The Lotus Cars Community banner

1 - 20 of 39 Posts

·
Registered
Joined
·
2,744 Posts
Discussion Starter #1
Just curious if anyone thought of leasing rather than purchasing the elise.

What are the pros and cons of leasing versus purchasing?

Discuss.
 

·
Registered
Joined
·
2,438 Posts
With a lease, you just don't get the feeling that the car is really YOUR car. The mileage limits would make me concerned every time I want to drive it. Plus you can't modify the suspension, exhaust etc. The only way I would lease is for business purposes. I was just thinking about this subject yesterday.

ed- I guess the advantage of a lease is that you can just give the car back when your lease expires and move on to another one, but I don't see myself giving this car back to anyone. (until the "S" version arrives I suppose).:)
 

·
Registered
Joined
·
2,744 Posts
Discussion Starter #3
I've been contemplating this for several reasons:

a) I wont drive it very much--mileage restrictions arent a problem
b) for business reasons
c) I likely will move in 3 years time...so I'd have to sell it anyway
d) $$$--I could pay the lease outright, however the purchase would require a monthly payment that is higher than I can comfortably afford...meaning less spare $$$ for track days, lotus meets, etc.

My concerns are:
a) I like to own...although technically even if I purchase the bank will own it for a few years anyway
b) taking it to the track
c) what if I decide to buy...how do you determine buy-back cost on a car like this? Isnt the agreement for wholesale value, but what if I'm paying for a certain amount of depretiation, and the car value in the end is much higher, then I'd be screwed.

It's a bit premature, but something to think about as I prepare to pick up my baby.
 

·
insert clever title here
Joined
·
7,702 Posts
If this isn't a tax write-off for you, leasing is generally not a wise financial decision when compared to purchasing.
 

·
Registered
Joined
·
3,970 Posts
c) what if I decide to buy...how do you determine buy-back cost on a car like this?

In a normal, closed-end lease, the residual value is determined at the time of the lease...so you know what your cost would be at the end of the lease, if you decide to purchase it then. The biggest problem I see here, is that the leasing companies will probably be pretty conservative with the residual value, which means your lease payments will probably be higher than on another car with a similar price. If the buy-out at the end is higher than the then current market value, you walk away or negotiate. If the buy-out at the end is lower than current market value, then you have the option to purchase the car at below market value.

An advantage of leasing, particularly for short leases, is that you are not paying the full sales tax. You pay the sales tax with each lease payment for that portion of the car value. You never pay the full sales tax unless you exercise your buy-out option at the end of the lease.

As with any financing, you need to understand the effective interest rate. Leases make that more difficult because most people are not familiar with the terminology (there is no APR term).
 

·
Registered
Joined
·
2,744 Posts
Discussion Starter #6
But why is it not a wise financial decision? I always hear this, but never understood why.

And yes, looking for write-off
 

·
Registered
Joined
·
3,970 Posts
Leasing isn't, necessarily better or worse, financially, it depends on what you need. If you are going to buy a car, keep it for 3-5 years, then sell it, then the biggest factors are: your residual, your effective interest rate, and the sale price you get for your purchased car at the end of your use of it.

As far as tax write-off, you can do that (if you qualify) whether the car is leased or purchased. Leasing simplifies the record keeping and filing paperwork, but shouldn't materially affect your tax benefit given identical circumstances. Also don't expect a 100% tax write-off, or anything close to that.
 

·
insert clever title here
Joined
·
7,702 Posts
Modern Wedgie said:
But why is it not a wise financial decision? I always hear this, but never understood why.

And yes, looking for write-off
The biggest argument I've heard against leasing is the interest. You're paying only the depreciation, not the value of the car - meaning, the effective loan balance will be greater (after three years, you still 'owe' maybe 50% of the value of the car, versus owning it outright if you had purchased it instead). What this means is, you would end up paying more in interest than someone who purchased the car. Also, keep in mind not only the mileage limits of a lease, but the condition the car must be in when you return it at the end of your term - will all paint chips need to be repaired?

I've also heard that you need to be much more careful reading the fine print in a lease - it's much easier to get screwed by a dealer with a lease than a sale.


Yes, you can still use it as a tax writeoff if you buy it, but that is more complicated, as pointed out already. I believe the main complication is the fact that you now have a depreciating asset that you're writing off, versus a monthly payment for what is essentially a car rental.

I've never leased a car, so my experience and knowledge in this area is limited, and I may be outright wrong with some of this. I've just read enough bad things about it to know that it's not the best course of action for most consumers.
 

·
Registered
Joined
·
1,744 Posts
I'm just guessing but I don't think you can track a car that you lease. At lease :D I've never heard of anyone doing it.
 

·
Forum Founder
Joined
·
29,081 Posts
Re: umm...

ROCKCENTER said:
this is a pointless conversation, as there is no option to lease the car here in the USA...
You do not have to lease through your dealer. You can lease almost anything from a leasing company. I have leased software.
 

·
Registered
Joined
·
2,744 Posts
Discussion Starter #15
Rockcenter,

I don't think that's true. It was my dealer that brought up the topic to begin with.
 

·
Forum Founder
Joined
·
29,081 Posts
Typically, a leasing arrangement would be dependant on each dealer. Just as a dealer may arrange their own financing.
 

·
Registered
Joined
·
212 Posts
how much would it be to lease the Elise...

if someone could direct me to a company that does this, and give me an indication on the cost, it would be terrific. In advance, thank you for your help.
 

·
Registered
Joined
·
2,744 Posts
Discussion Starter #18
I think its too premature to get an accurate leasing quote, because the lease cost depends on all sorts of variables, not just the actual purchase price.
 

·
Registered
Joined
·
212 Posts
hmmm...

This is frustrating... I am getting the car regardless, I just wish I could know in advance what type of financial arrangement this will be. If I finance the car, I will put down X, and thus, mathematically, my payments are X forX ammount of time... But when I ask about leasing the car (which may or may not be a possibility), there is no way to get a definative answer - and only months away, what are we to do?
 

·
Registered
Joined
·
2,744 Posts
Discussion Starter #20
We will wait, patiently, and discuss rumors, news, and BS to pass time :D

Somebody sedate me, please!!!
 
1 - 20 of 39 Posts
Top