RogerRoger

I have one dealer telling me one story about why to do a premium purchase over a lease. Another dealer telling me the lease is the way to go.

What they are telling me for a Lease (the Pro Lease Dealer):
* Car not in my name so I'm not liable if car is bad accident.
* Cheaper approach due to taxes
* Better since no balloon payment

For the Premium Purchase Dealer they are saying:
* Montly is cheaper
* No $ due at signing unless you want to do a down payment
* Cheaper at end since no taxes
* Lower interest rate (4.2%)

Thoughts?

TXurS6

In generalities,

For the lease:

* In an accident you will still be liable for any damages where you were at fault
* You can only deduct the lease for tax purposes if it is for business use
* You are not obligated for the balloon payment on either the lease or PP

For the PP:
* Montly cost may or may not be cheaper. They will be within a few bucks of each other
* Down payment will depend on the deal you negotiate
* Depending on where you live, taxes may be built in
* You will need to compare the interest rate with the money factor

carbonLORD

I will never buy a new car and I will never lease.

qksilverjc

My accountant wants to see actual comparitive numbers before he advises me. But your dealers reasoning confuses me. What's the difference between a baloon payment and a purchase option. The value is determined upfront in both cases. It is easier to expense lease payment out of my business. I don't put down any front money on a lease since it isn't covered by gap insurance. Rates seem lower because monthly payments work out lower if you use the A of A financial guide on their website. I need to get to dealer but wanted some knowledge upfront.

angleman 2.7t

Amen!

TeddyBGame

I would much rather buy a car from the dealer that is 1-2 years old and pay for an extended warranty.

My 2001 Avant cost me $30K. For a new one, it would run $38-$40K (depending on options). That new car smell comes with such a premium.

Bottom line: Cars are depreciable assets. A cars resale value drops 20% in the first year.

Jack Orr

You're damn well liable if you're operating it. This dealer is nutty.

2.7tDallas

I will never buy a used car, and I will never own.

HPH

I prefer somewhat older dealers, actually, no matter what the car.

phred

although CPO programs make a lot of sense, you can't lease one affordably and the interest rates ain't that great compared to the monster incentives on new cars.

As far as leasing, how else can someone realistically afford an A6, or even an A4 with options? As per our discussion last week on "rocketing," cars take up too much disposable income already.