Buy or Lease

[Cuey]

Guys,

Just wondering on what in your opinion is the best option. If anyone has any good or bad experiences with ether, let me know. Who here leases?

I'm looking to get either a BA Mk1 or 2 for around 17k, which do you think is the best option?

[Dean C]

I lease all my cars & its a great option. I try not to get to attacthed to the car as I only keep them for 2 and half to 3 years max but I lease for a 5 year term. Leasing is good as you can get a balloon payout figure at the end of the contract so your monthly repayments are alot less than if you had a loan. It can help your cashflow. I just alsways make sure the balloon figure at the end of the contract is less than what I anicipate to sell the car for, so I wont be out of pocket.

[Cuey]

What exactly is a balloon payout figure?

[flappist]

Important point.

If you lease then the lease company owns the car not you and if you mod it you could find yourself in a LOT of trouble.

If you chattel mortgage the car then YOU own it and can do what you like.

If you are a private person who is a PAYE employee other than that it is all the same. If you are a company etc. then leased cars do not appear on your balance sheet.

[photn]

i lease my car.....cheaper than a loan and some leasing companies wont hassle you too much about mods as long as you tell themand put it down on the insurance. well thats the case with myne

[bob^]

Mine is a novated lease. If I decide to keep my car, inc the $10,000 residual after 5 years that I have to pay, the car has cost about $28,000 as opposed to $38000ish. Can't complain about that.

[BPXR6T]

I lease the XR8. Its all wrapped up as part of my package. I signed up for a 45% residual but that's only $16K. I've decided to hang onto the car and am quitting my job soon so am making the most of the tax advantage by paying the car off now instead of a lump sum when I'm sitting on the beach collecting the doll. A lease has worked well for me.

[schmidty]

Originally Posted by bob^

Mine is a novated lease. If I decide to keep my car, inc the $10,000 residual after 5 years that I have to pay, the car has cost about $28,000 as opposed to $38000ish. Can't complain about that.

Work at ford??

I need to get some family working there and i'd be buying cars all the time!





I looked into leasing, but after going through all the details with the dealer, he said i do too many k's for it to be cost effective. Said i was better off to buy and keep updating.

[pecker73]

If your employer will come to the party, a Novated Lease is the best option.

I work for a company which runs a Ford only fleet, got a $8k discount off retail on the Ford Partner Program.

Then novated the lease over 4 yrs, all loan repayments, fuel, maintenance, insurance, rego paid with pre-tax $$...Based on annual kms of 25,000, I'm saving about $360 a week... : : :

[old_phoon]

If your company is up for it, Novated lease improves the more miles you drive, ie comparing the total costs against taking out a loan (say adding it to your home loan) to purchase the car, 5K-15K Km/year= perhaps a small saving, >15001-25000 Km = save lots, >25K Km/yr = yipee.
I have .xls spreadsheet calculator that allows you to input all the variables(costs) & calculates the figures before/after tax for each year & the total lease, indicates the total savings etc.

[It'sTheVibe]

Originally Posted by schmidty

I looked into leasing, but after going through all the details with the dealer, he said i do too many k's for it to be cost effective. Said i was better off to buy and keep updating.

Schmidty..
If you do a lot of k's, (over 25k per year) and you can novate lease, then that really is your best option. All your running costs are paid out of your gross income.
For me it works out the same as an interest free loan for the duration of the lease.

[merlin]

I didn't vote as it totally depends on your personal situation and a multitude of other factors such as your age, kilomtres your going to do, price of the car, discount available, your salary, lease company, ect ect ect.

There is no correct answer unless you sit down and do the maths for your own personal situation. For instance for my last car it was much cheaper to get a car loan than lease, present situation I am about to enter into a novated lease.

Do a google for novated lease calculators and go from there or here is one you can use:

calculator

[GXL078]

If for any reason you have to get out of a novated lease early, the GST is a killer. I just paid out $32K on a car (after 14 months of lease payments)that was $32K new without GST, Now I am trying to sell a car that's worth about $28k so I will lose $4000, IF I can sell it! (Only vulture dealers call so far). If you exit early you have to pay the remaining lease payments, the residual PLUS GST ON BOTH. The GST is almost the difference between my payout figure and what the car is worth, $2900! Just a thought.

[Paull]

I have a novated lease through my employer. That is, the leasing costs come of my pre-tax income - good thing too. Now, as I bought a new car (this is the better option as you get the full lease plan discount as compared to buying second hand with no real discount), I got a total of $9500 of the total price.

