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Lillie,

The effective interest rate is based upon the money factor that is quoted to you for the lease. Here's a website that will help you to calculate the 'effective interest rate' of a lease:

Lease Interest Rate Calculator

In order to write-off a lease, you probably should own your own company. If you do have your own company, you're probably better off buying the car, then "leasing the car to your company" for 3 years at an inflated lease rate. This will allow you to write-off the lease payments your company pays you as a cost to the company. (e.g. Your monthly payments are $700 on a loan, but you lease it to your company for $1,500 a month. Your company writes off this payment and receives about $500 tax credit.)

I really would encourage you not to lease. If you intend to purchase the car at the end, then you'll be double-charging yourself in interest. (Lease interest + purchase interest) I would just purchase the car either via loan or home equity line. The beauty of a home equity line of credit is that you can write off the interest expense from this money that you've borrowed.

The reason that a lease doesn't work "financially" for a car you intend to keep is that you'll end-up spending more money on the lease payments and buying it in the end than you would if you had bought it to begin with. Every dollar that you save in a lease payment now will cost you in terms of higher principle amount later. If you only plan to keep the car for 2 years (3 years MAX, never go beyond 36 months) and are willing to walk away from it with no attachments, then maybe leasing might work. If you plan on selling the car at the end of the lease period and it's a high demand car where you're sure your residual value will be lower than market value, then it may work out. If you're not willing to take that gamble, don't lease.

Hope that helps!

Bob
 

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Yes, leasing can be available from secondary sources

Amazon Leasing is where I leased my old '82 Ferrari 308 GTSi from. They were in Canoga Park area before, but I think they've moved to Westlake Village. I'm almost certain that they can arrange leasing on the Elise for you.

Bob
 

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Re: Yes, leasing can be available from secondary sources

I think I mentioned this before, but I will be leasing from a secondary company IF the dealer's leasing program is not competitive. At the very least, having a secondary company adds a bit of competition to the deal.

The company I plan on using is called Automoble Consumer Service (ACS Corp). They have a "lease module" called Leasecompare.com that allows you to select the vehicle and the lease criteria. Also gives you a break down of the payments, terms, money factor, and residual.

Right now, they don't have figures for the Elise, since it's not out yet and no residual have been established (at least publicly). However, I'm told they will have those figures when the first Elise arrive.

Here's their website:
http://www.acscorp.com/

Here is their lease quote module:
http://www.leasecompare.com/

Hope this helps.
 

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The main advantage of a lease is, the smaller down and monthly payment. It doesn’t look like Lotus USA has anything in place for a lease, so it’s going to be more up to dealers if they want to go that route. On the financial side this kind of a sports car doesn’t make much sense, so I’ll leave that one alone. ;)
 

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If you need to lease an Elise because it doesn't require a substantial down-payment and still has affordable monthly payments, make sure that there is a 'buy-back' at the end of the lease.
Then, while your socking away as much
savings as possible for the 36 to 48 month lease period, you could enact full ownership at that time by paying the balloon payment on the end. If you don't have the cash at that time, you could
approach a bank for a used-car type loan
and buy it that way, continuing with monthly payments but now with ownership a 'definate' at the end of the
loan period.
 

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Derek said:
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.
I know several people who have tracked their leased cars. One fellow has modded his car, and just took the aftermarket parts off at the end of the lease.
 

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i may well own my company by the time the car is here. i have indeed been pondering the concept of the company leasing the car from me. it is on the list of items for discussion with accountant and legal types. works for antiques as office furnishing and other interesting items as well
 

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Lillie

The only way to tell if leasing is cheaper than buying is to have the details of both contracts in your hands, then run a present value comparison. Sometimes leasing is cheaper than buying, and sometimes not. The last time I bought a car, I ran the analysis, and the present values of the 2 contracts were within $200 of each other. One advantage of leasing, previously mentioned, is not paying full value sales tax up front. Also, lease residuals are negotiable, and it's not uncommon for people who want to buy at the end of the lease to walk away with a sweet deal. I typically buy because I keep my cars a long time, and restrictions on some leases can be a burden. A financial person should be able to run the present value comparison for you, if you're not familiar with it. I may lease the Lotus, in that you never know how you're going to like a car until you've owned it awhile, and I've never had a chance to see the dam* thing, much less drive it.

Jeff
 

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I have never leased a car, and don't plan to, so this is just something I've heard: Don't typical lease contracts also require you to have all the recommended maintenance done at a dealer? If that's true, and you normally like to take care of your cars yourself, it could add a substantial amount to the total cost.
 

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Personally I will buy the Elise outright. But, a friend leased for not a financial reason but as a put option against getting a lemmon from Porsche.
 

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In general:

If you know you're going to give the car up in 3 years - lease.

If you know you're going to keep it - buy it.

As others have mentioned, it depends on the terms. But if you know you're going to sell the car, then not only are you paying interest on the money you've borrowed to buy the Elise, you also will eat the depreciation on the car when it comes time to sell. If you're the gambling type, you could hope that Elise-mania holds up for three years, and then you would not be hit hard by this. But I don't think the Elise will be extraordinary in this department, not 3 years from now.

But:

If you are going to put lots of miles on it (daily driver/lots of commuting/road trips) - leases usually have high mileage penalties.

Track days - if even track days are forbidden (as opposed to competitive events) - I guess the risk in ignoring this prohibition is, what if you crack it up on the track? If you make a claim on insurance, they'll know. If you don't, the repair cost might outweigh the money you saved.

If you like to mod the cars - you have to choose reversible mods (ones you can economically roll back - if you bored and stroked the motor, it would probably be pretty expensive to revert back to stock. :)

If there is no prohibition on track days (or you're not worried about a traceable mishap), and the residual is anything close to reasonable, lease.

If there is a prohibition, buy. If you can't use the car for the purpose you intend, what's the point?

I'm guessing, unless the Elise turns into the next Pinto, with some grievous safety defect, the Elise's resale value will hold up fairly well. It might be close to a wash if you get a good interest rate.


Though of course, in the end, just do the math as others have advised based on your options...




DLY
 

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My dealer informed me I am probably better off not leasing. As far as I know there are a few companies that could. However it might not be as appealing. Many of the manufactures rebate when you lease for example on 39K BMW z4 you could lease for $399 with $2500 down for 36 months. Which is not bad. My estimate on comparable lease on Elise would be closer to $600 with double the amount of money down. If you can’t afford the out of pocket your second best choice would be a loan from companies like people or etrade. You get a good rate depending on your down payment and length of the loan. You could have a payment between $600- $800.

Personally I will try to negotiate the best price I could and just purchase it. I hate payments, even though I did consider a lease for tax purposes.
 

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My dealer informed me I am probably better off not leasing. As far as I know there are a few companies that could. However it might not be as appealing. Many of the manufactures rebate when you lease for example on 39K BMW z4 you could lease for $399 with $2500 down for 36 months. Which is not bad. My estimate on comparable lease on Elise would be closer to $600 with double the amount of money down. If you can’t afford the out of pocket your second best choice would be a loan from companies like people or etrade. You get a good rate depending on your down payment and length of the loan. You could have a payment between $600- $800.

Personally I will try to negotiate the best price I could and just purchase it. I hate payments, even though I did consider a lease for tax purposes.


Allan I checked this web site (ascorp.com) however on the exact same vehicle I was looking at the quote they offered was twice the price of what the dealer offered. I would do a bit more shopping around.
 

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Several years ago I almost leased a new second generation MR2 but decided not to when I found out that the lease would require me to carry stricter (more expensive) insurance.
 
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