Alfa Romeo Stelvio Forum banner

81 - 100 of 110 Posts

·
Registered
Joined
·
57 Posts
Does anybody care to comment on leasing and credit ratings??
What did you want to know?

Both car purchases and leases show up under the same heading of loans on credit reports.

With a car purchase, lets say its a 50k dollar stelvio you got for 38 grand, your liability will show as 38 grand and each on time payment made will help your credit score and each amount your liability is reduced also helps your score.

To be clear, credit reports don't report your assets. Underwriters who are considering extending you credit will attempt to calculate your assets but your credit bureau report does not.

What it does do though is look at amount of credit you have available vs credit you are using, age of accounts, number of accounts, timeliness of payments, account standing, and delinquincies/public records/ chargeoffs.
........

So back to your 38,000 dollar liability. .... you will start off with this being a new account with full liability... no equity as you havent made a payment yet. As you pay it down it continues to look favorably to your credit as the account ages, as you make timely payments, as your account remains in good standing, and as your equity increases (used credit vs available credit decreases)


A lease deal is not really much different than a purchase as far as sealing the deal actually. You negotiate the "sale price" on a lease just like you do on a purchase. I negotiated 24% off msrp on the giulia. It states these figures right in your lease contract just like a purchase contract.

Where the lease is different is how it looks on a credit bureau report.

Lets say i leased that same 50k truck for $399 per month and that rate was based on 24% off msrp, the rental fee/money factor, and agreed upon residual. So my three years of payments will equal roughly $14,364

For the leasee, the liability or the auto loan/lease account will actually start out showing a $14,364 liability as opposed to a 38k dollar one. Same positive benefits apply as you pay it down as does the purchase loan.

.......

So the credit bureau and credit rating scores really dont care much if you purchased or leased. Actually the leasee will show a lower liability but as long as youre making goid payments that shouldn't really matter.

....

Where these things become more important is to underwriters. When people are looking to extend you credit they are looking for assets versus liabilities.

In this case leasing vs buying could be completely advantageous depending entirely on HOW the person is leasing and buying and what their total asset and liability picture looks like.

As an example, many people do 6 year loans on cars nowadays. Theyll be upside down for likely 3 of those years. Theyll look bad compared to a leaeee who is into a stelvio for $399 per month.

On the other hand you could have really gotten duped on a lease and be paying out $2000 per month on a 911 versus someone who did a 3 year loan on one and is already at year 2. That person has more equity because they didnt make a bad deal and paid it off more.

Ahh but now what if i did that $399 a month lease and then took the $434 per month i saved and bought a rental unit with it and now have equity and cash flow in that unit while the $833 per month car buyer has nothing but a 3 year old alfa?

Just way too many variables on this so i wont even go into everything that our decisions in life make when being considered by underwriters.

You asked about credit reports so lets just stay with that. Both car loans and leaes are looked at similarly by the credit bureau robots with the lease showing up as a lower dollar value liability.
 

·
Registered
Joined
·
57 Posts
I still dont understand....

Why would you turn in a lease at the end?

I know people do it..but why? Seems utterly nonsensical. A car lease is not an apartment lease. With an apartment you have no options, with a car..lots and lots of options. Giving the keys back at the end being the singular most popular, and profitable for both dealer and bank..but straight dumb for the consumer. Whether or not you are charged for wear and tear.

Sell it or trade it. Period. 0 loss of options, you actually gain some. When you sign the contract, understand..sell it or trade it before the final month. Or buy it. Basically the exact same choises you have with a purchase, except you will most likely not be as upside down in value at 1-3 years of use.

Leasing requires better credit than a purchase, because the bank actually, in general makes less off a lease than a purchase transaction in the short term. However alot more is made when the car comes back and they sell it a second time used. This is why banks/dealers love leasing. They are essentially guaranteed to sell the car twice, earning profit both times with a lower risk of repossession due to the stricter credit demands on the 1st transaction and the sale of a low mile used vehicle on the 2nd, which are statistically the least repo'd vehicles.

Done correctly, with research and planning, leasing can be win, done poorly a loss. Exactly.the same as a a purchase. Hate to break it to you..but any time a person enters into any contract with a corporate entity.....they lose control of some of thier destiny. Even if it's for employment not a sale.

Another benifit of leasing? Because it requires better credit, it also has a more positive impact on your score when the contract is finished. Whether you purchase it, sell it, trade it in or give it back. Looks better than a purchase. For me, years of leasing vehicles meant the first time I ever purchased a home I qualified for prime rates......not bad. Saved slot of money over my non-leasing friends who got hosed on thier first home loans.

