is it better to cash off a car? finance? lease?

[tktrthomas1]

I just needed some help. I will soon have enough money to pay off a new 350z, but the thing is I cant decide what is the best way to pay for it. Should I buy used? or new?

I plan to keep the car as long as I am living.

Would be cashing out the car be the biggest way to save money?

or would leasing be the cheapest route? because the car depreciates the second its off the lot, and in the end I have the option to buy off the car. Full ownership of the car isnt going to make a difference on insurance.

I was reading a thread awhile back about something like this, any financial gurus can help me out?

any suggesttions?

[Bubba1]

I'm not a financial guru, but I've bought/leased many cars. If you're looking to keep your car for a long long time, then I think leasing with a purchase option is not a good option.

Buying the car for cash is obviously the cheapest way to go, as you avoid interest payments. But you need to make sure before you part with that much money that you have enough leftover to insure/maintain/repair it as well as not have it affect your other life expenses.

I decided to finance part of my Z as I didn't want to take that much out of my short term cash reserves. Everyone has their own minimum safe level for short term reserves. Yes, it's costing me a little more than if I had paid cash, but I decided that route was best for me. Your situation may be completely different , so I can't say what I did is best for you. Repoman might be a good source to discuss this.

As far as buying a new Z vs a used Z, yes you will pay considerably less for a used one, but you are risking how well the previous owner treated/maintained that car. Is that risk absolutely worth the savings? Many people believe it is, many don't. There's no right answer. In my experience, used sports cars are riskier in general than regular sedans as they tend to be driven harder, so I personally would only buy a new sports car. I'm not saying you can't find an exceptional used Z. I'm sure there are tons of them out there. It's really up to you. I hope this helps

[DAEDALUS]

Good advice. Since you're not planning on getting rid of the car, purchasing is better than leasing. Leasing entails some rules that are not in your favor, such as mileage limits.

Good choice on the Z. My buddy has one and it is NICE. It grips the road like nothing else and handles incredibly. I keep telling him to supercharge it cause the only thing its missing is crazy power.

[SDRonEbay]

Great advice guys.

Here's the long/short of it.

Leasing is an excellent way to buy. It would not be bad for you to lease this Z because Nissan has great residuals right now on all their vehicles but keep in mind you will need to keep full coverage insurance on a leased vehicle. If you went with the lease you would come out paying less in the very end if you buy it than on a conventional finance.

Conventional financing is good if you want this purchase to mean good marks on your credit. Sounds like you're capable of making a substanial down payment. If this is the case you could finance like $2500 over 12 months or 24 months and that will help your credit but you'll be paying finance charges along with everything else; something you would not have to do if you pay cash and if you lease it's based on a money factor of like 0.00452 or some junk like that. (it varies)

Paying cash is a way to own the car and get it over with. You'll find that most dealers will come off the price quicker on a cash deal. It's because most of them just give up when they know they won't make any money on the back end (financing). Also with a cash purchase you don't need to purchase GAP insurance at all. You will and should keep full coverage for at least the first couple of years though. That's when the value of the vehicle is at it's highest

New vs. Used? Podnah, I'm the king of used vehicles. I wish for one second I could own a brand new car that no one's grubby hands have been all over but here's the deal. If you buy it used, pay cash. Finance will hit you if you don't. I'll be honest with you though....a car like a Z, for what people are selling used ones for you could get a new one. This guy Jon bought one from Dallas last weekend and I tried to warn him he was gonna get screwed but he didn't listen to me. I was offering him a 2004 Enthusiast model with leather add/on for $1000 more than he could get a 2003 Touring. All he wanted was the leather. He ended up getting a 2nd hand Z with a potentially worn clutch. What would you have done? Since he went into a lease, he just ensured himself that the value of the lease won't work for him. Who leases a used car?....dork. Anyway, that's what I got for you. Take it and run.

Shift_The Dragon is coming soon!

[Repo Man]

All good advice. I don't have much to add, except what I would do. I would consider what my high credit is, finance as much as I could given the high credit and then pay it off as quickly as I could without depleting my comfortable cash level. I would give the finance guy half of what he was charging for GAP and have the option to pay for it over time in case something came up that required a lot of scratch, like a twin turbo kit, lol.

