Who can tell me about leasing a car?

[ODoyle]

We just purchased an 2014 impala LTZ and I am looking to trade my truck in for a new 2017 Silverado. I want to lease it as I want a new truck every few years and it will rarely get driven aside from 12 miles a day to work.

 

I have always bought used but would like to try leasing. Who can tell me how this works? We have bought most of our cars from Chesrown in Delaware but im not opposed to going to someone on CR if it puts money in their pocket.

 

Thanks!

[BStowers023]

Any specific questions about it? Lease payments are typically lower than financing payments.

[Supplicium]

Doesnt put any money in my pocket but I have a good hookup at Jack Maxton if you would like a referral pm me

[STEVE-O]

What specific question do you have? It is basically a long term rental, they limit you to mileage so the value when you return it doesn't get the dearlership into the negitive.. Good thing for you if the market in your lease falls down your not stuck with negative equity. Bad news for you it's a rental so you don't own any of it but are paying for it each month.

 

Almost the same concept as renting someone else's house

[ODoyle]

I guess my main questions is at the end of the lease do I have the option to buy?

 

Does the normal service work (brakes and such) have to be done at the dealer?

 

I like the idea of a lesser payment but wouldnt be opposed to paying as much as I am now for a substantially nicer truck.

 

I guess what I wanting is pros an cons from people who lease and people who buy.

[TTQ B4U]

We just purchased an 2014 impala LTZ and I am looking to trade my truck in for a new 2017 Silverado. I want to lease it as I want a new truck every few years and it will rarely get driven aside from 12 miles a day to work.

 

I have always bought used but would like to try leasing. Who can tell me how this works? We have bought most of our cars from Chesrown in Delaware but im not opposed to going to someone on CR if it puts money in their pocket.

 

Thanks!

 

Feel free to give me a call. I grew up in the car business with a family of dealerships and have worked in the F&I office too. In the end, leasing is about keeping equity / money in your pocket and simply paying for a predetermined usage cost of a vehicle. Vehicles value is the same regardless of how you pay for it so the rates and residuals are what you can use as variables to determine the value to you. It offers more options / safety-nets in terms of risk to you vs owning.

 

Rules I live by are that you should go into the lease with as little up-front money as possible. If the costs are still too high, then you're on the wrong/too expensive of a vehicle for the program being offered.

 

Happy to walk you through the process.

 

Tim

 

614-795-4907 cell.

[Geeto67]

We just purchased an 2014 impala LTZ and I am looking to trade my truck in for a new 2017 Silverado. I want to lease it as I want a new truck every few years and it will rarely get driven aside from 12 miles a day to work.

 

I have always bought used but would like to try leasing. Who can tell me how this works? We have bought most of our cars from Chesrown in Delaware but im not opposed to going to someone on CR if it puts money in their pocket.

 

Thanks!

 

Some high level thoughts, I am sure others can fill in with the details.

 

The basic concept behind a lease is that you are renting a car long term. You are basically paying for the use and the depreciation on a new vehicle for using it for a few years. The Leasing company guesses as to how much the car will be worth at the end (residual value) and factors the depreciation into your payment and down payment. You are restricted to a certain mileage and pay for when you go over and are financially responsible for any loss of value (like your kid throwing up in the back seat and making the car smell like crap the rest of it's life).

 

In practice it works just like a finance agreement, in fact they will still do a credit check and there will be a % based finance charge (like the interest rate on a loan). Often you will put money down (usually about $2K, maybe more depending on how expensive it gets), and negotiate terms and payments with the dealer. Often dealers will focus on the low monthly payment and roll other fees into either the down or the end of the lease - don't get distracted by this, make sure you review everything you are paying for.

 

Some leases will have a provision that allows you to buy the truck at the end, others do not. Make sure you know which you have. this is a term you can negotiate, same as service at the dealer, and other things associated with use of the truck.

 

Don't just trust the dealer's finance group. You can get your own financing if the terms are better. Dealers make money in leases by leasing you the car at MSRP and then pocketing any holdbacks and incentives the mfg offers them so don't expect to get a "deal" on a low msrp. This doesn't mean you can't get deals on other things like services the dealer offers or accessories, just there isn't going to be much room to negotiate on the price of the car.

