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What do you guys think is a better choice? I already own a 2004-5 S40 T5 FWD and am looking to trade it in for AWD. If I purchase I will be getting it chipped and put exhaust on, and change the wheels. If I lease I am looking at getting the chip programmer instead and wait on the exhaust. But aside from voiding the lease contract by upgrading a car I dont own. What financial aspects to you think are better for either choice?
 

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Re: Lease or Purchase (ismetopher)

Some will say "repeat the mantra: 'search is your friend'". That said, I admit I often can't find threads I've posted so search doesn't always work well for me. But still try this: <A HREF="http://forums.swedespeed.com/zerosearch" TARGET="_blank">http://forums.swedespeed.com/zerosearch</A> enter "lease buy" in the 'Search For' field, select Archived Content, and you will see several relevant threads, written better than I can.<p>The bottom line is that you need to run the numbers for your individual situation. Lease money factor, residual, acquisition/disposition fees, excessive mileage, unusual wear and tear, and cap cost (after incentives) vs. purchase price (after incentives) and interest rate. If these terms are unfamiliar to you a quick Google should point you to some great sites to learn the mechanics of a lease. You really shouldn't lease until you understand the math -- otherwise you'll be easy prey!. And you shouldn't lease until you have all of those numbers.<p>If you know you will love the car and will keep it a long time purchase is (often) best. If you're not sure, a lease gives you an "out" but still lets you purchase the car for a fixed price "used". A lease "can" be more expensive over the long term life of a car, but it can also give you an easy way to dump a lemon.<p>I leased my XC70 last summer because it was my first Volvo, I had heard stories about the ETM, abs cpu, suspension parts, and other common problems. Coming from a couple Saabs (not Toyotas) I was ready for the "Swedish experience" and willing to accept some "character" in my car. But Volvo was also offering a $5,500 incentive to lease and only $4,000 to purchase. The extra offset the acquisition and disposition fees in the lease, plus a bit. Lease money factors were acceptable, and the residual (buy-out price) was less than I was seeing for vehicles like it on the used lot or on eBay. <p>My calculations showed the purchase/finance vs lease/purchase used options to be within a few hundred $$$ of each other. My lack of conviction pointed me toward the lease at the time. Now I believe we will purchase the car at lease end, and I've already bought a Volvo VIP extended warranty from Yannis! (great price -- thanks Yannis!)<p>Fwiw, my sales person gave me the incentive off the invoice price, $300 better than typical. If you are not working at invoice plus/minus, perhaps you should talk to one of the dealers here or a Costco/Sams/CU/AAA dealer rep. As you probably have observed, the sales folks posting here seem VERY fair and reasonable. I've never seen negative comments about them. I'm very satisified with my business relationship with one in particular, and if I wasn't happy with my local dealer I wouldn't hesitate to purchase a car from one of them.<p>We will purchase the V50 T5 AWD that we pick up in Gothenburg this June. In part because OSD is less complicated with a purchase than a lease. If I were buying it in the US I would again run the numbers but would factor in that I really like my XC.<p><BR><BR>
<i>Modified by jackf at 9:27 PM 4-13-2006</i>
 

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Re: (Crashy)

got to agree with crashy here but if you love to mod like most people here buying is much better. changing the wheels, springs, door pins, ecu, air filter assembly, down pipe , exhaust, not to mention simple things like the required tires . I'd say if mods even comes close to thinking of then buying would be better, if changing car within 2-3 yrs and you don't want to change anything besides air filter style then leasing might be OK
 

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Re: (WhiteS40TGirl)

Leasing and buying work out to very close numbers but often people forget some of these numbers. One cost people forget is the interest their money could be making. So, if you lease, you usually don't put much money down and you pay your money over 3-4 years. If you buy, you put in 30-40K, and that is money that could be EARNING some percentage, let's say 4% over those same years. 30K x 0.04 = $1200.<p>All totaled, when you look at all the costs leasing and buying work out pretty close. As others have said there are a couple things that may make one a better option for you:<p>For instance, if you put a lot of miles on your car a year, leasing will work out LESS well for you. You shouldn't be super frightened of over mileage costs. Everyone always makes these out to be terrible but they are usually 20 cents to 40 cents a mile, which if you calculate what you are paying for the 36K miles you get with your lease, the over mileage costs are not that bad. But, they will add to your costs. <p>So if you tend to not put a lot of miles (<12000) per year on your car, that may push the decision a bit toward leasing. If you put a lot of miles on your car, maybe buying is a better plan.<p>We leased two cars in a row and we find that it didn't work out for us. We put too many miles (22K/year) on the car.<p>As someone else said, if you tend to keep your cars for a long time(>4years) that is probably another argument for buying versus leasing. When you buy you take a huge depreciation hit as you drive out of the dealership. If you sell early <4 years, that is hurting you a lot. But if you tend to keep the cars for a while, this depreciation doesn't hurt you as badly.<p>Be careful about the up front costs if you decide to lease. It seems like it is possible to put very little money down, etc.<p>
 

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Re: Lease or Purchase (jackf)

I would only lease if the savings per month is significant over a 5 year loan. Otherwise the limitations aren't worth it in my opinion. <p>HOWEVER, I am a great believer in Leasing since I trade cars often. I pay less for each car I own than if I had financed it. Once I got past the mental block of "owning" my car, I haven't had any problems. Again, I usually have 2 cars available to drive, so my mileage is low. <p>Leasing my Boxster worked out great because I am paying the same amount per month that I was paying for a Toyota Tacoma I had. I don't want it after the warranty expired anyway, talk about $$$$$$$. <p>Now, when I was considering purchasing a spors car several years ago, I was thinking maybe I should just purchase a Miata so I can "Own" it. I compared 5 year financing it to 3 year leasing and it was only like $20.00 per month difference! I DON'T THINK SO! <p>If I didn't save $100 or more per month, I don't think I would choose a lease over financing.<p>Any way, $.02.<p>MichaelD.
 
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