Hey everyone,

I live in Australia and am about to buy a MCS and am wondering what you people think is the best way to pay for and finance buying a mini. So if anyone could please comment on their views and maybe experiences with using any of the above payment methods and any suggestions welcome!

thanks

 

Gooday Mate! I didn't have the money to buy outright but did ponder the lease vs. loan option. Let me first offer a disclaimer from any of us not down under. Our tax laws are different, loan rates will differ, and so on. Forget any advice from those of us who are not informed about such financial/tax deduction dynamics in Australia.

I eventually chose to buy via loan. I am really glad I went that route. In my case, I love the car so much I want it to grow old with me. The thought of it actually being someone else's that will eventually either be ripped from me, or that I would have to take out a loan later (who knows at what rate?), would take the joy of my bonding with her away. It would be like having a foster child I love: adoption much preferred here.

All Best whatever your decision!

 

FWIW, here's my take on the options based on 5 other new car purchases:

- Buy vs. Lease
I'm not a big fan of renting whether it be a house or a car, but especially a car. Paying several hundred dollars a month for a vehicle just to turn it over at the end of the lease term doesn't seem like enough value for the money. The only time an argument could be made for it is that if you normally change cars every 2-4 years anyway, don't drive a lot and prefer to drive a car that's more expensive than you'd typically buy.

I typically finance for 4 years and keep my cars 6-7 years. So I prefer to pay more each month and know that I own the car at the end and have several years without car payments.

- Finance vs. Buy Outright
I like the idea of owning free and clear immediately but only if it makes financial sense. There are always other things you could do with your money that may give you a higher yield. So if your bank is offering you a 4% loan but you can invest you money relatively safely at 7-10%, I'd say finance and get a higher return on your money.

On the other hand, if you have the cash available and typically just keep it in your savings account at 2% interest, then it may be better to buy the car outright and save money on the loan interest.

Just my opinion...I could be wrong...

Alex

 

Yeah I dont know what to do cause I am only 18 and am paying half the car myslef and my parents are paying the other half. I have already saved my half of the money, and my parents are trying to decide whether to pay outright, get a loan or put it under a lease which they can get a tax deduction for claiming use under our business.

Has anyone claimed a lease under a business here, and if so was it worth doing it, and any comments or suggestions?

thanks

 

I absolutely love the fact that I own my car outright. The economy here is odd right now, and while I could have LIKELY gotten a higher rate of return from investments than the interest I'd pay on the loan, it could not be guarenteed. Plus, being just out of college and completely in the dark about my future situation it made sense for me to just buy the dang thing and get it over with. That said, it's not a viable option for many people and it's completely dependant on your financial situation.

I'd say lease only if you don't plan on driving it alot and/or plan on switching cars at the end of the lease term. If you plan on driving it a lot (and you will, once you get it!) you'll get penalized for extra mileage. Then, if you decide to buy it out at the end of the lease term, you'll have spent enough money to have purchased 1.5 Coopers. All this assuming that leases work the same everywhere.

Loans are, in my opinion, the best normal option for car purchases. Drive it as much as you want, keep it as long as you want. Yeah, you pay more in the long run, but if you can get a safe return on investments then you're actually making more money than you would if you just bought it outright.

Good luck!

 

Hey there, I have always leased my cars until now. I got a loan from MINI at a great rate and bought the car. I am totally happy with my situation, it makes for peace of mind about modding the car and making it unique which is the whole point of having a MINI. Also you should do a search, and type in : leasing, or type in: financing, there is a ton of past topics that addressed these issues as I was on the fence before my purchase too. Good luck,

 

I chose to buy my MINI outright. Feels great not to be paying interest or a bill every month. I could not get a really low interest loan and so decided that I would just buy it and then not have anything to worry about if my financial situation changes in the future.

 

My last 5 cars were on leases of some sort (scary I've had my license for 12 years and I'm on cars 7 and 8 right now! Although getting married added additional vehicles). Some were traditional leases, where they leasing company kept the title, others where I got it. It worked well for me for a while because A. I liked to drive cars that were more expensive than I could normally finance and B. When I "bought" my first actual car I wasn't doing much driving (approx 250-500 miles a month).

However things have changed for me significantly since then. I do a lot more driving (sometimes in excess of 2500 miles a month) on both of our current cars. Interest rates are much lower right now, oftentimes less than what I'd be paying to lease a car. Making my monthly payment less if I financed it than if I leased it...

Then there's the military angle for me, and that's where my situation becomes complicated. My state of legal residency is Florida, although I currently reside in Virginia (being active duty military I can do that). Sales tax is higher in Florida than in Virginia, however Florida has no state income tax. Virginia charges a Personal Property Tax on vehicles garaged in the state, however Florida does not. As a Florida resident I'm exempt from Virginia taxes, including the Personal Property Tax on my vehicle per Virginia law, that is provided that the vehicle is titled in my name and my name alone. If I lease the car, I gotta pay the Personal Property Tax, even if the car is registered in another state (another thing I can do as military) because the title is in the leasing company's name, not mine. If I take out a loan, no tax.

 

Depending on tax laws and home equity there are a couple of options available to you. First, I would not recommend a lease for a vehicle you want to hold on to. It doesn't make good financial sense to pay interest to a leasing company when you get nothing in return (in the way of equity, that is). I own my house and I have a second mortgage that has a very low interest rate (prime plus zero) which is less than a new car loan. I took some equity out of my house and paid cash for my car. Now, I don't have to worry about a car payment and the interest on the second is tax deductible!! I LOVE THIS COUNTRY!!!

 

>>Depending on tax laws and home equity there are a couple of options available to you. First, I would not recommend a lease for a vehicle you want to hold on to. It doesn't make good financial sense to pay interest to a leasing company when you get nothing in return (in the way of equity, that is). I own my house and I have a second mortgage that has a very low interest rate (prime plus zero) which is less than a new car loan. I took some equity out of my house and paid cash for my car. Now, I don't have to worry about a car payment and the interest on the second is tax deductible!! I LOVE THIS COUNTRY!!!

The equity gained isn't associated with the interest paid. The interest is only based on the terms of the loan and the amount borrowed. So, to pay the leasor interest while not building equity is no reason to discount leasing. In fact, you are only paying interest on the predicted devaluation on the car at the end of the term, and not on the entire sum.

The biggest mistake one can make from a purely economic standpoint is to lease a car to make buying the "bigger" purchase more affordable. Leasing should only be an option if an outright purchase is also within your means. That said, in a perfect world where everything abides by the law of averages, leasing is the better alternative. If an auto loan demands $500 per month while leasing is $300, the added value of the liquid $200 can work in your favor with a little prudent investing. The interest earned lowers the effective interest you would pay on your lease. If, however, you plan to stuff this extra cash under your mattress or use it to live on, leasing is not for you.

You say you are young? Leasing makes even more sense if you haven't maxed out your tax-deferred investments. That is, if they even exist in Australia. Using such vehicles for investments, compounded interest will only tip the scales further in your favor. The effect of compounded interest can really be felt over the long haul, and you stand to benefit. Too often we forget that time does matter and in this case can be money in your pocket.

But, then again, I have only considered economic factors, and the pride of ownership can never be felt with a lease, if that is also important to you.

 

I really want to own my own car, and be able to say she is mine. So it probably is better for me to buy the car outright. However, how does the MCS hold its value? I am worried in a couple years it will not be worth much and I will need to save up a lot again for a new car.

 

Lay down the cash......

Goodday mate