 

If your vehicle is worth more than the residual value at the end, and the lease is the kind where the dealer retains the car for resale, you can often use that "credit" toward another car from the same dealer - most people don't realize this and they leave money on the table turning in a car at the end of the lease.

 

Do leases make financial sense? maybe for some, but generally they are not a great deal for the consumer. If you are currently paying a car note plus expensive repairs then a lease might reduce your loss to just the car note amount because it is a new vehicle and you seldom own them beyond the warranty. However, the smartest money is to take care of your vehicle and keep it for the same amount of time more than your finance purchase agreement was for. So for example if you financed a silverado for 5 years, keeping it an extra 5 years (for a total of 10) allows you to save back most of the money you spent on financing the vehicle, provided the vehicle needs only minimal repairs in 10 years. If you own a mini cooper you probably don't want to own it for 10 years, but if it is a honda civic maybe even stretch it to 15 years. The thing people point to on a lease is that you are just paying for use of a new car, expensive use compared to the marketplace, and you don't own an asset at the end.

 

If you own your own business or use your vehicle primarily for your employment it makes more sense to lease because of the tax deductions you can take.

 

does that answer your questions?

[SRTurbo04]

I guess my main questions is at the end of the lease do I have the option to buy?

 

Does the normal service work (brakes and such) have to be done at the dealer?

 

I like the idea of a lesser payment but wouldnt be opposed to paying as much as I am now for a substantially nicer truck.

 

I guess what I wanting is pros an cons from people who lease and people who buy.

 

Yes you can buy out at the end of the lease.

 

When i leased my accord there was nothing stating i had to do anything at the dealer.

 

I had a great experience with my accord through honda so be mindful yours might be different through another company.

 

Mine was simple went in found what i wanted, put no money down, payment was right and bam i left.

 

 

Did my daily duties for 3 years as if i owned the car.

 

When it was time to trade in they called me a few months ahead and said i had to have it inspected like 6 weeks before turn in. They came to my house to do so.

 

They gave me 2k in allowance for any damage that was done to the car. After that was as simple as calling a dealer to come drop the car off.

 

Only off the wall thing was the insurance. They requred some crazy high amount of coverage for it. Like 4 times what i had on any previous car before. Wasnt expensive just odd.

[TTQ B4U]

Yes you can buy out at the end of the lease.

 

GM / Pontiac back in the 90's ran a marketing slogan of a "3 year test drive" which was quite successful. It touted that as a way for people to try out Pontiac quality and if they liked it then they could buy their car.

 

In the end if the lease has a great rate/money factor and you pay up-front cash in full at the end, it actually works out well. Make sense to buy a used car from yourself too.

[greg1647545532]

How I saw leases explained once. "Driving a new car is nice, right? Nice things cost money." Financially, leasing is usually going to be inferior from buying new and selling used. After all, that's exactly what the leasing arm of the finance company is doing, except they want to get a small profit out of you in the process. "But not having to deal with selling a car every 3 years is nice." Right, see above.

 

There are two cases where I think leasing is smart. One, since the lease payment is based on the projected resale value at the end of the lease term, you think you've played the game better than the people with access to mountains of data. Which is possible, and sites like lease hackr can help, but you have to pay attention to a lot of details. Two, you're willing to pay extra for nice things.

[El Karacho1647545492]

Leasing is typically most advantageous when you're a business owner (you can write it off as operating expense) or when you're looking at luxury cars/vehicles with steep depreciation curves.

 

A rule of thumb for leasing is if your lease payment is ~1% of MSRP with minimal money down, that's a GREAT lease deal. Most cars won't get to that range.

[Geeto67]

There are two cases where I think leasing is smart. One, since the lease payment is based on the projected resale value at the end of the lease term, you think you've played the game better than the people with access to mountains of data. Which is possible, and sites like lease hackr can help, but you have to pay attention to a lot of details. Two, you're willing to pay extra for nice things.

