Quote:
Originally Posted by q0192837465
^ no offense, but I highly advise against leasing in OP's situation. He pays less now but the the balance will accumulate more interest. In the end, he will pay more for the car. What will OP do when the lease term is over? Buy it out? Refinance? Or lease another car. In the end, it will turn into a never ending drain on OP's cash flow. The sooner the debt is paid off the better. Leasing ensures that this doesn't happen. But I do agree about the part that you can just give them the car back if something happens in OP's life that demands a relocation of his finances.
I don't understand why people argue that car debt is a good debt. Debt on a depreciating asset is never "good" unless it somehow generate income. If OP wants to finance, make sure it is no longer than 36 months. If it takes u more than 36 months to pay it off, sorry, u simply can't afford it and should find a cheaper car or a better deal.
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I'm not quite understanding what you mean the balance will accumulate more interest. Interest is calculated based on sale price already and is divided into your payment and residual value.
Only problem I see is financing the residual value because interest is already calculated for leasing, now you add another interest for financing. So if you're gonna lease, either lease to own without financing buyout, or return it and lease a new car. I go with the former, because the latter will leave you in a never ending loop of leasing.
If OP is not buying a very expensive car, say $24,000 tax in. Lease $10,000 at 24 months, for $400 so a month, give or take $700 with insurance. In the 24 months, save up $14k - $16k to buy out the car. If he lands a $15/hr full time job, this can easily be done. He'll be out of debt in 2 years and purchased a brand new car. If you're not good with cars, brand new cars are the way to go, otherwise you'll find yourself getting ripped off like myself many times with used cars. New cars doesn't have to be $40k $50k $60k. Just get something like a civic. If you want sport, frs, accord coupe, and get it in standard.
Aside from my point, car will depreciate, but it's only a matter when you decide to resell it. I buy my car and I'm planning on keeping it until it dies. What's the point in buying a M3 for $70k and thinking about selling it hoping to lose only $10k - $15k? You'll have to sell it in like a year or two after buying it to minimize depreciation.
I'm using about 40% of my income on my car. Even though I overpaid like $10k for it, I can still save for the residual value while paying for my 3 year lease.
Yes, I live at home still, and decision you have to make is, buy what you want now or save up and get a property. I decided to go with the car because I needed to make sure I can fully commit to a debt and handle my financial situation before actually getting a place.