Helps also that I had like 6-7 car loans to thier 1 or 2.
This is a really good point.

I just went and looked at my stelvio contract. My buyout is $21,756.

At the end of 3 years ill have a 50k dollar truck that i made $399 per month payments on with 36k miles on it that i can buy for $22,000 dollars roughly.

Some leaseees negotiate with their dealership to buy it if its a smoking deal for them. 22 grand probably will be.

Some buy it out for 22 grand and now take a reasonable car note out on a car that has passed a significant depreciation curve plus they got to "test out" if the car was problematic and they dont want to keep it

Some may choose to flip it and in this case perhaps put 3 grand in your pocket.

If my 3 yearl old stelvio happens to be worth 25 grand at the end of 3 years ill take tgat money and now when you do the calculations my lease really only cost me $315 per month! Or maybe i buy a 1990 miata and race it in lemons lol.... hmm


Edit: just looked at the giulias 2 year lease and residual is $25,058. So this 50k car in 2 years and in 24k miles i can buy for 25 grand if i want. Hopefully thats good for another 4 grand in my pocket which means id have effectively paid like $250 per month to lease it lol. These cars are total lease hacks


Sometimes buyouts are a bit artificially high though. The manufacturer sets them high and encourages leases to get their cars out there. Thats fine too with me. It gets me that low lease rate and then you can throw that upside down mess to them at yhe end of 3 years for them to take a loss on. Either way works for me
 

·
Registered
Joined
·
202 Posts
I still dont understand....

Why would you turn in a lease at the end?

I know people do it..but why? Seems utterly nonsensical. A car lease is not an apartment lease. With an apartment you have no options, with a car..lots and lots of options. Giving the keys back at the end being the singular most popular, and profitable for both dealer and bank..but straight dumb for the consumer. Whether or not you are charged for wear and tear.

Sell it or trade it. Period. 0 loss of options, you actually gain some. When you sign the contract, understand..sell it or trade it before the final month. Or buy it. Basically the exact same choises you have with a purchase, except you will most likely not be as upside down in value at 1-3 years of use.

Leasing requires better credit than a purchase, because the bank actually, in general makes less off a lease than a purchase transaction in the short term. However alot more is made when the car comes back and they sell it a second time used. This is why banks/dealers love leasing. They are essentially guaranteed to sell the car twice, earning profit both times with a lower risk of repossession due to the stricter credit demands on the 1st transaction and the sale of a low mile used vehicle on the 2nd, which are statistically the least repo'd vehicles.

Done correctly, with research and planning, leasing can be win, done poorly a loss. Exactly.the same as a a purchase. Hate to break it to you..but any time a person enters into any contract with a corporate entity.....they lose control of some of thier destiny. Even if it's for employment not a sale.

Another benifit of leasing? Because it requires better credit, it also has a more positive impact on your score when the contract is finished. Whether you purchase it, sell it, trade it in or give it back. Looks better than a purchase. For me, years of leasing vehicles meant the first time I ever purchased a home I qualified for prime rates......not bad. Saved slot of money over my non-leasing friends who got hosed on thier first home loans.

Helps also that I had like 6-7 car loans to thier 1 or 2.
Huh? I don't get the so called advantages of buy/sell/trade before lease end. This is how I understand it: In any of these cases, you rely on the lease company (the actual owner) to determine the price--assuming it will be a bit different from your residual b/c you are proposing this before the lease ends. You can't "walk" away if you don't like the price like an orig buyer can (and go to another dealer). "Walking away" in this case means the lease company walked away from you b/c the terms were not advantageous to them, forcing you to just turn it in---which is how most people end a lease, and face the stuff already well-discussed on this thread. You may be able to nego with them a bit b/c you are saving them the hassle of inspecting the car and sending it to auction where dealers will buy it for their used car lots, but again, you are not in control, the lease company that owns your rented car is. And they are not going to just give you free equity. Really? If advantageous to them, at that time and space, then maybe you will get a small bump for a win-win for both of you. The point here is, while you say lesees have as many options as the buyer, they may not be good options b/c the leasing company controls the value of those options for a buyout/sell/trade before lease end. If I am totally missing something, please share--something that is always there as an advantage when leasing then becoming an owner over just buying in the first place?

Similar for waiting to lease end to buy out---residual set by lease company at origination. From what I have read, they tend to hedge a little high to keep monthly lease payments low (one of the best reasons folks lease in the first place). This could mean a higher buyout price for you than the realized market value at lease end, hurting you if you decide to become an owner and buy. Of course, it could be the other way around too---to your benefit. My point is, how often can a lease company get it wrong before they hurt themselves, really. They are still in business for a reason. They need to make money too.