 

I'll add a third to this (which doesn't really apply for the OP since he wants a truck) and that is when there is new technology. For cars like the Leaf, the Volt, the Prius, where they are the new crop of plug in hybrid the tech is moving faster than the finance agreements, leasing makes a ton of sense because by the time the lease is up the new car is significantly better than the last one. Why it makes sense with those cars is for a certain type of owner they reduce operating costs by close to the amount of the payment so it almost works out to be a "free car" by the time it is all said and done. Also the incentives on those cars are huge, and are accessible even to lessees.

[downingracing]

2017 Silverado 1500 4x4 Quad Cab 5.3l with 5'3" bed. No money down, 39 month lease, 15k/yr mile allowance - $450/mo. I tow with it and after 39 months (48,750 miles), it needs to be someone else's problem. I don't have little kids and take care of my vehicles (inside and out). The build quality of these trucks isn't what it used to be and I'm very happy to not 'own' one. Had a 2014 before this one that GM took back early (program they have to pull ahead the lease and get you out no money out of pocket). Even got a check back when turning the other one in. They said it was for a security deposit refund, but I don't pay those so no clue what it was for. Ended up with ~$1300 in my pocket and a new truck.

 

Leasing isn't for everyone. But if the terms and conditions work for you, it can be a great option.

[Rustlestiltskin]

lol

[l36tols1]

I leased a car once. Only advice I can give is replace the tires the first week you have it. Store the tires in your garage.

 

If you decide to turn it in and not buy, you won't have to worry about replacing the tires. You will still have the originals to put back on.

 

No fun being overcharged for tires by the dealer.

[Not Brian]

lol

[coltboostin]

Leasing?

 

LOL

 

 

In my opinion the only time leasing makes sense is if you have employment that pays for it or you can use it towards a legitimate write off. Otherwise, its renting. You do it for as long as you do it, and in the end you come out with not a fucking thing to show for it.

[El Karacho1647545492]

Leasing?

 

LOL

 

 

In my opinion the only time leasing makes sense is if you have employment that pays for it or you can use it towards a legitimate write off. Otherwise, its renting. You do it for as long as you do it, and in the end you come out with not a fucking thing to show for it.

 

That's why it typically makes sense for luxury cars. You get all the new bells and whistles when they come out, you never are out of warranty, and when it's over you're not worrying about how inflated your residual was compared to actual cash value.

[BStowers023]

Leasing?

 

LOL

 

 

In my opinion the only time leasing makes sense is if you have employment that pays for it or you can use it towards a legitimate write off. Otherwise, its renting. You do it for as long as you do it, and in the end you come out with not a fucking thing to show for it.

 

 

I don't know if that's completely true though. A lot of dealers give you the option to buy out your lease at the end of your term, so it could be used as a rent to own. I mean, if you're buying a new car and your finance term is 60 months, well you don't actually OWN that car until the 60 month term is up or unless you pay the car off early. At least if you lease instead of buy, you have the option to just turn the car in at the end without the hassle of trying to sell. And with a lease you can turn it in for the newer model or different model, so your car is always under warranty and you've always got a newer model car. I guess after "owning" cars my whole life, I can see the advantages with a lease. Obviously there are a lot of variables and everyone's situation is different, but in a lot of cases, leasing seems to make more sense than people give it credit for.

[greg1647545532]

Leasing is typically most advantageous when you're a business owner (you can write it off as operating expense) or when you're looking at luxury cars/vehicles with steep depreciation curves.

 

I'll add a third to this (which doesn't really apply for the OP since he wants a truck) and that is when there is new technology.

 

I don't get this. First, if it's a business vehicle then you can deduct the depreciation regardless. Second, if it's a "high depreciation" vehicle like a luxury car or a high-tech hybrid, that depreciation has already been factored into the lease payment, and the leasing company still expects to be able to make a profit off of you. Third, the leasing company gets to take the incentives and the tax credits, not the lessee, so again, that's already factored into the lease payment.

 

Again, all of this boils down to, "It sure is nice to always have the latest technology in a car and never have to worry about the guilt of selling it 3 years later at a massive discount. Sure is nice." Nice things cost money.

