StoopitTrader
StoopitTrader t1_ja7ptvx wrote
In most cases, long term you will do better in the market than your return on a house / condo purchase. What this purchase does do is lock your housing costs in (somewhat) and get you to the point of owning your place. If you plan to only stay there a few years (under 5-7) it's not a great idea as the market could decline and you could end up selling at a loss. Buying and selling has a cost. If you do buy do your research well, either lean on someone local that really knows the area or use a buyer's agent that can tell you the best areas and where you would be best off buying. Real estate location matters and can affect the long term value greatly.
StoopitTrader t1_ja7hloh wrote
Reply to comment by Jeom049 in Is this a Good Car Lease deal? Toyota Corolla LE 2023 by Jeom049
What I often see is people who think their time window is 3 years like you are thinking here, it turns out to be 4 or even 5, or longer. It happened to me with a house we bought. We figured it was temporary and we'd upgrade, we stayed 12 years. You are imagining the worst case but not thinking of the best case. You should think of BOTH. Plan for the worst, but hope for the best. You don't mention the current income or potential future income in this scenario. All of this matters in personal finance. And again, fear should not drive a decision, planning should.
StoopitTrader t1_ja61l6a wrote
Reply to comment by Jeom049 in Is this a Good Car Lease deal? Toyota Corolla LE 2023 by Jeom049
A new car is generally not recommended but if you buy cars for the long term (keep them 10-15 years) I don't see it buying new as always the worst choice. The goal of most on this sub is financial freedom. Making payments forever, car after car, always paying interest doesn't fit with this plan. It's all numbers. If you bought new, financed even for 5 years (I'd recommend less) and then kept the car for 15 years you'd get back that front end depreciation as you owned the car without payments for a number of years. And being a corolla, likely without problems until you hit year 10 or so. It's all a balance. As I've said a few times now, have a plan is really what's most important. Where do you want to be in 3 years with cars, with income, with everything? Does this fit? This is the question you need to answer.
StoopitTrader t1_ja5yzsi wrote
Reply to comment by Jeom049 in Is this a Good Car Lease deal? Toyota Corolla LE 2023 by Jeom049
Financial decisions should be made based on future planning not on fear. Fear is driving your decision here. Nobody knows for sure whether a crash will definitely happen and if so how bad it will be. It cannot be predicted. You plan around your budget, your future and don't try to predict what will happen. It's like timing the market, it seldom works.
StoopitTrader t1_ja5tdc2 wrote
Reply to comment by Jeom049 in Is this a Good Car Lease deal? Toyota Corolla LE 2023 by Jeom049
My guess would be 12k at the lowest. The lease company is betting it will be worth at least 14k. Can you buy a 3 year old corolla now for less than that? What I would be thinking about if I were you is what this payment and the guaranteed loss of 16k does to your budget over 3 years? You mention paying cash for a car later. Do you make enough so you will still pile up cash in parallel to paying this lease? Maybe this is the only path for you to have a decent car. But if you do this, at least map out your future budget and see where this fits, if it fits
StoopitTrader t1_ja5qw0i wrote
Reply to comment by MrsBeauregardless in Is this a Good Car Lease deal? Toyota Corolla LE 2023 by Jeom049
Nah, timeshares are far worse. Leases do have an end. Timeshares are often for life.
StoopitTrader t1_ja5qoq8 wrote
Reply to comment by Jeom049 in Is this a Good Car Lease deal? Toyota Corolla LE 2023 by Jeom049
Yes, you can just walk away and the lease company will be thrilled when you do. You will have paid them about $16,000 dollars and instead of you owning the vehicle at the end, they will.
StoopitTrader t1_ja5nf51 wrote
Just running this through a quick loan amortization at 6%, putting $1000 down I come up with a $425 payment and with with you owing $9500 on this car at the end of year 3. Being as this will then be a nice 3 year old corolla I would expect it would still be worth about 13-14k, especially if you only had 36k on it (the lease terms). Do yourself a favor and just finance it and own it. When it's been 3 years trade it in or sell it. It is a very rare case (like 2020 when covid hit) where you'll do better leasing than buying. You can also read Clark Howard's advice on leasing:
https://clark.com/cars/lease-car/
I couldn't get past the fact that I would be paying tax on a vehicle that wasn't going to be mine. Leases are horrible.
StoopitTrader t1_jegzfvz wrote
Reply to Question on automotive loans by Dynasty__93
I thought it was very rare for new car loans to have any sort of prepayment penalty. I've heard of it more on buy here pay here loans. I found this:
https://www.experian.com/blogs/ask-experian/how-to-avoid-paying-prepayment-penalty/
"Thirty-six states and Washington, D.C., let auto lenders charge prepayment penalties for loans with terms of 60 months or less. Lenders are prohibited by law from charging a prepayment penalty for an auto loan of 61 months or longer."
I would definitely try to pay this sooner and avoid a lot of the interest. Taking the loan down to 30 months would save you a ton in interest unless you loan rate is very low. As others have stated, read your loan contract but I would be surprised if there's any penalty.