Owned 2 Evo's before, just purchased new 05 Sti. My impressions.
Jan 5, 2006, 09:00 AM
#91
Evolving Member
iTrader: (3)
Join Date: Aug 2003
Location: Lexington, MA
Posts: 222
Likes: 0
Received 0 Likes
on
0 Posts
I guess I wasn't clear. Given a fixed monthly payment and number of payments, you want the residual to be as low as possible, because that means you're getting a lower interest rate on the loan (a lease is just a loan).
But you are right that, given an interest rate and new car price, a higher residual means you are getting lower lease payments, because you're paying off less of the principal. It all depends on what you consider to be input parameters and what is the variable being computed.
My point of view is that car salesmen are lying bastards and the only thing I believe is what's written into the lease contract, i.e. monthly payment, number of payments, down payment and residual (buy out price). I compute the equivalent loan interest rate myself from those numbers. When I do, plugging in a lower residual price gives me a lower interest rate, for a specific set of lease payment terms, because it says that I've paid off more of the loan, using payments of the same size and duration. This is clearly a good thing.
Example: would you rather pay $399/month for 65 months and be able to buy the car at the end of the lease for $13k, or would you rather make the exact same payments and be able to buy the car at the end of the lease for $5k? Obviously, given these choices, the lower residual is better.
Now, is that finally clear?
But you are right that, given an interest rate and new car price, a higher residual means you are getting lower lease payments, because you're paying off less of the principal. It all depends on what you consider to be input parameters and what is the variable being computed.
My point of view is that car salesmen are lying bastards and the only thing I believe is what's written into the lease contract, i.e. monthly payment, number of payments, down payment and residual (buy out price). I compute the equivalent loan interest rate myself from those numbers. When I do, plugging in a lower residual price gives me a lower interest rate, for a specific set of lease payment terms, because it says that I've paid off more of the loan, using payments of the same size and duration. This is clearly a good thing.
Example: would you rather pay $399/month for 65 months and be able to buy the car at the end of the lease for $13k, or would you rather make the exact same payments and be able to buy the car at the end of the lease for $5k? Obviously, given these choices, the lower residual is better.
Now, is that finally clear?
Originally Posted by nigletsyz
WRONG. You want the purchase price to be as low as possible and the RESIDUAL to be as HIGH as possible. That way, you are financing the least amount possible total. That is what keeps your payments low. Low residuals do nothing other than protect the bank's investment. Cars that hold resale better will have higher residuals. Look at Honda and Toyota. Why do you think that they can offer 250/month leases for 2-3 yrs? The residual is very high on the cars. Over 50%. The money factor (leasing apr) is ultimately going to be determined on your credit history anyway. So that is something that you don't have as much control over when it comes time to finance/lease. Different banks will have different residuals for the same car. The dealership will most likely have all their banks on their computer system and will easily be able to determine which one is going to be the best deal. Of course a dealership will pad the payments, try to write you up for a higher APR or money factor than you qualify so they can make extra profit on the "back end" of the deal (i.e. financing) when they are supposedly "losing" money on the front end of the deal (i.e. purchase price) BE AN INFORMED BUYER. Know what you qualify for before you walk into a dealership.
Locking yourself into that 66-month lease was the worst thing you could have done for yourself if you planned on trading it in 2 yrs from now. You will have to come up with an OBSCENE amount of money just to break even The banks DO NOT GUARANTEE A MONTH-TO-MONTH VALUE. ONLY IT'S RESIDUAL AFTER THE TERM.
Leasing is just another way of buying. Your 66 month lease was really like a 96 month purchase. Think about it. After 66 months, you'll still owe 13K. Sure, the car might be worth that, it might not be. Something might come up on the 05 Sti's that ruin its resale. Not likely, but possible. Either way, the bank guarantees its worth AFTER 66 months. But if you wanted to purchase it, you'd have to finance the remaining 13K. At your current payment, it'd take you another 3yrs to finish off the loan. WOW. ~92 months to pay off the sTi. 8 1/2 yrs!!!! So look how little is actually being put toward the principle of the loan each month..... And you want to trade it in in what, 1-2 yrs?!?!?! Good luck is all I can say. Maybe you'll find a sucker willing to pay close to your purchase price on it a year from now. Sorry that I'm using you as a scapegoat, but I think people need to know this information before they lock themselves into a loan.
