Don't feel bad even car guys get raped
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Joined: Oct 2005
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From: MT
Originally Posted by Tsurara
If you guys can't drive a RWD car in the winter, you should probably get off the road. 
Originally Posted by Tsurara
If you guys can't drive a RWD car in the winter, you should probably get off the road.
Brian
Originally Posted by Tsurara
If you guys can't drive a RWD car in the winter, you should probably get off the road.
Originally Posted by fast lane
Let me give all the anti lease people a quick school on lease vs. buy.
48 month lease with 500 down = 524 a month with a LEV of 22080.
72 month purchase with 1000 down = 669 @ 5.99%
It generally takes 48 months on a 72 month loan to reach an equity position. Because I'm buying for GMS, let's cut this number down to 36 for argument sake, and let's figure the car will be traded in at 48 months.
669 x 48 = 32112 paid into the loan. If it takes 36 months to gain equity, (which is unlikely) then the 4th year of payments should put me to the positive. So the additional 12 months x 669 = 8028. Now everyone knows interest is still being taken into consideration as not all of that 8028 is gong towards the balance. Let's say 75% is going to principal which is probably generous. So the end of the 4th year I am going to have app. 6000 in equity.
525 x 48 = 25200 paid into the lease. Just the difference between loan and lease payment has put 6900 in my pocket. I could invest this money and make a few bucks but we won't even take that into consideration. At the expiration of the lease I am going to owe 22080. I have no idea of what the market on a Vette is going to be 4 years from now so I am going to book out a 4 year old Vette. Kelley Book shows a Retail of 33000 and Wholesale of 28000 dollars for a like equipped vette. So let's say we take the middle and sell it for 30000 even. After paying off the lease buyout that leaves a positive equity position of 7900 dollars. This combined with the 6900 I saved in lease payments + the 500 less down payment, leaves me with a grand total of 15300 that I can do what I want with. This makes it a better way to go by 9300. Now you tell me which is the better way to go.
48 month lease with 500 down = 524 a month with a LEV of 22080.
72 month purchase with 1000 down = 669 @ 5.99%
It generally takes 48 months on a 72 month loan to reach an equity position. Because I'm buying for GMS, let's cut this number down to 36 for argument sake, and let's figure the car will be traded in at 48 months.
669 x 48 = 32112 paid into the loan. If it takes 36 months to gain equity, (which is unlikely) then the 4th year of payments should put me to the positive. So the additional 12 months x 669 = 8028. Now everyone knows interest is still being taken into consideration as not all of that 8028 is gong towards the balance. Let's say 75% is going to principal which is probably generous. So the end of the 4th year I am going to have app. 6000 in equity.
525 x 48 = 25200 paid into the lease. Just the difference between loan and lease payment has put 6900 in my pocket. I could invest this money and make a few bucks but we won't even take that into consideration. At the expiration of the lease I am going to owe 22080. I have no idea of what the market on a Vette is going to be 4 years from now so I am going to book out a 4 year old Vette. Kelley Book shows a Retail of 33000 and Wholesale of 28000 dollars for a like equipped vette. So let's say we take the middle and sell it for 30000 even. After paying off the lease buyout that leaves a positive equity position of 7900 dollars. This combined with the 6900 I saved in lease payments + the 500 less down payment, leaves me with a grand total of 15300 that I can do what I want with. This makes it a better way to go by 9300. Now you tell me which is the better way to go.
Loan Lease
Payment (669) (524)
# mos 48 48
Total pmts (32,112) (25,152)
Down pmt (1,000) (500)
Total cost @48mo(33,112) (25,652)
Loan bal @ 48mo (15,096) (22,080)
Sale price 30,000 30,000
Net Equity,@48 14,904 7,920
Less Total Cost (33,112) (25,652)
Cost to drive (18,208) (17,732)
The cost to drive is just about even, assuming the $30k selling price and lease payments of $524. The lease monthly payment is a lot lower because of the relatively higher remaining balance at mo 48 (22k v 15k). It seems like the lease just pushes off the bulk of the expense to the term end.
How did you arrive at the LEV of 22080? That seems kind of low, from the lessor's standpoint. Why would they let go of the car for that much, if the $30k is reasonable?
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From: MT
Originally Posted by madpacket
While my calculations don't take into consideration the value of reinvesting the monthly savings on the cheaper lease payment, the loan isn't that bad, over all (sorry for the formatting):
Loan Lease
Payment (669) (524)
# mos 48 48
Total pmts (32,112) (25,152)
Down pmt (1,000) (500)
Total cost @48mo(33,112) (25,652)
Loan bal @ 48mo (15,096) (22,080)
Sale price 30,000 30,000
Net Equity,@48 14,904 7,920
Less Total Cost (33,112) (25,652)
Cost to drive (18,208) (17,732)
The cost to drive is just about even, assuming the $30k selling price and lease payments of $524. The lease monthly payment is a lot lower because of the relatively higher remaining balance at mo 48 (22k v 15k). It seems like the lease just pushes off the bulk of the expense to the term end.
How did you arrive at the LEV of 22080? That seems kind of low, from the lessor's standpoint. Why would they let go of the car for that much, if the $30k is reasonable?
