In my other thread, we discussed what everyone uses and prefers for a DD. Now let's discuss paying for them. I have always financed a car but am considering a lease next time around. I read that in the long run you MAY end up paying more due to varying interest rates but at the same time, cheaper month to month payments and the opportunity to buy it out in the end if I like said vehicle is interesting. Or I can give it back minus whatever taxes and such and move into something newer. I have seen some models I am interested in going for pretty good lease pricing lately. What are some opinions? Is a lease worth it in any cases?
School me on leasing a car vs outright financing
- Thread starter EB85
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Financially, I don't think there is ever a case where you come out on top on a lease, even if you plan on purchasing the car at the end of the lease.
I've always heard that if you don't have to worry about going over on miles as long as you agree to lease from that dealership again. Can any salesmen give insight on this? I would love to lease but I am afraid of being charged a massive amount when I hand it back in.
With a lease you are essentially paying for the depreciation of the vehicle, then you turn it back in. Think of it more as a rental.
If you are the type that has to have the newest car all the time and don't tend to drive a lot of tinker, Leasing can be beneficial if you have the credit and driving situation to get into better lease terms. But if you like to tinker with stuff, will be driving the car a lot, or don't have the need to keep upgrading, leasing is often quite a bit more expensive.
Since you're talking about a DD, I would never recommend a lease. Reason being is you need to be able to drive it whenever and however you need. If you're worrying about putting miles on your DD because you have a low mileage lease, you're already handicapping yourself and you might as well daily drive your toy. Additionally, your DD gets all your around town parking lot duty. Because nobody knows how to respect other people's property, it's likely it'll end up with scratches and dents that will have to be either repaired prior to you turning the vehicle in, or take the hit and owe when you turn in.
It's just not a good situation to have a lease.
One area that I would suggest a lease is if you are in a situation where you know for a fact you only need the car for a short period of time. In that situation leasing would allow you access to the car while you need it and the ability to just turn it in and walk away when you're done.
If you are the type that has to have the newest car all the time and don't tend to drive a lot of tinker, Leasing can be beneficial if you have the credit and driving situation to get into better lease terms. But if you like to tinker with stuff, will be driving the car a lot, or don't have the need to keep upgrading, leasing is often quite a bit more expensive.
Since you're talking about a DD, I would never recommend a lease. Reason being is you need to be able to drive it whenever and however you need. If you're worrying about putting miles on your DD because you have a low mileage lease, you're already handicapping yourself and you might as well daily drive your toy. Additionally, your DD gets all your around town parking lot duty. Because nobody knows how to respect other people's property, it's likely it'll end up with scratches and dents that will have to be either repaired prior to you turning the vehicle in, or take the hit and owe when you turn in.
It's just not a good situation to have a lease.
One area that I would suggest a lease is if you are in a situation where you know for a fact you only need the car for a short period of time. In that situation leasing would allow you access to the car while you need it and the ability to just turn it in and walk away when you're done.
You agree to a certain number of annual miles when you sign the lease. That all goes into calculating the amount of depreciation the car will see by the end of its lease, and residual values. You can agree on higher annual mileage amounts.
That is one huge downside if you drive a lot.
Unless that dealership is the lease owner, I wouldn't think so. The owning bank is going to want the contract fullfilled. Now a dealership may offer to pay any existing penalty if they know they are getting another sale. Not that the fee doesn't exist, but the dealership is making enough to cover it for the client on the new sale. So probably a situation that depends on the dealer and the deal being made.
You are still pretty much guaranteed to pay at least the amount it has depreciated. No dealer is going to be willing to take a loss on depreciation.
Yes of course. But in the case of needing a car for a short period of time, selling a financed car will probably result in a similar total cost to own, but you have to then add the hassle and expense of selling the car. If you're done with it and the lease is up, you turn it in and pay any fees levied. Simple process that is done in an hour or so. It's literally the only time I would ever lease a vehicle.
There's no answer that's right 100% of the time. It all depends on your situation.
Theres a bunch of times where leasing is better than financing-to-own.
Leasing you are only financing the anticipated depreciation over the lease term. If you drive it less and its worth more when you turn it in, you get lease equity, which you can cash out (if you turn in the vehicle) or apply to a new lease/purchase.
If you drove it as much as your mileage allotment and its worth less than they anticipated, you can walk away owing nothing. Sure if you leased it for only 10k mi a year and you commuted and put 20k a year on it, then yeah, you are going to owe because YOU went over the terms. Many people **** themselves because they don't understand the lease terms, its like renting a car for a 2-3 year period, there are terms you must abide by, and if you dont, youll owe for it.
If you plan on purchasing at the end, better get a car that you know holds its value.
Id lease the **** out of cars, I love to have something different every 2yrs and always expect to have a car payment if I want a newer/reliable/warrantied vehicle. I cant, because I put ~20k/yr commuting. We are looking into it though for my GF as she drives maybe 1.5mi to work and back, and if we leased we would be way under the allotted mileage come time to turn in, so our chances of lease equity are higher.
