I'm very interested in the 2016 Honda Civic EX and is planning to do some shopping next month toward that vehicle. Now my mind is boggling since I'm leasing my 2012 honda civic and I'm ready to purchase this vehicle just as keep for the long run. Okay, let's break it down, please contributions in anyways are welcomed!
Finance: planning to put $5000 down, then finance the rest (I have alrighty credit, so the APR is not bad), my concerns are the gap insurance.
Lease, THEN BUY: get the best lease deal possible, then after 3 years, just simply buy off my lease (or refinance with penfed) when the the lease is due.
So my real question is, I'm essentially paying the same prices in both situations, what is the the advantage of financing vs. lease to buy? If I'm paying a total of $22,000 plus tax for financing, and if I lease to buy, it comes pretty close, why wouldn't I not go for the lease to buy? First it gives me options, instead of getting stuck with financing the vehicle with no significant advantage. Second, I'm planning to buy full coverage in terms of insurance even if I finance for the first couple of years, so that part is not a big problem. So please, what is the best options you guys think? Thank you!
Start of Gardening 12/13/14
@gr33nsuit wrote:I'm very interested in the 2016 Honda Civic EX and is planning to do some shopping next month toward that vehicle. Now my mind is boggling since I'm leasing my 2012 honda civic and I'm ready to purchase this vehicle just as keep for the long run. Okay, let's break it down, please contributions in anyways are welcomed!
Finance: planning to put $5000 down, then finance the rest (I have alrighty credit, so the APR is not bad), my concerns are the gap insurance.
Lease, THEN BUY: get the best lease deal possible, then after 3 years, just simply buy off my lease (or refinance with penfed) when the the lease is due.
So my real question is, I'm essentially paying the same prices in both situations, what is the the advantage of financing vs. lease to buy? If I'm paying a total of $22,000 plus tax for financing, and if I lease to buy, it comes pretty close, why wouldn't I not go for the lease to buy? First it gives me options, instead of getting stuck with financing the vehicle with no significant advantage. Second, I'm planning to buy full coverage in terms of insurance even if I finance for the first couple of years, so that part is not a big problem. So please, what is the best options you guys think? Thank you!
A couple of things to consider when you buyout your lease...
Add your initial up front cost that you paid for the 2012 at signing. Then add the total of payments for the term of the lease for the 2012. What's that total?
Now take the residual (lease buyout price) for the 2012. Add any costs associated with taking a loan for that balance (down payment, possibly taxes, new registration and optional warranties).
Add the finance charges for the new loan, your down payment and the amount financed. this will be you total time price.
Take the total cost you already paid for your 2012 lease and add that to your (planned) total time price for financing the balance and that is your overall cost for the 2012 Civic. And this is on a used (your) car.
Scary, huh?
Now the other side....
How interested are you in the 2016 Civic?
Is the 2016 that much better than what you have now?
Buying out your lease ONLY makes sense if your current buyout (residual) is lower than the market value for that car.
There is no advantage to leasing AND buying your lease unless the above is true.
Check with your State and see if you will be paying tax on the lease buyout. Some States charge the full tax up front, some States do not.
The advantage to leases are the options at the end, correct. The other (primary) advantage is that you only pay the estimated depreciation for the term of the lease plus the interest. Most of the time the lease payment is supposed to be lower.
If it's a monthly budget thing for you...
Compare the 2016 lease payment to what you would be paying monthly for financing the balance of the 2012.