In the end, the consumer is gonna pay for depreciation one way or another. I also look at it this way: cash buyer example: 2 mouths to feed (him and dealer). Lessee: 3 mouths to feed (him, dealer, and lease company). Hence 600-1k lease origination fee. Orig buyers don't deal with that. So again, structurally, a consumer can do about equally well (or not) either way, depending on info, timing, and determination.
 

·
Registered
Joined
·
57 Posts
Huh? I don't get the so called advantages of buy/sell/trade before lease end. This is how I understand it: In any of these cases, you rely on the lease company (the actual owner) to determine the price--assuming it will be a bit different from your residual b/c you are proposing this before the lease ends. You can't "walk" away if you don't like the price like an orig buyer can (and go to another dealer). "Walking away" in this case means the lease company walked away from you b/c the terms were not advantageous to them, forcing you to just turn it in---which is how most people end a lease, and face the stuff already well-discussed on this thread. You may be able to nego with them a bit b/c you are saving them the hassle of inspecting the car and sending it to auction where dealers will buy it for their used car lots, but again, you are not in control, the lease company that owns your rented car is. And they are not going to just give you free equity. Really? If advantageous to them, at that time and space, then maybe you will get a small bump for a win-win for both of you. The point here is, while you say lesees have as many options as the buyer, they may not be good options b/c the leasing company controls the value of those options for a buyout/sell/trade before lease end. If I am totally missing something, please share--something that is always there as an advantage when leasing then becoming an owner over just buying in the first place?

Similar for waiting to lease end to buy out---residual set by lease company at origination. From what I have read, they tend to hedge a little high to keep monthly lease payments low (one of the best reasons folks lease in the first place). This could mean a higher buyout price for you than the realized market value at lease end, hurting you if you decide to become an owner and buy. Of course, it could be the other way around too---to your benefit. My point is, how often can a lease company get it wrong before they hurt themselves, really. They are still in business for a reason. They need to make money too.

In the end, the consumer is gonna pay for depreciation one way or another. I also look at it this way: cash buyer example: 2 mouths to feed (him and dealer). Lessee: 3 mouths to feed (him, dealer, and lease company). Hence 600-1k lease origination fee. Orig buyers don't deal with that. So again, structurally, a consumer can do about equally well (or not) either way, depending on info, timing, and determination.
Check my post. My buyout is 22 thousand after 3 years on the stelvio and 25 thousand after 2 years on the giulia. If i want i can take advantage of that and put possibly 7 grand in my pocket between the two. Thats completely my choice. Ally has no choice in the matter. The price is set when you originally work the sales contract.

Its impossible to predict residuals absolutely perfectly. Some are low. Some are high. The giulias and stelvios are complete lease hacks. You get a rediculously low lease payment with a low residual as long as you negotiate the deal and sales price of the car well.

If on the other hand the residuals were a bit inflated like some companies do to get a car out there then thats great too because you just walk away and stiff them with a car that has an unrealistcally high residual.
 

·
Registered
Joined
·
1,675 Posts
Only lease I ever did was my 1993 Alfa 164L. The buyout was an old open end. It was a 4 yr lease. Alfa left in 1995. Buyout was like 5K. Yea, a lease worked for me on that car. Seems Alfa is doing the same thing again. Back in the day, a lease was a pure liability.

I certainly can't argue with your numbers. So you own your Stelvio for 36+k. + tax? MSRP was 50K so it was a ??TiSport? If so, you have probably gotten the single best deals I have heard of on a new 2018 Stelvio. That dealer was hurtin on that transaction. Looks like 28% off on a leftover. That's my kind of deal. I am rarely a first adopter. Stelvio was an exception as was my 2004 STi. Depreciation is a bitch but you can neutralize a lot of it by wise purchases on the front end so the back end hurts less. I have only bailed on 2 cars very early.
The only weakness I see ids you assume you will get what you think to trade in the vehicles after the buyout. Unfortunately, in our COVID world the Used car market has tanked 10-15% more so you may not do as well as you hope. Hope you do, but beware, the market is rough on used cars at present.
By chance was this an end of year deal, say SOctober on when the 2019's were released.? Can't argue with that. Have you done anything to it? Was it exactly as you wanted it? I assume its a 2018. When did you lease it? I got mine 4/18 which was a few months before the crazy deals kicked in, but it was one of a handful of Visconti Verdes in the country at the time. Let's put it another way, according to the end of the year deals that occurred I paid too much. I had enjoyed it for months by then. Where it came back to me was when I made the offer on the Maserati that go accepted. The main manager has known me for 30yrs and wanted that car , which he had specced, to go to a long time customer. So I paid for the Stelvio but was ahead on the GTS to the tune of 46% off. I never dreamed of owning a Maserati but a little give and take paid off for me.
Could have picked up a leftover 84K Guilia Quad last month for 60K but I decided its not the type of vehicle I want. My last sedan was a 2004 XJ VDP. Don't need rear doors on anythring but my SUVs. Was hoping they did the coupe like they originally spoke of.