Locking yourself into that 66-month lease was the worst thing you could have done for yourself if you planned on trading it in 2 yrs from now. You will have to come up with an OBSCENE amount of money just to break even The banks DO NOT GUARANTEE A MONTH-TO-MONTH VALUE. ONLY IT'S RESIDUAL AFTER THE TERM.
Leasing is just another way of buying. Your 66 month lease was really like a 96 month purchase. Think about it. After 66 months, you'll still owe 13K. Sure, the car might be worth that, it might not be. Something might come up on the 05 Sti's that ruin its resale. Not likely, but possible. Either way, the bank guarantees its worth AFTER 66 months. But if you wanted to purchase it, you'd have to finance the remaining 13K. At your current payment, it'd take you another 3yrs to finish off the loan. WOW. ~92 months to pay off the sTi. 8 1/2 yrs!!!! So look how little is actually being put toward the principle of the loan each month..... And you want to trade it in in what, 1-2 yrs?!?!?! Good luck is all I can say. Maybe you'll find a sucker willing to pay close to your purchase price on it a year from now. Sorry that I'm using you as a scapegoat, but I think people need to know this information before they lock themselves into a loan.
Jan 5, 2006, 09:14 AM
#92
Originally Posted by point&shoot
I guess I wasn't clear. Given a fixed monthly payment and number of payments, you want the residual to be as low as possible, because that means you're getting a lower interest rate on the loan (a lease is just a loan).
But you are right that, given an interest rate and new car price, a higher residual means you are getting lower lease payments, because you're paying off less of the principal. It all depends on what you consider to be input parameters and what is the variable being computed.
My point of view is that car salesmen are lying bastards and the only thing I believe is what's written into the lease contract, i.e. monthly payment, number of payments, down payment and residual (buy out price). I compute the equivalent loan interest rate myself from those numbers. When I do, plugging in a lower residual price gives me a lower interest rate, for a specific set of lease payment terms, because it says that I've paid off more of the loan, using payments of the same size and duration. This is clearly a good thing.
Example: would you rather pay $399/month for 65 months and be able to buy the car at the end of the lease for $13k, or would you rather make the exact same payments and be able to buy the car at the end of the lease for $5k? Obviously, given these choices, the lower residual is better.
Now, is that finally clear?
But you are right that, given an interest rate and new car price, a higher residual means you are getting lower lease payments, because you're paying off less of the principal. It all depends on what you consider to be input parameters and what is the variable being computed.
My point of view is that car salesmen are lying bastards and the only thing I believe is what's written into the lease contract, i.e. monthly payment, number of payments, down payment and residual (buy out price). I compute the equivalent loan interest rate myself from those numbers. When I do, plugging in a lower residual price gives me a lower interest rate, for a specific set of lease payment terms, because it says that I've paid off more of the loan, using payments of the same size and duration. This is clearly a good thing.
Example: would you rather pay $399/month for 65 months and be able to buy the car at the end of the lease for $13k, or would you rather make the exact same payments and be able to buy the car at the end of the lease for $5k? Obviously, given these choices, the lower residual is better.
Now, is that finally clear?
Jan 5, 2006, 09:26 AM
#93
Evolving Member
Thread Starter
Join Date: Jul 2005
Location: Spokane Washington
Posts: 262
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by infin|ty
STi is nice for what it is, however the handling feels dull compared to the razor sharp feedback of the Evo. Plus the Evo looks alot better.
Handeling IMO is a little Sharper on the Evo but not by far, as far as looks go I think both cars look amazing in there own ways. I like the hood scoop and aggressive front end of the Sti but also love the stealthy,sleek front end of the Evo especially the IX and of course the front mount intercooler looks great. I do feel the Sti is a little better built. It seems more solid and the interior surpasses the Evo by alot except for the Seats. The seats hold you in better in the Evo but I think the Design in the Sti looks better. If any of you havnt seen them yet the 05 Sti's look alot better inside the the 04's. I love both cars for what they are and I appreciate all the great feedback.
