Help me out here. I'm kind of a dummy. I'm going to ask some very stupid questions so please bear with me.

I've always bought vehicles that I paid 100% upfront for.

I decided to splurge 3 years ago and lease a $50,000 car.

My payments add up to $25,000.

Residual value is $25,000.

Does that mean I should be able to buy my car at $25,000 at the end of the lease? If so, what the heck is the downside of a lease? It's almost as if I got 3 years interest free, if I decide to buy it in the end?

Also, I checked on KBB and the value of my car seems to be from $34,000 to $38,000.

Just trying to figure out what the catch is here, aside from a car being the worst way to spend your money.

have any interest in a bridge?

The lease you signed should have a price you can buy the car for at the end. It is based on expected depreciation, which is why you can sometimes "win" with a lease because the purchase option is lower than book value. Even if you don't want to keep it, it is sometimes worth buying just to sell it. I believe some dealers will let you esentially buy it and sell it to them for closer to book as a trade in order to lower the taxes on a new ride.

Go here & learn something:

http://www.leaseguide.com/lease07.htm

I find it hard to believe that you would enter into an agreement like a lease without knowing what the hell you were doing.

BTW: There is no way that anyone could lease a $50K vehicle with a 50% residual value for 3 years @ $250/mo.

Why don't you want to tell the truth?

Dummy Wrote:
-------------------------------------------------------
> I decided to splurge 3 years ago and lease a
> $50,000 car.
>
> My payments add up to $25,000.
>
> Residual value is $25,000.

If $50,000 was the capitalized cost for the lease, that isn't possible. Leases have two components: Depreciation and the cost of funds. In your scenario, depreciation alone is $25,000, which you claim is the total of your payments. That means you were able to use $50,000 of someone else's money for 3 yeras for free.

I don't really know what the capitalized cost is.

MSRP is $50,000

Payment is $570 a month + I paid like $6000 when I first leased it.

Residual value is $24,444.

I guess it just means I got a good deal since no one can believe it?

I got my car through the Summer of Audi promotion a few years ago by the way

http://townhall-talk.edmunds.com/direct/view/.ef9d9c3/619

There is mention of Summer of Audi event there around when I bought my car, but for different terms..

$0 down $699 a month = $25,164 (plus whatever processing fees they rip you off on)

But the residual value turns out to still be around $25,000...

Dummy Wrote:
-------------------------------------------------------
> I don't really know what the capitalized cost is.
>
> MSRP is $50,000
>
> Payment is $570 a month + I paid like $6000 when I
> first leased it.
>
> Residual value is $24,444.
>
> I guess it just means I got a good deal since no
> one can believe it?
>
> I got my car through the Summer of Audi promotion
> a few years ago by the way

You know the residual value to the dollar,but not the captaized cost? Just read your lease agreement, it's right there.

Well, here's one scenario:

MSRP = $50,000
Selling Price = $45,500
Capitalized Cost Reduction = $6,000
Capitalized Cost - $39,500

Monthly payment = $570
Monthly Money Fee = $150 (9.11%)
Monthly Depreciation = $420 [($39,500 - $24,444)/36]

Total Cost (If you buy out the lease) = $6,000 + $20,520 + $24,444 = $50,964

So the bottom line is that you paid $51,000 for a car the dealer would have sold you for $45,500 in cash.

A couple of things: These numbers are ballpark guestimates based upon the info. you provided. You should not be surprised that you paid more to lease than you would have for cash, because you effectively used someone else's money and paid interest to them. Lastly, this is just one potential scenaio out of many, using selling price, the money factor as variables, although the results of any others will be quite similar.

Thanks, that makes things a little bit clearer!

That's Not Right Wrote:
-------------------------------------------------------
> Dummy Wrote:
> --------------------------------------------------
> -----
> > I don't really know what the capitalized cost
> is.
> >
> > MSRP is $50,000
> >
> > Payment is $570 a month + I paid like $6000 when
> I
> > first leased it.
> >
> > Residual value is $24,444.
> >
> > I guess it just means I got a good deal since
> no
> > one can believe it?
> >
> > I got my car through the Summer of Audi
> promotion
> > a few years ago by the way
>
> You know the residual value to the dollar,but not
> the captaized cost? Just read your lease
> agreement, it's right there.
>
> Well, here's one scenario:
>
> MSRP = $50,000
> Selling Price = $45,500
> Capitalized Cost Reduction = $6,000
> Capitalized Cost - $39,500
>
> Monthly payment = $570
> Monthly Money Fee = $150 (9.11%)
> Monthly Depreciation = $420 [($39,500 -
> $24,444)/36]
>
> Total Cost (If you buy out the lease) = $6,000 +
> $20,520 + $24,444 = $50,964
>
> So the bottom line is that you paid $51,000 for a
> car the dealer would have sold you for $45,500 in
> cash.
>
> A couple of things: These numbers are ballpark
> guestimates based upon the info. you provided.
> You should not be surprised that you paid more to
> lease than you would have for cash, because you
> effectively used someone else's money and paid
> interest to them. Lastly, this is just one
> potential scenaio out of many, using selling
> price, the money factor as variables, although the
> results of any others will be quite similar.

