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Old Yesterday, 02:33 PM
 
1,026 posts, read 578,065 times
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Don't listen to the folks who say leasing is always bad. It isn't the right choice for everyone but it is a good choice for others.

My first piece of advice would be to put $0 down at signing. All this does is reduce your monthly payment. Say you put $2,000 on a 24 month lease and 12 months in the car gets totaled. You know what happens to that $2,000? It's gone and you will never see it again. If you put $0 down you would have paid about $1,000 of that amount over the same 12 months of payments.

My second piece of advice is to call dealers and ask if they have any courtesy/demo units available. These are cars that the dealership lends to people when their cars are in for service. Was they have 2-3,000 miles on them the dealers are allowed to sell them as new. They receive a significant discount because they were demo vehicles and are also eligible for any manufacturer rebates/discounts that are currently running. They also tend to be pretty well equipped. I work for a major automaker and I always lease demo units.
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Old Yesterday, 03:06 PM
 
731 posts, read 1,274,000 times
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EDIT:


I'm deleting my post, because it is not my style to get into internet "arguments" with anyone. I was hoping to provide help to the OP, and stand by my statements, but do not wish to get into a back and forth with DetriotN8V, who is a long-time, and I'm sure valued poster. After reading our responses it is apparent we have very different lease expectations and experiences (and perhaps my contracts read much different than his/hers), and I'll leave it at that.

Last edited by z28lt1; Yesterday at 03:33 PM..
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Old Yesterday, 03:26 PM
 
6,285 posts, read 11,780,504 times
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Quote:
Originally Posted by z28lt1 View Post
I understand how a lease works, thank you.


You are correct you owe the "buyout" buy the overwhelming majority of the leases calculate an early buyout at the remaining payments plus the end of least buyout (originally calculated residual). You don't just owe the end of lease buyout amount, you owe the early buyout amount, which like I said is very often the remaining payments, plus the end of lease buyout. If you think your car is stolen 5 months into the 3 year lease and the leasing company is going to say "forget the 31 months of payments we are planning on, we'll just take the $12k end of lease buyout and call it a day", then you should re-read your lease contracts. Note that it is different than any early turn-ins of the lease, since you don't have a car to turn-in.



The down payment's impact is to lower your monthly lease payments. Therefore, if you make a down payment, your lease payments will be lower, and you will be less likely to owe more than the vehicle is worth.


You are correct, the down payment "disappears" but it was used to lower the amount you owe on the car, so you will owe less if the vehicle is stolen.



***NOTE never did I make any claim that someone should or should not make a down payment, I just stated without one, you are more likely to need Gap insurance****

The reality is the financial upside of a down payment is very much related to the money factor/interest rates of the loan, and your opportunity cost of using that money elsewhere.


It's not super complicated and not really different than a traditional finance. The math is the dealer "sells" the car for a price (cap cost). The leased amount is the "selling" price minus the defined residual value. That amount is then financed through a combination of down payment and lease payments. There is interest charged on the lease payments, so the less you put down, the higher your total cost is because you pay more interest. Same as buying a house or car or anything else.



You are correct, that the dealer is not involved and it is the financing/leasing company, I should have been more exact on that.
A down payment does not save you any money on interest on a lease. The MF is calculated on the total depreciation. All a down payment does is prepay a portion of each payment, resulting in an overall lower payment. It doesn't save you any money whatsoever though. A down payment reduces the cap cost, thereby reducing the payment, but the interest is calculated on the MSRP vs. the residual value. No reduction in "total cost".
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Old Yesterday, 06:32 PM
 
Location: Honolulu, HI
5,478 posts, read 1,496,705 times
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Quote:
Originally Posted by Quietude View Post
Leases have been grossly oversold and misrepresented as the wonderland way to have lots of new car real cheap. The downside, except for a very narrow range of buyers, is almost bottomless. It's not inaccurate to sum it up as the worst of buying combined with the worst of renting.
Agreed. People see folks with a brand new Mercedes every 2-3 years and think it's a wise decision to lease a car. Nope.

If leasing was a good deal for customers and not an easy way for dealerships to make money, leasing would end in a second.

