'10 - '13 Upgrade Plan

[l008com]

I have a 2010 2LT with about $11,000 left on the loan and about $21,000 value. Its very clean, very low miles. The warranty runs out next week.

So I was thinking that I'll pay off my loan, sell the car privately, trying to get about $21,000 for it. They I'd lease a new 1LT/RS for, according to Chevy.com, about $315 a month (or possibly less).

And I'd get about an extra $6000 in cash. Plus my monthly payments would be much lower, I'd get greater tax deductions from a lease, and other financial benefits. And the lease deal on chevy.com right now are really good. About $11,000 total for three years, on a $29,000 car.

Also more power, better MPG. Victory Red turned out to be firetruck orange, so I think the dark maroon will be a better color. The only downside is that ill be going from a 2LT to a 1LT/RS, which means no heated seats. Which I am really bummin about. Oh and I'll need new snow tires.

Thoughts?

[IMJ]

Pay off your car and keep it. Owning is better than leasing everytime. I'd never lease a car - I'd rather just buy what I can afford.

[l008com]

I subscribe to the theory that you buy things that increase in value, and you rent things that decrease in value.

[BRMike]

If you have the money to pay off the car, why not pay off the loan and keep it? If you have low mileage you should be able to keep it a while with minimal costs (maintenance, fuel, etc.). Then, your note would be $0 a month. It's very nice not having a car note.

This is assuming you're happy with your current Camaro. Otherwise, disregard the advice above.

[l008com]

Because the warranty is over, so I'm going to have to pay out of pocket for all future repairs. And because why put another $11,000 into this car, when i will never get that money back. 5 years down the road, i'll have an old car worth very little, that i've been driving for years, putting money into to repair. Just doesn't make sense to me.

[bballr4567]

Originally Posted by l008com

Because the warranty is over, so I'm going to have to pay out of pocket for all future repairs. And because why put another $11,000 into this car, when i will never get that money back. 5 years down the road, i'll have an old car worth very little, that i've been driving for years, putting money into to repair. Just doesn't make sense to me.

Or you could look at purchasing the GMPP from a dealer and spend a few extra bucks.


Right now you have $10k in equity. When you lease, that goes away so the next time you go to buy you will have zero. Nothing. Take that $10k and put it down on the next vehicle. Then, you will have a new Camaro with a $13k note and will be paid off completely in another 3 years if you want to. At the end you will have a $20k car that is completely paid off. Flip that $20k into your next vehicle.


See where this goes? Leasing can never, ever get you ahead.

[l008com]

The difference is that in your plan, the payments are much higher than leasing. Leasing, as long as it's not a least that's marked way up, is like cutting out the middle man. You only pay for what you lose, and you don't have to tie up all your extra money in the car, when you can, for example, invest it in something that will go up in value. Doing it your way makes no sense to me.

And besides all that, I'm also self employed and I get a much bigger tax deduction on a leased vehicle than I do on a financed vehicle.

[Jonster]

Advantages of leasing:

• lower monthly payments
• little or no down payment
• more expensive car for less money
• more cash available for other purchases
• sales taxes paid over term of lease
• possible tax benefits - check with your accountant

Disadvantages of leasing:

• no equity/ownership in the vehicle
• potential early termination liability
• potential end-of-lease costs like excess wear and tear and additional mileage charge

Really, leasing similar to getting a subsidized phone from verizon. Sure, getting all that money off initially is great and you have a brand new phone, but you are locked into a contract and can't do anything until it is up. Obviously the stakes are much different with a car because phones are not nearly the same cost, but same concept.

I personally think if you can afford to buy, do it. I view leasing as an last resort option if I ABSOLUTELY had to have it, but couldn't afford it.

[l008com]

This really wasn't meant to be a leasing vs not leasing thread. I've leased many cars before and it worked out great. It was more a "should i sell my '10 and get a '13 thread.

[Jonster]

Originally Posted by l008com

This really wasn't meant to be a leasing vs not leasing thread. I've leased many cars before and it worked out great. It was more a "should i sell my '10 and get a '13 thread.

my answer is no then. lol

But that is just my opinion

[bballr4567]

Great, except you are paying $300 for nothing in return. You are paying for NOTHING. Sure, a car will go down in value but in the end of a 3 year lease you will be stuck with zero in equity after paying almost $19k. After owning a car for three years you put $10k down with you will have equity left over.

If you take that $10k and get a 2LT you will be financing around $20-21k. If you do a 6 year loan you are looking at $316 a month. After 3 years, you will once again, have at least $10k in equity in the vehicle. Is your tax break enough to cover that $10k? I highly doubt it.


If I were you, I would easily take the equity and BUY the '13. Not only will you get the tax advantage at your trade in you will also double dip that tax savings and equity back into the car.

[l008com]

I've already paid about $19000 making my payments + downpayment. If I sold the car right now for $21000, I'd get $10,000 cash after paying off my loan. So the net is that it will have cost me about $9000 (unless there are extra payoff fees I don't know of) to own this car for three years. That's about the same as what it will cost me to least for three years, maybe $1000 less. The HUGE difference is that I don't have to tie up $19000 for three years in a car. I make my payments, the net cost is about the same, but my money is in my bank account or my investment account, not sitting in my driveway. And also, with leasing, I don't have to go through the hassle of selling it privately or lose a few more thousand in that equation by trading it in. It's just over and you move on. You don't have anything to show for it. Except THOUSANDS of dollars you did not sink into the car, that you get to keep instead.

[Jonster]

Originally Posted by l008com

I've already paid about $19000 making my payments + downpayment. If I sold the car right now for $21000, I'd get $10,000 cash after paying off my lease. So the net is that it will have cost me about $9000 (unless there are extra payoff fees I don't know of) to own this car for three years. That's about the same as what it will cost me to least for three years, maybe $1000 less. The HUGE difference is that I don't have to tie up $19000 for three years in a car. I make my payments, the net cost is about the same, but my money is in my bank account or my investment account, not sitting in my driveway.

You are correct, the initial investment does make sense and will be more beneficial. The long term AFTER that vehicle however will not put you ahead.
http://www.dinkytown.net/java/BuyvsLease.html useful tool

The '13 models are sexy and if the argument is set aside, the '13 model is bad ass. I say go for it.

[FINALLYSATISFIED]

Live for the moment, tomorrow isn't promised