Quote:
Originally posted by 350HP930
Brake jobs, waterpumps, cv joints and many other regular, non-catastrophic types of repairs all cost less than the typical car payment and occur much less than once a month if you buy a car that is in good shape.
Sure, its a crapshoot but taking a bath on the cost of a used car that suffers a catastrophic failure will still be less than the loss one takes due to depreciation on a new or slightly used car.
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I don't think $159/mo + tax is a typical car payment, and many repairs will cost more than say $172 to one who doesn't do their own work and needs their car everyday.
The Honda lease:
FEATURED SPECIAL LEASE: Closed-end lease for 2005 Civic Value Package with Automatic Transmission (Model ES1635W). MSRP $15,675.00 (includes destination). Actual net capitalized cost $13,477.56. Dealer participation may affect actual payment. Taxes, license, title, registration, documentation fees, options and insurance extra. Total monthly payments $5,724.00. Option to purchase at lease end $8,464.50. Lessee responsible for maintenance, excessive wear/tear and 15¢/mile over 12,000 miles/year.
The total depreciation (adding back the $999 down) is around $6,600 including the acquisition fee = $2,200/yr. It's hard to drive anything decent that will cost less than that, and for that you get a new car under warranty that's going to cost little more than oil changes.
On top of that, the lease factor works backwards to a 2.2% APR equivalent. Her mom's Escort for $1,000 is probably a great deal; in general it's hard to find a reliable used car for less than $3-5K. For each $1,000 more she puts down on the Honda lease, the payment drops by around $28/mo, so with a total of $5K down she'd be around $88/mo on the payment. At least all her money would be going to something of value, as opposed to keeping some turd running. New cars that hold their value, at the right price with good incentives don't cost that much more than a used car.