Car Lease Deals?
- Thread starter theodore
- Start date
Leasing is like renting a home with the option to buy. DON"T! Take your payments lets say they are 249 per month. Multiply that by 36. That is 8,964 you have paid towards the vehicle. Then, take your down payment lets say it is 1500.00. Now you have 10,464 invested in the vehicle after 36 months and you don't even own the steering wheel. Let alone insurance rates are higher on leased vehicles.
Basically leasing a vehicle enables a person to drive around in a car that they normally cannot afford due to the lower payments. For an individual who takes pride in ownership, stay away. New cars are a bad investment. Don't make it worse by being sucked in to buy one. Rebates and leasing options are nothing more than the Manufacturers admitting that the vehicle is overpriced to begin with. IB
PLUS, If you want to get out of the lease earlier there are VERY few options and NONE are in your favor.
Basically leasing a vehicle enables a person to drive around in a car that they normally cannot afford due to the lower payments. For an individual who takes pride in ownership, stay away. New cars are a bad investment. Don't make it worse by being sucked in to buy one. Rebates and leasing options are nothing more than the Manufacturers admitting that the vehicle is overpriced to begin with. IB
PLUS, If you want to get out of the lease earlier there are VERY few options and NONE are in your favor.
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Mazda, for example, is offering some outstanding lease deals right now. The best deals on leases are now found at manufacturers with an over supply of vehicles that retain a good residual value. The over supply of vehicles helps them justify a low money factor.
You really need to consider something other than the lease deal however. When looking for a new vehicle, are you buying the vehicle or buying the deal? A sweet deal on a vehicle you do not enjoy is not a good deal. If you also happen to really like a car that has a sweet lease deal--wonderful!
You really need to consider something other than the lease deal however. When looking for a new vehicle, are you buying the vehicle or buying the deal? A sweet deal on a vehicle you do not enjoy is not a good deal. If you also happen to really like a car that has a sweet lease deal--wonderful!
iowaboy, are you trying to tell theodore to buy a used car? If not, you have just told him to neither buy nor lease a new one.
I agree with IowaBoy. Most of the leases I've seen don't make any sense financially compared to just buying the car straight out. They are normally used by people who can't afford the car they want. Put pen-to-paper and see if it works for you but I've yet to find a car that I wanted that it makes sense to lease.
I gave this example a few months back:
2009 Honda Accord LX Auto
MSRP 22,415
36 month lease
$199/month
$2,700 due at lease signing(includes one payment)
So you're paying $9,600 to drive that vehicle for 3years and not over $36,000 miles
36 month purchase
purchase price $20,500 (msrp 22,415)
36 month purchase
3.99% APR
total cost $21,300
trade in value at the end of 3 years
At least $14,000
Total cost $7,300
So you lost at least $2,300 in 3 years.
I gave this example a few months back:
2009 Honda Accord LX Auto
MSRP 22,415
36 month lease
$199/month
$2,700 due at lease signing(includes one payment)
So you're paying $9,600 to drive that vehicle for 3years and not over $36,000 miles
36 month purchase
purchase price $20,500 (msrp 22,415)
36 month purchase
3.99% APR
total cost $21,300
trade in value at the end of 3 years
At least $14,000
Total cost $7,300
So you lost at least $2,300 in 3 years.
You have to watch it. I leased an explorer once. No problems whatsoever. Leased a Mazda and they screwed me to death at the turn in. Lease deals that look really good are sometimes loaded to get in your pocket with charges everywhere at the end when you turn it in. Leasing can sometimes help cash flow, when not a lot of cash is required at the front end, but I'm sour on them now. Wouldn't do it under any circumstances.
If you ever want to own your car and not make payments, this is correct. But I'm not sure how many people want to own their vehicle? It's the worst "investment" you can make. We like to trade our vehicle in every 3 years or so, before we have to put new tires on.
If you finish payments on a $20,000 vehicle, and you own it, by that time it's worth probably $8-10,000.
Trade your car in every couple years, but never for a brand new car. That's my advice.
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The only way leases aren't a bad deal is if you don't put money down. Usually the only way you get that deal is if you work for the automaker. Going over your alloted miles will cost you a fortune as well.
Most people that lease cars do it so they can drive a nicer car than they can afford to buy. It's fine if you want to pay more for less in the end. I prefer buying cars with less than 30k on them. You pay way less, pay a little more in maintenance, then trade em off at about 120k.
Most people that lease cars do it so they can drive a nicer car than they can afford to buy. It's fine if you want to pay more for less in the end. I prefer buying cars with less than 30k on them. You pay way less, pay a little more in maintenance, then trade em off at about 120k.
I am on my third lease in a row, and don't see any reason to stop. A car is a depreciating asset as someone said above, and I don't really have any desire to own one. (Unless I was going to buy a truck or something and keeping it for a LONG time) Leasing a car and leasing a place to live is comparing apples to oranges. House appreciates, a car depeciates. I'll own my house and lease my car.
Also with a lease you are always under warranty and really don't ever have to pay for repairs like you would with owning a car.
Anybody can get a lease with no money down as well. They just build it into the monthly payment.
Also with a lease you are always under warranty and really don't ever have to pay for repairs like you would with owning a car.
