Can you Lease a new vette?
#22
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A few notes for those of you that are interested in leasing:
The lease payment is the sum of the total depreciation divided by the lease term, an interest payment and sales tax if applicable.
The depreciation is the capitalized cost (purchase price + aquisition fees - any down payment) minus the residual value. The residual value is the MSRP times the residual percentage.
The interest payment is the Money Factor times the sum of the capitalized cost and residual value. The money factor is the interest rate divided by 2400.
You can easily build a simple spreadsheet to compare lease deals.
Before leasing, always find out what the capitalized cost, residual and money factor that has been used in the calculation of your payment. If the dealer won't tell you, go somewhere else! Leasing can be a good way to drive the car of your dreams but you need to understand how they work or you can easily be taken advantage of.
The lease payment is the sum of the total depreciation divided by the lease term, an interest payment and sales tax if applicable.
The depreciation is the capitalized cost (purchase price + aquisition fees - any down payment) minus the residual value. The residual value is the MSRP times the residual percentage.
The interest payment is the Money Factor times the sum of the capitalized cost and residual value. The money factor is the interest rate divided by 2400.
You can easily build a simple spreadsheet to compare lease deals.
Before leasing, always find out what the capitalized cost, residual and money factor that has been used in the calculation of your payment. If the dealer won't tell you, go somewhere else! Leasing can be a good way to drive the car of your dreams but you need to understand how they work or you can easily be taken advantage of.
#23
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Originally Posted by DonSet
A few notes for those of you that are interested in leasing:
The lease payment is the sum of the total depreciation divided by the lease term, an interest payment and sales tax if applicable.
The depreciation is the capitalized cost (purchase price + aquisition fees - any down payment) minus the residual value. The residual value is the MSRP times the residual percentage.
The interest payment is the Money Factor times the sum of the capitalized cost and residual value. The money factor is the interest rate divided by 2400.
You can easily build a simple spreadsheet to compare lease deals.
Before leasing, always find out what the capitalized cost, residual and money factor that has been used in the calculation of your payment. If the dealer won't tell you, go somewhere else! Leasing can be a good way to drive the car of your dreams but you need to understand how they work or you can easily be taken advantage of.
The lease payment is the sum of the total depreciation divided by the lease term, an interest payment and sales tax if applicable.
The depreciation is the capitalized cost (purchase price + aquisition fees - any down payment) minus the residual value. The residual value is the MSRP times the residual percentage.
The interest payment is the Money Factor times the sum of the capitalized cost and residual value. The money factor is the interest rate divided by 2400.
You can easily build a simple spreadsheet to compare lease deals.
Before leasing, always find out what the capitalized cost, residual and money factor that has been used in the calculation of your payment. If the dealer won't tell you, go somewhere else! Leasing can be a good way to drive the car of your dreams but you need to understand how they work or you can easily be taken advantage of.
I have a simple excel spreadsheet that I created. I will send it to anyone who might be interested! Let me know and I will email it
#24
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Originally Posted by luckyj
Hi Purdue: Is Notre Dame the most over-ranked team in the country or what? A fifth place team in the Big Ten at best!
Jim
Jim
#25
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Purdue....My email is fishininsteadofwishin@yahoo.com
A spread sheet would help on my decision greatly. Thanks Scott
A spread sheet would help on my decision greatly. Thanks Scott
#26
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Originally Posted by vettejoel
yup...I do every 2 years
#27
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I'm on the fence between buying a C-5 or leaseing a C-6 and haveing the option to buy at the end of the lease? Don't know what to do. Theres pros and cons both ways.
#28
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I think if you are going to buy the car, if you look at the bottom line numbers, IMHO it rarely makes economic sense to lease and then buy. I lease my daily driver, have for years, but I do it with $0 down and get rid of it at the end of the lease. My corvette, which I plan to keep for quite awhile, I purchased outright. Also, when I looked into leasing a Corvette, it just did not seem to be a car that leased "well". The residuals aren't that attractive. Just my $0.02.
#29
Before leasing, always find out what the capitalized cost, residual and money factor that has been used in the calculation of your payment. If the dealer won't tell you, go somewhere else! Leasing can be a good way to drive the car of your dreams but you need to understand how they work or you can easily be taken advantage of.
The one thing that I don't see mentioned in great detail here is the actual negotiating of the deal. The only difference between leasing and buying a car is the structuring of the financing. Everything else is the same. I will repeat this again; EVERYTHING ELSE IS THE SAME. You should never approach the sales staff with the "I want to lease" line because most people just get ushered into these lease "specials", which are ALWAYS based on MSRP. If you want o lease a car, the first and foremost important item is the price of the car. Leases use the fancy term of "capitalized cost". Just like with buying, the lower this is, the better. I always negotiate the price first, like I'm BUYIING, and then after all is said and done do I start in with the "you know, I might be interested in leasing this car". Your payments are based largely on what the depreciation dollar amount of the car is. This is some arbitrary figure that is based on whatever. Since you are essentially paying this depreciation amount as your lease, the smaller it is, the smaller the payment. For example, you're looking at a $54K Vette. Lets say the residual value is $24K for your 60 month term. This is what Chevy says the car is worth at the end of the term and is calculated at the beginning of the lease and stays fixed. In summary, this is the price that you can purchase the car for at the end of the lease. If the actual value of the car near the end of the term is higher, then you can sell the car to a third party and pocket the difference. Usually though, the car is worth less than the residual value, in which case it wouldn't make sense to purchase the car for $24K if it was worth $19K. Your lease payment will be based on that amount of depreciation($30K in our example) divided by 60. Now, your payment also factors in interest and taxes etc but the bulk of it is this depreciationm that you are paying for. If you negotiate a price of, let's say, $48K, you've now closed the depreciation gap by another $8K less that you have to pay over the length of the lease.
