Lease vs. buy?
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Charger, Saab & Aston
Lease vs. buy?
Soliciting opinions in my own mental debate for the GL 550 we will get shortly. Current program (expiring today maybe) is 66-month financing 1.9% and lease rate amounts to 1.7% for comparison over 48-month lease. We would never keep it for more than 4 years even if we bought, and I'm thinking with the unpredictability of gas prices and big-truck value 4 years down the line, leasing just makes more sense as there's no down-side. Am I missing something? It would also take a down-payment of $17,500 on the buy to have the monthly payment be the same as the sign/drive lease.
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From: Scottsdale, AZ
2004 RX330, 2008 Scion xB, 2001 Honda Insight Hybrid, 2010 Toyot Prius v ATP
The "Buy vs Lease" debate has been going on since auto leasing was first offered. But I think I can sum up the bottom line as this;
The main advantage of leasing is less money down to start with and a lower payment. But it comes with a variety of stipulations including insurance requirements that are usually much higher than state minimums (should your state have such minimums) and mileage limitations some folks either aren't prepared to sacrifice for or are willing to ignore and pay for.
The advantage of buying is that for some more money up front and higher payments, the vehicle belongs to you at the end of the loan term. But this financing can be harder to get sometimes (not always), and if you finance the car you also have to carry a heavy insurance load. However, besides ending up with the car at the end of the term, there are other flexibilities; if you pay for the car with a home-equity line of credit, not only do you carry the title outright but you can also write off the interest paid on the loan. And by golly, aren't home-equity lines at all time lows right now?
Just my two bits.
The main advantage of leasing is less money down to start with and a lower payment. But it comes with a variety of stipulations including insurance requirements that are usually much higher than state minimums (should your state have such minimums) and mileage limitations some folks either aren't prepared to sacrifice for or are willing to ignore and pay for.
The advantage of buying is that for some more money up front and higher payments, the vehicle belongs to you at the end of the loan term. But this financing can be harder to get sometimes (not always), and if you finance the car you also have to carry a heavy insurance load. However, besides ending up with the car at the end of the term, there are other flexibilities; if you pay for the car with a home-equity line of credit, not only do you carry the title outright but you can also write off the interest paid on the loan. And by golly, aren't home-equity lines at all time lows right now?
Just my two bits.
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Joined: Feb 2007
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From: Las Vegas, NV
GL450 (Alabaster White/Black Interior)
I went through this same thought process when I got mine two years ago. I ended up buying because I don't like debt/lease payments but if I had to do it over again I would have leased it. The reason I say that is because of the value of my GL now. I really thought it would hold its value well but when MB starting handing out $10,000 incentives on the 2008 GL's the values really took a hit. It also didn't help when gas prices were skyrocketing but that has subsided for now but who knows what is going to happen in the future. If you are going to have it less than 48 months I would take a look at the residual on the lease agreement and ask yourself if it will be worth the amount in 48 months. I my case, the residual I was quoted on a 48 month lease has already been passed (i.e. my GL is worth far less than the residual value I was quoted). The only thing that drove me crazy about the MB leases were all of the BS costs that they throw in (my favorite being the acquisition and termination fees) and my dealer marking up the MB money factors.
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Charger, Saab & Aston
Good points so far. I'd rather they assume the risk on the future value than me. I've hit a wall in negotiating with several dealers with all of them being at the same price-point. I don't wish to eat or roll-in the remaining payments on the vehicle this would replace, and dealers won't/can't absorb it either. I'll sit tight and see what May or past will bring.
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Joined: May 2007
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From: Scottsdale, AZ
2004 RX330, 2008 Scion xB, 2001 Honda Insight Hybrid, 2010 Toyot Prius v ATP
Good points so far. I'd rather they assume the risk on the future value than me. I've hit a wall in negotiating with several dealers with all of them being at the same price-point. I don't wish to eat or roll-in the remaining payments on the vehicle this would replace, and dealers won't/can't absorb it either. I'll sit tight and see what May or past will bring.
STP
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Charger, Saab & Aston
OK, it's done and I'll be picking it up next Saturday. Decided to go with the lease as it is full business write-off and no worries about will it be worth X or am I upside-down if I wanted to sell. 2009 GL 550 Iridium Silver with black, rear ent., heated wheel/2nd row, active/ventilated seats, trailer hitch. Nice truck and the Mrs. is happy just in time for Mother's Day and her birthday !
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From: FRESNO CA
GL550
OK, it's done and I'll be picking it up next Saturday. Decided to go with the lease as it is full business write-off and no worries about will it be worth X or am I upside-down if I wanted to sell. 2009 GL 550 Iridium Silver with black, rear ent., heated wheel/2nd row, active/ventilated seats, trailer hitch. Nice truck and the Mrs. is happy just in time for Mother's Day and her birthday !
