I'm looking to get replacement for my current Mini Cooper. I'm thinking in terms of getting a much less option loaded MC, for a monthly payment (60 mo. term) that would run about $330, or so.

Or...lease a more desirable, still less option loaded (but just fine by me based on my current options), MCSa for about $360/mo., over a 48 month term. Down payment would be the same in either case so it doesn't matter, and that's a term based on 15,000 miles a year, because I do drive a lot of miles every year. (Less these days, thank God.)

Now, the thing is, I'll likely be leasing to own, eventually. This is what I did with the car previous to my current MC, but then the Mini Cooper came along, and...the rest is history. So, I didn't buy that car, and turned it in instead, costing me an extra $2,500 in over mileage fees. If I bought that car, it would have run me $200 a month for a whole 4 more years! But, that's not bad (she was in good condition)...until the Mini came along.

Anyway, I think I'll be ok in either case, but I'd like to know if the Mini's higher resale value, or factors of that nature, make the lease idea a bad idea. An MCSa for $100 less a month now than I'm paying for my current MC sounds enticing, but I could buy that less loaded out MC for about the same money per month, and own the car at the end of that term...which is 2 years longer than the lease. So...

Well, what do you think?

I enjoy the MC (a CVT model), and I'm sure I'd enjoy an MCSa more, but I need to think seriously about how much it will all cost me either way. I'm definitely more concerned about monthly expenses, as that's just how I live.

Another issue, one that could make a big difference, is how much more I'd be paying in auto insurance. I pay about $2000 a year now, which is about what I payed when I had my Toyota RAV-4, so that's not bad. (Though less would always be better.) The MCSa will be more, but how much more by comparison?

If it helps any, my income is only in the $2,000 a month (after taxes) range. That might give you a better idea where I stand financially. There is no plan on my part to buy a house anytime soon.

 

I want from a MC CVT to a MCSa. I went from a leased MC to a MINI Select MCSa. I got out of the lease easily and early because the car was worth what I owed .

Also I went with the MINI select because its like a lease only better. There is no mileage to worry about . It works that your loan is only the amount they forcast the car will depreciate over the time of the loan. Only catch is the interest rate is high . But it worked out cheaper for me over a lease or standard loan.

Insurance:
My car insurance went up $1 a month with the MCSa. But it depends on your insurance company. I ordered my car and in the time I waited I grabbed a VIN off a similar car and took it to my agent and asked for a qoute. So I wasn't surprised when it came in.

 

What kind of terms did you have for the Mini Select lease? Higher interest rates don't sound attractive, and if I'm planning to buy at lease end (but who knows what the future may bring, eh?), then I'm not sure I should be concerned so much by not having to pay for extra miles used...since I wouldn't pay for them if I buy. (I do still drive a lot of miles though, so it's not a non-issue either, if I end up not buying at the end of the lease.)

From what I'm reading on the forums, it sounds like the dealerships really try to jack you on a lease. I'm planning on going through Classic Mini in Ohio, and they have a good reputation, so that might not matter so much.

That's good news about the insurance. I'll see if I can get an estimate quote from my agent, just to get a better idea what it'll really cost me. I use Farmers Insurance.

There is an interesting statement somewhere here on the forums that if you are contemplating a lease (unless it'll work out to be a great tax right off), you are likely looking at "too much car", and you should reconsider what you are doing. I don't think that is bad advice, but I'm not sure it applies to me, because...any car is always too much money!

(A truly affordable piece of transportation equipment for me would be a motor scooter, but I don't think my passengers would enjoy that during a snow storm. Neither would I.)

I was thinking of going for a 48 mo. lease term, as that drops the monthly cost just that much more, but I wonder if that affects the residual cost if doing a lease to own plan. Any idea?

Oh, by the way, thank you for the prompt response. God, I love this site!

 

With the MINI Select I went with they gave me 7.99% interest. High I know but they said went with the Select. So the loan was like $16k for 48months which worked out to be $410/month for a MINI that was just over $33,500.

After the 48months you have the option to turn the car over or pay a balloon payment which is the remainer of the car's value. I'm only 3 months in and love my car. I don't know what I will do in the end. But this was my way to afford alot more car with a budget just a bit bigger then yours. Single and no plans to buy real estate in the next few years.

Oh and my insurance is just about $700/year more then yours and I am will Allstate with super high "cover your butt" extras on my policy. To but it simply.