It's money down the drain as a result of chasing the novelty of a new car every few years. Hardly any financial expert in the world would tell someone to lease a car.
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Old Yesterday, 06:56 PM
 
Location: Metro Detroit Michigan
3,519 posts, read 960,781 times
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Quote:
Originally Posted by DetroitN8V View Post
A down payment does not save you any money on interest on a lease. The MF is calculated on the total depreciation. All a down payment does is prepay a portion of each payment, resulting in an overall lower payment. It doesn't save you any money whatsoever though. A down payment reduces the cap cost, thereby reducing the payment, but the interest is calculated on the MSRP vs. the residual value. No reduction in "total cost".
All Nissan leases include GAP coverage and my I only put down $1,000 on a 2018.5 Rouge sport SV AWD with the all weather package. I added the tire and rim protection for $25 extra because of were i live pothole county Iím covered if i crack a rim and tire blowout. The only thing it does not have is navigation and adapt cruise control. It goy collision avoidance and auto brakeing. I was in and out in a little over an hour lease makes sense to me because i donít keep a vehicle like i use to and Iím retired so Iím very happy getting a nev vehicle every 3 years.
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Old Today, 08:21 AM
 
5,808 posts, read 6,652,711 times
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Quote:
Originally Posted by z28lt1 View Post
My general experience with the billboard/advertisement lease deals is generally a scam, as it is for a stripper model that they don't have in stock, and high fees, etc....
The TV commercials I see for low monthly lease costs almost always include fine print with several thousand due at signing. And also require excellent credit, and don't allow as many miles per year. In addition to the other things z28lt1 pointed out.
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Old Today, 08:28 AM
 
Location: N of citrus, S of decent corn
35,905 posts, read 44,058,075 times
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Quote:
Originally Posted by ferraris View Post
The TV commercials I see for low monthly lease costs almost always include fine print with several thousand due at signing. And also require excellent credit, and don't allow as many miles per year. In addition to the other things z28lt1 pointed out.
I expect to have a down payment covered by my trade. I donít drive many miles a year and I have excellent credit. I not know why everything has to be so difficult.
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Old Today, 08:50 AM
 
5,130 posts, read 5,189,978 times
Reputation: 5177
Quote:
Originally Posted by gentlearts View Post
Aside from how much they are willing to give me for my car, what are the variables?

How much is the car?
How long is the lease?
What is the residual value?
What else?
Why ask these questions if mind is already made up?


Quote:
Originally Posted by gentlearts View Post
I not know why everything has to be so difficult.
Of course, if money makes no difference to anyone.
If student loans are all paid off.
No credit card debt.
No home mortgage to pay.
Emergency fund if fully vetted.
No college fund for any children to save for.
Not saving to purchase any home.
Nothing to leave to any heirs or don't care to.

Well then go lease anything. It's your money. Spend it. Walk into any new car dealership and state "I'll take that one". Done.
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Old Today, 08:53 AM
 
Location: Metro Detroit Michigan
3,519 posts, read 960,781 times
Reputation: 2827
Quote:
Originally Posted by gentlearts View Post
I expect to have a down payment covered by my trade. I don’t drive many miles a year and I have excellent credit. I not know why everything has to be so difficult.
It’s not just go to the dealer and get what you want don’t listen to everyone here it’s your choice not everyone on here is an expert I’m just telling you that i only put a $1,000 down and a $275 a month lease payment on a $30,000 2018.5 Nissan Rouge sport SV AWD with just about everything safety wise and all the bells and whistles i ever need 3 year lease 36,000 miles and built in GAP insurance, no just dealer prep fees and taxes and title fees no plate fee since i had my own plate. Jut get a vehicle that you like. Like you i don’t drive a lot and if i did go over the mileage I’ll pay it no big deal. I love having a new vehicle every 3 years and not worry about repairs because it’s always covered under bumper to bumper warranty. I pay an additional $20 a month for wheel and rim replacement because we’re i live there’s tons of pot holes in Michigan.
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Old Today, 09:10 AM
 
5,808 posts, read 6,652,711 times
Reputation: 3545
Quote:
Originally Posted by gentlearts View Post
Ok, so you are saying, go to a dealer and negotiate a price to buy, then ask about leasing.
I’m already thinking if. F it. Why do I need to play games? I’ll just keep my Jetta.

I have money. I could pay cash for a car. I just don’t want to get ripped off. I’ll use them, they won’t use me.
Quote:
Originally Posted by gentlearts View Post
I expect to have a down payment covered by my trade. I don’t drive many miles a year and I have excellent credit. I not know why everything has to be so difficult.
I would just pay cash in your shoes. It doesn't get any less difficult than that, and the simple nature of the transaction makes it a lot harder for you to get ripped off.
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