Subtract the costs of any benefits he received from the 3 year lease...

I bought a leased car once and ended up paying about $5k more than if I had purchased it outright in the first place. I have a feeling the buyout is much more than what the OP claims.

---------------------------------------------------------------------------------
http://bible.cc/1_corinthians/13-11.htm

You don't lease cars to own them long term. You lease cars to keep them for two or three years and then get another vehicle. If you want to keep the car past three years, you should buy it.

A lease means paying more money so that you won't be responsible for the balance three years from purchase, but you'll have no equity. All the money you spent is gone. All you get is dibs on buying it as a used car at the residual price.

Thank you leasers! I'm a cheap bastard that only buys used off-lease cars outright.. I went car shopping this year. I picked out a 2012 Dodge Durango model that I'll hunt for sometime in 2015.

That's the thing, my car is $25,000 to buy but the Bluebook value is $34,000. So weird.

Dummy Wrote:
-------------------------------------------------------
> That's the thing, my car is $25,000 to buy but the
> Bluebook value is $34,000. So weird.

You can thank BO for that. Cash for Clunkers took big numbers of used cars off the road in late 2009, distorting the price of used cars (driving the price up). Since your lease was pre-Cash for Clunkers, your leasing company bet wrong on the value of a used car three years hence. Simple supply and demand. Assuming we don't have another cash for clunkers, prices will return to normal eventually, but you hit a seam where you bought just before that program and the distortion in used car prices.

not that complicated Wrote:
-------------------------------------------------------
> Dummy Wrote:
> --------------------------------------------------
> -----
> > That's the thing, my car is $25,000 to buy but
> the
> > Bluebook value is $34,000. So weird.
>
> You can thank BO for that. Cash for Clunkers took
> big numbers of used cars off the road in late
> 2009, distorting the price of used cars (driving
> the price up). Since your lease was pre-Cash for
> Clunkers, your leasing company bet wrong on the
> value of a used car three years hence. Simple
> supply and demand. Assuming we don't have another
> cash for clunkers, prices will return to normal
> eventually, but you hit a seam where you bought
> just before that program and the distortion in
> used car prices.

There you go. The "clunkers" clearly shrunk the supply of off-lease Audis to the point where this guy is seeing inflated prices.

Believe it or not, this used to happen before 2009.

Hi "Dummy"

Sorry, maybe a little bit late, but I suggest you to evaluate the chances of not buying a car already leased.

Moreover, go and get another one or doing a Lease Transfer: https://www.leasecosts.ca/en/articles/lease-takeover-major-benefit-car-leasing

Good luck!

jorgediaz Wrote:
-------------------------------------------------------
> Hi "Dummy"
>
> Sorry, maybe a little bit late, but I suggest you
> to evaluate the chances of not buying a car
> already leased.
>
> Moreover, go and get another one or doing a Lease
> Transfer:
> https://www.leasecosts.ca/en/articles/lease-takeov
> er-major-benefit-car-leasing
>
> Good luck!


Given that it was FIVE FUCKING YEARS AGO he's probably done with it by now Dummy.

Leasing is like buying the car, since you'll have to register it, pay taxes, and insure it. You're essentially financing the vehicle potentially over a longer period of time. For example, 3 years to cover the first $25k of the lease and then take out a 5 year loan to cover the off-lease purchase.

Leases are not necessarily a better deal or worse, it all in the negotiated terms of the deal. Although I currently have a lease, I'd probably not do it again.
Why? Because it's not as simple as walking away after the 3-year lease, you'll have to pay for any excess wear and tear, which typically means a brand new set of tires, mileage over the limit, etc.

Make sure you keep the original agreement so you won't be charged sales tax if you buy your vehicle at the end of the lease.

I jus lease any car from Easterns....I got me a pimped out c class Benz....
I drive around National Harbor spreading AIDs to all the youngins I meet.
I don’t pay the lease, come and get it if you can find me. I jus park da car at my girl house.
-nigger logic