As the 2 of us have shown, negotiations happen in different ways. For me, its about my collection, each being at or near the top of its respective class of vehicle IMHO. My end goal is different. I have ZERO desire to be a slum lord at any level. I cringe when I hear about rental properties as I have known many folks get badly burned by tenants that trash the place etc and it ends up being a money pit. Doesn't matter if its on a top shelf Island or ghetto. If it happens it will suck ANY profits out very quickly.
I have my property investments for personal use and my business.
.

Good sparring with you and no doubt you have made some savvy purchases. Do you collect cars or are you more of the buy, drive, reload type??
 

·
Registered
Joined
·
202 Posts
Check my post. My buyout is 22 thousand after 3 years on the stelvio and 25 thousand after 2 years on the giulia. If i want i can take advantage of that and put possibly 7 grand in my pocket between the two. Thats completely my choice. Ally has no choice in the matter. The price is set when you originally work the sales contract.

Its impossible to predict residuals absolutely perfectly. Some are low. Some are high. The giulias and stelvios are complete lease hacks. You get a rediculously low lease payment with a low residual as long as you negotiate the deal and sales price of the car well.

If on the other hand the residuals were a bit inflated like some companies do to get a car out there then thats great too because you just walk away and stiff them with a car that has an unrealistcally high residual.
Please read my question. Your reply here does nothing to answer my question for Alfaoffroad. You give your personal example only--already congratulated you on your lease deal. He is implying increased options (and control) for those that may desire to buy/sell/trade before end of lease---like for everyone. Why doesn't everyone do it. So I called him on this and laid out my understanding of how it works. I need a reply to that, not hearing someone's particular deal. I know there will be exceptions, whether leasing or buying. Folks are trying to say they have as much control in a lease vs. buy. I call BS, show me.
 

·
Registered
Joined
·
57 Posts
Yeah good discussion.

I just leased the stelvio this month. Its a 2019. Been sitting around the lot im sure for a year. They had i believe 5 grand in incentives on it that doesn't come out of their pocket plus they wanted it gone. Looking closely the stelvio is a 48k msrp for 36k. I knew i wanted at least sport on the stelvio and then i knew i wanted hk sound sytem and either black or red/black interior and probably 5 different colors id be fine with.

The stelvio is volcano black with red/black interior, hk sound, a few other options that i dont care about i guess lol.

The giulia i got EXACTLY what i wanted and i didn't even know i wanted the color until i saw it. Its also a 2019 and i leased it in February. Its the most gorgeous color i could have wanted imo which is Lipari grey. Its got the sport performance package with lsd, red brake calipers, hk sound and NO SUNROOF. Lol i would have ordered it this way. Super happy with that car too and it had 6 thousand in incentives.

Im a car addict versus collector i think. I keep 5 or so around at any given time and swap 1 or 2 out per year based on interests... or addiction lol.

Ive only leased 10 cars out of 55 or so. If im honest i leased the alfas because their very hackable leases and i also was uncertain of reliability. Everyone hears the rumors and i didnt know what to think. Im decent at working on audis and porsches but i knew nothing of working on alfas so it was a way to get my feet wet.

I feel much more comfortable with the 2.0l now messing with it a bit. Id feel pretty comfortable buying it out. The giulia has had zero issues in 5k miles other then a battery that was toast likely from sitting forever.
Only lease I ever did was my 1993 Alfa 164L. The buyout was an old open end. It was a 4 yr lease. Alfa left in 1995. Buyout was like 5K. Yea, a lease worked for me on that car. Seems Alfa is doing the same thing again. Back in the day, a lease was a pure liability.

