QuestionQUESTION: Hey there. I want to drive a G35 sedan. I have purchased a 2006 base model from CarMax for $26,998 with 17,800 miles on it. Arranging my own financing (5.85 for 66 mos), I can put $4000 down, finance about $25,000 (the $26 did not include taxes/fees) and have a payment of about $480. I have 4 days to undo this deal if I want. And I might considering the following deal:
Apple Leasing, out of Austin, TX, told me they can get my payment about the same (let's call it $480/mo) with NO money down (so I'm holding on to $4000 right off the bat) on a 2007 G35 Journey model on a 60 month lease.
You should know this about me: I have owned two cars in my life and kept them both for 8 years. The commitment of 60 mos does not scare me.
What other downsides do I need to be aware of on a 60 month lease on that car. The kid in me wants to get the new model of G35 but not at the cost of an imprudent decision.
I have been over this stuff so much I can't seem to find my footing on what to do. I have 4 days to cancel CarMax and get the lease before CarMax is a done deal.
Thanks!
ANSWER: Hello,
It sounds like for you, the lease might be a better choice. Good luck!
Aaron
---------- FOLLOW-UP ----------
QUESTION: Hey, I appreciate the response. A follow up if I may: what concerns would you have about a 60 month lease, aside from the obvious wanting to change cars in the middle of the lease? I'm not so concerned about needing to change cars. My wife drives the SUV. Financially speaking, what do you see as the true risks of the 60 month lease? My gut feel is, by not putting down the $4000 - $5000 cash into a purchased car, and taking the, let's say, $3000 I get from the sale of my car, I can take that $7000- $8000 and put it into a 4.5% ING Savings account, let it earn interest, and be mentally prepared to use it for maintenance over the 60 months. Seems if I buy, I'm STILL putting the $4000 down up front and STILL having to pay that maintenance anyway.
Wow. Rambling.
Thanks.
AnswerMyers,
I would say that you are right on. You never have equity, nor do you have to worry about the car depreciating (as that is all you are paying for in the lease). Put your money to work, and enjoy the newer car now in the lease. Just make sure that you choose the mileage option that is realistic for you or it could really cost you in the end. Speaking of costing you in the end, you should see if they offer "excess wear and tear" insurance. If so you should probably buy it, but for $100-300 less than what they offer it for. Good luck!
Aaron
