Reasonable Amount For Car Payment?

Discussion in 'General Residency Issues' started by MD Dreams, Apr 16, 2007.

  1. MD Dreams

    MD Dreams Senior Member
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    ...on a residents salary? Only catch is that the car has to be All Wheel Drive/4 Wheel Drive due to region of country.
     
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  3. Bitsy3221

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    How much is your salary?
    How much is your rent/mortgage?
    How much will car insurance cost?
    How long is your commute? How much do you anticipate gas will cost?
    How much will you have to spend on health/dental insurance?
    Do you have a family to support?
    Do you have significant credit card debt?
    What other expenses will you definitely have?

    Rather than just try and figure out how much you can spend on a car payment, sit down and figure out a total monthly budget. There are some good resources on the web that can help you do this, but the most important thing is to look at all your expenses, including potentially overlooked/underestimated expenses (i.e. gas, parking, money for clothes, dry cleaning, haircuts, etc.), recognizing that you will obviously have to spend more on gas and potentially insurance on a SUV.

    Figure out "non negotiable" expenses, such as rent/mortgage, utilities, health insurance, etc. Then you can play around with what you have left and you will get a better idea of your spending range.
     
  4. mig26x

    mig26x Senior Member
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    Im going to be leasing for my three years or residency. I wont go over the 12,000 miles, lower monthly payments and I hope I dont go over the wear and tear limit on the contract.
     
  5. barelyawake

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    i thought leasing is such a bad idea. you could finance a car and will one day own it outright. with leasing, that is all it is - leasing.
     
  6. jashanley

    jashanley Senior Member
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    Depends on your salary and other costs as above. I know people who are swinging a $400 per month on car. Can be done if you defer/forbear loans and your living expenses are too high. I would say $250-350 range isappropriate.
    Your best bet, buy 2 year old car. Best bang for buck. Still new enough to not have major problems and old enough to have price deflated to a reasonable level. I have subaru outback. MPG fair, AWD awesome especially in snow. Can't beat it. Good luck
     
  7. DarksideAllstar

    DarksideAllstar you can pay me in bud
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    I agree with this. I have a car payment of $300/mo currently, and will have it for the first two years of residency. I will be living in one of the most expensive cities in the country and it will be feasible based on my predicted net income and expenses.

    I caution you about used cars. Lenders will typically charge a higher interest rate for financing a used car vs a brand new car, so take this into consideration when looking around. I bought my car new three years ago and got a rate of 1.9% for 5 years. I looked at a couple of used cars through the same dealer that were of comparable price and I couldn't get an interest rate below 3.5% (which is still very good by today's standards). So be prepared to have a little higher interest rate if you buy used.
     
  8. Mumpu

    Mumpu Burninator, MD
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    Leasing is a viable option in some circumstances. In my case, I needed a car but had basically no money for downpayment and wanted a lower monthly payment. So I leased for the duration of residency with the intention of buying out after the lease ends -- you actually end up paying less money total that way than if you bought outright. Depending on your living expenses (and don't forget the cost of car insurance on a new car -- comprehensive is quite pricey and can break $1000/yr depending on where you live and your record), under $300/mo should be definitely doable.

    Consider a non-4WD vehicle. My car is 2WD with traction control and stability control and last winter I could get up icy hills better than many 4x4s and never got stuck. Lighter cars also carry less momentum making them more controllable and less likely to skid or spin on slippery roads (despite all the bull**** car manufacturers advertise on TV, 4WD ONLY helps you accelerate -- you get NO benefit in braking or handling and no added safety if you start to skid, only a stability control system can do anything in those circumstances). As a final point, a cheap SUV would be American. American cars hold value like real estate in Baghdad -- worse depreciation means higher lease payments. If you are plunking down money for a Subaru, you can get a much nicer 2WD car for the same moolah.
     
  9. mig26x

    mig26x Senior Member
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    Yeah, Im planning on leasing because: 1- Dont have to give up a downpayment and the monthly payments still will be low. 2- I know I wont go over 12,000 miles 3- I can get a Murano for 310 dollars per month and that's sweet.
     
  10. mgdsh

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    While we're on the subject of cars: is there a such thing as too good of a car for residency? What I mean is, say you had worked before, had some business ventures or something like that and were able to afford a car nicer than most attendings. If one of the attendings or other residents saw it, would they look down on you or treat you differently as a result of it?

