thinking about leasing or buying a 2010 Prius, should I wait?

Didn't they say the Kelly estimated a drop of 4-5% drop in value in affected models?

The dealers are hungry now. I would take advantage of that a negotiate at least 5% off list price...

Also, I leased the car myself. I think the hybrid/electric car scene is going to change significantly in the new few years, and resale will be very unpredictable.

 

That's seems like a good deal. Better than than what I got anyway. I leased it last July and I thought I got a good deal for $308 including tax, zero $ down, and 12K/yr for 36 months.

 

That's hard to say if it's a 'good deal' or not, especially if we don't know what package/model the car is and what options are on it. Don't go by the "low" monthly numbers they give you. You want to work on negociating and lowering the price of the car, then that'll help lower your monthly payments and/or drive off fees.

 

Agreed.

There are so many moving parts in a lease (many of them specific to the local taxing authority), that asking if somebody got a good deal is pretty much a waste of time, unless they list every variable--and at that point who's going to bother analyzing it?

 

OK--I'll correct you.

My county in CA has 9.5% sales tax. Some areas of the country (Oregon for example, and others) have 0% sales tax. And some states require you to pay sales tax on the full purchase price of the car, whereas others only tax you on the "part" you use.

 

The local dealer here has $199 a month lease with $2,500 down for 3 years. Residual is $15,900.

 

A lease is never a good deal. Some people will claim is a better tax write off. This is not true. It is easier not better.

Going through a new car every three years is always a bad deal, buy or lease.

 

This is an old argument we've had before...but I'm not going to let misinformation go unanswered.

My accountant with 40 years experience disagrees with you. For some people leasing really is a good deal. When compared financially with keeping a car 10 years of course its a "bad dea;" but thats comparing apples to oranges. People who are attracted to leasing aren't going to keep a car that long anyways.

Better tax write off nowadays is a relative, there are so many credits for buying new cars and ways to depreciate a large portion upfront it can outweigh the benefits of a lease from a tax standpoint. That won't last forever though.

If someone is going to trade cars every 3-4 years anyways AND can write the lease off for business leasing can save them money and it simplifies things a great deal.

Its not for everybody...but it is for some people. I own both our cars outright but when it comes time to replace the Lexus which I use for business, unless there are ways at the time to take a lot of depreciation upfront I will definately lease.

 

The financial expert on CNN (Clark Howard) daily talks about two really bad investments.

Buying Annuities (biggest rip off in the world)
Leasing cars

Does your account recommend annuities? If he does you should get a new account very fast.

If someone has their house paid for. Is investing 15-20% of their income in retirement investments and they want to waste money by getting a new car every 3-4 years, good for them. These people typically pay cash for the car.

If you still owe on a mortgage, owe on credit cards, not investing in retirement and you get a car ever 3-4 years then it is a different issue. You are making bad financial decisions. There are a lot of people that do this. When they are in their 60’s the look back and wish they would have done things different.

99% of people that lease, turn the car back in and get a new one after 3 years. They eat the majority of the depreciation of the vehicle every three years.

 

Lease - cars are changing so quickly now that in 3 years it would be nice to have a choice to pick up what you have at the residual or get something even better on gas than the present car. Besides at $199 per month and all repairs and maintainence free , its a good deal. You might be forced to buy the extra miles over 36,000 at .15$ if you decide to turn it in, so that is a factor.

 

Rule #1 – Never buy a car on how much it will cost you a month.

 

Rule # 2 - Ignore Rule #1 if given all the constraints, a Lease is a better long term deal for you. Given a guarenteed residual value, the ability to do a 5 year loan for the residual on top of the 3 year lease means you can spread out the payments over 8 years as you use the vehicle up, and as the price of gas rises as well, the Prius being the most fuel efficient presently available will help pay for itself. My 2000 Insight paid for itself in gas savings over its 260,000 miles of my ownership.

 

My last car was a 2000 Toyota 4Runner. I kept it for 10 years and put 305,000 miles on it. I did not pay for gas, the company I work for did. I paid cash for it the day I purchased it.

Who do you think paid more in fees over the years? I paid zero fees and zero interest over the 10 years.

Using your logic you will have lease fees and interest for the first 3 years of the lease. Then new loan fees and more interest over the 8 years. If you have to finance a car for 8 years you cannot afford that car.

 

If you* can do the math, do it. Then add in the qualitative differences and make a decision.

If you can't do the math, buy.

You buy because
- purchase - resale < lease
- AND purchase < lease + residual

Without tax advantages you'd need all of the following for leasing to be better than buying:
- You'd sell or trade the car for a low price.
- You'd be low mileage so paying the minimum lease payment
- You wouldn't negotiate a sub-MSRP price for buying the car
- You'd be borrowing to buy the car at a relatively high interest rate yet would still qualify for a low lease price

In other words, leasing is better if you constantly make bad financial decisions.

* ... or you have an accountant and your accountant...

 

If price is the only concern then wait till the dealers have the 2011 model in stock, so they unload the leftover 2010's. I wanted a well equipped V version and they are not plentiful. If color matters to you then you need to buy sooner, if not take whatever is left of the 2010 model.

Of course if gas prices escalate the Prius prices will rise to the incresed demand that always creates.

 

Well put. The world is full of people that constantly make bad financial decisions.