Teach Me Car Leasing

[C-bus]

I wish I had the confidence in GM. I do. My BIL works for GM so my FIL buys exclusively. His latest Sierra is a 2010 and has vacationed at the shop at least twice now for transmission issues. It's almost no-big-deal to him. I find it entirely unacceptable. On the other hand, my Ford truck was awesome! I would buy another Ford in a heartbeat. We also had a Mazda MPV back around 2001 or so (made by Ford) and it had 100k flawless miles by the time we traded.

[Tpoppa]

Weather you buy new or lease new, you still pay for depreciation.  The only difference is when you're paying for it.

 

Going over on miles means that the car depreciates faster than assumed in the lease agreement, and you have to pay for it.  A purchased car also depreciates faster if you drive a lot of miles.  A nice thing about leasing is you never have to sell a used car and won't have to deal with a trade in.

 

I've bought new and leased new.  If you know how to negotiate a lease, there's really not much difference.   

[Bad324]

perfect candidates for leasing. The new buick line is pretty good. My fiance is leasing a Verano and has had it since March and its been an awesome little car that I actually thoroughly enjoy driving

[r1crusher]

Leasing cars can be done and with good results if you do your homework.  You have to be very mindful of what make and model your leasing because certain cars have better residual values than others and this is what effects your monthly payment.  I leased 2 F-150's starting in '06 and never did anything longer than 24 mo.  You can go 36 mo. on the lease as long as it will still be under warranty mileage wise.  This way you're never stuck footing a repair bill because it's always under warranty.

 

Rat...hit me up I have a lifetime account with a website that specializes in leasing information for ALL cars.  It will tell you lots of stuff like residual values, invoice, etc. and has some nice tools to make sure they dealer is giving you a good lease.  I used it on my second F-150 lease where the dealership was trying to charge me some hidden costs.

[conn-e-rot]

Go honda or toyota probably more american made than ford or gm

[Moto-Brian]

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?

But it's better to pay a down payment, interest charges and the asking amount for a car, keep it through the period of the loan and be lucky to get half of that back when you sell it after say, 5 years?

Heres another way to look at it:

40 years.

8 cars at 5 year loans. $30k each

8 down payments of about minimum 10% each = $24k

Interest rates are low, but say you have to pay a little. Maybe over the 40 years another $24k

On the balance of the cars, you still are paying monthly payments for $27k which means you shell out $216,000 in 40 years.

So, you've invested $296k and will be lucky to get $145k of it back. Lets be generous and say you get $160k. Total investment on JUST THE CARS is $136k.

But, there's more! You get the same 3 year free maintenance as the lease guys do. But, you have to pay after the three years. So, in two years if you drive 15k a year, you have oil changes, regular stuff like tires and stuff. You'll at least pay $40/ oil change and one set if not two sets of tires. Lets say you spend $600/car x the 8 cars. That's another almost $5k.

You spend over $140k to "own the car"...

[Moto-Brian]

Oh, and get a different amount of allowed miles. My parents lease and add a higher per year allowance. Pays for itself... If you're going to be 15k miles over, you are doing it wrong...

[r1crusher]

I almost never put money down on cars out of my own pocket.  To me your just throwing money at the depreciation which at some point it will break even during the loan period so why do it up front.  Most people will buy a car and keep through the entire loan period.

 

Example: Buy a new $30k car and throw down $3k, drive it off the lot and it's only worth $27k.  You've taken a $6k loss already and what did that $3k down get you...$30 less in payment.  I'll just find a way to save an extra $30 a month I think.

[r1crusher]

Oh, and get a different amount of allowed miles. My parents lease and add a higher per year allowance. Pays for itself... If you're going to be 15k miles over, you are doing it wrong...

 

If you're driving extra miles because you know you'll be going over the standard term miles def. buy them upfront!  

 

But be warned!  When you buy them upfront at $.15/mi. and you don't use all of them you will be getting money back....but not at $.15/mi.!  Ford lets you buy them at a lower rate than paying for them at the end of your lease but they refund you $.10/mi. if you don't use them. So you essentially lose $.05/mi. at the end.

Edited June 21, 2013 by r1crusher

[r1crusher]

Give this a read if you can get to the link.  If not let me know.

 

http://www.leaseguide.com/leasekit/LeaseGuide.pdf

[jporter12]

I wish I had the confidence in GM. I do. My BIL works for GM so my FIL buys exclusively. His latest Sierra is a 2010 and has vacationed at the shop at least twice now for transmission issues. It's almost no-big-deal to him. I find it entirely unacceptable. On the other hand, my Ford truck was awesome! I would buy another Ford in a heartbeat. We also had a Mazda MPV back around 2001 or so (made by Ford) and it had 100k flawless miles by the time we traded.

 

Must have been a 4L60E.  The 6 speeds are pretty solid.

 

Are you sure that MPV was Ford built?  Having worked on a few of them, I'm pretty sure they were not.

[C-bus]

Must have been a 4L60E. The 6 speeds are pretty solid.

Are you sure that MPV was Ford built? Having worked on a few of them, I'm pretty sure they were not.

I could swear it was in the manual. Could be wrong.

Wikipedia:

At introduction, the MPV used the same 170 hp DOHC 2.5 L Ford Duratec V6 unit that powered the Ford Contour and Mercury Mystique and Cougar.[3

Edited June 21, 2013 by C-bus

[ReconRat]

A lot of info, thanks. I'll work on convincing them to get something reliable. Since that is important to them. They do tend to buy GM. But that could change. I gave up brand loyalty, they can too.

 

Well, I still go after Honda motorcycles, I'm not totally free yet.