Anybody can get a lease with no money down as well. They just build it into the monthly payment.
Generally speaking, you should own things that appreciate in value and lease/rent things that depreciate in value. Own your home, land, etc...and lease vehicles, equipment,etc...
That is GENERALLY speaking however. Some people may have the ability to pay cash for a used car and drive it for 10 or more years and that's awesome.
If you're the type of person who is going to want a different car every 3 years or so than leasing is a good tool for many.
Buying a new vehicle is a bad "investment" whether buying or leasing. The depreciation on them over the first 3 years sucks.
I leased a Mercury once and it went good. But I'm the type who likes to own a car and drive it for 5 or more years so I typically don't look at leasing.
Some days I wish I had my old moped from my middle school days so I could put a big orange flag on it and drive that to work with an awesome helmet on, beep beep.
That is GENERALLY speaking however. Some people may have the ability to pay cash for a used car and drive it for 10 or more years and that's awesome.
If you're the type of person who is going to want a different car every 3 years or so than leasing is a good tool for many.
Buying a new vehicle is a bad "investment" whether buying or leasing. The depreciation on them over the first 3 years sucks.
I leased a Mercury once and it went good. But I'm the type who likes to own a car and drive it for 5 or more years so I typically don't look at leasing.
Some days I wish I had my old moped from my middle school days so I could put a big orange flag on it and drive that to work with an awesome helmet on, beep beep.
This is not necessarily true either. You can negotiate the MSRP on a lease as well. So when they advertise $199 per month you should not actually pay that much. In addition they give you a residual value of the car that is usually on the low end. However, if at the end of the lease your car is worth 2 or 3 thousand more than the residual value you can buy the car for residual value an either keep it or trade/sell it for that extra 2 or 3 thousand.
For a depreciable asset like a car, If you buy it, you only recognize the depreciation when you sell or dispose it. When leasing , you pay monthly for the depreciation.
Vehicles loose the most value in the first few years. This means you are paying for those most depreciative years in the lease.
This rule about depreciating assests is kinda phony. Almost everything you consume, falls in value. Do you lease your TV ? Do you lease your clothes ?
Leasing in some cases makes sense, but you just have to realize you are paying the depreciation on a vehicle during the years it falls the most in value. If you are fine with that, go lease what you want to drive (and can afford).
Vehicles loose the most value in the first few years. This means you are paying for those most depreciative years in the lease.
This rule about depreciating assests is kinda phony. Almost everything you consume, falls in value. Do you lease your TV ? Do you lease your clothes ?
Leasing in some cases makes sense, but you just have to realize you are paying the depreciation on a vehicle during the years it falls the most in value. If you are fine with that, go lease what you want to drive (and can afford).
All that's assuming you can afford $600+/month to payoff that 3 yr loan and pocket the $14K at the end.
Many cannot.
Not to mention the nearly $1300 you threw to the bank in interest charges. Now your net cost of ownership is closer to $8600
What you say makes alot of sense, I'm not a big fan of leasing either. But for many it's more of an issue of payments. I see alot of value in a car that is pretty much always on warranty too.
Peoples ideas of leases are ridiculous in my opinion. I have leased my last 2 vehicles, every car salesman I know leases their vehicles. In the correct situation, it makes perfect sense. I drove a near $40,000 car for $300 a month 0 down. I drove it for about 28 months and then the car manufactuer gave me $1000 to give it back to them early. I also now qualify for lease loyalty rebates that amount to over $1000 for when I lease again. I spent a total of $8,400 hundred dollars on my lease in that time, had I purchased, my cost would have been near $20,000 in that time frame and I would have owed more than I traded it in for. But yes, clearly I could have purchased, that way i could be driving a 5 yr old truck still. I personally would rather spend less money and have a brand new car every 3 years. Just don't go for the first deal you see, they can differ hundreds of dollars a month between dealers. Shop around. People afraid of leases are generally the same people scared to death of car salesmen, because everyone's out to get them.
Can you please tell me the $40K vehicle that you leased for $300 month without any money down? That is the most amazing lease I've ever heard of.
The 'ownership' of a car is a necessary evil. Pick your poison: buy to own or lease. Each has its drawbacks...and advantages. The key piece to understand is the money factor in a lease. You can quickly google money factor to convert to a real interest rate. We own one car outright(cash) and another(my wife who drives our kids around and that's it) leases. There is a lot of absolutism in this thread but every scenario, every deal is different. Long way to say I agree with DM on this.
Ooorrrrrrr, you could just tell them to f off about the down payment which they will gladly do, and you will be even. Also, where do you trade your cars in? I would love to get down on those trade in prices.
Yes, a Dodge Ram 1500 hemi 4 dr Big horn edition w/ every option possible. I use to sell cars, I leased about 10 more of them to my friends. Currently I have the same lease on a different vehicle, 0 down, $300 a month. My buddy has the same lease on that car as well but for $310 a month. They originally wanted $500 a month and I told them to f off. Also, im talking 45,000 miles not 36. I soon will take my current vehicle in after 24 months and get another new one as I am tired of driving it, and they will happily take it back to keep me in their brand. It really is not that difficult.