The list price was $38000 but with no up front GST and a combined dealer/lease plan discount of $6000, I could not go wrong. What works best though is the almighty great blessed "Fuel Card"!!!!! No more using the credit card as I know use soley the fuel card. Taking the LTD to BP and filling up with BP Ultimate every 4 months is a real nevelty!!

As mentioned above, it really does depend on your individual circumstances. For me, I have picked 15000 + kays per year on a relatively cheap car to buy/run. I aslo had three expensive V8 Fords that I no longer have to run/maintain. What you really need to do is to work out what it is you need and what is most cost effective. For me it was not only cost effective but a really good move all round.

Very happy indeed!!

[chich]

Like most of the guys here have mentioned there is no clear cut 'yes' or 'no' answer, it all depends on your personal situation. One thing to keep in mind when entering a novated lease is the impact of the fringe benefits tax (FBT) on the overall price of the car. If your lease is calculated on 25,000km per year, you need to make sure you cover the 25,000km or you get stung with ALOT more FBT. You'll find that around the beginning of the year (Jan/Feb) everyone is busy driving huge distances to clock up enough kays to avoid an FBT hit.

[Chrispy]

Three things made us buy our Territory outright.
First is having put Kms on the car. I hate the thought of it, and we didn't think we would do enough km's to make it worth it.
I know people who lend their cars out for driving holidays, to get the milage up.
The second is that the car is not owned by me, Therfore I can not reclaim the Tollway cashback, or any other benifits.
The last is our changing situation, with in 1 year of buying the car, I moved jobs and my wife and I had our first child.
I would hate to think what the novated lease would have done to us.

The other option is to put it on the house, but with interest rates increasing and property going down that is probably a bad idea.

You have to do the maths for every situation

And as my tax accountant says "you can go broke making deductions".
In other words, shop like a man, and look at what it costs and not how much you have saved.

Chrispy

[BAFalconXT]

I lease is best if you can use it as a salary sacrifice or tax deduction and dont want to spend money modifying your car.

[TURBOTAXI]

I am looking at leasing an XR6T. I am doing about 35,000k's per annum
on a three year term it costs between $321 a fortnight and $410 per fortnight depending on how much I spend and what fuel I use.

The old Turbotaxi costs about $161 per week (322 per fortnight) to keep on the road doing the same mileage.

The bonus is I get a newer car with factory warranty, full comprehensive insurance and all the nice bits about driving a late model performance car for the same out of pocket money I spend on the taxi. I also dont have to do any work on it myself.

[jonbays]

I lease my wifes car but the old wagon is owned. If you mod your leased car you have problems as it's not yours really and you MUST keep it fully insured.

Only a problem if you worry about being caught out of course.

[jarridtheruler]

If you normally do a lot of kilometres, then a lease will save you money. But a lot of people get caught out with only doing the kilometres because they have to do them. If you can buy the car outright, (without a loan) then i believe it is cheaper.

[AUIII XR8 MAN]

I buy it because it your to do what ever you want to do with it.

[Cuey]

So overall, i'm under the impression that if i plan to do 25 000 km's - 30 000km's and don't plan any modifications, then a lease is the way to go.

Thanks for the info guys, it's been a big help

[Cuey]

What kind of lease payments would i expect to have with say a $15000 car such as a BA XT, compared to something like an XR6 worth around $23 000 ?????

[Outbackjack]

Originally Posted by Cuey

What kind of lease payments would i expect to have with say a $15000 car such as a BA XT, compared to something like an XR6 worth around $23 000 ?????

Go to www.smb.com.au use one of their on line calculators. It will give you a rough idea.

[devilcv8]

For those who work for a certain large telco, the operating lease they have available is the best option bar none, especially if you plan on doing a high mileage. 2 or 3 year lease, all fuel, tyres, servicing, repairs etc paid, no minimum or maximum kms, any immediate family member can drive it, no FBT for the employee to pay, and if you leave your job, just hand the car back with no penalties.

[fivepointseven]

Originally Posted by Cuey

So overall, i'm under the impression that if i plan to do 25 000 km's - 30 000km's and don't plan any modifications, then a lease is the way to go.

Thanks for the info guys, it's been a big help

Main difference is the km's per year affect the FBT you have to pay. Anything less than 25000 is 20% (i think) after that it drops to 11% for (25 to 40,000) and 8 or 9% for 40,000+ (i think).