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-   -   Advice on 4X4 lease and types. (https://britishexpats.com/forum/canada-56/advice-4x4-lease-types-792999/)

jossie Apr 5th 2013 4:45 pm

Re: Advice on 4X4 lease and types.
 

Originally Posted by Oakvillian (Post 10642012)
Car costs $50k. I have $50k in the bank, earning 2% a year. I leave it there, take the dealer offer of 0% finance. A (diminishing) proportion of my $50k stays in the bank, earning interest, while I'm driving around in my $50k car for a few hundred $ per month. Simples.

Anyone that believes they are getting a good deal with 0% finance are just being fooled. 0% finance just means you pay an inflated sale price. If you offered to buy the car with the cash you would get it for way less money. 0% finance is just a gimmick ;)

Alan2005 Apr 5th 2013 4:51 pm

Re: Advice on 4X4 lease and types.
 

Originally Posted by jossie (Post 10642122)
Anyone that believes they are getting a good deal with 0% finance are just being fooled. 0% finance just means you pay an inflated sale price. If you offered to buy the car with the cash you would get it for way less money. 0% finance is just a gimmick ;)

It depends on how the dealer is incentivised doesn't it. I was offered a bigger discount for taking 0% finance than they were willing to give for cash. I actually wanted to pay cash, but it didn't make any sense to do so. This was a while ago now though and the credit environment is different today.

Aviator Apr 5th 2013 5:19 pm

Re: Advice on 4X4 lease and types.
 

Originally Posted by mohtechnix (Post 10642007)
How do you earn interest on your money from financing? educate me

I borrow the money from the manufacturer at 0% and invest my money that I would have used to pay cash for the vehicle. If I can get 2.5% return on my money (which I can right now), even after tax I am ahead of the game.

Aviator Apr 5th 2013 5:21 pm

Re: Advice on 4X4 lease and types.
 

Originally Posted by jossie (Post 10642122)
Anyone that believes they are getting a good deal with 0% finance are just being fooled. 0% finance just means you pay an inflated sale price. If you offered to buy the car with the cash you would get it for way less money. 0% finance is just a gimmick ;)

I have managed to get both a discount and dealer financing at 0%. It is all about the math and each individual, some make it work, some don't. Some even pay the ridiculous 'documentation fees' charged by a dealer.

jossie Apr 5th 2013 6:10 pm

Re: Advice on 4X4 lease and types.
 

Originally Posted by Aviator (Post 10642186)
I borrow the money from the manufacturer at 0% and invest my money that I would have used to pay cash for the vehicle. If I can get 2.5% return on my money (which I can right now), even after tax I am ahead of the game.

But your vehicle is depreciating rapidly so either way you are losing money as a vehicle is just a rapidly depreciating asset. Take the 50K, spend 5K cash on a half decent used vehicle and bank the 45K and then bank the monthly payments that you would have been paying - wouldnt that be the best way to go?

Oakvillian Apr 5th 2013 6:26 pm

Re: Advice on 4X4 lease and types.
 

Originally Posted by jossie (Post 10642287)
But your vehicle is depreciating rapidly so either way you are losing money as a vehicle is just a rapidly depreciating asset. Take the 50K, spend 5K cash on a half decent used vehicle and bank the 45K and then bank the monthly payments that you would have been paying - wouldnt that be the best way to go?

Now you're just being silly :p. I doubt there are many people for whom our hypothetical $50k car is a seriously-contemplated option would be happy stepping into a $5k beater for a year or two. Sure, a new car depreciates. For some people that's a financial burden worth bearing to be seen driving a brand new car. For others it's more about the warranty/servicing/reliability of a new car. For most it's probably a bit of both.

Aviator Apr 5th 2013 6:43 pm

Re: Advice on 4X4 lease and types.
 

Originally Posted by jossie (Post 10642287)
But your vehicle is depreciating rapidly so either way you are losing money as a vehicle is just a rapidly depreciating asset. Take the 50K, spend 5K cash on a half decent used vehicle and bank the 45K and then bank the monthly payments that you would have been paying - wouldnt that be the best way to go?

It is less about the depreciation and more the cost of ownership. I buy decent new or dealer demo, keep them for 15 years, do all the regular maintenance, do low mileage. My cost of ownership is likely less than someone buying an older car every couple of years. I seriously doubt you would get a half decent vehicle for $5k, more likely something needing money spent on it from the beginning.

A half decent used vehicle is closer to $10k.

