The Suzie Orman thread was locked because of this.
There are merits to buying and their are merits to leasing.
I read the stickie about leasing but I have more questions.
According to the stickie the money factor is basically the same as the APR on a car loan. Your credit score impacts the money factor and they also tend to use the Auto Enhanced FICO Score.
I am in the middle of paying off my credit card debt I ran up the previous four months, so what my score is currently is unimportant. As long as that repo is on my credit report, I am going to get a higher than normal interest rate. It finally comes off this summer and I will try to get done earlier in the summer/late spring.
The same rules apply; pay as little for the car as possible and don't even mention leasing until they ask how your going to pay for it.
According to my calculations my payment in a lease would be $80-$130 less than my current car payment.
That would be lease #1
Lease #2 would be for ride share and can be done through Uber itself unless I can find a leasing company that will give me more favorable lease terms.
All total I could be only paying about $200 more a month and preserve my personal car while I mainly use the other for all my work including my other job.
I doubt I will be doing ride share past 2017, so I can walk away from the Uber lease without more than a two week warning.
Anything else I should look out for when leasing?
There perks to both, leasing and purchasing. The major issue with leasing is mileage. Just be wary of how much you drive. You can wind up 20-50 cents per mile if you go over. I know someone that rolled negative equity from three cars into a Benz C-Class lease. He's pretty much paying $700 a month for a stripped C-Class that now mid way through the 3 year lease, is at 30,000 miles on a 36,000 mile lease.
First, how did your friend get into that negitve equity situation? Second, what would you have done?
First, how did your friend get into that negitve equity situation?
People get themselves into these kinds of situations because they feel they need to have a new model car or a particular make. Of course it makes no financial sense but emotion wins out over good thinking many times, that is why car dealers LOVE these sorts of people walking in their doors. They are easy to manipulate, especially when they start talking "$ per month" payments.
I had an aquaintance who loved Porsche's, before long his two buddies who were driving Toyota's and Mazda's were suddenly driving late model Mercedes Benz's, it was just to have an image to fit in with their friend. They couldn't really afford these cars and it all came to grief after a couple of years. One guy was retired and the second was a small businessman who should have known better. Emotion is a strong pull on many people.