Jan 5, 2006, 03:34 PM
#94
Newbie
Join Date: Dec 2005
Location: Spokane
Posts: 5
Likes: 0
Received 0 Likes
on
0 Posts
The only difference between the '04 and '05 STi's interior is the center console. That's it. The dash, guages, and seats are all IDENTICAL. The stock seats in the STi may look okay, but they feel terrible when you compare them to the stock EVO. You'll see my point the first time you take some fast corners; they don't hold you in the seat at all. You feel like you're sitting ON the seat, rather than IN the seat.
Jan 5, 2006, 03:38 PM
#95
Newbie
Join Date: Dec 2005
Location: Spokane
Posts: 5
Likes: 0
Received 0 Likes
on
0 Posts
By the way brijen123, are you the guy in Spokane that's had 2 WRX's, 2 EVO's, an Intergra GSR, and the Integra Type R within the last few years? I think that you used to live in my neighborhood.
Jan 5, 2006, 03:54 PM
#96
Originally Posted by point&shoot
I guess I wasn't clear. Given a fixed monthly payment and number of payments, you want the residual to be as low as possible, because that means you're getting a lower interest rate on the loan (a lease is just a loan).
But you are right that, given an interest rate and new car price, a higher residual means you are getting lower lease payments, because you're paying off less of the principal. It all depends on what you consider to be input parameters and what is the variable being computed.
My point of view is that car salesmen are lying bastards and the only thing I believe is what's written into the lease contract, i.e. monthly payment, number of payments, down payment and residual (buy out price). I compute the equivalent loan interest rate myself from those numbers. When I do, plugging in a lower residual price gives me a lower interest rate, for a specific set of lease payment terms, because it says that I've paid off more of the loan, using payments of the same size and duration. This is clearly a good thing.
Example: would you rather pay $399/month for 65 months and be able to buy the car at the end of the lease for $13k, or would you rather make the exact same payments and be able to buy the car at the end of the lease for $5k? Obviously, given these choices, the lower residual is better.
Now, is that finally clear?
But you are right that, given an interest rate and new car price, a higher residual means you are getting lower lease payments, because you're paying off less of the principal. It all depends on what you consider to be input parameters and what is the variable being computed.
My point of view is that car salesmen are lying bastards and the only thing I believe is what's written into the lease contract, i.e. monthly payment, number of payments, down payment and residual (buy out price). I compute the equivalent loan interest rate myself from those numbers. When I do, plugging in a lower residual price gives me a lower interest rate, for a specific set of lease payment terms, because it says that I've paid off more of the loan, using payments of the same size and duration. This is clearly a good thing.
Example: would you rather pay $399/month for 65 months and be able to buy the car at the end of the lease for $13k, or would you rather make the exact same payments and be able to buy the car at the end of the lease for $5k? Obviously, given these choices, the lower residual is better.
Now, is that finally clear?
Jan 5, 2006, 04:08 PM
#97
Originally Posted by point&shoot
I guess I wasn't clear. Given a fixed monthly payment and number of payments, you want the residual to be as low as possible, because that means you're getting a lower interest rate on the loan (a lease is just a loan).
Example: would you rather pay $399/month for 65 months and be able to buy the car at the end of the lease for $13k, or would you rather make the exact same payments and be able to buy the car at the end of the lease for $5k? Obviously, given these choices, the lower residual is better.
Now, is that finally clear?
Example: would you rather pay $399/month for 65 months and be able to buy the car at the end of the lease for $13k, or would you rather make the exact same payments and be able to buy the car at the end of the lease for $5k? Obviously, given these choices, the lower residual is better.
Now, is that finally clear?
1)Residual
2)Purchase price
3)Money factor / APR
your payments are going the be based on the difference between the purchase price and the residual. Then you throw in your money factor that you qualify for.
Purchase price - residual = xx,xxx (amount financed)
So tell me again why you would want a lower residual?
