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  • avatar texases 09/09/08 1:09 pm PST

    Let's look at your two options (I'm no expert on leasing, so remember that): Option 1, get somebody to take over the lease - could be risky, I have no idea what's involved in doing that, you could be on the hook if they default. Option 2, sell used car with money still owed on a loan- also risky if you take anything but a short term loan because you could end up 'upside down', where you owe more than the car is worth. How's this for a different option: lease a recently-returned car (off of, say, a 2-year lease) for 12 months at a time? Lower risk, lower payments.

Answers

  • karjunkie 09/09/08 11:03 am PST

    Go to Edmunds.com buy versus lease calculator at

    http://www.edmunds.com/autofinance/inde
    x.html

  • texases 09/09/08 11:45 am PST

    With those criteria (same price vehicle, know you have to get rid of it in fixed amount of time), leasing might be better. However, you say you won't need it in '12-24 months'. Is it 12, or is it 24? If you lease, you have to commit to a period. If there's uncertainty in the period, you could end up with an undesired obligation. If so, I'd rather buy and sell.

  • fattysnax 09/09/08 11:58 am PST

    Thanks, Texases for the reply. You are correct and that is the debate I am having. I do not know for sure when I am moving abroad, depends on the company's needs. There seems to be an exit strategy with each option. Leasing: Find someone to take over the lease. Buying: Just sell the car before I need to leave. With these exit strategies in mind, the total cost to me over say, a 12 month period, is cheaper with a lease because lease payments are typically much lower than auto loan payments. Correct?

    WIth buying/selling, how does the bank factor in? Do I start with a 36, 48, 60, or 72 month loan knowing full well that I am selling the car in 12 months? 72 months will get me the lowest monthly rate so is this the obvious choice to minimize my total cost?

  • texases 09/09/08 1:09 pm PST

    Let's look at your two options (I'm no expert on leasing, so remember that): Option 1, get somebody to take over the lease - could be risky, I have no idea what's involved in doing that, you could be on the hook if they default. Option 2, sell used car with money still owed on a loan- also risky if you take anything but a short term loan because you could end up 'upside down', where you owe more than the car is worth. How's this for a different option: lease a recently-returned car (off of, say, a 2-year lease) for 12 months at a time? Lower risk, lower payments.

  • fattysnax 09/09/08 2:09 pm PST

    Yes both options do carry a certain amount of risk. I am a bit apprehensive about the whole selling process as it would be my first time and would probably have to be done under some time constraint. Your point about ending "upside" down is also of concern. I see how taking a 72month loan on a higher interest rate vs. a short term loan with a lower interest rate can increase your chance of being "upside" down in the end.

    A short-term lease on a used car would be the perfect option. I don't know anyone who has done this so I do not know if it's an easy thing to do. I don't think most banks offer used car leases and dealerships probably don't as well... will need to do some more research on this option.

    So if I had to act today, minimizing risk and total cost, my choices would be in this order:
    1. Lease used
    2. Lease new
    3. Buy used then sell
    4. Buy new then sell

  • simpilot1 09/10/08 4:24 am PST

    Let me present another option, a monthly rental. Google "monthly car rental" and get some online quotes. Avis calls them mini leases. Almost all of the rental agencies offer monthly rentals at rates that may work for you. Since you don't have a definite date yet this may be your best option. Turn it in at a moments notice, and you can switch cars anytime if you want a change.

  • canddmeyer 09/10/08 6:29 am PST

    Lease. You don't want to get stuck with a vehicle you can't sell or the hassle of selling on short notice, then having to worry if the cashiers check you accepted is any good. You may end up eating some lease payments, but your choices are minimal except for the monthly rental previously noted.

  • fattysnax 09/15/08 4:45 pm PST

    Thanks very much for your help, everyone. I actually decided to buy-out my current vehicle at the end of the lease. Lowest risk option in my opnion, since it's been my car from the very beginning.

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