Now that Infiniti has great financing 1.9% APR and 2.9% APR while G37 has pretty good residual value on leases. Who should take which one would be more beneficial?

I'm looking into 2.9% APR financing, but i'm also looking into leasing my first car...

 

At the end of a purchase you own a car that has resale value and you don't have to make any more payments until you need/want another car. From strictly a financial standpoint, it makes more sense to purchase than lease a car because over the long run it will save you many thousands of dollars assuming that you keep the car for a while after it's paid off. It's also the only viable option if you drive a lot of miles. But Leasing may be for you if you don't drive a lot of miles, can't afford the typically higher monthly payment associated with purchasing, own a business and will use the car for business purposes, or have ADD and need to be in a new car every 2 years no matter how much it ends up costing you in the long run.

I purchased and got the 2.9% as well.

 

Financing means a higher down payment to be at a comfortable payment, however you'll own the car. Leasing is much less out of pocket and typically a lower payment as well, however you'll have a mileage cap and you won't own the car, but you can purchase out the residual at the end of the term if you wished to.

Better credit can lease or get special financing. If you plan to heavily modify this vehicle or plan to put quite a few miles on it, your better option would be to buy it. If not, leasing might be a lesser out of pocket solution for you.

 

If something has a very high residual and a low interest rate, then it makes sense to lease, assuming a lease works for your situation.

 

IMHO from a financial standpoint, you invest in/buy assets that appreciate in value, you rent assets that depreciate.

 

Well said... Even if you do tend to get a new car every few years, you can normally come out better with a purchase if you don't mind the hassles of selling, etc.

 

This really doesn't make any sense. Do you rent your furniture? Televisions? Computers? Typically, "renting" is for those that cannot afford to buy.

Cars not assets anyways... If you really think about it, it's a liability.

 

I've never quite followed this logic; maybe I'm dimwitted. Help me to understand what I'm missing. After say 7 years, how much will the leasing guy have paid (presuming he has to lease another car every 2 to 3 years and always has a payment) and how much will the purchaser have paid? How much will the leasing guy's car be worth as an asset to him and how much for the guy who owns the car?

And to Dave ISM's point, yes to get an equal payment you'd have to put down substantially more money on a purchase vs a lease, but down payments are for suckers! I pay probably twice as much per month than the average leasing person, but I put no money down and can afford to have a higher payment each month knowing that 1) my payments will end in a few years and not continue on every month 2) I can mod the hell out of my car and not have to reverse it and put everything back to stock in 23 months 3) I'm free to drive to Tierra del Fuego if I want because I don't have to restrict my mileage or get raped on a mileage charge in a couple of years at the end of a lease 4) the car actually belongs to me and not Infiniti when I finish paying for it.

Depreciating asset or not, it's actually an asset once it has positive equity and isn't a continuous liablility every month for the rest of my life. I can sell it and have money to get another one. If I have enough resale value, I could sell or trade it in and put down enough money to get lease type payments on my next purchase.

 

Ok, I should have elaborated here, we're talking about high cost, short term investments with high depreciation value here, that's what my statement was pertaining to. Things like furniture I would not lump into the same category investment as a car.

My statement was also pertaining to the fact that the majority of people do not keep their cars long term and drive them into the ground. They change up every 3-4 years and in that time, would it make more sense to invest a large amount of money, take a huge hit on depreciation and still possibly break even or be upside down at the end of that term or just rent it and pay for only what you use?

The mindset of leasing is for people who do not hold onto cars for the long term which tends to be a lot of people. This is obviously just the lesser evil though as the best solution would be to buy the car outright and drive it into the ground, but how many do that? Most of us here are car enthusiasts and thus are drawn to buying cars, so to live with that habit leasing is generally the best solution. If you like to keep your cars for a long time then you don't have to be a rocket scientist to know that a lease is a bad idea.

Leasing has the additional benefit of allowing you to step into cars for cheaper true, but the statement that leasers "can't afford to buy" is just as factual as me saying financers also "can't afford to buy". Financing is NOT truly buying, you are financing to own the car true, but you do not truly OWN the car until your loan is paid off (if you defaulted on a few payments your loaner could take the car from you). If you can say leasing is for people who can't afford to buy, I would say that is true in every sense that financers are also people who cannot afford to buy. The only people who actually "buy" cars are people that have the cash in an account and buy the car outright. Financing is just another system, like leasing, to be able to afford a car you normally could not. Think about it why split payments monthly, paying interest on a large loan if you could just buy the car outright like someone who can "really" afford it? Leasing is also another method to be able to afford a car, but that's not what I use it for. It also has the benefit of allowing you to drive a car short term for cheap and move into another car when you are done. If I like to switch cars often it is a way for me to make more efficient use of my money. This is the same case with many leasers and why financing is not an attractive option.

Cars are indeed assets, they just have the attribute of being depreciating, an asset calculation is merely liability - equity. So in the real world cars are not a positive asset until you break even or pay off your financing loan. This is why financing is the only option that makes sense in the long term. You can liquidate your car and still make money.

No you are correct Black Betty, leasing in general means you always have a car payment. But then I bring this point up again, leasing is for people who like to switch cars more often, not for people who like to drive a car for 10 years+. This is a question that everyone has to ask themselves when contemplating which method to go with. By far and large more people like to switch cars more often then 7-10 years. Seeing as most financing terms are 4-5 years, leasing becomes a better option the shorter the term becomes. This is just how human nature works, with cars there's always something bigger and better coming along and people will buy it, does it make them stupid? perhaps, but speaking as an car enthusiast it's a fact of life we live with.

The other thing most people don't realize is that with a lease, not only are there tax right off incentives, but with a payment sometimes half of a similar finance payment, what do you do with all that money you are saving each month? If you just blow it somewhere then really you are no farther ahead. But what if you invest that money and make your savings work for you? that's what I do, if I can net even 7-14% returns on that money compounding month to month, I'm coming out pretty good at the end of that lease. Can you say the same for a finance?