>Buying a vehicle coming off of a lease is often a good bet. Most of the quick depreciation is done and now you're in the period of a slowly depreciating. You also have a relatively new vehicle.
I assume you mean buying a used car that someone else leased from the dealership. If you leased then want to buy out your leased vehicle at the end of the contract, you end up spending more than if you bought it outright.
>Always put down at least 20% of the vehicle's purchase price, i.e. don't finance more than 80%. This does two things. One, it ensures your loan is unlikely to be upside down. Two, it limits how much you can borrow which keeps you from financing fantasies. For example, you had $4K cash for the last car you purchased. Given that, I would say that you should have kept your budget at $20K or under. $20K, even today, can get you a nice used car.
You may not be from the US, but this is typically poor advice. Even with 20% down, you're likely upside down on the loan regardless after a year. US auto dealerships (credit dependent) have great loan rates, zero percent to 3%, which means every dollar you put down is wasted versus putting it in a money market that are getting nearly 5% now. The optimal strategy in this setup is to put zero down, borrow at ridiculously low rates, and get gap insurance for the portion that you're upside down on.
I have not seen zero or very low rate car loans for used cars. You do see them for new cars, but they are just taking whatever they would have given you as a cash discount and converting it into a low rate. Maybe a bit more, as they charge fees on the loan that they roll into the balance owed.
I meant up-front loan fees like origination fees, etc. You're saying they don't have those? It's been a long time since I financed a car at a dealer. Also title work/documentation fees, warranties, and whatever else they might talk you into.
Not necessarily. When I bought a used car a few years ago I got a great rate (< 2.5%) from my local credit union, and the rate the dealership offered was almost as low. Rates are much higher across the board these days, but the principle should still hold.
I assume you mean buying a used car that someone else leased from the dealership. If you leased then want to buy out your leased vehicle at the end of the contract, you end up spending more than if you bought it outright.
>Always put down at least 20% of the vehicle's purchase price, i.e. don't finance more than 80%. This does two things. One, it ensures your loan is unlikely to be upside down. Two, it limits how much you can borrow which keeps you from financing fantasies. For example, you had $4K cash for the last car you purchased. Given that, I would say that you should have kept your budget at $20K or under. $20K, even today, can get you a nice used car.
You may not be from the US, but this is typically poor advice. Even with 20% down, you're likely upside down on the loan regardless after a year. US auto dealerships (credit dependent) have great loan rates, zero percent to 3%, which means every dollar you put down is wasted versus putting it in a money market that are getting nearly 5% now. The optimal strategy in this setup is to put zero down, borrow at ridiculously low rates, and get gap insurance for the portion that you're upside down on.