Hi everyone. I’ve been reading for hours but haven’t been able to find a answer to a question I have. My wife wants a new car. We are looking at the new Mazda CX-5 signature with a msrp of 38k and with incentives around 36k. I want to use her current car as a downpayment which is worth 15k to get my lease payments down to around 150 a month for 36/10. My full intentions is to purchase the car when the lease ends in cash. The only reason I am not considering financing right now is because I want a very low payment for a couple years until I receive my guaranteed “windfall” of cash flow in 3 years to pay the car off. Is choosing to lease a car like this a bad thing? I’ve been reading that you should be trying to put the least amount down as possible due to if I totaled the car quickly after but that shouldn’t matter in my case since the car would still be worth more than what my final buyout would be and I would just receive the difference back. Am I doing this wrong or just a different way of taking advantage of leasing? Thanks, Mike
Yes wrong.
Why are you getting a windfall in 3 years?
Just put the money into an account and only use it to pay the monthly. Result is the same but safer.
I would imagine it would be the same as if I was financing the car and put the 15k down and totaled it a month later. I would still have “equity” that would be paid out to me.
Flip the car, ask for a check cut to you. Put it in a dedicated account that you will use every month to make up the difference of the 150 you are willing to shell out
Basically what I’m trying to ask is should I just finance the car for around 400 a month for 72 and still pay it off in 36 or can I not take advantage of the lower payment of the lease for 36 months and still pay it off at the end? I can afford the bigger “ballon” payment of the lease at the end vs I really don’t want higher payment right now. Thanks
I feel like that’s doing extra work when not needed or am I wrong?
If you totaled the car immediately, 12 months in, or whenever, you’d still lose a ton of money so this is a bad idea. You can’t predict that what the value of the car will be down the road
But wouldn’t I lose some money even if I financed it? I’m just looking at it as only “borrowing” a few thousand for 3 years instead of the whole 24k.
If my totaled it one month in and now the cars worth only 34k, my payoff would still be the same wether I financed or leased it. I would still get a equity check back so how would I be losing any more by doing it this way?
This would be my second lease doing it this way. My current daily I leased last July at a purchase price of 22k out the door. I put 5k down with intentions of paying it off shortly after. They gave me 2 options. Finance the 17k at 300 a month for 72 or lease 36/10 for 170 a month. I figured why not take the smaller payments for a couple years and when the lease is up I’ll just pay the cash for the residual which is comes to like 11k. Both ways added up to the same amount within a few dollars of each other. I’m only starting to second guess myself due to what I’ve been reading the past few days. If I totaled my car now, insurance would give me 17k for my car. My buyout is 15k currently. So where is the risk that I’m reading about? Am I not seeing something or what? Lol even if I financed my car and totaled it now, I’d still be out the 4K difference just as I would have the lease.
Finance:
35k msrp
You put 10k drive off, your loan is 25k
1 month the car is lost. Insurance pays 30k.
Your loan is 25k, so Mazda gets 25k and the account is closed. You keep the 5k (30-25). However you have had the car only for 1 month and you lost 5k because you put 10k to drive off.
Lease:
Msrp 35k
Zero due at signing.
Car is lost. Insurance pays 25k. Mazda still wants its money and gap insurance pays Mazda and you are done.
Your loss zero.
You just said it’s the 2nd time you’ve done this. The windfall come late?
This is an easy one…
Sell the car and use the $15k to make your payments and when you get your windfall pay off the car. Finance before putting $15k down
Ok I think i understand now. So basically by leasing with no money down leaves me no “risk” if I was to total the car soon after buying it. I suppose since I plan on buying the car afterwards unlike most everyone on here I’m still going to lose either way. I was just trying to minimize my payments for the time being. Thanks for the response though. It definitely helped me see…lol
I’ve been sending quadruple payments on my house for a year already. When I bought my car is when I first took on my home loan so I thought by having smaller payment for a bit until I pay the house off would be better than the bigger payments.
You don’t understand. The payment is the same. You artificially lowered your payment by putting more up front. Instead put that money into a different account and only withdraw to pay the monthly payment. The amount of money you pay over the 3 year lease is almost the same irrespective of how much you put down initially.
I see what your saying but this is all dependent on IF I totaled the car anytime with the first 3yrs but even then I would still be out the lease payments up to that point. If I don’t and I purchase the car for 24k the day the lease is up and total it, insurance pays me 24k, I’m still out all that money. So if I’m understanding this correctly, putting no money down only minimizies my risk but up to what point? If I put no money down my lease payment would be roughly 500 a month for 36/10. So if i totaled it 12 months in, i would only have lost 6k out of pocket but who’s to say I would or wouldn’t lose more in that same time frame financing or putting a larger downpayment down?
I wish my car payments would have any effect on my mortgage payments! That’s what I get for living in Los Angeles 
Generally speaking, you don’t want to lease if you plan to buy as you’ll incur a lease inception fee and a purchase fee at the end as well. Together, they can easily add up to a grand.
Dude. Do as you wish. I am done.
Let’s flip this. What is the benefit to putting money down? Do you think you would save money? Calculate the amount of money the entire lease would cost you with money down and no money down, there is virtually no difference. Just more risk with money down.
Here is your first problem, you are looking to lease a 35k vehicle which leases at 500/mth. That is typically a very poor candidate for leasing, especially for a mass market vehicle.