    *edit* I also agree with the leasing because as a resident it makes sense. When you're leasing for a period like 3 years you'll be in a position to get a nicer car 3 years later if you choose to do so. (also depends on what residency/fellowship route you're in)
     
  11. NinerNiner999

    NinerNiner999 Senior Member
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    Buy a 2-year-old used car with low miles and a warranty. You can do this without a down payment (finance it), your payment will be close to/cheaper than a lease, and you won't be restricted to scheduled maintenance ($200-400 per service). A car payment between $200-400 is a good goal. Of course, if you have a reliable car now, no car payment is the best thing...
     
  12. DarksideAllstar

    DarksideAllstar you can pay me in bud
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    To counter this point, a car with AWD or a truck with 4WD will do nothing for you if you do not have snow tires on it. It makes all the difference in the world. I have lived in Reno and Lake Tahoe where Subarus were popular with most people and everyone threw snowtires on during the winter months. I have a front wheel drive Honda which does very well in the snow/ice with cable-type chains. You can even by special set-ups that allow quick installation of cable-like devices so you spend minimal time with installation if and when you need better traction.
     
  13. Mumpu

    Mumpu Burninator, MD
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    True. Car and Driver tested summer tires on AWD vehicles in the snow a while ago and found that traction was non-existent.

    Niner, you are not tied to scheduled maintenance -- the only way a dealer/manufacturer can legally obligate you is if they pay for it. I can change the oil myself for $10 in 15 minutes, thankyouverymuch. A used car was not an option for me because I wanted traction control and stability control and these are very new features, especially on smaller cars.
     
  14. siempre595

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    There are a lot of online car payment calculators, I think there is one on yahoo even. They'll give a fairly accurate look at what you'll pay for what type of car over what range of time if you buy in whatever state. Try looking for those also.
     
  15. Dr.McNinja

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    A reasonable amount is take the amount of money you have after food and housing, and then figure out how much of that you want to spend on a car vs going out and getting drunk.
    $400 isn't terrible, I'm doing it, but my rent is also only $400. So it isn't going to kill you.
    One caveat, do not get into a 72 or 84 month loan. It isn't worth it, because even if you want to keep the car that long, if you wreck it anywhere between years 2-4, it will be worth a lot less than the loan. Unless you have gap insurance, it comes out of your pocket if your car is totaled.
     
  16. NinerNiner999

    NinerNiner999 Senior Member
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    Good call, and gap insurance is like $5 a month added to your car payment. They will do this for used cars too...
     
  17. DarksideAllstar

    DarksideAllstar you can pay me in bud
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    I agree--always get the gap insurance!
     
  18. Lizard1

    Lizard1 Member
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    during residency, i bought 3 new porsches and finally stuck with the last one. i also bought a ferrari near the end of residency as my "fun" car. my attendings never gave me grief nor did any cohorts.

    it's all about how you carry yourself - be cool and low key and everything will be fine. be flashy, showy and brag.....not only will your life be harder but others will essentially laugh at you. where do you think the "compensating for something" mentality came from.

    this applies to life too. be humble, be happy and be thankful
     
  19. mig26x

    mig26x Senior Member
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    Is gap insurance really that low per month?
     
  20. mgdsh

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    Good to hear, thanks. Definitely agree on the being humble part.
     
  21. ajce9

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    LETS SEE,

    Audi RS4, goes for about 66K.

    So around 1100 dollars per month should do it. :rolleyes:

    Oh, you will have to live in the call room. :eek:
     
  22. Mumpu

    Mumpu Burninator, MD
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    Why is it that general surgical residents always seem to drive the worst cars? If I see a mid-90s Chevy with peeling paint in the parking lot, it probably belongs to an R3. If it's a mid-80's Chevy, it belongs to the attending.
     
  23. Amgen1

    Amgen1 New Member
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    by definition, owning/driving a porsche or ferrari puts you in the "flashy, showy" category
     
  24. unagi2007

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    been looking into leasing a car too and found a good website where you can take over someone's lease. has anyone ever done that>? is that a good idea to take over what's left of someone's lease>? check out the website www.leasetrader.com

    thanks
     
  25. mgdsh

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    don't forget premium package, tax, gas guzzler tax, additional options (like a clear bra), and the fact that it gets about 18 mpg if it doesnt possess you to be a more 'spirited' driver
     
  26. mgdsh

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    Ehh, I don't really agree. Some people love cars for the quality that goes into them. I think it really depends on the color you get (say you get bright yellow... then thats asking for attention). But if you got a more neutral color in either, and you didnt blast your music or drive like an ass every chance you got... then a civic with an obnoxious paint job, spoiler, rims, etc could be much more flashy than a ferrari, porsche, etc.
     