My parents just walked away from their Focus lease, even having only put 12k on it in 3 years (36k max alotment) since in order to purchase they wouldve had to finance more than it was anticipated worth (thanks to that pos ****ing autotragic killing focus resale).
Theyre more than happy they leased and didnt have to get stuck with a pos Focus after 3 years and 4 transmissions later with Sync that doesnt work worth a damn and got go to "here, its yours now" and walk away.
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If you own your own business, and it was 15 years ago the lease was the way to go.
I would arrange to have very high lease payments, with an extremely LOW buyout at the end.
So I could deduct all the lease payments and then at the end of the lease buy the vehicle outright for myself.
It was the only way to get the government to buy my cars for me.
But they got wise and now limit lease payments and types of vehicles that can be leased.
So just arrange financing and buy the dammed car.
I would arrange to have very high lease payments, with an extremely LOW buyout at the end.
So I could deduct all the lease payments and then at the end of the lease buy the vehicle outright for myself.
It was the only way to get the government to buy my cars for me.
But they got wise and now limit lease payments and types of vehicles that can be leased.
So just arrange financing and buy the dammed car.
Leases exist as it is a way to make more money from a dealer's perspective plain and simple.
If you want a new vehicle every three years, lease a vehicle.
If you can pay off a vehicle in 3-5 yrs and end up owning for 8-10, then buying is the way to go.
Sadly, I know people that buy a car and then still turn around and trade it in every 3-4 yrs.
If you want a new vehicle every three years, lease a vehicle.
If you can pay off a vehicle in 3-5 yrs and end up owning for 8-10, then buying is the way to go.
Sadly, I know people that buy a car and then still turn around and trade it in every 3-4 yrs.
Think of it as a phone upgrade with the monthly plans, just a more expensive version of it. If you want the latest and greatest, its perfect for you, if you want to "trade" every time a new model comes out, its perfect for you, if you want a car where you dont have to worry about maintenance, its perfect for you.
Big problem i’ve seen on buying a new car from a ton of people is….. they get rid of the car after 3 years. Big chances are, you are upside down on it, even worse for those getting it for a 6 year buy.
IMO i see it pointless buying a brand new car if you arent going to keep the car longer than 5 years or buy it cash. Why pay bigger monthly payments/give a bigger downpayment on a car that will lose 5%? value as soon as you drive it off the lot. IMO a CPO car is a smarter way to go.
13 Cobra set up a great example about the Taurus SHO in another thread about leasing vs buying.
Big problem i’ve seen on buying a new car from a ton of people is….. they get rid of the car after 3 years. Big chances are, you are upside down on it, even worse for those getting it for a 6 year buy.
IMO i see it pointless buying a brand new car if you arent going to keep the car longer than 5 years or buy it cash. Why pay bigger monthly payments/give a bigger downpayment on a car that will lose 5%? value as soon as you drive it off the lot. IMO a CPO car is a smarter way to go.
13 Cobra set up a great example about the Taurus SHO in another thread about leasing vs buying.
I got Mercedes c250 that I want to get out of lease transfer if you interested. No money down and I'll pay first month
I've done two leases in my life. The first was back in 2001 after my divorce, I needed a cheap car with a cheap payment for two years while I got my life back in order. I had a 2002 focus zx5 for about $175/month with no money down.
The second time was 4 years ago, my girlfriend was broadsided in her car on a Friday night, car was totaled. She was working and taking night classes, and I had her a car the next day from the dealership, a 2012 focus 5speed, with no money down for $225 month two year lease. Picked up that Monday, she was out of a car for 72 hours.
The second time was 4 years ago, my girlfriend was broadsided in her car on a Friday night, car was totaled. She was working and taking night classes, and I had her a car the next day from the dealership, a 2012 focus 5speed, with no money down for $225 month two year lease. Picked up that Monday, she was out of a car for 72 hours.
I work for M-B so whatever you want I can get for better $$$.
FWIW, I was looking at new Subarus. ~$200-250/month depending on vehicle and mileage. I was talking to a coworker and he pretty much echoed what most people said on here. Not worth it if you want to keep it. I need to keep my Legacy GT on the road for another 3-4 years while paying on my Cobra and hopefully by then I'll have squirreled away enough $$$ to make a nice down payment on a new or CPO car.
As mentioned by someone else, one thing to heavily consider with a lease is that at the end of the lease contract your vehicle will likely be thoroughly inspected. Things like tire wear, wheel rash, dings, and scratches (over a certain size) are added to your final payment. So a daily driven vehicle with a few larger scratches and dings could add a considerable excessive-wear charge to your bill. I remember when my Buick LaCrosse lease was up the rep spent about 20 minutes going over my car, inside and out. The car was immaculate. I did find a scratch near the minimum size but decided not to add it. So I paid nothing additional. But I've got to say that I was a bit nervous since none of my prior leases had such an inspection done.
There is nothing better than holding the title to your car and knowing that no more money is going out the window. Case in point, I just paid off the GT500. Now I don't have $830 per month hanging over my head. Mod money baby!
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