Teach Me Car Leasing

[ReconRat]

I don't know much, just a few horror stories. My parents are considering leasing instead of buying. And they are asking questions, of course.

 

1. They would not put many miles on a leased car.

2. They would never do any of their own repair work.

3. It would mostly sit in the garage, and go to the grocery.

 

With used cars kinda high, maybe leasing is the way to go.

 

Oh, and they are in their 90s or will be soon. Yeah, still driving ok. Rather well actually.

They hate freeways and won't go anywhere on them.

 

Secondary question, what type of car to recommend.

Current car is an Olds Aurora with the fast engine and the trick suspension.

They had a Cadillac that needed repair way too often. Wasn't trust worthy.

[JStump]

I would say leasing is a great idea for someone in their situation. You can get a new car every 3 years, and with the amount of driving they do, they probably won't even break out of the warrantee.

I am leasing my current car and it has been great so far, only thing is I may hit my mile limit or come close. Have been riding the bike a ton though so it may work out about perfect. I got it when I needed something reliable that wouldn't break the bank. I pay $200 a month and was doing that on repairs of my old car each month so it was a no brainer.

The new mazda 6 is a really nice car, check into those.

Edited June 20, 2013 by JStump

[ReconRat]

They kinda stick to American cars. And aren't happy with many of them, ha. Mazda might just be a good choice.

 

I'm thinking the best leasing deals are on overstock vehicles, pick one of those.

Edited June 20, 2013 by ReconRat

[shittygsxr]

Audi a4

[Tpoppa]

I don't know much, just a few horror stories. My parents are considering leasing instead of buying. And they are asking questions, of course.

 

What horror stories?  It's not that much different than buying.

 

Some people don't realize that you can negotiate a lease price.  You absolutely can.  You can negotiate the down payment, monthly payments, residual value, and obviously the trade-in.

Edited June 20, 2013 by Tpoppa

[Tonik]

I talked my really old mom into buying a convertible Mercedes. Think about it.

[8Rider6]

I'm leasing my current car for a few reasons.

1) I'm not sure how long I'll be in this city/state in the next few years. If I go to a city like Chicago, I likely won't even need a car.

2) I don't want to touch cars as far as repair work

3) I can get a different car every few years which appeals to me

4) Monthly payments are generally lower than buying

5) At the end of the lease period, if you want to, you can buy the car. Yes, the overall cost will likely be a few thousand more than if you bought it to begin with, but compared to buying another used car, you'll already know the history behind it.

[chevysoldier]

I'll never lease. I don't want a car payment the rest of my life. I do most of my own repairs. I like customizing my vehicles, getting to know them really well, I have a bit of loyalty towards them. I want to own it myself, not rent a car I won't keep just to give it back. Kind of like renting an apartment, I hate the fact I don't own it.

[C-bus]

If you can live within the miles, it's better to lease a depreciating asset and purchase an appreciating asset. My best lease was my 2007 f-150 4x4. It was $500 down and $189/month. Turned it in under miles and wasn't charged a dime for any dings or dents. Leased wife's Toyota Sienna and the buyout was do much lower than blue book, we bought it out.... No problem. With my current job, I can't lease. For perspective; I bought my 2013 Pilot on January 20 and have 22000 miles on it today.

Long story, short.... It definitely can make sense if negotiated and is far enough under the sale cost.

[madcat6183]

Yeah, with them it's definitely the way to go.  American made, have them try out the new Fusion, thing is sick, or even the Taurus.  They redid the Taurus and it's actually really roomy, and based off what became the Ford 500 for a few years.

 

My dad's been talking about doing the same thing with a new Eco-boost because they take moms car everywhere and he only drives about 2 days a week, 20 miles each day.  Then once or twice a month drives to a race no more then 3 hours away, so it could make sense.  All he is waiting for is when the repair bills on his current F150 outweigh the payments for a new lease.

 

Mom's car however, no chance.  She's gone 8 hours a day(retired) volunteering and doing all kinds of stuff.  Then weekends she goes to MI, MD, hell, most of the time I don't even know where.  So we can't lease with her due to miles, which is the biggest downfall I see in leasing.

 

And as stated above, in my wife and I's case leasing wouldn't work.  I mod all my cars/trucks, and do my own maintenece.  Well, except hers, but that's because we bought it new and their service plan actually worked out covering way more in service work than the costs when I did the math, so we bought that too.  But at 0.00% why wouldn't we, free money, and if we just paid for oil changes for 5 years or 100K it would be more than the plan.

 

 

I'd say go for it, sounds like they are the perfect type for a lease program.

[max power]

My grandmother is practically begging for a Subaru. She like the idea of an all wheel drive car. Grandpa was in the army at the end of WWII and won't buy some jap crap. Meanwhile I get to work on their POS blazer and Durango on a semi regular basis.

I wish they'd lease a car.

[chevysoldier]

If you can live within the miles, it's better to lease a depreciating asset and purchase an appreciating asset. My best lease was my 2007 f-150 4x4. It was $500 down and $189/month. Turned it in under miles and wasn't charged a dime for any dings or dents. Leased wife's Toyota Sienna and the buyout was do much lower than blue book, we bought it out.... No problem. With my current job, I can't lease. For perspective; I bought my 2013 Pilot on January 20 and have 22000 miles on it today.

