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With my credit profile, Buy or Lease?

Regular Contributor

With my credit profile, Buy or Lease?

I am looking to get a new car but i have no prior experience as i have never financed or leased a car.

 

Basically what i am looking at is a Hyundai Elantra Coupe which are valued at around 18K brand new.

 

I am leaning towards leasing because the monthly payments are a lot lower and i like the idea of having a new car every 2 years, However i have also heard that it is a lot harder to lease then to finance.

 

If i decide to buy should i seek the auto loan myself directly from a bank (like Capital One) or should i just go straight to the dealer and have them find a bank for me instead? The less down i have to give the better but if i need to i can give up to 8K down which would only bring the loan to 10K.

 

My credit score right now is around 650-660 and i have an income of around $2200 a month, It is worth noting that i am 23 and live in Miami so  insurance is likely to be very high.

 

 

Any answers are appreciated, I am looking to get this done by the end of the month.

Message 1 of 14
13 REPLIES
Moderator Emeritus

Re: With my credit profile, Buy or Lease?

Hyndai financing is actually one of the better financing programs from what I've heard. They also have promotions going on such as $159/month for 24 months with $1999 due at signing.

 

 

They also have the college grad program:

 

If you’re graduating in the next six months, or you graduated within the past two years, you can buy any new Hyundai with:

• No down payment required
• An additional $400 on top of current Hyundai rebates*
• Ninety days until the first payment (note: not available in the states of CT and PA)

 

Valued Owner Coupon

                                        If you are currently a registered owner of a vehicle distributed by Hyundai Motor America, you can receive an additional $750 off a new 2013 Hyundai Elantra Coupe. Offer cannot be combined with Competitive Owner Coupon.

                                        Competitive Coupon

                                        If you are currently a registered owner of a qualifying competitive vehicle, you can receive an additional $750 off a new 2013 Hyundai Elantra Coupe. See your local dealer for program details and list of qualifying competitive vehicles. Offer cannot be combined with Valued Owner Coupon

 

 


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Message 2 of 14
Moderator Emeritus

Re: With my credit profile, Buy or Lease?

When it comes to the choice between buying vs. leasing...  I tend towards buying because I drive a lot of miles, and I prefer to keep my vehicles longer... 

 

not everyone is the same in this regard.


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Message 3 of 14
Regular Contributor

Re: With my credit profile, Buy or Lease?

Got approved for 18.7K through Capital One @ 8% rate!

 

What do you guys think? Is that a fair deal considering my score and the fact that i don't have any history with car loans?

Message 4 of 14
Moderator Emeritus

Re: With my credit profile, Buy or Lease?

In your case, you may get a better deal through Hyndai Finance... but its great that you have a loan pre-approval to walk in the door with. 

 

let the dealer pull your credit and see if he can do you a better finance deal. Otherwise, 8% seems like a fair, but not exceptional deal.


Starting Score: 08/29/2011 TU 671 EQ 674
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Message 5 of 14
Regular Contributor

Re: With my credit profile, Buy or Lease?

Honestly I think that is a pretty good number, especially considering you are a first time buyer. If you expect to refi any time soon make sure you make a decent down payment and pay extra each month!

Age: 22 //Cards: Chase Freedom, Chase Amazon Visa, Discover IT, CreditOne, CapOne Quicksilver, CapOne Cash, Walmart, Barclaycard, Citibank BestBuy, NavyFederal Visa Signature cashRewards //AAoA: 1 Year 3 Months (but going down quickly Smiley Tongue) //CK:692, Sesame:656
Message 6 of 14

Re: With my credit profile, Buy or Lease?

I've been browsing the forums for a while, and I have seen a disturbing-yet-common trend: people seem to be buying way too much car than they can comfortably afford.  Why on earth would one want to put themselves $19K in debt for a new car if they make $2200 a month?  A car payment on that would be $600 a month or so at 8%, no?  I realize that most people need a car, but why try to max out your outlay every month?

 

I would hope you have, at the minimum, $5k for emergencies saved (cash), and you are putting 15% towards some sort of retirement fund.  Please take my advice that a new car is not worth sacrificing your financial stability.  I see so many of my friends doing the same thing, and it's a 50/50 crapshoot as to when they will miss a payment due to the inevitable "life happening" occurrence.

 

That being said, I also believe new cars are a huge waste of money, and have never purchased one in my 24 years of owning cars.

 

Am I crazy?

 

 


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Message 7 of 14
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Established Contributor

Re: With my credit profile, Buy or Lease?


Flying_Spaghetti_Monster wrote:

I've been browsing the forums for a while, and I have seen a disturbing-yet-common trend: people seem to be buying way too much car than they can comfortably afford.  Why on earth would one want to put themselves $19K in debt for a new car if they make $2200 a month?  A car payment on that would be $600 a month or so at 8%, no?  I realize that most people need a car, but why try to max out your outlay every month?