 

I guess after "owning" cars my whole life, I can see the advantages with a lease.

 

Likewise, after owning my house for 8 years I can see the advantages of renting, but at the end of the day it's nice not to have to clean your own gutters and replace old plumbing, and nice things cost money...

[Geeto67]

Second, if it's a "high depreciation" vehicle like a luxury car or a high-tech hybrid, that depreciation has already been factored into the lease payment, and the leasing company still expects to be able to make a profit off of you. Third, the leasing company gets to take the incentives and the tax credits, not the lessee, so again, that's already factored into the lease payment.

 

Again, all of this boils down to, "It sure is nice to always have the latest technology in a car and never have to worry about the guilt of selling it 3 years later at a massive discount. Sure is nice." Nice things cost money.

 

 

When my father leased his volt he was able to get all the tax credits and incentives applied to the price of the vehicle. Twice. The Tax credit doesn't go to the leasing company, it goes to the mfg who then passes it on to the dealer who uses it to lower msrp. They are not obligated to do this by law, but almost all of them do it to be competitive. The lease is based on the adjusted price post incentives so the depreciation works out to be less than you think.

 

Now, if you live within a single charge range of where you work or usually drive, there are charging stations at your home and destination, and your fuel costs for the month are about $200-$250 and your lease payment in that same range, then eliminating the fuel costs by buying electric will offset the lease payment - meaning your total vehicle expenses go down for the month. In a finance agreement, the payments would be higher so the effect of the offset would not be as great.

 

With qualifying plug in hybrids and electric cars once they are out of warranty they are more expensive to fix than a conventional car due to the complexity and the expense of battery technology (which you don't realize has a finite lifespan regardless of mileage - imagine if you had to replace a tranny every 10 years regardless of mileage). Battery technology is also the area whose evolution is most critical to the functionality of the car and you can't upgrade older tech easily. So if you meet the certain parameters, leasing a hybrid/electric car is a better deal than financing a conventional ICE powered car.

 

My father experienced this with both his volts, he was able to charge it at home and work, and most of his driving was in congested city areas which were bad for ICE mpg anyway so his fuel cost dropped to nil. For any long trips they usually had to take the dog so they took my mother's car and so nothing changed for them. He often said having the volt was like having a free new car since he was just paying for what he was paying in gas. I have two different co-workers who have leafs and they tell me the same thing - their commute and daily use fuel costs dropped by the same amount as their lease payment so it felt like a "free new car".

[greg1647545532]

I see, I thought you were talking about leasing vs buying, but you're talking about leasing a car that you couldn't otherwise afford to buy.

[ODoyle]

After talking to the dealer JEGS works with I think Its best If buy outright for what I want and use the supplier pricing tool to have the truck I want built and not buy one off the lot. A little more money down is needed but owning it is worth it. I dont want a 52K truck that I just have to turn back in and lose money on.

[Geeto67]

I see, I thought you were talking about leasing vs buying, but you're talking about leasing a car that you couldn't otherwise afford to buy.

 

sort of...you can still afford to buy the car, but it makes less financial sense to do so because you hold it for longer and you pay more to do it (5 year finance vs 3 year lease). It's about $471 (per chevy's website) a month to finance the car for 2 years where as a lease is about $237. The book value of a volt after 5 years is about $12-$13K but by leasing at that rate (twice) for 5 years you would have saved $14040, so in reality leasing saves you roughly $1K-2K over a 5 year period. Most of the depreciation in the hybrids and electrics happens between the 2 and 5 year mark - the closer you get to that 8-10 year battery replacement schedule the more worthless the car becomes.

[Geeto67]

After talking to the dealer JEGS works with I think Its best If buy outright for what I want and use the supplier pricing tool to have the truck I want built and not buy one off the lot. A little more money down is needed but owning it is worth it. I dont want a 52K truck that I just have to turn back in and lose money on.

 

company incentives make a huge difference in the equation. I think Chevy's supplier pricing is $3K off the top before any further dealer incentives which is hard to beat with a lease deal. I get subaru VIP pricing at work which is 2% under invoice.