[districtofc]

ive got a question for you financially smart folks...i should be getting a cooper s in about 9-12 months (better known as eternity) and i was curious as to whether i should lease or buy. at this stage im planning on putting 10k down and buying but i was curious if i put down 10k on a lease does that mean i dont have a payment? assuming the depreciation was 10k for 36 months(i think its actually a little less), am i able to pay all of that upfront at the start of the lease? i understand they make money off the "money factor" or interest but would they let me do this? pardon my ignorance, this is gonna be my first new car purchase so im unsure of how it all works. thanks a ton. im leaning towards leasing and then if i like it buy it at the end of the lease. the reason being im from a toyota family and have pretty strict expectations about reliabilty and id like the mini to prove itself before dedication to buying it. once again thanks.

[MGB Boy]

Look out! Duck for cover!

Sorry. It's just that, in my experience, the "lease vs. buy" decision tends to bring out passions and prejudices of a "Palestinians vs. Israelis" magnitude.

But for what it's worth, I'm buying. And that's all I'm gonna say about that.

-Ricardo

[J.N.]

Leasing is a great way to get and keep a new car on the road for a relatively modest initial outlay and monthly payment.

It'll cost you a packet in the long term though, because you're paying interest on your monthly payments AND the 'balloon' payment at the end.

Dealers like it, because it ties you to them. To hand back the keys at the end of the term and walk away is EVEN MORE expensive.

My advice is: Put down as much deposit/trade-in value as you can and shop round for a loan on the balance. I got 4.2% p.a. flate rate last month.

Then; at the end of the term, it's yours to do with as you wish (and to trade it in for a different make if desired).

[districtofc]

well the thing is ive got 10k i can put down, and honestly i am leaning towards the buy option. im just worried because i have shady credit (not horrible). i missed one payment a little more than a year ago when i was layed off my job, and my credit history isnt that long. i now have a secure job and make enough money to afford the payment easily. i was just curious if it was possible to pay the whole lease value up front (the 10k more than covers it)...i guess it just comes down to being approved unfortunately. i talked to my friend at toyota and he said to absolutely stay away from leasing, especially my idea of putting a bunch of money down on a lease. hows that for advice? =) i appreciate the help, im just nervous about the whole new car buying "experience". =)

[Aurel]

I am in the same boat as you on this, but I decide that if I go for it I will BUY!

This car is a keeper and anyway if I am sick of it in a few years I can always sell it for a good deal, since it is a brand spanking new model.

Look for used PT Cruiser prices in comparison, even though the car is 2 years old at this point, the prices on used models is not that much different than a new one.

Buying gives you ownership and if you are putting 10K down you will be looking at miniscule monthly payments anyway ...

This car ...it just makes sense to own ...me thinks!

[chiph]

Quote:

Originally posted by districtofc
well the thing is ive got 10k i can put down, and honestly i am leaning towards the buy option. im just worried because i have shady credit (not horrible).

With $10,000 cash, you would be putting more than 50% down on a heavily-optioned Cooper (or a stripped Cooper S), and I don't think any lender would hesitate to give you the other half. Of course, you won't get the best interest rate (due to your credit history), so get as short a loan as you can to minimize the amount of interest that you'll pay. If you end up having trouble getting financing, talk to Ford Credit - they'll finance almost anyone.

If you do decide to lease, pay careful attention to the section of the contract titled "Early Termination". There are penalties involved in ending a contract early, and if you were to be laid off from work again, you might be trapped in the lease. Also - if you put money down on the lease, make sure they credit you as having made pre-paid payments, and not just reduced the price of the car. The difference is: By pre-paying, you get that money back at the end of the lease. By reducing the price of the car, you're buying a lower payment, and they keep that money. So beware if the payments seem amazingly low, and read your contract carefully. Verbal promises mean nothing... Sometimes they make little mistakes that seem to always work in their favor

Like MGB Boy said, "lease vs. buy" can devolve into a religious war. The best thing to do is get some education on the subject and make your own decision. I recommend a book called "Look Before You Lease", which explains how leasing works (gives you the formulas, etc). It also explains the situation(s) where leasing makes sense for a person.

