I have never leased a car before. Always bought cars 100% cash. I am going to get a Lexus NX200t premium and the only question remaining is lease or buy. I have a $39k OTD offer (Florida, transfer tag) on the car, but when it comes to lease terms, I’ve just been given a list of variable down payment and monthly payment options that all seem to add up to about $16000. The things that make me think I should lease are: 1. our business will be buying the car and I can only get a tax benefit on $23k if I buy, but the entire lease payments would be deductible. 2. We are not sure if we will want a bigger car in three years. 3. We don’t drive that much. We have another car that we’ve had for 4 years, bought, and it only has 18k miles on it.
I apologize for such a basic question, but if you guys can walk me through some of your logic on leasing versus buying it would be very helpful.
Leasing might make sense for you since you can claim 100% as tax deduction, but $16k (I’m assuming 36 month term) sounds too expensive. You should be able to get a monthly payment under $400 easily.
Leasing makes good sense for you in this situation, but it needs to be the right lease, and not just spending too much money because it’s tax deductible.
I’m not an expert by any means, but for me, I was comparing total cost of ownership over a given period of time to decide what was best for me. For example, on this fancy Lexus, if I assume you keep it for 6 years and decide to sell it for $15k, you’ve spent $333/month. You’ll have to come up with your own best guesses but then compare that to what the lowest lease payment might be (dividing total lease cost over term) The longer you keep the car the lower your monthly cost but you have to weigh that against having a new car in 3 years and potential of having an out of warranty luxury vehicle. Also you will also have to weigh in the write off which I have no experience with. Just my 2 cents. Thanks!
Right, I’ve been trying to do that kind of math myself, but true cost of ownership is hard to calculate. I was in Cambodia recently and saw 20 year old lexus RX300s tooling around, so I think Lexus is more reliable than the Germans.
Lease the car-- but work on the terms. A few people have posted numbers here. Try to replicate and if you can’t call the dealer from Northern California and see if he will ship you one. The used car market is unpredictable in 3 years to know what the vehicle will be worth. Cars leased 3 years ago are a problem for the leasing companies as no one want them now on the used market. Everyone wants a suv. Now that everyone is getting a truck or suv the market may be flooded in 3 years bringing values down. With a lease (and Lexus does msd) you can get almost free money and let Lexus Financial take the risk of the future value.
Well, we ended up buying, but the numbers were very very close in the end between buying and leasing–adding up all the payments and the residual, it would have been about $2k more than buying. Will definitely consider leasing in the future and appreciate the generosity of spirit of folks here in sharing their perspective. Thanks all!