 

Billy ...

I tired to do the same recently, going from a CVT to an MCSa ... the dealer was going to give me a good offer on the trade in of my 03 MC and keep the monthyl payment on the MCSa the same as I had on the MC ... based on the trade in value. I decided to wait however for the 07's

Personally, and no offense to anyone here, leasing a MINI does not make sense to me. The resale value is far to great for it to want me to just spend money every month with no return.

In a little over 2 years I paid of half my car, have some $10K left to pay ... but the car is still worth about $15-$16 today.

 

The reason a Lease makes sense to some is because your loan (lease) is only for the forecasted depreciation of the car over the time of the loan(lease).

So with that the monthly payments are more enticing to people who just want a car for say 12-48 months.

 

I'm going to be the veteran voice of reason here. Leasing can make sense under some circumstances but you should never include a down payment on one. Generally speaking too, terms longer than 36 months do not favor a lease. If you do "lease to own" on the 48 months, you will end up paying a lot more total for your new car for the "convenience" of a cheaper monthly payment. If you can't really afford it now, wait. Trust me, I got into some really ugly car loan deals when I was younger and less aware.

 

But leasing can also be more expensive than traditional financing. I leased a car once before, and while it was a fairly good experience, I wouldn't do it again. Leasing works well for folks that own their businesses and can deduct the use of their vehicle as a business expense. But for the rest of us, leasing often times is a questionnable choice.

Now days most leases require you to put down at least 20% cash downpayment + other inception fees making it an expensive proposition from the get go. The auto industry and dealerships love leasing because they can entice their customers into purchasing vehicles that are well beyond their financial reach.

Leasing is a complex and often misunderstood process. I believe that buying outright is much cheaper provided that you are the type of person that keeps cars for along time.

Finally,another thing I don't like about leasing is that people get themselves on a never ending car payment tread mill.

 

However, even with such a high residual value, the lease rates (money factor) are also comparatively high - raising the payment. On another vehicle of similar price, you would likely be able to achieve a noticeably lower lease payment - even though it might not have as good of a residual value. So, the advantage of a lower payment through leasing is minimized. I've seen lease payments on a $30K+ BMW in the same range as a $25K MINI!!!

Frankly, if you are the kind of person who will get a new vehicle every 2-4 years anyhow, then leasing isn't necessarily a bad idea. If you plan to keep the car for at least 5 years, then just buy it outright if you can. It should cost you less overall - and the high residual value should work in your favor even better because of the equity you have in the vehicle.

 

If you're looking to keep the car long term as you say then you're better off buying rather than leasing.

 

The mini "lease" program is not a lease it is a loan with a balloon payment. This is so simple that even the Simpsons have made fun of the idea in their first season in the Homer buys an RV episode. Allow me to roughly quote:

Dealer: So you’re monthly payment is $350 a month... of course there is the crippling balloon payment.

Homer: But that's not until the end right?

Dealer: (with giant grin on his face) rrriiiiiight....



In essence the mini "lease" program is simply a 6, 7, or 8 year car loan. After the "lease" term is up and you want to buy the car you have the convenient ability to finance the "crippling balloon payment" for an additional 3 years. So if you "lease" the car for 4 years and then refinance for another 3 you are basically taking out a 7 year car loan. Does it seem logical to still be making payments on that new car you bought in 1998? If you can't afford to buy the car you want now why not just wait and save up some money until you have enough to make a down payment large enough to make the monthly payments manageable?

 

The MINI lease program is a lease program

The MINI Select (Owner's Choice) program is what you are referring to.

 

wait a minute... so with a lease I can write off my payments as a business expense? I was going to use my mini for a lot of business use anyway... and if this is the case it may sway me back to the lease.

well, off I go to call the accountant!

 

if that truely was the case, the MINI would be very innexpesive to lease ... as the depreciation is very low ... but this is not the case however.

if there was ever one car, that it is worth to get a loan out for over a lease ... its the MINI.

 

you don't have to lease to write off your car as a business expense ... i have been financing it and writing it off for the last 2 years.

 

I believe so. But check with your accountant first.

 

I went through a similar thing about a year ago, except I went from a manual MC to a MCSC. Got out of the lease of my MC after only a year and a half and wound up actually getting money back even though the car had 37k on it. Opted for the MINI select on the new MINI, although I probably won't own it for anymore then 2 years. I tend to get bored of a car and want a new one relatively fast (but it will be a new MINI not anything else).
I think insurance wise my payments went up $27 every 6 months.

