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      01-23-2019, 09:23 AM   #45
gatorfast
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Originally Posted by Isty View Post
You guys dont have car loans where you have a so called fixed residual? It's very common in Sweden.

Lets say I want a 40k car with 50% fixed residual, 36 months.

Putting down 10k and then I have to pay off 10k + interest for 36 months.

After 36 months I either give the car back and we're done or I finance the 20k fixed residuals or just pay the 20k cash if possible. If used car obviously very stupid to give it back.

This is on new but also used cars, so you can also get a car that doesn't depreciate as much as a new one.

Interesting example for me is a Volvo S/V60 polestar which were 65k new in Sweden, can now be had for 32k.

32k
10k/32% down
36months
50%residual
210 dollar/month
3% interest
We absolutely have this in the States but we call it "leasing". A lease is the same sort of financial arrangement you describe.
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      01-23-2019, 10:28 AM   #46
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Originally Posted by JDTX View Post
There's nothing inherently wrong in financing, 60 or 72 months even. What is important is the motivation... If you finance for a long term because you cannot otherwise afford that is one thing. If you finance because you prefer cash flow or having the money in the bank and the finance charge is reasonably low, then great.

I tend to finance and use my cash for elsewhere, but I can also just pay cash.
In 2014 I bought a used low-mileage '08 Z4 Coupe, $26K. I over-paid for it a bit, but that's CarMax for you. Anyway, I financed it for 5 years (it was already 8 years old), which seems stupid especially when I had (still have) the cash in the bank to buy it. But I got a car loan at 1.9% from my bank where some of my investments are. 1.9% is almost free money when you factor in the cost of money over time. I have a nice low monthly payment I barely even notice and a neat car to drive. The trick is to find a car you really like and know you'll want to keep it long-term. Finance it for 5 years then keep it for another 10.
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      01-23-2019, 11:32 AM   #47
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Originally Posted by gatorfast View Post
We absolutely have this in the States but we call it "leasing". A lease is the same sort of financial arrangement you describe.
Ahh ok!

Leasing in Sweden is stricktly 0% down payment and a fixexd montly payment for 36 months, then you lend it back or get offered to buy it out.
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      01-23-2019, 04:04 PM   #48
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Quote:
Originally Posted by Isty View Post
Ahh ok!

Leasing in Sweden is stricktly 0% down payment and a fixexd montly payment for 36 months, then you lend it back or get offered to buy it out.
Interesting. Yea here in the States a down payment is optional and obviously the monthly payment will be effected depending on how much or little you put down.
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      01-23-2019, 04:57 PM   #49
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Quote:
Originally Posted by Isty View Post
Ahh ok!

Leasing in Sweden is stricktly 0% down payment and a fixexd montly payment for 36 months, then you lend it back or get offered to buy it out.
For us, the lease is really more of a rental... It's not really a loan with a balloon payment at the end. The expectation is very much that you will return the vehicle, and you must. If you decide to purchase you must return, then purchase.

The vast majority of folks that lease simply return and never intend to purchase (doesn't make much sense to purchase in most cases). For me in Texas, is particularly brutal due to taxes.

In Texas, you pay taxes for the entire vehicle price during the lease (e.g. for the MSRP minus discounts). Then if you decide to purchase you pay taxes again for the residual value. So in the end you pay taxes for about 150% of the vehicle.
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      01-23-2019, 07:49 PM   #50
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Quote:
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Quote:
Originally Posted by Isty View Post
Ahh ok!

Leasing in Sweden is stricktly 0% down payment and a fixexd montly payment for 36 months, then you lend it back or get offered to buy it out.
For us, the lease is really more of a rental... It's not really a loan with a balloon payment at the end. The expectation is very much that you will return the vehicle, and you must. If you decide to purchase you must return, then purchase.

The vast majority of folks that lease simply return and never intend to purchase (doesn't make much sense to purchase in most cases). For me in Texas, is particularly brutal due to taxes.

In Texas, you pay taxes for the entire vehicle price during the lease (e.g. for the MSRP minus discounts). Then if you decide to purchase you pay taxes again for the residual value. So in the end you pay taxes for about 150% of the vehicle.
That's not really true. You can buy out a lease at any point without turning it back in. Also it's most certainly not a rental. It's a financing arrangement with a purchase option and fixed residual.
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      01-23-2019, 08:59 PM   #51
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Quote:
Originally Posted by Isty View Post
Ahh ok!

Leasing in Sweden is stricktly 0% down payment and a fixexd montly payment for 36 months, then you lend it back or get offered to buy it out.
Can this type of financing arrangement be done for used cars in Sweden?

In the States, this situation is strictly only for new cars. Hypothetically, if you walked into a dealership today to lease a vehicle, depending on the finance company, you can't even lease a 2018 MY vehicle, and can only buy it at whatever end-of-year discount they're promoting. But to lease, it would have to be a 2019 MY vehicle. YMMV by dealer/lessor.
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      01-23-2019, 10:10 PM   #52
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Originally Posted by JDTX View Post
For us, the lease is really more of a rental
While leasing is similar to renting, in actuality you aren't paying just for use. You are paying depreciation, and the amount you pay is largely determined by the selling price minus residual value. In financing a car, residual value is determined by the market and the condition of the car at the time you wish to sell to an unknown party. A lease is essentially an agreed upon buyback from the dealer in which the amount, aka the residual value, is predetermined. Additionally, you have certain rights afforded in leasing that you do not have in renting. For instance you can buy the car out at anytime, there is no prepayment penalty, and you can benefit from a car that has not depreciated as expected—If the car is worth more than the buyback, you can take advantage and get some money back. When you rent a car from Hertz, for example, you can't sell the car if its worth more than predicted. You also can't transfer the rental agreement.
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      01-24-2019, 01:00 AM   #53
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Quote:
Originally Posted by backhill View Post
Can this type of financing arrangement be done for used cars in Sweden?

In the States, this situation is strictly only for new cars. Hypothetically, if you walked into a dealership today to lease a vehicle, depending on the finance company, you can't even lease a 2018 MY vehicle, and can only buy it at whatever end-of-year discount they're promoting. But to lease, it would have to be a 2019 MY vehicle. YMMV by dealer/lessor.
As far as I know it can't be done on used cars. You're always the first owner on a privatelease car over here(some swede correct me if im wrong!)
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