From: cooper@seismo.CSS.GOV (Dale Cooper)
Newsgroups: misc.consumers
Subject: Re: Pathfinder lease advertisement
Date: 23 Nov 92 20:17:01 GMT
Organization: Center for Seismic Studies, Arlington, VA


In article <92328.094954MARK@wvnvm.wvnet.edu> MARK@wvnvm.wvnet.edu writes:
>
> In last Fridays USA Today (November 20th) Nissan advertises their
> 1993 Pathfinder XE 4WD w/ Sport Package for $299 month on a closed end
> lease...

Without going any further you must ask yourself two very important questions?

	1) What are the real benefits of leasing a car vs buying?

	2) Is it any concern that I will have nothing to show
	   for my $299/mo. payments after X months?

The first question will help you understand the difference between "renting"
an automobile (which is pretty darn close to what you will actually be doing)
and actually owning the vehicle.  If I was a business man and I intend on using
the car in my business, I can usually deduct the lease payments as a business 
expense.  For this reason alone, leasing is a great option.  No fuss, no muss.
at the end of term, I hand over the keys and the car, pay a few "use and abuse"
charges, and I'm outta there.  However, if I am going to use the car for 
private use only, the tax benefits just aren't there.  I will be tossing $299 
out the window every month...$10,764 plus the prepaids (@$1600) at the end of 
the 36 months...

The second question actually relates to the first.  Obviously, if you can't
write the $299 off as a business expense, you have to ask yourself if having
nothing to show for your 36 months of trouble means anything to you. Personaly
when I shell out several thousand bucks out for something, I like to have 
something to show for it.

Getting down to the dimes and pennies...let's get an estimate of how much money
you would spend on this car if you took it to term, and then decided to buy
the car after the 3 year lease.  Lessee, with no money down (since you weren't
putting any money into the vehicle during the lease), you are now saddled with 
yet another 3-4 years of payments (and what will the interest rates be in 3 
years?  I'll leave that to the pundits).  Yep, now you're buying a 3 year old 
truck for $13,302.  OK, that means that after all is said and done, you will 
have paid $10,764 plus the $1,600 prepaids plus $13,302 plus interest (assumimg
9.9%)...that comes to $25,600+interest (approx. $1500.00) and that all comes to
(drum roll please) are you ready for this kiddies?...  

	$27,100.00!!!  What a deal!  For a Pathfinder?  Pullleeeze

Is this what you want to pay for this car?

> In reading the fine print for this add, it states the $299 month
> is based on a M.S.R.P of 22,935.00 including freight and destination
> charges, less dealer capital cost reduction of 1,298.00 and a non-refundable
> pre-paid rental reduction of $1,298.00.  Actual captilized cost of
> $20,689.00 includes a non-refundable acquistion fee of $350.00.

OK...

> Total of monthly payments 10,764.00. First month payment of $299.00, a
> refundable security deposit equal to one months payment rounded to
> the next $25.00 increment , the non-refundable pre-paid rental deduction
				  ^^^^^^^^^^^^^^
I love that word!

> of 1,289.00. Purchase option may be available at end of lease for $13,302.30.

OK...

> So if you were to lease this vehicle you would pay the following prior to
> driving it home
>
>                $1,298.00    pre-paid rental-reduction
>                $  299.00    1st months payment
>                $  324.00    security deposit + $25 increment
>               ===========
>   Total   =   $1,921       to lease vehicle up front

My prepaids calculation is 1,900-300 (1st mo. payment)... ($1600)

>My question:  Are the numbers in this add concrete, no negotiation allowed
>             to lease this vehicle, or are they just used as an example
>             to attract customers to think about leasing.

As long as the two parties agree, ANYTHING is negotiable.  It appears that
the numbers they use are helpful in getting to the $299 quote.  No more.

>             From what I
>             have been told by other folks who lease. They only were
>             required to pay the first months lease payments and a security
>             deposit equal to 1 months payment.  They also were able to
>             negotiate the actual selling price of their vehicle prior
>             to leasing it.

Like I said.

>It would seem to me if I had to pay almost $2,000 to lease this vehicle I
>my as well put the $2000 towards a down payment and flat out buy the vehicle.
>(Plus I could negiotiate a price).

Again, that depends on what you want to use the vehicle for.

>In leasing a vehicle to most companies
>pay the suggested retail price ?

I'm not sure I understand your question...

>I would be interested to hear other folks experiences if they ever leased
>a vehicle(payments required, were you able to negotiate price, bank leased
>or auto makers credit company, etc).

Yes, I've leased and I will NEVER do it again.  It is a rip off and a great
way for automakers to make a sh*tload of money.  Look what they get.  $299
per month plus the prepaids and the car back in three years.  What do you
get?  YOu get to pay the $299 per month, the prepaids AND any "wear and tear"
costs at the end of the lease term.  Oh, by the way.  If you die, whoever is
your legal heir gets to pay the remaining lease obligations.  No negotiation
there, BTW.  READ THE CONTRACT!  If the car breaks?  YOU FIX IT.  Titles, tax
and tags?  (In Virginia at least) YOU PAY IT (one way or another).  What do you
have to show for it after the 36 months?  Guess.

My personal situation:

'91 Ford Explorer XLT
Leased for 16 months, broke the lease after 16 months after I got sick of
paying so damn much and bought the car.

Cost of vehicle at negotiation, $18,500.

Lease costs:

$500 security deposit
$489/mo for 36 months

Negotiated to get out of the lease and buy the truck for $16,000.

Downpayment $1,000.
new monthly payment:  $366  (16,000@7.9%)

Monthly savings...$123.00  That's a ton of beer!

>Please mail all responsed to me since our news feed does not always function
>correctly (about a week behind).
>
>
>                           Thanks in advance
>
>                           Mark.

My advice to you is to whip out your calulator and do the cost analysis 
yourself.  I expect a Christmas card...

Don't lease, buy it!   Just my $0.02

Hope this helps.

Dale Cooper
Center for Seismic Studies
Arlington, VA

Newsgroups: misc.consumers