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Originally Posted by **********
Hi Bossku69,
First congrats on your new car!
The thing to remember is that all prices are flexible. The cost of the car of course is flexible but so is the costs of the lease.
Leasing is great for certain situations - mostly it lets you afford a car that is normally beyond the budget, and it lets you get a new car every few years or so.
What you want to try to do is the following:
- Get the lowest financing rate. Loans are dirt cheap these days and you should be able to get a rate of 5% or less.
- Most of the time the dealer will want to lock you down to a milage limit per year of say 20k. Try to know ahead of time how much you think you will drive because if you exceed the rate they will charge you a per-mile (or per kilometre) penalty when you go to return the car. The limit is negotiable too.
- Put the lease under your company name instead of your personal name to enjoy some tax savings (ask your accountant how this would work).
Here's the best part. The dealer will say that all you have to do is return the car when your deal is up. "Nothing more to pay!" he will say. This is true if your millage is under the limit and the car is nice and clean without damage. But what he doesn't tell you is that when you bring the car back in good shape, it is actually worth alot more.
What you want to do instead is first call the dealer or financing company to learn how much is still owed on the car, then put the car up for sale for a few thousands MORE than what you owe on the car. Don't forget that the dealer will be trying to sell your car when you return it and the lease rates are calculated to make sure they make a profit not only on the initial sale but on the resale too. You can take advantage of this and sell your own car yourself and pocket the profit.
When you have a buyer, take him to the dealer and do the paperwork there. The dealer sells their car but YOU get the resale profit from it.
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Thanks
Tax purposes is exactly why we are doing this. The rate is good for the lease, actually factoring in residual, its almost like borrowing for less than 1% for 3 years.
When I last leased my Audi, I was able to sell it for WAY more than what was owed, but I didn't know about having to pay tax on the balance, so that really sucked, so at least with this, I'll know.
However, when I went to pick up that car, I got hit with a $795 bill right there to take the car. The sales rep never told me it was due on top of whatever $$ down. So I asked in this case and the sales rep at Mazda said "oh, I'll just divide that into your payments for you."
The lease deal is nice, $0 down and $0 due first month. They wouldn't budget on the price and called my bluff that I was going somewhere else, so I said I would pick it up from them if they tossed in a the retractable cargo net and floor mats and 2 coffee mugs