  27. Mumpu

    Mumpu Burninator, MD
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    Considering that you can get the same level of performance from a four-door sedan for less than half the money, buying a two-door exotic sports car is definitely flashy. A silver $100,000 911 Turbo is still a $100,000 911 Turbo.

    Unagi, if you do take over someone's lease, read the contract EXTREMELY carefully. With penalties at the end of the lease like 2 cents/extra mile, you can get very screwed financially.
     
  28. WestcoastMedicine

    WestcoastMedicine Senior Member
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    DAMN, I wish my insurance was that cheap. As a new jersey resident, for a 6 year old car, with NO accidents and NOT A SINGLE ticket for any moving or non moving violation I pay $2,600 a year for insurance!!! and yes I did shop around for the best price
     
  29. NinerNiner999

    NinerNiner999 Senior Member
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    This thread makes me chuckle. You can buy a porsche or ferrari, lease an audi, and get the most expensive car you can afford, the have it lose 1/2 of its value in three years and become bored with it. Then, you can be tied down to a car payment after residency. OR, you can make a sensible decision now, wait until you finish residency and make an attending salary, and outright own just about any car you want. I personally would never sacrifice my ability to go out, travel, dine, drink, party, see friends, buy furniture, or provide things that make my life more comfortable when I have the time to enjoy it, instead of dumping what little salary I have into an expensive car that I will rarely drive and will lose money on. Just my thoughts...
     
  30. Dr.McNinja

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    Move. I pay less than $1K for two cars, a 2007 Jeep Wrangler and a 2004 Pontiac Vibe. Although I am married, but I'm still not very old (and neither is she).
     
  31. cdql

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    Awesome avatar! :D

    Out of curiousity, what does it say on the back of the clipboard?
     
  32. Dr.McNinja

    Dr.McNinja Nobel War Prize Winner
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    Chuck Norris with a red circle and slash.
     
  33. mgdsh

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    Haha wow, you really redefine performance with that statement. Please show me a car, more specifically a 4 door sedan that will have the same performance/class/style/engineering/exclusivity/etc as a porsche 911, bmw m5/m6, audi rs4/r8, maserati, aston martin, etc or any other car you'd find around the $100k range for half the price.

    And BTW, plenty of people who get cars like that actually don't buy them so other people notice. I know my fair share that have gotten cars like that in very neutral colors and even debadged em.

    Conversely, you could get any other car and put:
    1) obnoxious rims on it
    2) an obnoxious spoiler
    3) some fake badge
    4) get a truck and get some ridiculous lift
    5) drive around blasting your music

    Or any combination of the above, which would be far flashier.

    It's entirely possible to get a nice car and appreciate that for what it is and the elements that make it up (as mentioned above), including fantastic automotive engineering. The engines of the RS4/R8 and new M3 are absolute marvels.


    To some of us, having a nice car is enough to put a smile on our faces (and I mean like a grin ear to ear). Personally when I see my car every morning, I know that regardless of how my day will end up, that atleast I'll enjoy the absolute peace/pleasure of driving those minutes to and from.

    And again, like I mentioned above: some of us have either :
    1) wives/fiancees that work too
    2) have worked before
    3) have other business ventures on the side

    Personally, despite being in fairly good financial health at this time: I still find it amusing to see women carrying around $500+ purses that could easily be lost, stolen, stained etc. I also find it a lot flashier when someone wears something that blatantly says gucci, armani, prada, or some other top name brand flashed all over it. I always think if those people really enjoyed the quality that went into those products they won't need something that told everyone what they are wearing.
     
  34. Mumpu

    Mumpu Burninator, MD
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    Evo MR and Impreza WRX/Sti will run about the same lap times as any of the precious and overpriced BMWs and Porsches for a third of the price. A Corvette (esp Z06) would outlap any of the cars you mentioned at half the price. Even a V6 Accord or Camry would easily keep up with the exotics in traffic. The famed BMW engineering has never ever translated into reliability or build quality, the cars are fragile, and the masterpiece M3 engine burns oil like its Exxon Valdez.
     