I certainly can't argue with your numbers. So you own your Stelvio for 36+k. + tax? MSRP was 50K so it was a ??TiSport? If so, you have probably gotten the single best deals I have heard of on a new 2018 Stelvio. That dealer was hurtin on that transaction. Looks like 28% off on a leftover. That's my kind of deal. I am rarely a first adopter. Stelvio was an exception as was my 2004 STi. Depreciation is a bitch but you can neutralize a lot of it by wise purchases on the front end so the back end hurts less. I have only bailed on 2 cars very early.
The only weakness I see ids you assume you will get what you think to trade in the vehicles after the buyout. Unfortunately, in our COVID world the Used car market has tanked 10-15% more so you may not do as well as you hope. Hope you do, but beware, the market is rough on used cars at present.
By chance was this an end of year deal, say SOctober on when the 2019's were released.? Can't argue with that. Have you done anything to it? Was it exactly as you wanted it? I assume its a 2018. When did you lease it? I got mine 4/18 which was a few months before the crazy deals kicked in, but it was one of a handful of Visconti Verdes in the country at the time. Let's put it another way, according to the end of the year deals that occurred I paid too much. I had enjoyed it for months by then. Where it came back to me was when I made the offer on the Maserati that go accepted. The main manager has known me for 30yrs and wanted that car , which he had specced, to go to a long time customer. So I paid for the Stelvio but was ahead on the GTS to the tune of 46% off. I never dreamed of owning a Maserati but a little give and take paid off for me.
Could have picked up a leftover 84K Guilia Quad last month for 60K but I decided its not the type of vehicle I want. My last sedan was a 2004 XJ VDP. Don't need rear doors on anythring but my SUVs. Was hoping they did the coupe like they originally spoke of.

As the 2 of us have shown, negotiations happen in different ways. For me, its about my collection, each being at or near the top of its respective class of vehicle IMHO. My end goal is different. I have ZERO desire to be a slum lord at any level. I cringe when I hear about rental properties as I have known many folks get badly burned by tenants that trash the place etc and it ends up being a money pit. Doesn't matter if its on a top shelf Island or ghetto. If it happens it will suck ANY profits out very quickly.
I have my property investments for personal use and my business.
.

Good sparring with you and no doubt you have made some savvy purchases. Do you collect cars or are you more of the buy, drive, reload type??
 

·
Registered
Joined
·
1,533 Posts
Trade in value, just like the retail sales value, has nothing to do with the lease end residual value. As long as you have not made the last payment, residual value is inconsiquential other than as a loan payoff amount.

Buy, lease, own outright, valuation is determined by market and individual dealer as well as your negotiation skill. Unless you made the last payment in a lease, THEN your options go away. Again dont know why anyone does that.

In a 5 (or worse, 7) year purchase contract you are buried regardless of the price you bought, because of how the interest is computed on the loan. The majority is charged upfront, that's why in the beginning your principle goes down slowly, and speeds up after about 1/2 to 2/3rds of the way through the loan. (Exception for a simple interest loans..which very few car loans are..very few.)

This means in the first half of the loan very little principle is paid down, as the car suffers its worst depreciation. Most often leaving the car upside down, or in a negative equity situation. Get rid of it..owe money.

Whereas, in a lease after 2-3 years the payoff is the residual value + a couple payments which - generally, not always - is right about or less than what you can get trading the vehicle, so getting into another vehicle can be much easier, and cheaper. If you sell it outright it's even possible to make money.

That is if you want a different vehicle. If you don't, buy the lease. Renegotiate the residual value like you would any other car purchase. Now you just got 2 levels of discounting with less commitment. Not bad.

Not all banks will negotiate the residual value if you want to buy at lease end. Some will though.
Otherwise I think bhvrdr covered it well.
 

·
Registered
Joined
·
1,533 Posts
Another very important thing to understand.

Purchase or lease.

The owner of the vehicle is the entity with the title. Which is the bank.

The differance is who gets the title at contract termination. A purchase, you get it, a lease you don't..unless you pay the residual, then you do.

Untill that final payment is made (outside of insurance requirments and such) the differance between a lease and a purchase is negligible.

Either way, the bank wants the loan payoff amount in the contracted amount of time, or they are comming for your kids...as long as they get the full amount, they dont care what or how they got it, who paid them...or who they send the title to at the end.

Different story if you make the final lease payment without paying or renegotiating the residual though..then and only then does the bank care about the car.

And No, the leasing company does not determine what value you can get for the vehicle were you to sell it on your own or trade it to a car dealer.
 

·
Registered
Joined
·
2,399 Posts
So maybe the smart thing to do is buy used, pay cash, until you can buy new, and pay cash.
Although it would be smarter to continue buying used even if you can afford new for cash. Let someone else take the early depreciation.
But it's what people want, not what's smart.
 

