Re: Leasing new versus purchasing used? - Saab 9-5 Bulletin Board - Saabnet.com
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Re: Leasing new versus purchasing used?
Posted by pursang (more from pursang) on Wed, 21 Aug 2002 15:14:58
In Reply to: Leasing new versus purchasing used?, Pat Mc, Wed, 21 Aug 2002 10:45:12
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The fact that many owners lease means that eventually these cars come back on the market with relatively low mileage and usually well maintained as they were under warranty. Plus with carfax and certification programs you can be certain of the history of the used car if you do your research. And because the factories keep increasing the incentives, everybody re-leases a new car creating a glut of three year old used cars.
I only buy used and was attarcted to SAABs because they are uncommon, have a better build quality than average and have the hatch. I track down a car coming off lease and pay cash using a home equity loan. But, I pay down the home equity loan within three years or less. That way I get a lower interest rate and its tax deductible. Ordinary car loan interest or lease payments are not tax deductible.
Better yet, if you buy from a dealer, ask for a discount on the used car if you take out a loan through him, at whatever rate they want. You might save a few hundred because the dealer makes something on each loan he generates, so he might split it with you to make the sale. Then, assuming there is no prepayment penalty (actually, don't assume, make sure first), take the home equity loan and pay off the dealer originated loan. The dealer will not care as the bank is holding the loan. That saved me $450 a few years back when rates were higher.
I think buying used and holding for 100,000 miles is the best way to do it if you can do a lot of your own work. You will be owning the car during its repair and replace cycle as things will wear out or break. But I think its worth the risk. Price the cash flow of two three year lease terms against a purchase of a used car and holding it the same period, net of its resale value at the end of year 6. You will save real cash even if you leave something for repairs or a warranty purchase.
posted by 208.212.2...
Posts in this Thread:
- Leasing new versus purchasing used?, Pat Mc, Wed, 21 Aug 2002 10:45:12
- Usual paradigms skewed by Saab deals......, Mike Lynch , Thu, 22 Aug 2002 19:15:41
- Re: Leasing new versus purchasing used?, KP, Wed, 21 Aug 2002 15:40:35
- Re: Leasing new versus purchasing used?, pursang, Wed, 21 Aug 2002 15:14:58 <-- Viewing This Message
- Re: Leasing new versus purchasing used?, Dave in PA , Wed, 21 Aug 2002 12:11:31
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