How many have here have leased or did normal loan
12-02-2005, 02:07 PM
#52
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2001 C320 (purple), 2002 BMW 540i
meh, write a check. Don't have to pay interest and you can often get a better deal (and it makes salesmen happy because then the finane guys don't get to rig things up so that the salesman gets screwed on his cut... at some dealerships the finance boys will totally screw the salesman out of his cut, if its one of those then paying in cash means the salesman can sell it for less, cutting into his share of the money, but the finance guys cant steal anything from him so he actually is better off)
oh yeah, and then when people ask what your payments are (happens to me a lot) you just say "payments?" "yeah, your car payments" "ooooh... no, i just wrote a check for it" and then they go
and you go 
oh yeah, and then when people ask what your payments are (happens to me a lot) you just say "payments?" "yeah, your car payments" "ooooh... no, i just wrote a check for it" and then they go
and you go
12-02-2005, 02:44 PM
#53
Out Of Control!!
Originally Posted by eddieo45
one quibble, Rev: What constitutes a "known" or "unknown" varies from individual to individual. Some go car shopping and consider the MB and the BMW, some the MB coupe and the MB sedan. I, for one, have no idea how long I'll want to keep the car, and don't spend any time pondering the issue (I guess buying therefore gives me more flexibility, if I end up needing it, then leasing). I think I approach every car loan with the idea that I'll eventually pay it off, then I'll be driving "for free", but in 30 years of driving, that hasn't happened that often. Of course, this is how dealers rationalize leasing to customers ("you're going to want something new in three years, you always have a payment, you're only paying for the time you have the car, etc.")
My guess is that if two twins went and procurred 2 identical cars, one purchased and financed, the other leased for the same length of time, then kept them till the end of the term, then liquidated their positions, it might come out about the same, with the big difference being when the money was spent or recouped.
They say that, over the long term, low-carb diets are no better than other established diets, but they cause one to lose more weight at the beginning. In that situation, I'd take the "instant gratification", but to drive a new Benz off the lot for $3500 at lease signing, vs. putting enough down to own it...that's a different story.
My guess is that if two twins went and procurred 2 identical cars, one purchased and financed, the other leased for the same length of time, then kept them till the end of the term, then liquidated their positions, it might come out about the same, with the big difference being when the money was spent or recouped.
They say that, over the long term, low-carb diets are no better than other established diets, but they cause one to lose more weight at the beginning. In that situation, I'd take the "instant gratification", but to drive a new Benz off the lot for $3500 at lease signing, vs. putting enough down to own it...that's a different story.
I can guarantee right now that I could call around and get many different lease and finance deals on a car (normal cars, not "high demand" cars). There will be advantages in financing, and advantages in leasing. It can be very hard to actually see the difference. Many people just go by the amount they pay each month.
Here's a scenario which may better explain what I mean. Say these twins get the same car and one leases for 4 years and one finances for 4 years. At the end of the 4 years, what does each one have? The one that leases has nothing. The one that financed has current value of the car. The true value of the car depends upon what your plans are (sell, trade, keep). Now factor in the difference of the payment over the 4 years between the two twins, and that is the cost of the equity at the end of the finance. You may find that for $10K in equity, it cost you $15K. You may or may not think this is a good deal. Now if you were to take that $15k and NOT spend it on the car over the last 4 years (as the lease twin did), what would you have? Well, even if you put it under your pillow, it's still a +5,000 to the other twin. Of course, depending upon the deals, it may be the opposite where you have a $10k car but only paid $5k more.
12-02-2005, 02:59 PM
#54
Out Of Control!!
Originally Posted by livestrongONe
Ok I understand that now so. I will pay off my car in 24 months than 30 months BUTTTT how do I know they pay a certain % to intrest and a certain % to principle and what is the normal % split. I know these are silly questions I am just trying to educate myself so I can make thw right choices. Thank you for all the answers and advise.
First, take the finance amount. Lets say 30,000. Then take the interest amount (you can use the APR to get close), lets say it's 6%. Divide the 6% by 12 (12 months in a year) and you get 0.5%. This is your monthly interest rate. So here we are in your first month. Current balance is $30,000. Multiply that by your monthly rate and you get $150.00. This is your interest. Subtract this amount from your payment amount (say your payment amount is $717.82) and the amount to principal is $567.82. So your 1st payment would look like this:
$717.82 = $567.82 Principal + $150.00 Interest. New balance is $29,432.18 ($30,000-$567.82).
Now you start over for the next month; $29,432.18 times .05% equals $147.16 interest. $717.82 minus $147.16 interest equals $570.66 Principal. New Balance is $28,861.52.
And so on.
If you have a finance program such as MS Money or Quicken, they both have a set up for a loan that it walks you through, and then tells you each month what your principal and interest payments are. Also, there are many internet calculators available that will give you these breakdowns.
12-02-2005, 07:20 PM
#55
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I used a online Amortization Calculator to see how its broken down. Thanks for all the good information. http://www.eloan.com/s/amortcalc?con...8&user=&mcode=
