Lease contract evaluation, how much should i be paying?

i've leased a few cars. my taco was a lease, saved me a lot of money on interest. i know own it outright. i had an accord that i leased for a work car because i do about 25k miles per year and it would have tanked the value

 

no!!! don't do it! that'll be on your credit for typically 7 years i believe. so you could have a high payment for 4 years and deal with it, or you could fuck yourself for 7 years because anything else you finance will be at 15+% and you'll have another high payment

 

Very smart move right there. Sounds like you know finances pretty well

Yea don't do that! OP we are just kidding for the love of your credit do not do this

 

Ha... that's what I was thinking. Not the way to go at all. Yikes! He would be F'ing himself for 7 years instead of 4 years...

 

As I said, there is a narrow segment where a lease makes sense - those that can write off the lease. I didn't intend to compare time-shares with leases, although I can see how it may have seemed that way. Getting into a contract without an easy extraction is often a costly mistake.

 

i play with money a lot and i've spent a lot of time in the car business

i misunderstood you then. but leasing i probably a better option for most people than they realize, especially those who trade every 3 years and never pay a car off.

lease is the easiest extraction. if you finance a 30k car with little money down for 72 months, after 3 years you have no options because you're likely flipped and can't roll the negative into something else. after 3 years in a lease you can turn it in, trade it, sell it, etc. i traded my accord a year early and was able to break out slick. none of my cars are write off's, i just do too many miles to keep a car long term and hammer it. leasing is great for people in my line of work because you get a car under warranty that has modern safety features, reliable, and when you've dogged it with miles you can give it back at the end

 

I'm assuming the 3k negative equity is rolled into the $42434 principal.

Seems like the SE Toyota interest rate (i.e. "rent charge") is uncompetitive. Rough calculation (no compounding): 9889/4yrs/42434 = 5.8%. Did you check your local banks and credit unions for a better rate?

For reference, when I leased my truck, I got about $2000 off sticker, then did a 3-year lease at a promotional rate of 2.9% offered by Toyota Financial at the time.

Another good thing about leasing is you are not paying sales tax on the residual amount during the 4-year term.

 

Spot on right here. It's why I put my wife in something new every 3 years or so. I budget X amount of dollars for that and it gives me piece of mind.

 

I remember back in the day before the housing bubble burst, my neighbors were taking out home equity loans to buy cars. Somehow it allowed them to write off the interest. And if I remember correctly if you leased back then the whole payment could be written off somehow. When the bubble burst they were the one's hit hard because they were upside down in their house.

 

That was stuuuuuuuuuuuupid.

 

Fair point. Most people do 5 year loans on cars is why I did 5. Same thing for 4 is 937 so just about spot on.

 

That is actually not legal to deduct mortgage interest that is not used to buy a house or house improvements. Most people do it without realizing that though.

 

I asked about leasing a couple weeks ago. I was going to lease a 2018 TRD Sport, Access Cab, 2WD. I had to give them my paid off Tacoma and they would write me a check for $6,000. I then could drive the new truck for the next 3 years for free. Once the 3 years were up I take the truck back to them and I would have nothing. I told them thank you for the information and I talked to them about buying a new truck.

I can trade my truck in and have 72 payments of $155.00 for the new 2018 TRD Sport, Access Cab, 2WD. And own it after 6 years!

 

FYI you don’t have to give it back. You could sell it on your own or trade it and will probably have a little positive equity.

 

I can find no stipulation in the current tax code that stipulates any restrictions regarding what you can spend cash-out refi proceeds on. any interest reported to you on your 1098 in box one maybe entered on your schedule A and included with your other deductions.

 

If you have to finance a car for this long its safe to say you cant afford the car.....

 

It didn't sound like a great idea at the time either.

 

it's pretty typical these days

 

This kind of reminds me of a "no pay lease" that my dad did on his Lexis. He's never leased before and he grilled the sales guy with every question in the book. He's a skeptical kind of guy and really shrewed at getting a good deal. He didn't see a downside, and apparently there wasn't one.

It required a trade in on his other Lexis. At first they didn't want to give him the dollar number he wanted to have for his trade. He finally convinced them to give him what he wanted.

He thought long and hard about this deal, saw no downside, it made no sense to him at all, and yet he still did it.

As it turns out he had no payments at all and was able to buy the depreciated leased vehicle at the end of his lease. He came out way ahead on the deal. Somehow it was a win for him and a win for the dealership somehow.

The only thing that I can think is that he traded in his SUV and got a brand new sedan. The SUV was in high demand at the time and the sedan...not so much.

It was a big shift in his buying practice because he almost always either buys used cars or fleet cars. In fact his Lexis that he traded was a lease return. So the whole thing really worked out for him.

 

My 17 sport was a little over 40K on the sticker. I put down 3K and I'm $290 a month for 36 months on a 12K mile a year lease. That negative $$$ is what killed you. The difference between mine and yours is about $6000 the 3K you were in the negative and the 3K I put down. $6000 divided by 36 months is $167 a month plus interest. $290 + $167 plus interest is $457. Plus yours was about $1500 on the sticker higher then mine. So I don't think they screwed u, I think you kinda screwed yourself.

Rob

I just also realized u have a 15K a year lease so that factors into the almost $600 a month payment..