 14k on the same car.
i just leased a 2008 JEtta. Here are details:
1) i could have purchased. either give them 25k outright from my bank or $550 per month.
2) i could lease at 300 per month, 0 down.
Now who wants to OWN a VW without a warrenty? this is a 4 year proposition.
optio 1 costs me between 25 and 26k and after 4 years I have a liability (not an asset because it continues to depreciate AND now i have no warrenty) worth say 13k at most.
option 2 costs me 14k and i can pocket the difference of about 250 per month. after 4 years i have 12k in cash built up and its liquid. in option 1, all that equity is not only tied up in metal in my parking lot, its going down every month.
i see no reason to not lease a new car every 4 years.