Jan 5, 2006, 04:37 PM
#98
Evolving Member
iTrader: (3)
Join Date: Aug 2003
Location: Lexington, MA
Posts: 222
Likes: 0
Received 0 Likes
on
0 Posts
I'll try one last time:
If I can pay one bank X dollars/month for Y months and then buy the car for
$13k, or I can pay a different bank the same amount, for the same length of time, but then buy the car for $5k, which should I do?
Congratulations, you are right, I should by the car at the dealer that has the lower residual.
And yes, you are also right that this would only be possible if the two dealers had very different "money factors" (which really means "interest rate"). But so what? The whole point of taking out a loan (whether it's a lease or a conventional loan) is to get the lowest interest rate, right? Nothing else matters, in terms of the cost of the loan.
I don't understand what you mean by "what the buyer qualifies for is what the buyer qualifies for". If you mean that the interest rate (money factor) is not negotiable, I don't believe that. At the very least, you can select where to buy your car based on the lowest offered interest rate, which was my whole point to begin with. You don't just buy the car at the place that tells you it is giving you the lowest purchase price or the place that offers you the lowest payments. You also have to consider the finance charges you are going to pay, whether in a lease or a loan.
If I can pay one bank X dollars/month for Y months and then buy the car for
$13k, or I can pay a different bank the same amount, for the same length of time, but then buy the car for $5k, which should I do?
Congratulations, you are right, I should by the car at the dealer that has the lower residual.
And yes, you are also right that this would only be possible if the two dealers had very different "money factors" (which really means "interest rate"). But so what? The whole point of taking out a loan (whether it's a lease or a conventional loan) is to get the lowest interest rate, right? Nothing else matters, in terms of the cost of the loan.
I don't understand what you mean by "what the buyer qualifies for is what the buyer qualifies for". If you mean that the interest rate (money factor) is not negotiable, I don't believe that. At the very least, you can select where to buy your car based on the lowest offered interest rate, which was my whole point to begin with. You don't just buy the car at the place that tells you it is giving you the lowest purchase price or the place that offers you the lowest payments. You also have to consider the finance charges you are going to pay, whether in a lease or a loan.
Originally Posted by nigletsyz
The only way this would be possible is if the 13K residual loan had some insanely high money factor and the 5K residual had some insanely low money factor. What the buyer qualifies for is what the buyer qualifies for. Dealerships are not allowed to "pad" the payment and have limits on the points they can earn on a loan. Why would you want to have a low residual again? Your payments are directly reflected upon your:
1)Residual
2)Purchase price
3)Money factor / APR
your payments are going the be based on the difference between the purchase price and the residual. Then you throw in your money factor that you qualify for.
Purchase price - residual = xx,xxx (amount financed)
So tell me again why you would want a lower residual?
1)Residual
2)Purchase price
3)Money factor / APR
your payments are going the be based on the difference between the purchase price and the residual. Then you throw in your money factor that you qualify for.
Purchase price - residual = xx,xxx (amount financed)
So tell me again why you would want a lower residual?
Jan 5, 2006, 04:48 PM
#99
Evolving Member
Join Date: Nov 2005
Location: SoCal
Posts: 485
Likes: 0
Received 0 Likes
on
0 Posts
The Post
I don't feel anyone is going to bust your ***** for buying a great car. I think we all considered the WRX or STi at some point in time. For me, this is what swayed me to buy my VIII and in 06 my IX. For one, Price. In S. CA the STi runs about the same money as an MR. So my VIII and IX were allot less. Second, Looks. I think the EVO is the better looking of the twok, especially true for 06 where the new STI looks very very ugly IMO. Also, the ease of maintenence. My parents both owned Subies, and they are a pain in the *** to work on. You have to take half the car apart in the front to get to spark plugs out, and just simple things are just a pain in the ***. For me, I like to work on the car myself, and Hellen Keller can work on the EVO, vs. you need to be Albert Einstien to figure out the STi boxer engine. I am a fan of both cars, they are so good that picking one is like going to the playboy mansion and Hef says, go ahead pick one of my ladies. Its just like 
. I agree the STI has a nicer interior and thank that to SAAB. They are the ones who redesigned it for SUBIE, as stated in Motor Trend anyway. It does look much better inside, but the I feel the EVO's seats are better though. I also liked how the STI has an outside Temp guage, and cruise control. I think for 30K+ you should get those things. But all and all, great purchase on the STI...Its just I happen to be a bigger fan of the dissplacement underdog. haha. Till the Next Post..........