 

A little bit of more reason here.

Your statement above is absolutely true. From Edmunds http://www.edmunds.com/advice/leasin...5/page001.html

" Leasing allows a person to drive a brand-new car and make lower monthly payments, thus making the "new-car experience" more accessible to more people"

Bottom line, your getting to much car. The real issue is equity. You lease and after 4 years what is your equity? You buy and you will have some equity. After 4 years would you rather have driven that stripped S and own nothing ... or driven the loaded MC and have, maybe $8 -10K in equity? (or whatever its worth)? I would think that would be a no brainer.

I think C4 hit it on the head ... leave and your on the payment bandwagon forever. Want to know how the really rich folks get rich? When they buy a car, they drive it until the wheels fall off ... they dont trade it up every 4 years.

 

Dave Ramsey says "Live like no-one else so later you can live like no-one else"......If you chose to live like everyone else you will be broke just like everyone else......Do not buy a car to impress people you will never meet, or those you do meet for that matter. Don't go GET a car....Go buy one and OWN something.....Dealers make more money on financing than they do the car itself!

Do not lease, Do not go deeply in debt and pay high intrest and finance just so you can save PENNIES on your taxes.....Do not buy a car that is more than half of your yearly income (ehhhm....40-55k a yr for a MCS)

And remember that ballon payment idea....take a look around at what 8yr old cars are worth....you will be paying $350 a month (>4k a year) 7years from now and your car will only be worth 7k

 

What he said!

Bet you weren't expecting that kind of advice. Wait, did you say don't buy a car more than half your income?

Man, that leaves out that new Ferrari!

 

I've been thinking this over a lot, and I think I'll take a pass on the lease idea. I've gone that route before, and it was ok, but it would've been nice at the end of that 5 years to be able to use the car as a trade in...instead of having to pay more fees. It's a big difference, and I can't really justify it.

The other program, which I don't fully understand, sounds slightly interesting, because I'm already looking at doing a 72 month (6 year) finance as is. So, what's the big deal about another year? Still, it's confusing, and gimmicky, and I prefer to stay away from such things.

I'm still debating if I should get another CVT (which I have some mechanical doubts about these days), or a 5-speed Getrag MC. The CVT is fun, and good friends, that can't drive a stick (read: the ladies) can drive it with me once and awhile, which can certainly be fun. It's a good city car, and not bad on the highway either, but it's short on initial take off power, and not terribly miserly on gas. The 5-speed Getrag MC is a pretty good set up for a stick, probably better than any other stick I've driven...back in the days (many moons ago) when I drove such beasts.

I can't say my mind is totally locked up now on just buying a low optioned MC 5-speed, but...it pretty darn near is.

Of course, I've not driven a stick shift in a long time, and I guess I have some reservations about having to get back in the habit of using that pesky clutch. I'm not sure I was ever very good at it in the first place. (Lots of riding the clutch too often when unsure of weather I was going to be speeding up, slowing down, or stopping, or whatever.)

Thank you for the input folks. If there is anything else anyone would like to add, please feel free to do so.

Hmmm...you know, if I drop the CVT, I'll have some spare budget money left over for that new leather interior they've got. Tempting idea, but...the leatherette seems a better bet for long term ease of care and durability, and I could always use the money elsewhere.

P. S. They took away Liquid Yellow as an MCS color? The bastards! (Pardon my French.) Oh well, that does it, now it has to be a Mini Cooper.

*sigh*

 

How does that work? I'm very interested because I'd consider getting out of the lease on my Saab. I was under the impression that you were stuck once you agreed to a lease.

 

With a car with such low resale value, such as the Saab, I am afraid you are pretty much upside down with your lease. Unless you are only 6- months away from terminating the lease contract, you are stuck with it.

Typically, some leases have inflated residual values that help lower your monthly lease payment, but create a bad situation should you decide to dump the car during the lease or if you want to purchase the car after the end of the lease.

Unless you have positive equity on that Saab (Worth more than the current lease payoff) you are out of luck.

Call your lease company and find out your current payoff as of today's date. Then find out your car's current market value and compare the two.

 

I thought about a lease once and quickly concluded that I would rather pay for a car and own it than pay for a car and not own it.