Hey Everyone, My brother wants to get a Prius as well, but he is a little short on cash. He wants to own the vehicle(finance) but he doesn't make enough for the monthly payments. Leasing is a cheaper option. My question is: If he were to lease the car for 3 years, then buy the car after the lease is up - would he lose any money? Thanks!
Mathematically, if he negotiates a good lease, the answer is no or not much more than if he financed to begin with. However, if he can't afford the car unless he leases, that would indicate he can't afford the car at all. This would mean that the chances of him being able to afford the car at the end of the lease is low. Therefore, he has a much higher chance of returning the car and owning nothing after 3 years. I'd recommend he look into buying used vehicle instead. If the math says he can afford the payments for a 3 year old car after the lease is over, then he should be able to afford a used 2012/2013 Prius right now.
I agree with this advice. A 2013 Prius is still a great car a will be loads more affordable. Priuses have very good reliability and the cost of ownership is low. Even better, get a 2010 and save money for a year or two for a down payment.
itdepends on the financial times. have the dealers work out both prices and compare them. post details here if you want help. right now, its the perfect prius storm. prices are cheap, and financing is cheap.
Well my bros looking at a dealer that has this offer: Toyota Prius 2 Eco 3 years/36,000 miles MSRP: 24,800. Put 2,000 down(before fees), pay 240 a month taxes included. My brothers concern is this: Over the next three years he will spend a total of 10,000 on this lease. If he decides to purchase the vehicle after three years will the purchase price be more than 14,800? If so, he doesn't want to do that because he will be losing money since it would cost less financing it
I told him that, his only concern is the battery in the prius failing. He says they are expensive to replace
I have looked at leasing several times, and every time have had to ask the question, "What's in this deal for me?" No lease deal has ever looked even the least bit inviting once the spreadsheet comes out ...
they should be able to tell you what the buyout will be at the end of the lease. keep in mind too, when you lease, there is a mileage limit per year. if you don't buy, they will charge you for any extra miles. is LA los angeles or louisiana? the reason i ask is, cali gets a 10 year/ 150,000 mile warranty on the hybrid system, including the battery. louisiana gets 8 years/100,000 miles.
otoh, if he finances for 3 years, he's going to pay $700,/mo. plus taxes, even at 0%. or 5 years would be $400./mo. plus taxes. but remember, some serious deals are being made on 2016's, so, he shouldn't be paying more that 21 or 22k.
There's interest, so for sure the residual value will be greater. It's just math. There are 4 scenarios: 1. Lease and battery doesn't fail 2. Lease and battery fails 3. Used 2012 and battery doesn't fail 4. Used 2012 and battery fails. In scenario 1, he will have spent $10,000 after 3 years. He will owe around $15,000 if he buys the car. In scenario 2, the battery is covered under warranty and he will have spent $10,000 after 3 years. He will owe around $15,000 if he buys the car. In scenario 3, after 3 years, assuming the same $10,000 payments, he will owe about $5000 on the car. (2012 used Prius is going for around $15,000) In scenario 4, the battery is covered under warranty. Assuming the same $10,000 payments, he will owe about $5000 on the car. I'm assuming LA in your profile means Los Angeles, CA and the battery is warrantied for 10 years or 150k miles. Even if you don't live in CA and it's not covered by warrantied, It costs $3500 for a battery replacement. That is still better off than having nothing after 3 years in scenarios 1 and 2 and owing $15,000 instead of $5000 to buy used. Go tell your brother to get his head out of new car euphoria and get back to affordable reality.
The other thing to consider is a used PiP - plug in Prius ...we are expecting to hear in June the status of the green HOV sticker program. Used PiP values may hinge on how PiP is handled in the revised HOV program.
