Need advice: lease then buy?

[clergykid]

Are there any downsides to leasing a car first then buying it at the end of a lease? Especially when the lease rate is 0%?

I'm only asking because some cars offer 0% interest rate on a lease for say 3 years. Now I'm thinking, if I can afford to buy the car, is it not beter to lease then buy out rather than paying non-zero interest rate on a finance for the full value?

Some people told me to be careful, saying this is too good to be true. And of course, if you read most car buying guides, they all say finance from the beginning is better than leasing. The only thing is, if the lease is 0%, and I'm only paying for the depreciation in the first few years, then pay full residual in the end, then isn't this the best way to go? I mean wouldn't total cost of the car be the same but I get to hold some of my money longer?

Thanks for your advice :)

[azn_dan]

i have thought of the situation myself, and consider leasing to be a better option in my opinion. Say you dont have alot of money now, like you are just out of school, but you know in the future you will make a substantially larger amount. Leasing can offer you to get a better car now then it would to finance one. Correct me if i am wrong, but if you dont like the car to much to buy it out, then at the end of the lease i believe you can have a third party buy out. In such cases you yourself can make some money :cheesygri

[Bullseye]

If it's 0% lease rate vs 0% finance rate, then yes, better to lease, then buy. Assuming you'll have the full amount of money at lease end to buy it out, of course.

[number84]

i have thought of the situation myself, and consider leasing to be a better option in my opinion. Say you dont have alot of money now, like you are just out of school, but you know in the future you will make a substantially larger amount. Leasing can offer you to get a better car now then it would to finance one. Correct me if i am wrong, but if you dont like the car to much to buy it out, then at the end of the lease i believe you can have a third party buy out. In such cases you yourself can make some money :cheesygri

some companies won't let a 3rd party buy it out...i just tried with my audi and they refused to let me do it...so i just returned the car.

[azn_dan]

oh damn, i thought you could just do it with everyone. Does anyone know if bmw allows third party buy outs?

[VivienM]

Correct me if i am wrong, but if you dont like the car to much to buy it out, then at the end of the lease i believe you can have a third party buy out. In such cases you yourself can make some money :cheesygri

Except that the buyout price is often higher than the fair market value of the car...

[Bullseye]

Except that the buyout price is often higher than the fair market value of the car...

And just as often it's lower. ;) Leasing companies have a legal obligation to set the buyout price as accurately as possible.

[nepean19]

Who has a 0% lease rate anyways?

[MP3_SKY]

Who has a 0% lease rate anyways?

Yes, I never see 0% lease neither.....0% of Finance yes, but on 24 months..LOL

[Jeff-TheBiz]

Yes, I never see 0% lease neither.....0% of Finance yes, but on 24 months..LOL

Right now Mazda3 and Mazda6 have 0% lease rates on shorter terms...

And financing is 0% on the 6s as well..

[clergykid]

Thanks for your responses!

Anyone know if you can finance the buyout after lease end from the dealership? Or does it have to be a straight full cash buyout or finance from some outside source?

[hOrnizuka]

what's 3rd party buy out? If you transfer the lease to another person and that person becomes 3rd party?

[azn_dan]

what's 3rd party buy out? If you transfer the lease to another person and that person becomes 3rd party?

Well not quite. A third party buy out is when your lease expires you have a chance to purchase the car at a confirmed buyout price(which you has already been determined upon signing the lease), but instead of you buying it out, you sell the car to someone else and they perform the third party buyout. And sometimes there is a chance that you can make some money on the side.

Also guys aren't buyout prices set when you sign the lease? Atleast that was what i was under the impression of.

[azn_dan]

Except that the buyout price is often higher than the fair market value of the car...

Well that could be true if you buy a car that doesn't hold residual value well.

[sixer]

Keep in mind then when you buyout the lease you will have to pay 15% taxes on top of that amount plus pay for safety and emissions. This is a new thing dealers enforce when buying out a lease. Must have those things done.