Someone changing new cars every three years is sinking money into a hole. I have an old VW, cost me $10k new, excluding running costs, which occur whatever, it has cost me around $500 a year so far.

My pick up is newer, but I will hang on to it for as long as it is going.

mohtechnix Apr 5th 2013 7:34 pm

Re: Advice on 4X4 lease and types.
 

Originally Posted by jossie (Post 10642287)
But your vehicle is depreciating rapidly so either way you are losing money as a vehicle is just a rapidly depreciating asset. Take the 50K, spend 5K cash on a half decent used vehicle and bank the 45K and then bank the monthly payments that you would have been paying - wouldnt that be the best way to go?

What people choose to buy or do with their money shouldn't be really your cup of tea Jossie. I came on here to seek advice on the most viable way to finance a car I believe I can afford, not advice on how to spend my well earned money. Thanks

Geordie Lass Apr 5th 2013 7:47 pm

Re: Advice on 4X4 lease and types.
 

Originally Posted by mohtechnix (Post 10642081)
Thanks. It helps, but would appreciate if you elaborate on:

What was the interest rate?

Was this from Mazda or an independent dealer?

Was 40% the minimum required due to your lack of credit history and if you don't mind what was the car worth at the time?

Thanks

From Mazda.

No it's what we wanted to put down because we wanted the payments under $500 a month.

I would have to look at the paperwork but it was worth the sale price of a brand new CX5. He got a ton of stuff thrown in - that stuff the paint under your car to stop corrosion, to come back and get winter tires at trade price and a brilliant warranty which living in Alberta we wanted peace of mind. You can't be doing with your car breaking down in minus 30!

jossie Apr 5th 2013 7:53 pm

Re: Advice on 4X4 lease and types.
 

Originally Posted by mohtechnix (Post 10642405)
What people choose to buy or do with their money shouldn't be really your cup of tea Jossie. I came on here to seek advice on the most viable way to finance a car I believe I can afford, not advice on how to spend my well earned money. Thanks

My apologies, i thought you came on here to let everyone know that you are buying a BMW that you cant afford. If you can afford it then why are you financing it ?? Was just trying to offer some advice. Even the founder of Ikea runs around in an old Volvo.

mohtechnix Apr 5th 2013 8:54 pm

Re: Advice on 4X4 lease and types.
 

Originally Posted by jossie (Post 10642437)
My apologies, i thought you came on here to let everyone know that you are buying a BMW that you cant afford. If you can afford it then why are you financing it ?? Was just trying to offer some advice. Even the founder of Ikea runs around in an old Volvo.


Abdolute bananas. You clearly haven't read my original post or other contributors post before sticking your nose into something you have absolutely no clue on. I did warn against people like you, do I give a monkeys what the owner of IKEA drive? WTF I mean what's that got to do with me for heaven sake? Get a life will ya!

bats Apr 5th 2013 9:41 pm

Re: Advice on 4X4 lease and types.
 
I just want to post something to annoy the OP who I find intensely irritating and full of it. But that would be wrong so instead I will comfort myself with the thought of his Beemer dancing in the snow.

Alan2005 Apr 5th 2013 10:07 pm

Re: Advice on 4X4 lease and types.
 

Originally Posted by mohtechnix (Post 10642531)
Abdolute bananas. You clearly haven't read my original post or other contributors post before sticking your nose into something you have absolutely no clue on. I did warn against people like you, do I give a monkeys what the owner of IKEA drive? WTF I mean what's that got to do with me for heaven sake? Get a life will ya!

Don't listen to them. With a BMW you get what you are borrowing money to pay for after all.

jossie Apr 5th 2013 10:09 pm

Re: Advice on 4X4 lease and types.
 
1 Attachment(s)

Originally Posted by bats (Post 10642588)
I just want to post something to annoy the OP who I find intensely irritating and full of it. But that would be wrong so instead I will comfort myself with the thought of his Beemer dancing in the snow.

Me too :p

Geordie Lass Apr 5th 2013 10:14 pm

Re: Advice on 4X4 lease and types.
 
With the risk of getting into an argument (which I don't do on the internet - can't be bothered - or in real life actually...)

Aren't BMW's rear wheel drive?

Do they have the capacity to change to All Wheel Drive?

If not OP I would reconsider.... it's lethal out here when there is snow on the ground. Good winter tires are a must. I see people spinning around in the school car park and with my trusty Mazda tank I am in and out no spinning every time. I do have good winter tires tho.


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