Long story, short.... It definitely can make sense if negotiated and is far enough under the sale cost.

So you spent $7300 in 3 years for a vehicle you gave back?

I'm 28. If I rent a vehicle until I'm 67, at $500 down and $189/mo, I'll have spent $6500 in down payments and $88,452 in monthly payments, totaling $94,953 right?

And yet I don't own any of those 13 cars.

If I keep my cars for 13 years, even at $20,000 for each including tax and fees for the loan, I'm still only at $60,000.

I've also never spent near $10,000 per car in repairs but if I did on each of them, I'd only be at $90,000.

Am I off base with any of that?

[C-bus]

2 year lease. Essentially paid down the depreciation.

[chevysoldier]

2 year lease. Essentially paid down the depreciation.

Ok, so 20 cars over 40 years would be $10,000 in down payments, $90,720 in monthly payments, for a total of $100,720. Not to mention if you go over miles I hear you get dinged bad.

Then they sell it so you could pay the depreciation for someone else?

Edited June 21, 2013 by chevysoldier

[Mykill]

I leased mine and bought it at the end. The buyout was really reasonable for a 3 year old Honda. I did go way over my miles though and would have had to pay them $4000 just to return it to them. Id lease again if I knew I wouldnt go over the mileage. At their age its probably a good option for them. 

[chevysoldier]

Yeah I guess if they are in their 90's, it might not be a bad deal.

[chevysoldier]

I leased mine and bought it at the end. The buyout was really reasonable for a 3 year old Honda. I did go way over my miles though and would have had to pay them $4000 just to return it to them. Id lease again if I knew I wouldnt go over the mileage. At their age its probably a good option for them.

So how many miles is $4k worth?

[donkason]

So how many miles is $4k worth?

Probably 20 to 25 cents a mile at lease maturity. So 15 to 20 thousand over. If you buy miles upfront it is normally 15 cents.

Leasing sounds like it would be a good option for your situation too. I'm in the car business and sell Cadillacs at Germain of Easton. PM me if you have any questions.

Btw domestic cars, especially GM/Cadillac have really stepped it up in quality. I switched to Honda/Toyota for some time but wouldn't hesitate to pick up a GM car now.

[Mykill]

So how many miles is $4k worth?

~ 20k miles. Was never a concern for me.

[Scruit]

I buy cars that are 2 years old, drive them for 5-7 years then repeat.   Have had my current car for 6 years, cost me $18k.  Trade-in value on KBB is currently $10k, private party sale is $12k.  

 

Assuming I sell it privately the car has cost me $6k for 6 years.  I have spent approx $2k in repairs/maintenance that a warranteed car would have done for free.  So $8k in 6 years.     Costs like gas, tires, brakes and other consumables are the same leased or not so I don't figure that in.

 

So my car has cost me $111/month.

 

Buy:  $111/mo or ~$8k

Lease (used car, same value): $200/mo or ~$14.5k

 

Maybe I'm doing the math wrong here, but...

Edited June 21, 2013 by Scruit

[jporter12]

Btw domestic cars, especially GM/Cadillac have really stepped it up in quality. I switched to Honda/Toyota for some time but wouldn't hesitate to pick up a GM car now.

 

I'm not feeling the Cadillac "quality" being improved lately.  The rest of GM is doing pretty well on quality, and they are VERY proactive on taking care of design/build issues as they find them.

 

The new Impala is pretty sweet from what I've seen of it.  We have a couple in stock!  (I doubt they would be up for lease though.)  Maybe a 2013 Impala?  They're pretty solid cars, built on a mature platform.

[imprez55]

Probably 20 to 25 cents a mile at lease maturity. So 15 to 20 thousand over. If you buy miles upfront it is normally 15 cents.

Leasing sounds like it would be a good option for your situation too. I'm in the car business and sell Cadillacs at Germain of Easton. PM me if you have any questions.

Btw domestic cars, especially GM/Cadillac have really stepped it up in quality. I switched to Honda/Toyota for some time but wouldn't hesitate to pick up a GM car now.

 

 

Let me get this straight: you drive Honda/Toyota, but say that caddy/GM are ok now and you are conviniently a salesman for caddy/GM.

 

Edited June 21, 2013 by imprez55

[donkason]

Did drive Honda and Toyota.

[donkason]

And I truly don't care what they buy. I'm not desperate enough to troll on a forum for a deal. I'm just sharing my opinion like everybody else. But thanks for the "gotcha" way to contribute.

GM was junk for years. I've worked on cars and sold them. They are much better now.

[C-bus]

Ok, so 20 cars over 40 years would be $10,000 in down payments, $90,720 in monthly payments, for a total of $100,720. Not to mention if you go over miles I hear you get dinged bad.

Then they sell it so you could pay the depreciation for someone else?

Obviously, a used car is the better purchase because there isn't an accelerated depreciation. The discussion, however, is about a new car. Those same 20 $35K vehicles at 4% interest would be $120k in payments alone (60 month terms), not to mention that you would always be under water when you traded and would likely have to pay to get out.... And would still not have anything to show. Buying a depreciating asset is never going to bring you out on top unless your original purchase was so far under the value that you beat the depreciation by the time you sell.

Again..... The conversation is about new cars.