·
Registered
Joined
·
202 Posts
Trade in value, just like the retail sales value, has nothing to do with the lease end residual value. As long as you have not made the last payment, residual value is inconsiquential other than as a loan payoff amount.

Buy, lease, own outright, valuation is determined by market and individual dealer as well as your negotiation skill. Unless you made the last payment in a lease, THEN your options go away. Again dont know why anyone does that.

In a 5 (or worse, 7) year purchase contract you are buried regardless of the price you bought, because of how the interest is computed on the loan. The majority is charged upfront, that's why in the beginning your principle goes down slowly, and speeds up after about 1/2 to 2/3rds of the way through the loan. (Exception for a simple interest loans..which very few car loans are..very few.)

This means in the first half of the loan very little principle is paid down, as the car suffers its worst depreciation. Most often leaving the car upside down, or in a negative equity situation. Get rid of it..owe money.

Whereas, in a lease after 2-3 years the payoff is the residual value + a couple payments which - generally, not always - is right about or less than what you can get trading the vehicle, so getting into another vehicle can be much easier, and cheaper. If you sell it outright it's even possible to make money.

That is if you want a different vehicle. If you don't, buy the lease. Renegotiate the residual value like you would any other car purchase. Now you just got 2 levels of discounting with less commitment. Not bad.

Not all banks will negotiate the residual value if you want to buy at lease end. Some will though.
Otherwise I think bhvrdr covered it well.
Yeah, I get all the abstract talk of depreciation, buy, lease, trade in, etc..stuff. Easy to highlight worst case buying scenarios though--5 to 7 yrs of financing is a disaster. Those folks should just be in a cheaper car at that point to lessen the pain. Cash buyers avoid this, and I'm lucky to be in that camp. All of the $$ talk above has been covered extensively---is usually a wash between leasing and buying b/c we know the captive lease company and dealer, in the end, eventually need to make a profit to survive. Where do you think that comes from? We've long agreed that customer skills and market timing are far more influential here to an outcome.

My argument is on control and your comment here helps my point: you said "...buy the lease. Renegotiate the residual value like you would any other car purchase." The lessee can try to re-nego like any other buyer, but does not have the leverage like a buyer to walk away to another dealer. The lessee is trying to nego while still captive to a lease contract. The buyer has no such constraint and has the power to walk away. I already addressed this in my prev post, nothing new. My point was about control. If the bank is willing to re-nego, knowing the alternative is likely lease turn-in, do you really think they are going to give away equity? Like I said before, they might give some, a win-win for both sides, but the lessee does not control this, the bank does. Buyers, by comparison, can just walk away to another dealer/offer if they dont like the terms.
 

·
Registered
Joined
·
202 Posts
Another very important thing to understand.

Purchase or lease.

The owner of the vehicle is the entity with the title. Which is the bank.

The differance is who gets the title at contract termination. A purchase, you get it, a lease you don't..unless you pay the residual, then you do.

Untill that final payment is made (outside of insurance requirments and such) the differance between a lease and a purchase is negligible.

Either way, the bank wants the loan payoff amount in the contracted amount of time, or they are comming for your kids...as long as they get the full amount, they dont care what or how they got it, who paid them...or who they send the title to at the end.

Different story if you make the final lease payment without paying or renegotiating the residual though..then and only then does the bank care about the car.

And No, the leasing company does not determine what value you can get for the vehicle were you to sell it on your own or trade it to a car dealer.
of course the lease company does not control the price you get when you decide to sell or trade---its not their car anymore, it's yours. I think you misunderstood what I was saying or I did not say it clearly enough, What I meant was the process that leads up to this---they set the residual, which seems to hedge a bit high high for lower monthly payments (great adverts). This means if you want to exercise the buyout, it is quite possible the realized value at lease turn in is less than the residual, which means the lessee pays the difference. If this is the case and you want to re-nego buyout, just before turn in, the bank is in control of your outcome. You may come out ok, or even with a slight bump, but it was not due to your leverage---it was because the bank also saw some financial advantage. The bank decided, not you. Cash buyers dont lose this control during nego---when buying or trading-in or selling. Owners dont like the terms, walk away and try elsewhere. Again, setting aside the now dead horse on overall costs, its the control thing. Buyers have more.
 

·
Registered
Joined
·
202 Posts
So maybe the smart thing to do is buy used, pay cash, until you can buy new, and pay cash.
Although it would be smarter to continue buying used even if you can afford new for cash. Let someone else take the early depreciation.
But it's what people want, not what's smart.
I agree. Let someone else eat the sharpest depreciation. But that new car smell....
 