  35. mgdsh

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    Yea so they might keep up in 'performance' after mods etc, but they will never have the handling/style/class/exclusivity/luxury of any of the aforementioned cars. You can take an old mustang and mod it to high hell and say the same thing about it. Again, its not just about 0-60 times or times around a lap. If that was the case, you're right everyone would just get a Z06 and keep modding that.

    But alot of those mods 1) void your warranty 2) add up in price; and that Z06 isn't all that cheap on the base price. It also doesn't exactly get the best gas mileage. But then again, everyone and their mother can get a Z06, impreza, honda, etc.

    *Edit* If all you want to do is have a great 0-60 and lap time, just get a little sport bike lol
     
  36. WestcoastMedicine

    WestcoastMedicine Senior Member
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    I grew up blue collar and I'm not trying to argue back and forth, but most people can't afford a Z06, hell even a $35,000 STI or G35 is steep for a large percentage of americans.
     
  37. Bitsy3221

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    I'm really not trying to start a flame war or single anyone out, but hypothetically speaking, someone looking to buy an outrageously expensive car (i.e. in the $100K range) that mentioned in another thread that they needed a job to start paying back student loans may want to rethink their automotive decisions.

    I only say this b/c I speak from experience. I love cars too, and I love getting in a car that I love every morning. When I was younger I bought a high end (not quite THAT high end, I am in the camp that still thinks 40-60K for a car is more than sufficient) car that I adored b/c I too thought I was "in fairly good financial health," but ended up getting screwed when major life changes arise. I will just throw out there that a residency is not a great time to get strapped down with huge unnecessary debt (i.e. flashy car, flashy house) if you are already sitting on a pile of student loans--we just don't have a great cushion as residents. If you married/invested well and can walk into a dealership and pay cash for a 100K car, then cheers. Otherwise, as someone already pointed out, it's probably better to be patient and wait until you can REALLY afford life's luxuries. Isn't it a sign of maturity to be able to practice delayed gratification?

    But FWIW, yes--those very few residents who were driving the Porsches and M3s at my intitution caught a fair share of flack (mostly good humored, though)
     
  38. mig26x

    mig26x Senior Member
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    So whats a reasonable amount to pay monthly for a car with a resident salary of around 48,000?

    Im thinking maybe 350 top?
     
  39. mgdsh

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    Yea, I guess a lot of it is perspective where you come from. I personally grew up in a pretty good part of California. You see dozens (if not hundreds) of Audis, Porsches, MBs, BMWs, etc etc here daily. The other day on the way to the gym (5 minute drive) I saw 3 Ferraris in 5 minutes (all were fairly new, or new too).

    From what I do know though, is that lending standards have become a lot more relaxed in previous years, making credit easier to achieve for most people (which is also part of the reason for the housing boom).

    Yea I supposed I should have worded it differently. My goal if anything else was to ensure I secured a paid position as I didn't want to have to dip into my savings to work for free. Alas, I'm studying to take Step III while waiting to see if anything opens up.

    I do appreciate you sharing your previous life lessons. I guess its a bit late for me in order to hold off on that gratification though. Hopefully I won't have to learn the hard way, but you're right, anything can change, esp during residency.
     
  40. pgg

    pgg Laugh at me, will they?
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    Funny, I've put ~50K miles on my E46 M3 and it has never once needed a drop of oil other than the scheduled changes (and two extra changes since I can't make myself go the "recommended" 15K miles between).

    In fact, the only things wrong with it are all the dents and scratches my kids have inflicted upon it by crasing their bikes or kicking soccer balls in the driveway.
     
  41. pgg

    pgg Laugh at me, will they?
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    Oh, and the time my 5 year old son "helped" me clear snow off the windshield by picking up a snow shovel and swinging it, baseball bat style, at the hood.

    But that's OK, the hood did its job and protected the masterpiece M3 engine.
     
  42. Dr.McNinja

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    Seriously, if you can't figure out your own budget, we can't help you.
    If only because I don't know how much you like to eat out, pay for rent, dress nicely, parking, insurance, and everything else that is applicable in this discussion.
     
  43. MD Dreams

    MD Dreams Senior Member
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    Another question I've been wondering about is the amount of time we will actually have to drive a vehicle during residency. I'd hate to buy a nice new car and have it mainly sit in the parking garage while I'm working all the time. Anyone have this experience?
     