. I agree the STI has a nicer interior and thank that to SAAB. They are the ones who redesigned it for SUBIE, as stated in Motor Trend anyway. It does look much better inside, but the I feel the EVO's seats are better though. I also liked how the STI has an outside Temp guage, and cruise control. I think for 30K+ you should get those things. But all and all, great purchase on the STI...Its just I happen to be a bigger fan of the dissplacement underdog. haha. Till the Next Post..........
Jan 5, 2006, 05:31 PM
#100
Originally Posted by point&shoot
I'll try one last time:
If I can pay one bank X dollars/month for Y months and then buy the car for
$13k, or I can pay a different bank the same amount, for the same length of time, but then buy the car for $5k, which should I do?
Congratulations, you are right, I should by the car at the dealer that has the lower residual.
And yes, you are also right that this would only be possible if the two dealers had very different "money factors" (which really means "interest rate"). But so what? The whole point of taking out a loan (whether it's a lease or a conventional loan) is to get the lowest interest rate, right? Nothing else matters, in terms of the cost of the loan.
I don't understand what you mean by "what the buyer qualifies for is what the buyer qualifies for". If you mean that the interest rate (money factor) is not negotiable, I don't believe that. At the very least, you can select where to buy your car based on the lowest offered interest rate, which was my whole point to begin with. You don't just buy the car at the place that tells you it is giving you the lowest purchase price or the place that offers you the lowest payments. You also have to consider the finance charges you are going to pay, whether in a lease or a loan.
If I can pay one bank X dollars/month for Y months and then buy the car for
$13k, or I can pay a different bank the same amount, for the same length of time, but then buy the car for $5k, which should I do?
Congratulations, you are right, I should by the car at the dealer that has the lower residual.
And yes, you are also right that this would only be possible if the two dealers had very different "money factors" (which really means "interest rate"). But so what? The whole point of taking out a loan (whether it's a lease or a conventional loan) is to get the lowest interest rate, right? Nothing else matters, in terms of the cost of the loan.
I don't understand what you mean by "what the buyer qualifies for is what the buyer qualifies for". If you mean that the interest rate (money factor) is not negotiable, I don't believe that. At the very least, you can select where to buy your car based on the lowest offered interest rate, which was my whole point to begin with. You don't just buy the car at the place that tells you it is giving you the lowest purchase price or the place that offers you the lowest payments. You also have to consider the finance charges you are going to pay, whether in a lease or a loan.
The same $399/month payment that get you a lower residual is directly reflected from the fact that you have a insanely low money factor in comparison to the 13K residual. It still doesn't justify wanting to have a lower residual at all!
If that same money factor was applied to a residual of 13k, you have a WAY lower payment than $399/month.
Jan 5, 2006, 05:56 PM
#101
Evolved Member
iTrader: (6)
Join Date: May 2005
Location: San Diego, CA
Posts: 501
Likes: 0
Received 0 Likes
on
0 Posts
brijen123 glad to hear you got your STi. enjoy your new ride. i miss my sti sometimes...but the evo is a great change from so many subarus. its always nice trying something new. what color did you end up with? gold wheels? hit up rockblocker and get a clear bra so she looks new after winter is over.
check out the jdm sti pink springs...had 'em and i loved them.
check out the jdm sti pink springs...had 'em and i loved them.
Thread
Thread Starter
Forum
Replies
Last Post
fromWRXtoEVO
The Loft / EvoM Car Talk Corner
30
Dec 27, 2014 08:19 AM
yenny
EvoM New Member / FAQs / EvoM Rules
87
May 13, 2007 11:27 AM
