Insults?! Are you serious?! Read through the thread, you called numerous folks dumbasses, including myself. I've yet to call you anything but a typical car salesman.
yea, I know it's by state, but sales tax actually is that here because there's a $300 maximum state sales tax here (yea, it's great!), and dmv fee is $54, and doc fee was $99 at last dealer, for the $453 as stated.
$300. That's the max tax here on sales tax.
if in another state with 7.5% sales tax, it would be $1500.
Actually, the author says nothing about 0% APR. The article uses this example:
Some people need to see the numbers, so we looked long and hard for a lease deal that would seem to beat out buying.
We found a promotion for a 2014 Honda Accord Sedan 2014 lease deal listed by Edmunds.com (you can find similar deals here). After $1,999 down, the lease payments are just $199 a month for a 36-month, 36,000 mile lease. The total cost for three years comes to $9,163. Let’s assume you found a similar lease again for another three years. Your total cost comes to $18,326, or $3,054 a year for six years.
The same vehicle had a target price of $20,840 according to car pricing service TrueCar.com. If you put the same $1,999 down and financed the car for 48 months at 2.5 percent, your monthly payment would come to $412.88. At the end of the four-year loan, the total cost to purchase the car (including interest) comes to $21,817. Over six years, your annual cost would come to $3,636 a year.
So far it seems like leasing is way cheaper … by almost $600 a year!
But we’re forgetting something: After the loan is paid off, you own your car.
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Your comments on this topic have been a bit nutty.
Anyway, leasing is a dumb idea for the overwhelming majority of car buyers. So no, you should not lease a Kia or any other car.
You forget that you can buy your lease after the term. Honda provides gap insurance so if your car is wrecked there will be no risk of owing any difference from what insurance pays and what is owed unlike if you financed the car. You can own your car or drop it off. I personally would hate owing 10 k on a car that was worth 7. Lease gives you choices and ties up way less of your money. After 5 years most people are upside down in their trade ins. The only thing is miles are limited on a lease
I still want you to explain to us how "after 5 years people are upside down in their trade-ins" when the car is paid off? They owe nothing...
Dave Ramsey expmains a fleece:
QUESTION: Listener asks Dave to break down the mathematical flaws in a car lease.
ANSWER: A car fleece is basically renting a car. You pay $400 a month and at the end of the new car lease, you turn it back in. If you want to buy it, you are buying it for what they estimate at the beginning of the fleece to be the market value. At the end of the lease, it’s called the residual value. If you pay $400 a month for 60 months, you pay $24,000 before turning it in. The car will not have gone down in value more than that, because the car companies would lose money if it did. When they get the car back, you will have paid them more than the car has depreciated during that time.
During that time, you’re maintaining the car as if you owned it. You’ll get charged for excessive wear and tear, or if you put too many miles on it. If you rent it for $24,000 and it went down $15,000 in value, then it cost me $9,000 to rent this car for this period of time. That is their profit during that time.
Another thing is that the interest rates on a vehicle lease are not disclosed because the Federal Trade Commission has determined that this is not a debt, so there is no federal disclosure involved. Therefore, you have no truth in lending disclosure sheet. The interest rates you get charged are unbelievably high. That’s where you’ll realize you got screwed over.
People get sold automobile leases because they are told that it’s what sophisticated people do. But as it turns out, the car companies make more money on leasing you the car than if you bought the car with cash, according to the National Auto Dealers Association. Broke people think ‘how much down and how much a month’. Rich people think ‘how much’. If you can’t pay cash for a car, then ride a bicycle. But don’t lease a car.
QUESTION: Listener asks Dave to break down the mathematical flaws in a car lease.
ANSWER: A car fleece is basically renting a car. You pay $400 a month and at the end of the new car lease, you turn it back in. If you want to buy it, you are buying it for what they estimate at the beginning of the fleece to be the market value. At the end of the lease, it’s called the residual value. If you pay $400 a month for 60 months, you pay $24,000 before turning it in. The car will not have gone down in value more than that, because the car companies would lose money if it did. When they get the car back, you will have paid them more than the car has depreciated during that time.
During that time, you’re maintaining the car as if you owned it. You’ll get charged for excessive wear and tear, or if you put too many miles on it. If you rent it for $24,000 and it went down $15,000 in value, then it cost me $9,000 to rent this car for this period of time. That is their profit during that time.
Another thing is that the interest rates on a vehicle lease are not disclosed because the Federal Trade Commission has determined that this is not a debt, so there is no federal disclosure involved. Therefore, you have no truth in lending disclosure sheet. The interest rates you get charged are unbelievably high. That’s where you’ll realize you got screwed over.
People get sold automobile leases because they are told that it’s what sophisticated people do. But as it turns out, the car companies make more money on leasing you the car than if you bought the car with cash, according to the National Auto Dealers Association. Broke people think ‘how much down and how much a month’. Rich people think ‘how much’. If you can’t pay cash for a car, then ride a bicycle. But don’t lease a car.
"Way less money down" -a down payment is an option.
"leasing gives you more options" -buying gives you numerous options also
I can tell you right now if you're upside down on a Honda in a .9% 60 month term finance rate like we've been talking about, then you got shafted by the stealership from the start with a shitty sales price and dealer fees, ridiculous overpriced options that you didn't need like a $2500 extended warranty, and lawd knows what else because Hondas have great resale value and I've yet to see a civic or accord owner upside down under proper buying terms and average mileage and wear...I mean the stealership may try to get a vulnerable person to believe that with a shitty trade-in value, but a used Honda is an easy sale if in good shape as mentioned...
Bingo. One of the worst things you can do is walk in and say "I wanna pay $x dollars a month". You're screwed from the start and just walked right into their bag of tricks.
Boss,
I know you can buy it after the term. You can buy it at a very, very unfavorable rate & terms. If you hate owning $10,000 on a car worth $7,000, then you should really hate a car payment on any term after paying 36 months on a leased vehicle. Because you're much more upside down than 10k vs 7k.
First off when you lease a honda the residual value is not some jacked up value. Second of all do you know what grounding a car means? It means the dealer does not keep the car and turns it in to the manufacturer because the book dropped so much. Happens all the time. Honda is one of the best cars to lease and that is a big portion of their business. Do you know what a cap cost reduction is? The way they get to thise low payments is reducing the sale price of the car so you are getting a deal without even asking for it. I dont have 20k to be smart like you guys say and buy my car outright but i have 2k and can pay 200 per month with more options in 3 years. Go to honda.com and read a special lease. There is nothing in there that is set up to fleece you.