ALWAYS REMEMBER THAT PRICE IS STILL THE MOST IMPORTANT FACTOR WHEN LEASING A CAR. IT IS NO DIFFERENT THAN WHEN YOU BUY.
Dealers know that most people don't know squat about leases and bait people into these "great" lease deals that sound good but when you examine them on paper, are based on full MSRP and long terms that make the dealers the most money. Dealers love these "sign and drive" lease deals because most people see a car that they probably couldn't afford otherwise, start to salivate, and then lie down without any resistance. What could be better than just signing and driving? No fuss. No muss. For the dealer that is......
Before you sign on the dotted line, post your proposed deal on the Forum and let us take a look at it. It drives me nuts when people lease without a haggle because, in my opinion, it is the sneakiest takedown that a dealer pulls on customers. The worst part is that you think you left with a good deal. Anyway, I could go on forever but I can't type any longer. Think things over before you sign.
Last edited by own2vettes; 10-03-2006 at 09:17 PM.
#30
Burning Brakes
So I run my own successful business on the side in addition to my own job...some accountant out there tell me how I can deduct my lease on my vette. Please?
#31
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Originally Posted by Tight Lines
Purdue....My email is fishininsteadofwishin@yahoo.com
A spread sheet would help on my decision greatly. Thanks Scott
A spread sheet would help on my decision greatly. Thanks Scott
#32
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Of course. Leasing is simply another variation of purchasing, only you only are purchasing a portion of the vehicles useful life. Same factors are involved - time value of money, interest rate, etc. which go into a purchase financing. Just another way of slicing the same vegetable.
#33
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Thanks guys for all the help. I've always bought new and have never least befor. I have some learning to do. I'm not sure how much my friends and fammily plan from GM will help on price. So 48,000 is a good goal to shoot for you think?
#34
I'm self-employed and I do deduct the lease payments on my car (G35). Actually, about 80% of the lease payments is deductible since about 80% of the time the car is used for business.
My lease payment is $425 on the G35. This is a three year lease with 12k/yr. A buddy also leases the G35 but he's paying close to $550/month. Why such a difference? Mainly because his negotiated price was about $1500 above invoice, I got mine for $500 under invoice. He also pays a higher money factor.
When I lease a car, I usually call up the dealership, ask them for the best deal on a car I want, once we agreed, I tell them I want to lease it. At that point, my focus will be on money factor, term, and residual value.
I learned all this from the website leaseguide.com Educate yourself before you lease a car. You should be able to sit down at the dealership, with a calculator and a paper, calculate your approximate lease monthly payment if given lease price, MSRP, residual value, money factor, and term.
So why do I lease? With a lease payment of $425 and after tax deductions, my effective cost is only $290/month. So if the money factor is low enough, this makes a lot of sense. Had I bought the G35, I only get to deduct the depression of my car, and that is not nearly as much as the entire lease payment.
Right now I'm thinking about leasing the C6 and write it off for three years. At the end of the lease, simply pay the residual value and own the car. Again, this only makes only if the money factor is low enough. And did I tell you that if I lease the C6, I can write off everything, and that include new rims, tires, maintenance, gas, and maybe even Z06 wide body kit
My lease payment is $425 on the G35. This is a three year lease with 12k/yr. A buddy also leases the G35 but he's paying close to $550/month. Why such a difference? Mainly because his negotiated price was about $1500 above invoice, I got mine for $500 under invoice. He also pays a higher money factor.
When I lease a car, I usually call up the dealership, ask them for the best deal on a car I want, once we agreed, I tell them I want to lease it. At that point, my focus will be on money factor, term, and residual value.
I learned all this from the website leaseguide.com Educate yourself before you lease a car. You should be able to sit down at the dealership, with a calculator and a paper, calculate your approximate lease monthly payment if given lease price, MSRP, residual value, money factor, and term.
So why do I lease? With a lease payment of $425 and after tax deductions, my effective cost is only $290/month. So if the money factor is low enough, this makes a lot of sense. Had I bought the G35, I only get to deduct the depression of my car, and that is not nearly as much as the entire lease payment.
Right now I'm thinking about leasing the C6 and write it off for three years. At the end of the lease, simply pay the residual value and own the car. Again, this only makes only if the money factor is low enough. And did I tell you that if I lease the C6, I can write off everything, and that include new rims, tires, maintenance, gas, and maybe even Z06 wide body kit
#35
When I lease a car, I usually call up the dealership, ask them for the best deal on a car I want, once we agreed, I tell them I want to lease it. At that point, my focus will be on money factor, term, and residual value.
So 48,000 is a good goal to shoot for you think?
simply pay the residual value and own the car.
Last edited by own2vettes; 10-04-2006 at 09:37 AM.
#37
So I run my own successful business on the side in addition to my own job...some accountant out there tell me how I can deduct my lease on my vette. Please?
Last edited by own2vettes; 10-04-2006 at 11:50 AM.