Comments on: Car Ownership Cost Goes Beyond the Purchase Price http://moneyning.com/money-tips/car-ownership-cost-goes-beyond-the-purchase-price/ A personal finance blog where we share insights on carefully saving money, investing, frugal living, coupons, promo codes because the little things matter in achieving financial freedom! Sat, 11 Feb 2012 19:58:22 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Randal http://moneyning.com/money-tips/car-ownership-cost-goes-beyond-the-purchase-price/comment-page-1/#comment-58419 Randal Thu, 17 Nov 2011 17:12:11 +0000 http://moneyning.com/money-tips/car-ownership-cost-goes-beyond-the-purchase-price/#comment-58419 Do the math on the "total cost of ownership" comparing Leasing vs. Financing. The out-of-pocket cost can be very similar. Then make your own decision on what's best for you. With leasing though, you have the "first right of refusal" at the end of the lease. If the end lease value is higher than the current market price near the end of your lease, you can profit by buying out and selling the vehicle privately or getting bids from dealers to purchase the vehicle. If the market value is lower than the current market value, you can hand it back to the leasing company. If you sell it for more, you pocket the difference. Also, if you've had an accident during the term of the lease, and it significantly devalues the vehicle, it will be better to hand it back to the leasing company & let them take the lump on the resale value of the vehicle. (If you financed the same vehicle, you'll personally feel the pain of the lowered value when you sell it). With leasing, you're also only paying the tax component on the "monthly payment", and NOT on the entire vehicle... (in Canada anyway), and finally,... I've leased and then used (invested) the difference between the cost of a lower lease payment and a higher finance payment - again I've invested the difference in a small real estate syndication, and made enough with a good ROI to pay for the entire vehicle... PS... Don't get into an Open End lease... where the leasing company can determine the end lease value,... base on "their" perception of the current market value. You should only ever participate in a "closed" lease, where the residual or end lease value (buy-out) amount is determined at the beginning of the lease. Kind regards, Randal in Canada Do the math on the “total cost of ownership” comparing Leasing vs. Financing.
The out-of-pocket cost can be very similar. Then make your own decision on what’s best for you.

With leasing though, you have the “first right of refusal” at the end of the lease. If the end lease value is higher than the current market price near the end of your lease, you can profit by buying out and selling the vehicle privately or getting bids from dealers to purchase the vehicle. If the market value is lower than the current market value, you can hand it back to the leasing company. If you sell it for more, you pocket the difference.

Also, if you’ve had an accident during the term of the lease, and it significantly devalues the vehicle, it will be better to hand it back to the leasing company & let them take the lump on the resale value of the vehicle. (If you financed the same vehicle, you’ll personally feel the pain of the lowered value when you sell it).

With leasing, you’re also only paying the tax component on the “monthly payment”, and NOT on the entire vehicle… (in Canada anyway), and finally,… I’ve leased and then used (invested) the difference between the cost of a lower lease payment and a higher finance payment – again I’ve invested the difference in a small real estate syndication, and made enough with a good ROI to pay for the entire vehicle…

PS… Don’t get into an Open End lease… where the leasing company can determine the end lease value,… base on “their” perception of the current market value. You should only ever participate in a “closed” lease, where the residual or end lease value (buy-out) amount is determined at the beginning of the lease.
Kind regards,
Randal in Canada

]]> By: LTC Tony http://moneyning.com/money-tips/car-ownership-cost-goes-beyond-the-purchase-price/comment-page-1/#comment-57820 LTC Tony Mon, 14 Nov 2011 01:19:23 +0000 http://moneyning.com/money-tips/car-ownership-cost-goes-beyond-the-purchase-price/#comment-57820 They all lose 20% before you leave the lot, I am sure those BMW's lose more. I would love to see an Index on every vehicle with lets say an instant depreciation value sticker on it. It would force this charade to stop! Then again as tax payers we are in the business of selling cars so some of you might not! They all lose 20% before you leave the lot, I am sure those BMW’s lose more. I would love to see an Index on every vehicle with lets say an instant depreciation value sticker on it. It would force this charade to stop! Then again as tax payers we are in the business of selling cars so some of you might not!

]]> By: CarFan http://moneyning.com/money-tips/car-ownership-cost-goes-beyond-the-purchase-price/comment-page-1/#comment-5123 CarFan Wed, 12 Mar 2008 02:08:27 +0000 http://moneyning.com/money-tips/car-ownership-cost-goes-beyond-the-purchase-price/#comment-5123 Great post. There's definitely a lot too look into before buying a car if you want to keep your long term cost down to a reasonable level. When I bought my last car I pretty much looked into all of this including all the latest safety and crash test. Great post. There’s definitely a lot too look into before buying a car if you want to keep your long term cost down to a reasonable level. When I bought my last car I pretty much looked into all of this including all the latest safety and crash test.

]]> By: MoneyNing http://moneyning.com/money-tips/car-ownership-cost-goes-beyond-the-purchase-price/comment-page-1/#comment-824 MoneyNing Sat, 07 Jul 2007 05:19:21 +0000 http://moneyning.com/money-tips/car-ownership-cost-goes-beyond-the-purchase-price/#comment-824 Baz: Of course I agree with the RSX part since I own one... I think happiness doesn't have to be totally tied to money. There are many ways to make yourself happy without spending a dime, so no worries :) Baz: Of course I agree with the RSX part since I own one…

I think happiness doesn’t have to be totally tied to money. There are many ways to make yourself happy without spending a dime, so no worries :)

]]> By: Baz L http://moneyning.com/money-tips/car-ownership-cost-goes-beyond-the-purchase-price/comment-page-1/#comment-820 Baz L Sat, 07 Jul 2007 01:39:02 +0000 http://moneyning.com/money-tips/car-ownership-cost-goes-beyond-the-purchase-price/#comment-820 You have to admit though, the RSX is a sweet car, ain't it? But you're right. It's all about happiness, well at least how much happiness you can afford at the time. -- Baz L You have to admit though, the RSX is a sweet car, ain’t it?

But you’re right. It’s all about happiness, well at least how much happiness you can afford at the time.
–
Baz L

]]> By: MoneyNing http://moneyning.com/money-tips/car-ownership-cost-goes-beyond-the-purchase-price/comment-page-1/#comment-816 MoneyNing Fri, 06 Jul 2007 17:31:06 +0000 http://moneyning.com/money-tips/car-ownership-cost-goes-beyond-the-purchase-price/#comment-816 J2R: You just need to make sure you are happy with your decision. There is nothing wrong with spending money, but don't "overdo" it. J2R: You just need to make sure you are happy with your decision. There is nothing wrong with spending money, but don’t “overdo” it.

]]>