I guess in this example you would technically pay less if you lease because when you buy it after lease the residual price is lower than the purchase price, so that means you are paying less taxes because that is percentage based...

I'm still unlcear as to how modding your car works during a lease though. Doesn't it work the same as purchasing it? If you lease to own, why would how much you mod it matter?

 

Mod as much as you want. Just bring it back the way you picked it up.

 

Few things here.

The biggie is the tax savings. I traded in a car for $19,000 on an Evo that I got for $35,500. If I had bought the Evo outright, I would have immediately saved $1700 in taxes because you only pay tax on the difference in my state.

But I also look at financials. Say you have a kid (or two) in daycare that whacks you for $1400 a month, so a $250 lease payment is mighty tempting. That cost won't exist at all in two years.

The problem with mileage selection on the front end are the unknowns. Two months ago, I didn't see me wanting to change jobs, but now I'm looking at it seriously. It's a real possibility that my mileage will go up or even way up, so that part stinks. If I turn in the car with 10,000 extra miles on the odometer, it's going to cost a pretty penny. Of course that's not going to happen- If my driving requirements go up substantially, I'd get a fuel miser beater. But I just wanted to mention that although there are good things, there are also a couple darker sides to leasing.

 

PS: How did financing the residual work? I assume most everyone goes through MMC, because there's no BS strings attached on the back end. Do they offer to finance your loan on the end? Did you get a good rate?

 

Here is a buy vs lease example
I used bankrate auto calculator
http://www.bankrate.com/calculators/...alculator.aspx

Buying...
$36,500 + $2920 Tax - $3500 down payment = $35920
%2.99 @ 72 months = $545.60 per month.

545.60 x 72 = $39,283.20 (Total paid out).

Leasing and then purchase
$3500 down + $300 x 23 (first month included in down payment) = $10400 total.
Residual Value = $27,000
Finance $27,000 + $2160 tax for four years
%2.99 @ 48 months = $645.31 = $28680.48
So the six year total is... $10,400 + $30974 = $41,374.88

OK, so in the end straight out purchasing is cheaper by about $2000.
It might not be that bad if you can get a better interest rate for a 4 year vs 6 year loan. Of course rates could be through the roof in two years anyway...

 

Sent you a PM. 2 actually, lol.

 

Thanks for the PM and all the comments. I guess it basically boils down to higher monthly payments to save at the final purchase or lower monthly payments now and shell a bit extra at the end of purchase. I'm leaning towards used at this point, but I will go into a dealer to see what the options are still.

 

My first bit of advice is don't buy a car that you can only afford to own with financing. If I don't have the cash to buy it, I don't. That doesn't mean you don't finance, but you have to finance for the right reasons. If you can get a 1.X% loan on the car, go ahead and finance it and put your cash to work for you and make you some money. Only finance when the interest rate is lower than what you could earn on the money. I wouldn't pay interest on a depreciating item such as a car just to be able to buy a nicer one.

second, financing a car for 72 months is downright crazy. If you need 72 months to make the payments affordable, you are buying a car you can't afford. Who wants to be making payments on a 6 year old car with probably 72000miles.

There is no point in buying or leasing a new evo, because it seems like it will lead to the OP living beyond his means.

 

I say lease and if u still like the car just buy it off... that will save u the trouble if u decide u change your mind and want to get rid of it..

 

I'll disagree. The price of the car is independent of financing. Sure there are a lot of different ways of purchasing and haggling tactics to make something sounds more appealing... but in the end the price of the car is the price of the car. If you don't get the best price of the car - it is because one didn't negotiate well enough(which happens all the time). Having cash for a car will not save you 10k unless youre practically financing a car using credit card interest rates.

Cash does make for easier negotiating. No doubt about that. Especially if you keep it in OTD numbers.

I don't think the lease offered by Mitsubishi is a bad option at all - if I was on the market for a new X I would most likely use it. This is coming from someone who generally frowns upon leasing.

 

First off, the interest rates are going to be lower on a lease than when you refinance as a used car. Secondly, assuming tier 1 credit (best), the interest rate on a 24 month lease will be significantly lower (like 0.9%). And thirdly, where are you getting the residual value from? I thought that was something only a dealer had on what we call a "lease sheet" showing the residuals for miles x years.


Dude, I'm calling your BS here. I work at a dealership.

We make more money when you finance with the dealership. This notion that you get a better deal with cash is compete and utter ****ing nonsense. We want you to finance with us. So if anything you'd get a better price by telling a dealer you will finance with them up front.

Secondly, I doubt anyone on this forum has bought a brand new (CURRENT model year) MSRP of $35,790 (including $795 for Destination) for 30k including TTL. You're talking out of your butt lol.

 

Anything under $400 a month for a Evo on lease sounds good to me. A year ago I leased the 'lancer se' (not evo) for $250 a month with zero down. It hurts when I see people spending like $70-$100 more a month on a Evo, I want one, real bad i fantasize about this **** daily and when im on the computer im on youtube watching videos and reviews on it and when im not im on the road I just looking at oncoming traffic to see if I spot an evo on the other side. But I dont know how mitsubishi will react when I tell them I want to get out of the lancer lease and go for the Evo. I've leased honda's for decades before and have no problems. Has anyone had experience with this?

 

In my experience from working at a dealership, here's what I've seen with Hondas. Most of their lease returns are worth fairly close to the residual values. We've bought out a couple, we've returned a couple. It all depends on what our current inventory of used cars looks like. But once in a while, depending on condition, they're not worth as much as they buy out, so we pass.

We take people out of Mitsu leases all the time with a "pull ahead" program. Basically 9 months from the end of your lease, we call people up and see if they are interested in leasing or buying a new Mitsubishi. If so, Mitsubishi will let them out of their next 9 payments. I've never seen us NOT buy out a mitsu lease, other than ones with sever damage. Mitsu intentionally under values their residuals. This is done for a number of reasons.

1) They don't end up stuck with the cars. Several years ago Mitsubishi ended up with several millions of dollars worth of lease returned cars that they had trouble getting rid of.

2) It puts the customers in a good position to buy out their cars.

3) It puts customers in a position where they may be able to trade in their lease and have some equity (Yes, you can have equity in a lease!!!)

 

my lease was for 36 months and when i knew that i really wanted the car and this is the car for me, i shopped around, contacted banks and credit unions. you simply deny if you don't like the rates they are giving you.

at that time, the evo X's blue book value was way higher than the residual so getting a loan was easy. with that said, no wonder MMC kept sending me letters to get in (lease) another Evo X that they'll even cover the last 6 months of my current lease, meaning i can get out of lease early with no penalty to me as long as i get another mitsubishi.

 

Are rates the same when financing a new car vs. financing the residual value? I realize rates could (will) jump in two years, but are new & residual rates equal today? I always thought residual interest rates were comparable to the rate somebody would get when financing a 2 year-old car.