Loan Lease
Payment (669) (524)
# mos 48 48
Total pmts (32,112) (25,152)
Down pmt (1,000) (500)
Total cost @48mo(33,112) (25,652)
Loan bal @ 48mo (15,096) (22,080)
Sale price 30,000 30,000
Net Equity,@48 14,904 7,920
Less Total Cost (33,112) (25,652)
Cost to drive (18,208) (17,732)
The cost to drive is just about even, assuming the $30k selling price and lease payments of $524. The lease monthly payment is a lot lower because of the relatively higher remaining balance at mo 48 (22k v 15k). It seems like the lease just pushes off the bulk of the expense to the term end.
How did you arrive at the LEV of 22080? That seems kind of low, from the lessor's standpoint. Why would they let go of the car for that much, if the $30k is reasonable?
I love the arrogance, "If you can't drive a RWD car in the snow you shouldn't be on the road". I don't care what RWD car you have try getting up a sloped driveway or road in a RWD car even WITH snow tires and snow - A BITC*! It's not about capability of driving.
Originally Posted by fast lane
I have been trying to figure out where you are getting your calculations from until I saw the selling price. ... Are you using an amortization calculator to figure the payoff at the end of 48 months?
Originally Posted by fast lane
If you are basing your figures on 30,000 dollars and you think that LEV is low, you are way off.
Originally Posted by fast lane
You want the lowest LEV you can get while still maintaining a reasonable residual. Generally speaking the lower the LEV the higher the payment and vice versa.
Indeed if you meant You=buyer, then of course you want a low LEV, to maximize any possible "equity".
In my limited experience, the LEV was always a somewhat higher than the car would likely be worth at lease end. That way the lessor was always sitting pretty- either the buyer would pony up the difference between LEV and market value just to keep the car, or they'd turn it back in already having paid down the depreciation below LEV and the lessor can turn it around again at some markup.
Did that LEV you threw out come from a table or something? Or was it just for discussion's sake? It makes a big difference to this scenario.
Originally Posted by bad4banger
I love the arrogance, "If you can't drive a RWD car in the snow you shouldn't be on the road". I don't care what RWD car you have try getting up a sloped driveway or road in a RWD car even WITH snow tires and snow - A BITC*! It's not about capability of driving.
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Joined: Aug 2005
Posts: 22
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From: Indianapolis
...of course modding a lease car if you're not sure you'll keep it...you get the point.
I have both an EVO and a C5. I drive the C5 in winter all too often, because it's just a damn fun car. It's got enough stability systems on it (AH/ABS/TC) that you may survive a little snow, but it's sure a scary time.
What i will say is, the vette will likely be a less painful ownership with your dealership position (maint, parts, warranty claims) vs dealing with questionable mitsu dealers (which you seem to have already picked up on).
I have both an EVO and a C5. I drive the C5 in winter all too often, because it's just a damn fun car. It's got enough stability systems on it (AH/ABS/TC) that you may survive a little snow, but it's sure a scary time.
What i will say is, the vette will likely be a less painful ownership with your dealership position (maint, parts, warranty claims) vs dealing with questionable mitsu dealers (which you seem to have already picked up on).
Originally Posted by FriskyFruitFly
Your on an EVO forum.... and your asking us would be prefer and EVO or Vette??
Either I'm lost, or you are....
Either I'm lost, or you are....
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From: MT
Originally Posted by madpacket
Yes, using Excel actually to calculate the payoff. I should have made that clear. I took your payment of $669 and the 5.99% rate for 72 months to back into a loan amount of ~$40,300 (that does not include the $1,000 down you mentioned, coming close to your $42,000 price).
Nope, see above.
Please define "You". Is that the car buyer, or the car seller/lessor? If the car will be worth $30,000 at lease end, the lessor wants a LEV close to $30,000, yes? Otherwise the buyer can just walk of with the equity, as you've described earlier?
Indeed if you meant You=buyer, then of course you want a low LEV, to maximize any possible "equity".
In my limited experience, the LEV was always a somewhat higher than the car would likely be worth at lease end. That way the lessor was always sitting pretty- either the buyer would pony up the difference between LEV and market value just to keep the car, or they'd turn it back in already having paid down the depreciation below LEV and the lessor can turn it around again at some markup.
Did that LEV you threw out come from a table or something? Or was it just for discussion's sake? It makes a big difference to this scenario.
Nope, see above.
Please define "You". Is that the car buyer, or the car seller/lessor? If the car will be worth $30,000 at lease end, the lessor wants a LEV close to $30,000, yes? Otherwise the buyer can just walk of with the equity, as you've described earlier?
Indeed if you meant You=buyer, then of course you want a low LEV, to maximize any possible "equity".
In my limited experience, the LEV was always a somewhat higher than the car would likely be worth at lease end. That way the lessor was always sitting pretty- either the buyer would pony up the difference between LEV and market value just to keep the car, or they'd turn it back in already having paid down the depreciation below LEV and the lessor can turn it around again at some markup.
Did that LEV you threw out come from a table or something? Or was it just for discussion's sake? It makes a big difference to this scenario.
The only way a lessor would pick up a lease return is from an auction. When a customer turns in a lease (not trading, returning), it goes directly to the lease company where they send it to a corporate auction.