If this is not your new high credit, then I would probably finance about 50% and just add to my credit history with a perfectly paid account and not worry about GAP.

Let us know how you make out.

repo

[C-Kwik]

but keep in mind you will need to keep full coverage insurance on a leased vehicle.

Also with a cash purchase you don't need to purchase GAP insurance at all. You will and should keep full coverage for at least the first couple of years though. That's when the value of the vehicle is at it's highest

Kind of an FYI about "Full" Coverage. There is really no such thing. Or to clarify, there is just no clear definition of it. It means different things to different people. Banks only care that the car itself is covered from damage(Comprehensive and Collision Coverages). Consumers sometimes view full coverge as liability + Comp + Coll. But many also view it as every coverage you can get. But there are a lot of coverages out there.

Getting back on topic though, financed vehicles need to have comp and coll coverages as well. Banks want their interest protected.

As far as Gap insurance, you should assess it like any other insurance. Determine first if there is a need. If you put a substantial down payment, it may not be necessary. Gap only pays off the balance of your loan if you are upside down on the loan(value of the car is less than the loan payoff). If you put a larger down payment, you reduce the principle and consequently the payoff is less. Secondly, determine if the risk you are asking the insurance company or loan company to take is worth the extra cost to you.

The same concept applies to how long you keep comp and/or collision coverage on a vehicle that is paid off. If the car is worth $30K, is it necessarily a wise choice to remove those coverages, even if you owe nothing. This can very from person to person as far as what their comfort level of risk is, but when your car is paid off, you also have some more flexible options. You can get a high deductible to lower your premiums. I've seen deductibles as high as $2500 on personal auto policies. You take on a lot bigger burden in smaller losses, but it protects you from a total loss of your investment should the car receive major damage or be totalled.

[matt4pl]

if you can find a new 03 model at a dealer, you could probobly save loads of money and still have a brand new Z. i have no clue how likely that is, but its an idea. that gives you extra money to put either toward a downpayment or pay off the loan if you choose to finance it or to just leave in your pocket for the unforseen

[SDRonEbay]

I think the 03's were all sold shortly after November. Even used 03's aren't as good a value as a new one. The retail is too high right now.

[AJ1356]

all good advices but as some one who work with some former car salesman and have family who are car salesman i must put my nickle and dime on this . leasing is for people who want to keep the car for a year or two and then get another one and not worry about whatever amount they have paid . so in your case as everyone else has already said no leasing. THAT IS NO LEASINGif you want to finance the car or part of it get a car loan from your bank then go to the dealership. cuz if you get financing at the dealership cuz if you do , you might as well accept the fact that you are gonna get f**ked without any kind of lube. DO NOT buy any kind of extended warranty from the dealership no matter how good it sounds , if you are asking why reffer to the last sentence. when you go to you the dealership make sure you already have some kind of insurance cuz again you don't want to buy from them. if you want to buy a used 350Z try to find a private seller ..

[Repo Man]

all good advices but as some one who work with some former car salesman and have family who are car salesman i must put my nickle and dime on this . leasing is for people who want to keep the car for a year or two and then get another one and not worry about whatever amount they have paid . so in your case as everyone else has already said no leasing. THAT IS NO LEASINGif you want to finance the car or part of it get a car loan from your bank then go to the dealership. cuz if you get financing at the dealership cuz if you do , you might as well accept the fact that you are gonna get f**ked without any kind of lube. DO NOT buy any kind of extended warranty from the dealership no matter how good it sounds , if you are asking why reffer to the last sentence. when you go to you the dealership make sure you already have some kind of insurance cuz again you don't want to buy from them. if you want to buy a used 350Z try to find a private seller ..

What are you talking about? Have you sold cars yourself? This entire paragraph is nearly 100% ignorant. I will address this when I get home from work. Damn.