·
Registered
Joined
·
1,533 Posts
Again..why would you wait till lease turn in to do anything?

The bank wont renegotiate and the residual is too high? Ok..go to a dealer and trade it in on another one at a lower value. Still options. Worried about lease end fees? Ok, understandable. I've leased alot of cars and never paid a fee, so.... but again, never turned one in at lease end either. Seriously wtf, why would anyone ever do that?

I leased a VW Passat for 5 years once, 10k/yr so 50k total. Was at 110k miles by year 4..traded it in, no fees, no nothing..dealer ate the negative value like they do on alot of tradeins. Always options on a lease..until the last payment is made.


I get lots of people make every payment and turn the car in like the bank says you is aspossed to..lots of people do lots of dumb things...doesnt mean I will, or you should, or that there aren't other options.

Probably is an instance where it would make sense to turn a lease in and walk away..I really cant think or one though.

Can argue back and forth all day. Point is, while what you say is true...in theory. In practise I've personally come out ahead on every lease I've done. Every purchase on the other hand I have regretted. (Except the Stelvio, which I leased first)

Everything has risks, even a purchase contract, or a cash buyout. All depends on your particular perspective and life situation.

Not everyone can afford to pay cash, and not everyone wants to drive a used car. However, everyone should be able to spend what they earn however they want without feeling less than someone else...with the same thing....

Lease, purchase, pay cash. Do what is best for you. In any and all circumstances understand the only way you come out on top is to be prepared and know all your options. Especially with a lease because there are more options, and more variables in how they are exercised.
 

·
Registered
Joined
·
35 Posts
Money factor (the interest rate figure used in lease calculations) is low right now for Alfas. So if you were to purchase instead and get a Loan, the interest rate on that loan would probably be higher than the money factor.

Also, the money factor on my Stelvio is lower than inflation, so you are better off leasing than even buying outright and paying cash (assuming you were just keeping cash in a low interest savings account).
My Alfa dealer had about $2500 more in incentives for me to lease than to buy. It was a no brainer decision to lease.
 

·
Registered
Joined
·
202 Posts
Again..why would you wait till lease turn in to do anything?

The bank wont renegotiate and the residual is too high? Ok..go to a dealer and trade it in on another one at a lower value. Still options. Worried about lease end fees? Ok, understandable. I've leased alot of cars and never paid a fee, so.... but again, never turned one in at lease end either. Seriously wtf, why would anyone ever do that?

I leased a VW Passat for 5 years once, 10k/yr so 50k total. Was at 110k miles by year 4..traded it in, no fees, no nothing..dealer ate the negative value like they do on alot of tradeins. Always options on a lease..until the last payment is made.


I get lots of people make every payment and turn the car in like the bank says you is aspossed to..lots of people do lots of dumb things...doesnt mean I will, or you should, or that there aren't other options.

Probably is an instance where it would make sense to turn a lease in and walk away..I really cant think or one though.

Can argue back and forth all day. Point is, while what you say is true...in theory. In practise I've personally come out ahead on every lease I've done. Every purchase on the other hand I have regretted. (Except the Stelvio, which I leased first)

Everything has risks, even a purchase contract, or a cash buyout. All depends on your particular perspective and life situation.

Not everyone can afford to pay cash, and not everyone wants to drive a used car. However, everyone should be able to spend what they earn however they want without feeling less than someone else...with the same thing....

Lease, purchase, pay cash. Do what is best for you. In any and all circumstances understand the only way you come out on top is to be prepared and know all your options. Especially with a lease because there are more options, and more variables in how they are exercised.
You are equating the proposition of the lesee having the same number of options as a straight cash buyer with the assumption that these same options include the same leverage (or control) that a cash buyer has when actually carrying out these options. I say this is just not true and it is really common sense that it is not true. That has been my point all along since we buried the straight cost debate for leasing vs. buying. Your comment in post 88 actually bears out my point:
"Not all banks will negotiate the residual value if you want to buy at lease end." Very true, and I said same in a prev post. Lesee sees residual above realized value and wants to re-nego before turn in. Bank says no. End of story. Who has control here? Not the lesee. Stuck in lease for turn in (that I agree with you could be a bad idea for some folks). But then you say, ok trade it in somewhere else. Ok, true, on the surface this appears to be another good option for the lesee. But the quality of this option is far poorer for the lesee than a car owner (cash buyer) in the same situation (trading in). The lesee attempts to bargain for trade in value. Dealer knows the lesee's alternative is to remain stuck in a captive lease. Dealer knows how this works and has all the leverage (control) in these nego (residual, realized market value, etc..)---because the lessee does not own the asset in question (the car) and can't walk away with title in hand like a cash buyer who owns the asset can and either go to another dealer or just wait them out for more favorable market conditions. Lesee's contract clock is ticking---dealers know this. Advantage: dealer. So, not all options are of the same quality if one example owns the asset (cash buyer) and the other is captive to a lease contract and has less leverage (and time) to ensure a favorable outcome. That's my point.