  44. 2ndyear

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    Residency is a great time to lease. You'll have a good paying job when your lease is up, and you don't have to worry about maintenance. And you can drive way more car than you otherwise would be able to. You'll probably need a bit of a down payment for something really nice, but $300-$350/month will get you into a BMW or Audi. All wheel drive even. I leased a new 3-series BMW with all wheel drive and it's really good in the snow. Nice car. When I was looking I could have got a Honda Ridgeline for like $100/month! That's cheap.
     
  45. radonc

    radonc Senior Member
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    a subaru is a subaru
    a honda is a honda
    a toyota is a toyota
    and a BMW is a masterpiece of engineering

    i dont care if a rally car is as fast as a 50K car...it looks like arse.
     
  46. Mumpu

    Mumpu Burninator, MD
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    Hey man, I'm not trying to convince anyone to not buy a stereotypical doctor car. IMHO if you are going to spend that much money, get something that's actually special (a nice driver's restoration of a Jaguar E-Type or a Mark II 3.8 or a Toyota 2000GT) instead of a soulless mass-produced German panzerwagen.

    Pgg, lucky you. From what I hear the E46 engine has a rep for being a big oil burner.

    Mgdsh, in the real world people routinely use lap times to assess handling. The exclusivity of mass-produced cars is in the eye of the beholder. By "special," do you mean the $600 oil changes or the $1000 brake pads? Or the clutch that lasts 5000 miles? The jerky manumatic shifts? The inability to get a manual gearbox because the manufacturer thinks the owners are too dumb or lazy to shift their own gears?
     
  47. yankeedoodle1

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    if you lease a car and your car breaks down, does the leasing company take care of the repair cost/bill? i am hoping to take over a lease pretty soon, of a car which is under warranty, so does this mean i have to read the fine lines or is it ok to assume that the car is under warranty for repairs, etc if it breaks down before the lease ends

    also what kind of insurance should i get for a leased car, and what's a ball park figure for monthly insurance in california for a good driver?
    thanks
     
  48. NinerNiner999

    NinerNiner999 Senior Member
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    Leasing a car is no different than owning one, except that your payment goes toward the lease, not your ownership. Expect the same maintenance and insurance costs as any other car. And, when the lease is over, you can typically pay the residual value of the car (which is agreed upon when you sign the lease) or turn in the keys and give the car back. You do not get any value for the car (or the payments you made during the lease)....
     
  49. mgdsh

    10+ Year Member

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    Sorry, but quick update: an automatic car is by definition soulless. I also really doubt anyone who really is a car enthusiast would bother to get a panzerwagen.

    pgg: kudos to a good break-in on your ride.

    Lap times will never tell you how smoothly a car handles a turn and is largely dependent on road conditions / driver skills.

    Exclusivity is something that is definitely in the eye of the beholder, but most people would agree that certain factors definitely to pertain: # of units of that car produced, price of that car, other differentiating features vs other cars (esp in its class).

    The oil (10 quarters x $6+/q) and a $20 filter add up to at least $80 alone, but thats all an oil change costs. You can easily do it yourself at that point. I change mine. I agree brake pads are definitely expensive but how often you change those and the clutch are largely dependent on how you drive and driver skill.

    I personally don't like manumatic aka SMG/DSG. To me it's standard manual or nothing :) to quote a friend "I prefer to drive, not to be driven."
     
  50. yankeedoodle1

    2+ Year Member

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    thanks ninerniner. so then what does it mean when the car is under 'warranty'? i thought that meant if the car has any repair issues and is under 'warranty' then the leasing company will pay for the cost.
    also if the agreed upon car value was 25000$ and you paid 10000$ in lease over the 3yrs, would you then have to pay only 15000 to own the car--is that what you mean by 'residual value'?
    thanks
     
  51. 2ndyear

    2ndyear Senior Member
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    Here's the deal with residual value. The higher the value of the car at the end of your lease term, the less your payment will be. On the other hand this also means that if you decide to buy at the end of your term (and nobody does) then you'll end up paying more. You still need credit to get you approved for the full amount though.

    As far as warranty: On my lease, and most I believe, everything is covered. Oil changes, any maintenance at all, all lights and fluids, even windshield washer fluid. And I get a nice loaner if I have to leave it there.

    The downside of leasing and driving in general is in the miles. You pay for the miles if you go over your allotted amount. Most are 10-12,000 miles per year. I only drive on the weekends so no problem here. But if you have a commute or take over a lease you could end up very screwed.
     

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