[Repo Man]

[QUOTE]Originally posted by AJ1356 "]all good advices but as some one who work with some former car salesman and have family who are car salesman i must put my nickle and dime on this . leasing is for people who want to keep the car for a year or two and then get another one and not worry about whatever amount they have paid . [QUOTE]

What does this even mean? Not worry about the amount they paid? When one leases, one pays the depreciation relative to the residual value at the end of the lease term plus a rent charge and applicable sales/use tax. It works extremely well for those that can stay within the parameters of a lease, ie not driving excessive miles, keeping wear and tear within lease standards, maintaining the vehicle, etc.

so in your case as everyone else has already said no leasing. THAT IS NO LEASINGif you want to finance the car or part of it get a car loan from your bank then go to the dealership. cuz if you get financing at the dealership cuz if you do , you might as well accept the fact that you are gonna get f**ked without any kind of lube.

Do you know this from personal experience? How many cars have you financed? Why do you feel you have been "f**ked without any kind of lube"? Sure, there are dealers out there that will mark up their buy rate as much as possible, but with most companies that buy paper will have a cap, ie 3 participation points, that you can add to the buy rate. Additionally, any reasonably well-educated buyer will know what his/her FICO score is and will have already checked with their bank or thrift. Most finance departments will have the tools to beat that rate provided the applicant qualifies for credit.

There are exceptions of course. Credit unions and some banks can offer lower rates and better terms, but with the downside of cross-collateralization, chattel mortagages, right of offset, etc. In those situations, the finance manager may not be able to match the rate, but the applicant will not have such major drawbacks

DO NOT buy any kind of extended warranty from the dealership no matter how good it sounds.

Why not? Please define "f**ked w/o lube" as it pertains to and extended service contract (ESC). Are you going to pay for their parts and labor? Have you compared the cost of and ESC versus the cost of an engine replacement? Ask any Q owner what it would cost to replace their engine and compare that to the cost of a service contract and report back.

when you go to you the dealership make sure you already have some kind of insurance cuz again you don't want to buy from them.

You won't be able to leave the dealer without comprehensive insurance, so be sure to have it. Dealers do not offer vehicle insurance, but they do offer credit insurance. Is credit insurance what you were referring to or vehicle insurance? If you were not going to purchase that at the dealer, where were you going to get it?

[AJ1356]

to your question if i have sold a car in my life or whateve rit was , i'm not a car sales man cuz if i was then it would have made much sense to talk bad about my own line of work . as you probably know when you go to a dealership unprepared you most likely would end up with a finance that is just gonna cost you way more than the car is ever worth . thus getting screwed with out any lube . never has happened to me cuz whenever i have bought a car i have paid below the book ( below wholesale) i dunno about others but i know alot more than you about how credit, fico, banking and all the other stuff regragig financing work . and i am still for paying cash ( if you can afford it and it is not gonna mess up your other finances ) idea when it comes to buying a car , and if you want to finance go to a credit union or a bank to get a loan , rather than to get a loan through the dealership . .that is all the time i am wasting on you. good luck talking all kinds of sh*t , that you may end up talking .

[SDRonEbay]

i dunno about others but i know alot more than you about how credit, fico, banking and all the other stuff regragig financing work .

Dear Lord, I hope that's not true. I'd have to kill myself.

Now, I usually don't make snide remarks like that but sometimes it's necessary to grab the attention of the reader or in this case, the poster. Look, I know all about how leasing got it's bad name but it'll never work for you if you aren't willing to look past the past. Also, this forum is moderated by a few guys with many years EXPERIENCE. Play nicely. We all offer our advice based on this experience and no one would offer any malicious advice in here.

Shift_"Blue, if I have to get up it's gonna be trouble...TROUBLE."

[Bubba1]

AJ, I think the only point I agreed with you on is the importance of going to a dealer prepared. That's a no-brainer. But it sounds like you have issues with dealers. Sure, there are some bad dealers out there. There are also many good ones too. When I bought my Z, the dealer finance manager actually went below the lowest ratee I came in with. (Having good credit and a big downpayment helps, of course). My point is part of being prepared is exploring all options, and that includes seeing what the dealer can do. They may surprise you.

Now as far as leasing goes, There are advantages to leasing over buying, but it has to be the right situation in order for it to work. In tktr's situation, leasing is probably not the best option.