Chip H.

[districtofc]

thanks Chip...i didnt know ford would lend to people for other cars? interesting...once again thanks

Russ

[mr.bill]

Leasing makes sense for a business because it can be written off, but many individuals who lease do so because the down payment is low, even zero in many cases. It is more common on expensive luxury vehicles. But when you lease, you are essentially "renting" the car and when the lease is done and you walk away, you leave your equity in the car.

If you have 10K to put down on the car, why not "pay yourself first." In other words, take the money that you would set aside for monthly payments and put it into a bank account before you buy the car. Before long, you would have enough to pay cash and you'll save money in the long run on the interest charges. In a year or so, the MINI hype will subside and dealers will stop adding mandatory extras, so you should be able to get a better deal.

If you buy on credit and miss a payment, they take the car. If you pay cash, it is yours do do with what you wish. Go with 100% down, 0% APR and no monthly payments if you can.

[chiph]

Quote:

Originally posted by districtofc
thanks Chip...i didnt know ford would lend to people for other cars?

I financed my Jetta GLX through them a few years ago (the VW dealer had 3 or 4 financing companies to choose from). They had the best rate (even better than my credit union), so I went with them.

I've just sent them (Ford Credit) an email asking if you can still finance through them if your dealer doesn't have a relationship with them -- should hear back in a few days.

Chip H.

[districtofc]

good stuff...keep us posted. thanks for all the responses from everyone.

[groovy_jr]

I have bought!

Cheap loan which was less than the payments of leasing and with NO deposit.

PLUS you own the car at then end of it without paying extra for it!

[chiph]

OK, I've heard back from Ford Credit:

Quote:

Thank you for contacting the Ford Credit Online Application Center.

We lend on behalf of the dealership, if the dealer does not have a relationship with Ford Credit, you will need to use the financing source that they work with.

If you have any questions or require additional information, please feel free to contact us at 1-877-350-6148 or by e-mail.

So it looks like they're an option only if your local MINI dealer has a relationship with them.

Chip H.

[groovy_jr]

Could always try and get the Ford free insurance! :P

....oh yeah...its not a Ford!

[d. hale]

In all likelihood you'd have to go with BMW's captive finance arm. Most independent lenders (banks, credit unions) have stopped providing auto leases because over the past, oh, ten years, the "residual" (the balance remaining on the car after the lease term has concluded) is so high that the lender takes a loss. The industry wrote off $billions in 2001 because of this. Crazy. It's kind of a sick deal all around: the consumer loses their equity in the car; the lender loses money on the deal. Ah, but market share is all these days...

P.S. One last thing: since the car ultimately belongs to the lender, you need to take *extra* nice care of it. Scratches, dings, higher-than-expected mileage, and smoking exhausts all come out of your hide when the lease expires. Since a Cooper S is likely to be "rid hard" your car might have incurred a tad more wear after three years than the lender would like. Just something to consider.

[PghArch]

Obviously everything depends on your personal situation, but from what you have said so far I'd lean towards making the purchase. If you think there is a reasonable possibility you won't feel a need to own the car at the end of the lease term, then leasing may be a reasonable option. But leasing with the intent of making the purchase after the lease term is not likely to end up financially benefitting you.

Also, you mentioned concern about your credit, but keep in mind, regular payments on a debt help your credit more than no activity at all. Even if you could pay a full lease term up front, you are losing the opportunity to demonstrate good financial habits in the meantime. Whichever option you choose, I'd recommend getting on a program which automatically makes your monthly payments out of your checking account to help build your credit rating up for when you are ready to buy your second MINI!

[districtofc]

seems like the general consensus is that i should buy...thats what im gonna go with. thanks everyone.