 

edit: The PDF link worked, thanks. And I agree, cars like Honda and Toyota are more American made than most domestic vehicles. R1Crusher, hang on till they get settled on something and need info. They won't know how much to negotiate, I'm sure. But my Dad does car negotiations very well.

Edited June 22, 2013 by ReconRat

[r1crusher]

No problem man. You just say when they are ready and I'll help you out however I can.

[zx3vfr]

I buy piece of crap cars for under 2k, usually closer to 1,200. Do whatever work I need to do as I go keep insurance at high liability and no collision or comp. ill drive it for 2-4 years and sell it for what I bought it for.

Soooo I have 3k max into a car with repairs and with around 200 dollars a year insurance. So over 3 years that's max 3600 into a car I paid less than 2k for so after 3 years worst case scenario I'm 1600 in the hole.

If I were to lease: I'd be looking at 1k down plus + 36mo x 200 = 8200 PLUS FULL COVERAGE of 700 a year = 10500 into something I don't even own and not to mention a 5-600 dollar set of tires at end of lease and I have nothing to start over again

Buying new is just as retarted best case scenario 2,500 trade in 2,500 dp gets a 15000 dollar car down to 10k + tax title all that good shit, full insurance etc paying 350 a month for payment and that 15k car is only worth 7k when you're paid it off and still in the hole at the end of the life car by a serious amount, yay you have something worth a value but still.

Leave buying cars to the rich and middle class soccer moms.

Ill just buy crappy craigslist cars every few years.

[zx3vfr]

Oh, and get a different amount of allowed miles. My parents lease and add a higher per year allowance. Pays for itself... If you're going to be 15k miles over, you are doing it wrong...

15k a year? Bwaha, when I was going to school in canton and working in Cleveland I did 45k in 9 months.

[zx3vfr]

Boobaroo

[baptizo]

I rack up almost all of the miles on my company truck - about 50k miles a year just for work - and just use mine for food/beer runs.  

 

My '09 Ram will be paid off in February - my only debt - and it'll still be worth more than I paid for it.  

 

I've always stuck with the saying that leasing is fleecing.....no matter how you do the math, you're still getting fucked.  

[r1crusher]

....

 

I've always stuck with the saying that leasing is fleecing.....no matter how you do the math, you're still getting fucked.  

 

 

Your logic is not sound because math is fundamentally logical so if the math works, you're not "getting fucked".  The key is are you willing to always have a payment to drive a car.

[Kritz]

I buy piece of crap cars for under 2k, usually closer to 1,200. Do whatever work I need to do as I go keep insurance at high liability and no collision or comp. ill drive it for 2-4 years and sell it for what I bought it for.

Soooo I have 3k max into a car with repairs and with around 200 dollars a year insurance. So over 3 years that's max 3600 into a car I paid less than 2k for so after 3 years worst case scenario I'm 1600 in the hole.

If I were to lease: I'd be looking at 1k down plus + 36mo x 200 = 8200 PLUS FULL COVERAGE of 700 a year = 10500 into something I don't even own and not to mention a 5-600 dollar set of tires at end of lease and I have nothing to start over again

Buying new is just as retarted best case scenario 2,500 trade in 2,500 dp gets a 15000 dollar car down to 10k + tax title all that good shit, full insurance etc paying 350 a month for payment and that 15k car is only worth 7k when you're paid it off and still in the hole at the end of the life car by a serious amount, yay you have something worth a value but still.

Leave buying cars to the rich and middle class soccer moms.

Ill just buy crappy craigslist cars every few years.

That's great if you're happy with that. Not everybody likes to live with POS cars though..

[Kritz]

GUYS guys the mileage thing is no issue unless you just drop the car off.... Most any dealer will write it off to put you in another car. You can also purchase the car at the end of the lease with no mileage or damage penalty.

[Bad324]

GUYS guys the mileage thing is no issue unless you just drop the car off.... Most any dealer will write it off to put you in another car. You can also purchase the car at the end of the lease with no mileage or damage penalty.

 

yup exactly. My fiance is leasing her current car she got in Feb and is starting to freak because she is starting to rack up miles with her new job and I was like just stay calm because either you lease another and they drop the overage or we buy it out which I already have a good idea what the buy out will be with estimated mileage and its not a total screw job either

[CBBaron]

Leasing works if you drive a reasonable yearly mileage and want to always have a new car.

Buying a used car and/or keeping the same car for 10+ years will be better financially for you.

However there is something to be said for getting a new car every 3 years and having all repairs covered under warrentee.

Ofcourse buying a depreciating asset is going to cost you money, but so will leasing that asset. The leasing companies are out to make money so that means you could do better by buying and saving their profit for yourself. However if you are talking a new car every 3 years you are going to have to work to do better than the lease. 

 

Craig

[Revelstoker]

I would advise against it. Probability of it being involved in a wreck driven by 90 yr olds is really high and they will have a horror story on their hand as the dealership will want nothing to do with it. Pay for the repairs and get hosed on the turn in value.

 

They are only going to drive for a couple more years which makes sense to lease along with the low miles.

 

I would advise to just find a used car that they like and one you (or family) can inherit in a few years. Assuming they have a $300 month payment for 36 months, they will pay $10,800 plus fees, down payment and such. Total outlay may be $15k. That will buy a pretty decent used car.

[baptizo]

 

Your logic is not sound because math is fundamentally logical so if the math works, you're not "getting fucked".  The key is are you willing to always have a payment to drive a car.

 

Math is math but leasing is 100% stupid.  You're trying to justify paying for a car you cannot afford. 

 

Pay cash or if you must, finance a used vehicle with a large down payment and pay it off as quickly as possible.