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Jeom049 OP t1_ja5nnra wrote

Reply to comment by StoopitTrader in Is this a Good Car Lease deal? Toyota Corolla LE 2023 by Jeom049

My family's got 660 credit i doubt a 6 percent is possible. They also want to do 0 down. I know buying is probably best, but with the market going down most likely I'm afraid we won't need the car no more and we are upside down. Where as with the lease we can just walk right off.

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StoopitTrader t1_ja5qoq8 wrote

Yes, you can just walk away and the lease company will be thrilled when you do. You will have paid them about $16,000 dollars and instead of you owning the vehicle at the end, they will.

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Jeom049 OP t1_ja5qv14 wrote

what if I financed and the market drops, and I still owe more than what its worth? If I don't need the car, that would mean I'm going to have to pay to get rid of it. how much do you think the price of a 2023 corolla le with 30k miles will be 3 years from now?

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banalinsanity t1_ja5t8z0 wrote

Well, even if you owe more than what you can sell it for, it's just a factor to consider; not like you go to jail for it. If comment OP's math is to be trusted, by leasing it, you'd be betting that 30k mile 3yr old corollas are worth less than 10k in 3yrs. And that's just you breaking even on going either way. For leasing to actually be financially better, you're betting it's going to be worth meaningfully lower than 10k since you're also giving up all upside (i.e, the chance that it's worth more than you owe on it in which case it cost you even less to use it for 3yrs not to mention the lack of lease restrictions). And say it is actually artificially depressed b/c the market tanked, just keep paying the loan off and you'll have the car, it's yours! You can sell it when the market recovers (cars are usually not this volatile so i'm just humoring your beliefs here) and buy the fancy car. If you just completely don't care about optimizing for a few thousand $s, I don't see this as a personalfinance question.

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Jeom049 OP t1_ja60we3 wrote

It was never intended to be. It was mainly about current lease prices and if what I was sharing in the post made sense to what's in the market out there for leases. The other thing that bothers me is the rate, rates are crazy high right now. I could be betting that the rates go back to that 3-5 percent on a used car. But maybe I'm wrong

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StoopitTrader t1_ja5tdc2 wrote

My guess would be 12k at the lowest. The lease company is betting it will be worth at least 14k. Can you buy a 3 year old corolla now for less than that? What I would be thinking about if I were you is what this payment and the guaranteed loss of 16k does to your budget over 3 years? You mention paying cash for a car later. Do you make enough so you will still pile up cash in parallel to paying this lease? Maybe this is the only path for you to have a decent car. But if you do this, at least map out your future budget and see where this fits, if it fits

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Jeom049 OP t1_ja5wqys wrote

This car is not for me, My girl's father is paying for it. She does not have a car and needs one asap.

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Jeom049 OP t1_ja5wzi1 wrote

That's my point Part of me believes I will be upside down. I strongly believe everything will crash. especially with Gold going up like crazy in the past couple of months. Plus If I purchase I would be tied to a contract with a high interest rate. where as if I were to keep the lease I could purchase at the end at a way lower rate If the market tanks... Still I want to get my girl a way better car in 3 years from now. The only reason why I'm considering leasing is because I fear an 2023 LE corolla with 30-40k miles will probably be bought by dealers or auction around 12-13k like you mentioned to be sold at 14-16k (dealers gotta have that 1-2k mark up most of the time lol)

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StoopitTrader t1_ja5yzsi wrote

Financial decisions should be made based on future planning not on fear. Fear is driving your decision here. Nobody knows for sure whether a crash will definitely happen and if so how bad it will be. It cannot be predicted. You plan around your budget, your future and don't try to predict what will happen. It's like timing the market, it seldom works.

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Jeom049 OP t1_ja5zfvm wrote

buying a new car is a bad financial decision. But is probably a bad one as well to buy a used car thats 2 or 3k less than a new one, Which is the case for all fairly-new used cars right now

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StoopitTrader t1_ja61l6a wrote

A new car is generally not recommended but if you buy cars for the long term (keep them 10-15 years) I don't see it buying new as always the worst choice. The goal of most on this sub is financial freedom. Making payments forever, car after car, always paying interest doesn't fit with this plan. It's all numbers. If you bought new, financed even for 5 years (I'd recommend less) and then kept the car for 15 years you'd get back that front end depreciation as you owned the car without payments for a number of years. And being a corolla, likely without problems until you hit year 10 or so. It's all a balance. As I've said a few times now, have a plan is really what's most important. Where do you want to be in 3 years with cars, with income, with everything? Does this fit? This is the question you need to answer.

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Jeom049 OP t1_ja620c4 wrote

To be honest, I feel like I'm worrying to much, I don't think I would care much about 2-4 k loss in a car a few years from now

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StoopitTrader t1_ja7hloh wrote

What I often see is people who think their time window is 3 years like you are thinking here, it turns out to be 4 or even 5, or longer. It happened to me with a house we bought. We figured it was temporary and we'd upgrade, we stayed 12 years. You are imagining the worst case but not thinking of the best case. You should think of BOTH. Plan for the worst, but hope for the best. You don't mention the current income or potential future income in this scenario. All of this matters in personal finance. And again, fear should not drive a decision, planning should.

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