Lease question: $0 down vs $x down
05-10-2012, 02:56 PM
#1
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Lease question: $0 down vs $x down
I don't know too much about leasing a car, but I have a question about prices of leasing a car with $0 down vs $x down
e.g. the JX has a $0 down $649 a month for 36 months and $3400 down $549 for 36 months.
They both "add" up to be just over $23k, what are the difference between the two lease besides just money up front and the monthly payment?
Whats the reason to go with one over the other?
e.g. the JX has a $0 down $649 a month for 36 months and $3400 down $549 for 36 months.
They both "add" up to be just over $23k, what are the difference between the two lease besides just money up front and the monthly payment?
Whats the reason to go with one over the other?
05-10-2012, 03:03 PM
#2
They will reflect the same figure. Zero down means the sales taxes are rolled in. X down usually means putting the taxes up front and therefore lowers the monthly payment. Really what you're doing is moving the "slush" from one end of the equation. IMHO I put the sales tax down. You're gonna pay it anyway wether its over 36 months or up front. But you live with the down payment one time, vs the other 35. So if you're comfy putting down a little more...it makes the monthly pmt a little more attractive.
05-10-2012, 03:04 PM
#3
Actually after reading the leases...none of those figures include sales tax lol. However the same rule applies. The $3400 down is what's called "capitalized cost reduction" and all it does is lower the payment. Bear in mind tho, that you still need to pay the taxes over and above that, and if you total the car you're usually out the $3400. You don't get it back and leases usually aren't in an equity position until very near the end of term.
05-10-2012, 03:32 PM
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Actually after reading the leases...none of those figures include sales tax lol. However the same rule applies. The $3400 down is what's called "capitalized cost reduction" and all it does is lower the payment. Bear in mind tho, that you still need to pay the taxes over and above that, and if you total the car you're usually out the $3400. You don't get it back and leases usually aren't in an equity position until very near the end of term.
so in case of totalling the car, a comprehensive insurance coverage will only covers the value of the car but the bank (Infiniti Financial) will get all that value, but I would still be out $3400 (even though its a full coverage insurance)?
then wouldn't it be better if i put $0 down (even though the monthly payment is higher), put the $3400 in the bank (what 1% interest, LOL, but still better than $0 interest)? (small amount of interest money and don't lose $3400 if anything happens to the car)
05-10-2012, 03:35 PM
#5
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http://forums.vwvortex.com/showthrea...culate-a-lease...
Now, what about putting more money down in the form of a capitalized cost
reduction. You would simply deduct this amount from the capitalized cost
before you run the numbers. For example, if you put $1,000 down, your monthly
payment would drop to $316.73. Now you are probably asking yourself, why not
put more money down? First off, you have to pay your 8.25% sales tax on that
$1000. But that is no big deal. The bigger problem is that if the car ever
gets stolen or totaled, the insurance will pay off your lease, but you will
never see that $1,000 again since it was paid up front. Also, think of it this
way. If you were leasing an apartment and the rent was $750/mo, but the
landlord said, "Give me an extra couple of thousand up front and I will lower
the rent to $650/mo." Few of us would actually do that. Leasing your car is
just like renting. If you can't afford the payment without putting more money
down, I would suggest taking the money you would put down and put it in the
bank to earn interest and then deduct an amount every month to cover the
difference.
cliffs
never put any money down on a lease if possible. also leasing outside the warranty is risky too as you will be responsible to fix the car and then probably end up giving it back. paying to fix someone else's car...not good.
Now, what about putting more money down in the form of a capitalized cost
reduction. You would simply deduct this amount from the capitalized cost
before you run the numbers. For example, if you put $1,000 down, your monthly
payment would drop to $316.73. Now you are probably asking yourself, why not
put more money down? First off, you have to pay your 8.25% sales tax on that
$1000. But that is no big deal. The bigger problem is that if the car ever
gets stolen or totaled, the insurance will pay off your lease, but you will
never see that $1,000 again since it was paid up front. Also, think of it this
way. If you were leasing an apartment and the rent was $750/mo, but the
landlord said, "Give me an extra couple of thousand up front and I will lower
the rent to $650/mo." Few of us would actually do that. Leasing your car is
just like renting. If you can't afford the payment without putting more money
down, I would suggest taking the money you would put down and put it in the
bank to earn interest and then deduct an amount every month to cover the
difference.
never put any money down on a lease if possible. also leasing outside the warranty is risky too as you will be responsible to fix the car and then probably end up giving it back. paying to fix someone else's car...not good.
05-10-2012, 04:59 PM
#6
My personal opinion...I'm a sales rep and I lease both my and my wife's cars....put the tax down only. It's a much smaller risk and still has a nice impact on the payments 
Anything more than that is not a good idea.
Anything more than that is not a good idea.
05-10-2012, 05:12 PM
#7
Don't lease.
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