MoneyBiz

I just found out that I can lease in NY through Putnam. What is better if you want to return the car early or pay it off early and keep the car?

1999Porsche911

IMO.....never lease. Why give yourself an option to BUY the car rather than the option of SELLING when you are finished with it? If you can negotiate a good lease rate, you can negotiate a better loan rate.

TT Surgeon

You can write off a lease as a bus. expense unlike a purchase. Certain tax advantages if you own your own bus.
BTWN the two a lease would be better, esp if something bad(RMS) happened to the car, you may not want to own it off warranty. JMO

Bodhi

Read IRS Publication 463. If you own your own biz, leasing is the way to go. You can write off much more of the lease payment, than you could capture by buying the car and writing off the depreciation.

I'm leasing for the term of the warranty period. At the end of the lease (and warranty), if the car turns out to be a dog, it's the dealer's problem. Otherwise, I buy the car for the residual amount and sell it at a higher price (recapturing some of the lease cost).

cooz

always compare your total costs for both ownership by end purchase as well as usage without purchase. Putnam's lease program does make it easier to get out early compared to a traditional consumer's manufacturer's lease....but not any easier than the Porsche NY balloon finance program. remember that you own the car with the balloon program and there can get out anytime but you may very well be in a negative equity position as with a lease. also, realize that you guaranty lease end value even if you don't want car.

cooz

to clarfy

I mean that you guaranty lease end value on an open end lease like the Putnam program....

however you can walk away from your final ballon payment from Porsche just like one can walk away from vehicle without lease end purchase with any closed end lease

Moogle

ah the old buy versus lease debate

this varies drastically from person to person as it really depends on your lifestyle and financial situation, as well as any business you may have to be able to use the tax advantages of a lease.

if you are even considering balloon finance, it seems like you are interested in the low monthly payments of the lease and could care less about the tax benifits.

in that case, go with the lease, balloon finance interest rates are usually nothing short of rape, and in the long run, you really get screwed.

Speed

Do you have a home, co-op or condo on which you can get a home equity line of credit? The interest rates are generally the lowest you can get plus the interest is tax deductible.

TT Surgeon

Only the floating rates are low, fixed HE rates are around 7.5% now. Floating rates are going to skyrocket, I don't want to spend 30yrs paying for a car at 7.5%. JMO

Speed

Everyone approaches these things differently so I certainly respect your approach. But my HE loan is .25% under prime for the life of the loan; 10 year draw down period and then 20 yr. self-amortizing payoff of whatever is outstanding after draw down period ends. I, too, don't want to spend 30 years paying off a car so I just make monthly payments of principal sufficient to pay off the loan balance over 3 yrs. A few years ago the Wall Street Journal did an analysis of the various ways to buy and finance a car and concluded that this was the cheapest way at least for those who have the discipline to make monthly payments of principal.

BD997

buy it cash or dont buy it...dont let the banks make money!

MoneyBiz

I sell mortgages so my accountant got me a deduction for my driving. The leases weren't under my name so I don't know if it would have made a difference. I just want something that I can get out of easily so my mom ( good credit ) can sign again. If I want to keep it I can buy it out and keep the car and insurance under her name.

Tse-Tse

I lease because my company pays for it and the company gets the write off. At the end of the lease, if I really want it - I will buy it out (But as always, I usually want something new so I lease again.)