Savings Vs Debt Pay off? free advice please?

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I think used with low milage is the key.

my MINI had 4500miles on it when i bought it. in March 2006. it was first sold in Aug 2004. I paid 25K at the same time the new 2006 similarly equiped were about 33-36K.
 
leasing is NOT always a ripoff if you know what you are doing. The key is to look for a lease subsidized by the factory with BOTH good money factor, and good residuals.

I have a purchased vehicle, and a leased car. The vehicle you know you will keep for a long time, it is a no brainer to pay it in cash or quickly pay it off, unless you get a factory subsidized loan independent of the purchase price. For the vehicle you know you won't keep for more than 3 or 4 years, it is best to find a factory subsidized lease with GAP insurance included. It is not easy to spot a subsidized lease and be able to negotiate a good price on car also. The basic BMW 3 series often offer some of the best leasing deals from the factory (good money factor at an equal. of 2%, and one of the best residual values). However, you can potentially get screwed by the salesmen on the price if you are not careful.

Like anything else, do your home work first.
 
ventouxbob:

Yes, putting it on a credit card is a risky proposal for an average Joe. And this only works if you have a credit line 3 X the amount you want to borrow. Otherwise, you are correct your credit score will be compromised. Ideally you spread this $16,700 amount over 2 credit cards with $16K limits each. So balance on each credit card would be ~ $8350K. Then you use your 3rd credit card for regular purchases.

Backup plan is to refinance the car.

You can refinance used cars 5.29% for 80% of new car value up to 48 months with limit of $100K see https://www.penfed.org/productsAndRates/loans/vehicleLoans/usedAutoLoans.asp

I should warn you, PenFed have very strict guidelines, they reject liberally

I paid off my first new car in 12 months worth 1/3 my gross salary. Used zero interest rate credit card transfers, back when there was no cash advance charges.

You are in good financial shape. Keep saving and be sure to invest in a Roth IRA, if you are below the income limit. If not you still can still contribute to a taxable IRA (not get tax deduction) but rollover to a Roth IRA in 2010 or use it for a down payment on your first home.

Leasing is only advantageous if you have a cash generating business to deduct the leasing expense. Or you work for a car manufacturer like Toyota or Mazda. They have great lease rates which include maintenance and GAP insurance. One employee can lease up to 4 cars, for family/friends so start looking for friends in the right car company!
 
ventouxbob:

Yes, putting it on a credit card is a risky proposal for an average Joe. And this only works if you have a credit line 3 X the amount you want to borrow. Otherwise, you are correct your credit score will be compromised. Ideally you spread this $16,700 amount over 2 credit cards with $16K limits each. So balance on each credit card would be~ $8350K.. Then you use your 3rd credit card for regular purchases.

Backup plan is to refinance the car. You can refinance used cars 5.29% for 80% of new car value up to 48 months with limit of $100K. https://www.penfed.org/productsAndRates/loans/vehicleLoans/usedAutoLoans.asp

I should warn you, PenFed have very strict guidelines, they reject liberally.

I paid off my first new car in 12 months;worth 1/3 my gross salary. Used zero interest rate credit card;transfers, back when there was no cash advance charges.

You are in good financial shape. Keep saving and be sure to invest in a Roth IRA, if you are below the income limit If not you still can still contribute to a taxable IRA (not get tax deduction) but rollover to a Roth IRA in 2010 or use it for a down payment on your first home.

Leasing is only advantageous if you have a cash generating business to deduct the leasing expense. Or you work for a car manufacturer like Toyota or Mazda. They have great lease rates which include maintenance and GAP insurance.One employee can lease up to 4 cars, for family/friends so start looking for friends in the right car company!
 
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