james.bond

My last car, 2015 Audi A4 Premium Plus I brought [I do not finance I just buy them out right], this one I would have to pony up anywhere between 16k - 21k US dollars in addition to exchanging my 2015 A4 which I am not so happy about because I could buy a brand new car with that. Would it be better just to lease it? I generally drive about 5 to 7 thousands miles per year.

plat27265

My opinion is based on my experience with buying a car and then leasing one. If you have the money to spare, I would say buy the car outright. Instead of paying interest to someone else, just finance yourself at 0% interest. It is convenient at lease end to just surrender the car and take another one but it will be an endless cycle of leasing and paying someone interest to loan you money. If you are someone who does not keep cars for more than 2 or 3 years then leasing makes sense. If you, like me, tend to keep cars for more than 6 years, it is best to finance yourself if you have the money to spare. This is only a good idea if you get a car with a good resale value since you want to break even or make a bit of money when you get rid of it. Do not self-finance a car that has very poor projected resale value.

Erasmus354

Generally it is better to finance (either through a loan to purchase, or lease) because the interest rates on new car purchases are lower than the rate of return you are likely to see with investing. So if you have 45k to buy the car outright, it is still better to "pay interest" to someone and invest your 45k than it is to buy the car outright.

james.bond

I agree. I make more interest in the equity market than I will either by taking a loan for a car or a house [which incidentally, I am purchasing this year- was going to pay for it all by liquidating some of my portfolio until I engaged in some DD and determined that the interest rate and the historic house appreciation of 3% can be easily be overwhelmed by the 8% - 10% lifetime in mutual funds or even higher in several equities]. Since I decided to take out a loan for a house instead of paying for it, I discovered taking a car loan [for the difference I owe] will automatically lower my credit score significantly which I do not want to engage in. All of a sudden it will appear that I have a debt [right now I am debt free since I almost always purchase items from my financial accounts]

JD15

Why did you decide to trade in the 2015 so quickly? Obviously, you are going to take a bath on your car if you buy and trade in after one or two years.

VM

Planning to lease mine.

Why? Given the fairly high (by Canadian standards) residuals on the B9 right now, you only come out ahead buying it if you keep it about 8 years... (maybe a little more/less depending on how much is paid in interest, the cost of any extended warranties or major repairs, etc)

And if you're going to keep the car 4-5 years... well, let's just say that I'd rather hand the keys back to Audi Finance and let them deal with trying to sell a blue car with grey interior rather than have dealers tell me "oh, but you know, most buyers of used Audis really like white/black/grey cars with black interiors, so we can only offer you $4000 less than we would a base model black-on-black car"? And as for trying to sell it privately - good luck getting anything close to the residual if you can't offer CPO warranties, financing, etc. I just can't imagine there's a huge private market for a $30K (CAD) 4 year old car in a somewhat unusual colour/equipment combo...

Nullman

I buy my cars, because I tend to keep them 5-7 years. I plan to do the same with this car, but my salesman does want to at least discuss leasing with me. He said he could CPO it at the end of the lease and get my warranty extended. I don't think I'll bite though if the lease payments + residual = much more than I want to just buy the car for. If I purchase, I may finance some of the amount for a few years.

VM brings up an interesting point about about color combo and resale. I've not had that happen though, them offer 4k less because it was blue and not black.

As for whether it would be better for you to lease... If you plan to get rid of it in 2 years again, I'd say yes.

plat27265

That's the general thought and I agree with you both. However, it is rare nowadays to realize an 8% to 10% interest gain in mutual funds because the market is so fickle. Also, those interest rate projections that the mutual fund advisors sell to you are just expected interest rates if the market is performing well. It is not a guarantee or a hard rule. Can you honestly say that 10 years down the road, your mutual fund investment will make, at least, the claimed 8% interest? No way. Not at this day and age.

james.bond

Features that the 2015 model does not have, Audi navigation and speech recognition is terrible [Audi or any other car company has no business in making their own navigation or voice command systems], I can not use it, have to use my mobile instead. Sirius XM Traffic tells me I am in traffic when I am already in it, the Google Maps on my phone tells me 5 to 7 minutes before I even approach the traffic. I was told the INRIX is the best or close to it. T-Mobile HSPA is too slow, The Audi Q7 when I tested it was lightning fast. I wanted some semi autonomous features, the 2015 mobile does not have.

Paying 48,000 in cash the car back in 2014 the car is VERY loud, engine and wind noise are there, the Road noise is unbearable. I like a very quit cabin without having all of the outside noise seeping into the car when I am driving.

The list is long.....

SFV A4

I have heard the "use your money to invest in something else during the life of car payments," but in reality, most people do not invest the money they save from a car purchase or car lease. We are not savers or investors. We are consumers and spenders. When given "extra" money, nine times out of ten we will spend it.
A more realistic final approach would be to either spend it on a car, or spend it on another object- whichever item may be most important to you.