 

I would hope you have, at the minimum, $5k for emergencies saved (cash), and you are putting 15% towards some sort of retirement fund.  Please take my advice that a new car is not worth sacrificing your financial stability.  I see so many of my friends doing the same thing, and it's a 50/50 crapshoot as to when they will miss a payment due to the inevitable "life happening" occurrence.

 

That being said, I also believe new cars are a huge waste of money, and have never purchased one in my 24 years of owning cars.

 

Am I crazy?

 

 


You're not crazy, its because people live beyond their means, and cars are a status symbol you see it on this forum everyday. Members who have terrible credit who brag about leasing a BMW or more recently Acuras, who by there own income and credit admissions should be riding a bicycle or taking mass transit.

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Message 8 of 14
Regular Contributor

Re: With my credit profile, Buy or Lease?


Flying_Spaghetti_Monster wrote:

I've been browsing the forums for a while, and I have seen a disturbing-yet-common trend: people seem to be buying way too much car than they can comfortably afford.  Why on earth would one want to put themselves $19K in debt for a new car if they make $2200 a month?  A car payment on that would be $600 a month or so at 8%, no?  I realize that most people need a car, but why try to max out your outlay every month?

 

I would hope you have, at the minimum, $5k for emergencies saved (cash), and you are putting 15% towards some sort of retirement fund.  Please take my advice that a new car is not worth sacrificing your financial stability.  I see so many of my friends doing the same thing, and it's a 50/50 crapshoot as to when they will miss a payment due to the inevitable "life happening" occurrence.

 

That being said, I also believe new cars are a huge waste of money, and have never purchased one in my 24 years of owning cars.

 

Am I crazy?

 

 


It depends on what type of cars you are buying. If you are buying honda, hyundai, toyota, etc. then you should always buy used in my opinion. But performance cars are a different realm IMO. I know many people who buy cars RIDE them to hell and trade them in before they conk out. Used cars can be a bit of a gamble, but as long as you cover yourself with a warrenty I think they are well worth the money saved!

Age: 22 //Cards: Chase Freedom, Chase Amazon Visa, Discover IT, CreditOne, CapOne Quicksilver, CapOne Cash, Walmart, Barclaycard, Citibank BestBuy, NavyFederal Visa Signature cashRewards //AAoA: 1 Year 3 Months (but going down quickly Smiley Tongue) //CK:692, Sesame:656
Message 9 of 14
Valued Contributor

Re: With my credit profile, Buy or Lease?

I hate the maintenance costs involved with purchasing. I just leased my first car. Yes it is an Acura. Can I afford it? Of course I can.

I put so much money into my Nissan that I traded in for a brand new Acura, and the stupid car still died at 106K miles with $2500 requested for repairs. I had enough! Now all my maintenance is rolled in the lease so I just drop the car off and pick it up after routine maintenance without being charged and my lease runs concurrent with the warranty. The added plus is I get to drive a luxury car for cheaper and I'm able to drive a brand new 2016 Acura in 3 years. I have 15K miles per year and what is not used, is rolled into my next lease. I'm still under 5K on the ODO, which means I have 10K more miles I can drive until Nov. I know I won't get to 15K by Nov which means a road trip is in my future.

I've financed many cars in my life....no leases until now. I got tired of the maintenance, repairs, and negative equity. I have a worthless POS Dodge Stratus that is paid off and broke down in the garage. It is worth less than $2000 now as a trade in...more likely $1000 when I paid $23K MSRP for that stupid car in 2004. I bought it brand new so I am the only owner. Cars depreciate so fast such that when you finally pay it off, it isn't worth much.

4 years was the longest I've financed and I planned on riding it until the wheels fell off. I felt that was possible with Nissans as they are more reliable than some vehicles. Wrong! Despite my punctual maintenance and repairs, the stupid car died just a little over the magical 100K mile mark when everything is doomed to go out.

Now I don't worry about any of that. I just drive. And I'm not adding paid off POS cars to sit in my garage collecting dust because they aren't worth anything anymore. On the flip side, the home I just purchased in Feb is already worth $20K more than what I paid for it. When I opened the door to the house for the first time, the home value didn't fall off a cliff like new cars do the minute they are driven off the lot.

I could buy out one of my leases one day but right now I'm happy leasing. I am not sad that I will never own the vehicle as it amounts to less junk that must be kept in the garage because it is barely worth anything. And I don't have to worry about maintenance and repair costs which were a major hit to the savings as that is where the money would come from every time there was a repair needed. Drove me nuts!
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Message 10 of 14