Advantages/Disadvantages of Leasing...

[Richman]

I was/am thinking of trading my 2000 Sentra SE in for a 2003 Sentra SE-R Spec V. I went to a dealership over the weekend and was talking with one of the guys there. He crunched some numbers and said that if I was to buy the car, I'd have payments of $339 for 72 months. If I was to lease, I'd have paymnets of $257 (wich is $10 less than what I pay right now) for 36 months, then I have the option to buy, etc...
I am new to leasing and not too knowledgeable on it. I don't know all the good and bad points about it. What should I look for in a lease? Can I get screwed in a lease? Good points vs bad points....
Can someone let me know the adavantages and disadvantages in a lease? Let me know what you experienced and how I can protect myself incase I do decide to get the Spec V.
If someone has already posted this info, please direct me to that thread.
Thanks (in advance).

[Mark F]

Leasing is great if you want a new car every 3 or 4 years. If you intend to keep it. Don't lease. Buying out a lease can keep your payments down but you'll be on the 7-8 year buying plan.

A question for ya. At what rate did you get a payment of $339 per month and how much are you financing to get that payment?

[Richman]

The rate of $339 is based on my trade in and if I buy the car. Funny... we never even discussed a trade value of my car or negotiated on the price of the Spec-V.
Currently, my payments on the SE are $267 at 2.9% (special through Nissan when I bought it).
Now, if I buy the Spec-V after the leasing period, don't I just pay for what is left over after it has ended. The lease payments go towards the price of the car, right?
You can't modify a leased car, can you?
Would insurance be more?
Also, (just thought of this)... when I negotiate for the car (if I get it) how much over cost should I ask for? When I got my 2000 SE, I said I wanted to get it for $250 over cost... and I did! http://forums.freshalloy.com/ubbthreads/images/icons/wink.gif

[Mark F]

Hmmm, OK we need to back up a bit.

First of all, what's the MSRP on the Spec?

Secondly, describe the trade. Miles, equipment, how much do you still owe?

Third, did they quote an interest rate (in other words, did they run your credit)?

Finally, what's sales tax in your state and do they charge state or local sales tax rates on a lease there?

If you want to buy out a lease then you just have to pay the buyout, or wholesale price for the car, which is nice. Then again, if you did a 36 month lease, then did a 4-5 year loan to pay the car off (but keep that same low payment) then your on the 7-8 year buying plan. Do you want to keep paying on the car that long or would you like to pay it off sooner? Sooner is always cheaper.

As for selling price, I would certainly start at $250 over but don't be disappointed if they won't go that low. In most (not all) area's, Spec's are rare enough that they don't have to give them away, nor is it a car that we see dealer cash or trunk money on.

[Richman]

1) The sticker price on the Spec Vs were $17,000 to $19,000 (there were a few of them on the lot).
2) I owe $9,000+ on my SE. It's in excellent condition, has the 6 disk in dash CD changer, the side airbag option, 20,000+ miles.
3) They did run credit, but they didn't mention an intrest rate to me. I currently am paying 2.9% intrest on my SE since Nissan was running a deal when I bought it.
4) Washington state sales tax is 8.2-8.6% (depends if you are in the city or not). When I bought my SE, I didn't buy it in Seattle, I bought it in Everett and saved $200 in taxes that way. When the salesman was talking to me about the lease he said I would be paying 36 months at $256, tax free. That sounded good...
If I buy it, I would like to pay it off sooner. I am currently on a 5 year payment plan for the SE.
Thanks for the help, Mark.

[Mark F]

OK, for simplicity let's assume your at break-even on your trade (actual trade value is about a grand either side of the $9,000 you owe depending on the local market). That basically means you'll be financing MSRP on the new vehicle plus tax and license. Let's say the new car has an MSRP of $19,000. You'll be financing $19,000 - $10k trade difference plus your payoff - plus 8.2% sales tax on the $10,000, plus title and license. Your probably looking at a rate of 5.9% to hit a $339/mo. payment at 72 months, trade only down. That's not a bad rate for 72 months. If you shorten the term to say 60 months you can probably get a better rate but your payment will go up into the $390 range. Put a grand down and the payment will drop by around $19 per month. Go to 48 months and you might have a payment in the $475 range based on the above terms ($450 with $1,000 cash down). It all depends on what you are comfortable with.

If you go the finance route get a rate quote from your own bank before you go back to the dealership. That will give you some leverage in case the bank the dealership is using has a less aggressive rate. You might be surprised when the finance guy can suddenly match or beat your banks rate http://forums.freshalloy.com/ubbthreads/images/icons/grin.gif

There are no factory finance programs on the 03' Spec at the moment BTW http://forums.freshalloy.com/ubbthreads/images/icons/frown.gif

Tell them you want $10k for your trade. They will probably bid it for somewhere around $8k. If you stick to your guns you should be able to get somewhere right around your payoff for it. Again, it depends on the local market though.

I'm curious how leases work in Washington if you don't have to pay sales tax on the payments. Do they charge the sales tax up front instead of on the individual payments?

[Richman]

The $339 that I mentioned in my first post was for the purchase price, not the lease price. If I lease it, he says he could get me 36 months at $257 tax free (that's $9,252).
I checked online at CarPoint.com and it says my SE is worth $9,395 (based off of the KBB quote).
So, let's say I trade it in for $9,000 for the Spec V ($19,000). That leaves $10,000 left over plus the $10,000 that I still owe on the SE. $9,395 of leasing over 3 years comes off of the $20,000 to come to the total of $10,605. Wow... thats still alot... or did I do all of this right???
Of course I'll negotiate for the highest price on my trade in! I'm a [censored] when it comes to that! http://forums.freshalloy.com/ubbthreads/images/icons/laugh.gif When I bought my 2000 SE, I got it for $250 over cost and I got the full $1,500 I wanted off of my 1992 Sentra XE (they were offering me $700 at first for it). I held onto my guns (even after 3 hours of negotiating). They went up to $1200, and I said no and I was wasting their time and started walking out (man, I had a headache), they stopped me and said the car was mine for what I was wanting! Weee~!
I'll have to check on the sales tax thing. I forgot the reason why they said I wouldn't have it.