This comment from you makes total sense:

"Can argue back and forth all day. Point is, while what you say is true...in theory. In practise I've personally come out ahead on every lease I've done. Every purchase on the other hand I have regretted. (Except the Stelvio, which I leased first)."

Indeed, correct, and I never intended to argue the indiv cases, but in general (theory), who has more leverage or control--common traits of the system, not indiv outcomes. I am happy for you and others that are successful lessees---good on you. We all agree there are times when leasing is prob better, other times maybe buying. But we also agreed that indiv skills, timing, and persistence impact the outcome more than anything else.
 

·
Registered
Joined
·
1,675 Posts
BHVRDR, know I know why you got the "DEAL". Long term leftover. So you saved 28% based on your numbers when all is said and done +/- a few bucks. Good deal....but

That is peanuts compared to my 46% off deal on my 2016 Maserati GTS bought 3/19 new. Finance accrued less than 1500 for the year I ran the finances. BTW it really is that good.
Lots of ways to have what you want.
 

·
Registered
Joined
·
57 Posts
BHVRDR, know I know why you got the "DEAL". Long term leftover. So you saved 28% based on your numbers when all is said and done +/- a few bucks. Got deal....but

That is peanuts compared to my 46% off deal on my 2016 Maserati GTS bought 3/19 new. Finance accrued less than 1500 for the year I ran the finances. BTW it really is that good.
Lots of ways to have what you want.
Thats an awesome deal for sure on a car with an amazing exhaust note. I keep a few of these on my watch list. The evoras too actually. Great choices!
 

·
Registered
Joined
·
1,533 Posts
Sorry man, dealers are a dime a dozen and you give them way too much credit.

The only thing they care about is moving inventory. Oh..your dealer is different? Ok. Find another dealer.

Go to the next. There is always another. Oh but time is limited? Ok, I can shop 10 dealers in 3 states in one day thanks to the internet. Maybe the time will come when I shop every dealer in a 500 mile radius and none will do the deal I want..maybe..but probably not. Regardless, not going to take that perspective when entering into a negotiation.


"Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win." - Sun Tzu, Art of War.

Leverage is not the only factor, and - really - is nothing more than perception. Only human being that has so much leverage over me I cant walk away..is my Wife. And even she doesn't come out ahead on every negotiation (just most of em).

Something I learned selling cars....one way or the other, lease purchase or cash, the biggest factor in a great car deal is the mindset going into negotiation and the tactics used..not the method of payment. The dealer doesn't care how they get paid ("Cash from the buyer or cash from the bank, all cash eventually." Is what the manager who trained me always said), and they are at least as motivated to sell a car as you are to buy one, even if you are being "forced" out of a lease. Probably more, however they are better skilled at hiding this fact. Dont let them fool you...they are good at fooling people. Hundreds of hours of training once a person makes it to managment in auto sales..specifically in how to fool people.
 

·
Registered
Joined
·
202 Posts
"Leverage is...nothing more than perception." LoL man. Yeah, try that one with the IRS, a judge who orders wage garnishment, a damage/wear-tear inspector's write up for those that turn in leased cars, or to someone wanting to buy out their lease and become an owner but still owe the diff between residual and market value. That will get you out of paying, for sure. In fact, that debit to your acct/bill for these is just an illusion. But, you must be right. I suppose owners of anything have no more control/leverage than renters; it's just a perception. If you have to pay to ship your car for a sale/trade, you probably lost what was gained by finding that dealer willing to pay some of the diff between residual and market value.

Time will always be one of the best things owners of stuff have over renters/lessees. Seems many lesees are monthly payment people and not likely able to buyout the lease at end (becoming an owner)---there are many exceptions, granted, and some are in this thread. But I don't think this is the norm. If they finance the buy, it might help them b/c the depreciation curve is a bit flatter after a 3 yr lease, but their interest rate would likely more than wipe this out possibly due to higher rates for a "used" off-lease car. Could be wrong on this part, not sure if buying your own lease makes it a used car purchase. From a title transfer perspective, it seems to.
 
81 - 100 of 110 Posts
Top