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I am glad I read this thread. I am in the process of selling My 2010 Fusion Sport and I was really thinking of leasing from now on. Although I can afford something in the $40-$50 price range ( not bragging), I have never had a car for more than 3 years ( all except 2 bought new). After about 2 or 3 years I am always looking at getting something else and I dont like the hassle of selling my car or getting screwed on a trade in. Although my wife is totally against it I am really considering giving leasing a try.
I dont think it is financially good forme to finance a car for 5 or 6 years, make these high paymenst only to sell it and lose money...
I am one of those people who doesn't really understand the appeal of leasing. My car is a mode of transportation, nothing more (certainly not a status symbol, LOL -- I drive a Hyundai!). I buy new, which I know is not usually a smart move, but then I keep the car forever. My last car (a Toyota Tercel) lasted 17 years and all but 2 of those years included Michigan/New Hampshire winters.
For me, leasing would make no sense at all because I usually keep my car for at least a decade after paying them off. A decade of no car payments at all is really, really nice!! (Basically, I keep them until it makes no more sense for me to do so, e.g. something major goes wrong and it would cost big bucks to fix it.)
I do understand why leasing might make sense in some situations, but I can't imagine ever doing it myself.
So when would you guys suggest someone NOT lease? What situation would make leasing not viable or a poor choice?
The financially sensible thing to do is to buy a car that you can either pay for right up front or within a couple of years. Then own it for 10 years. This is my parents' philosophy. Between the two of them, they have had 3 cars in almost 30 years. They have not spent money on cars.
I lease my primary vehicle for a couple of reasons.
I love cars. I love high end cars. I love changing them out frequently. I already own 2 (fully paid-for) cars. This is an entertainment cost for me (with the added benefit of peace of mind for a very long commute at odd hours). But I know it is an entertainment cost. I have already fully covered retirement, savings, my other bills, etc, before entering into this lease. I also don't want the hassle of selling a used car.
Another reason to lease may be if it makes sense from a business point of view.
A bad thing to do is lease to get into a car you cannot otherwise afford.
Good point - there are other arguments out there, but burying negative equity in a lease has always made sense to me. I've never had to do it, but if done, once the lease is up, you're free and clear of the negative. All you're doing is rolling the negative and paying off monthly, but at least you can walk away clear when the lease is over. The problem is most GAP companies only protect 110-120% (of msrp) so in this case it may make sense to put some money down to protect yourself.
Good point.
On my last car, the calculated residual after 38 months was 62k on a 105k car.
That is what I paid my lease based on.
The economy tanked and that car blue booked at 49k.
I didn't eat the loss. The bank did.
Now that the economy is bad, my new lease residual is much lower. It's 32K on a 76k car. However, should it be worth more, I get the advantage of the equity in the car.
[quote=stan4;23413760]
I lease my primary vehicle for a couple of reasons.
I love cars. I love high end cars. I love changing them out frequently. I already own 2 (fully paid-for) cars. This is an entertainment cost for me (with the added benefit of peace of mind for a very long commute at odd hours). But I know it is an entertainment cost. I have already fully covered retirement, savings, my other bills, etc, before entering into this lease. I also don't want the hassle of selling a used car.
quote]
similar thoughts here. My wife and I enjoy driving new/different cars, but also like having one of our rides under warranty considering the longer trips we take back home, etc.
For some years now, we've leased our "family truckster/boat puller" vehicle, but owned our second car which at this point in our lives is our toy. If we were of the type to want to own a vehicle long term regardless of mileage or warranty then leasing anything would not be for us. But since we do want one car to be fully covered and new(er), then we normally are better off leasing rather then dealing with depreciation every 3 or so years.
Yes. I didn't put anything down on either of my leases. I did the math. The savings isn't that much.
So did you literally walk out of the dealership with a new car and didn't spend a dime? Or do they at least want the first month's payment?
I'm leasing a 2008 Prius and I think I got ripped off. I had a trade worth something like $3500, so that was my "down payment" or cap cost reduction on the lease. It's a 60 month lease, so I have a year to go, but the payments are $350 a month. The original value of the car was about $21K.
The Prius works well for my needs, I only drive about 6K miles per year, so I'd like to just upgrade/lease a new Prius in a year. Leases are so confusing, I feel like I got ripped last time and don't want to again. I remember them trying to get me to pay even more down at the time and I told them the trade was enough, and was going to walk. I didn't even know there was a possibility of nothing down at all.
If VW is better with zero down leases, I'd be willing to go with a Jetta Diesel next time around. I just want good gas mileage, ability to have two booster seats in the back, and not a huge car.
Although I can afford something in the $40-$50 price range ( not bragging)
What a used bike? I'm sure you mean 40 to 50 thousand.
Quote:
Originally Posted by daellis99
I don't think it is financially good form to finance a car for 5 or 6 years, make these high payments only to sell it and lose money...
A cost breakdown of owning vs. buying, you always come out ahead buying (provided you keep the car several years after it's paid off), but there's always the risk your old car going to break down a leave you stranded somewhere. Personally I would never consider leasing, but my Wife like's to have a new car every 3 years, and she's the Boss. I on the other hand, owned all my cars, I've had the same car since we met and she is on her 3rd leased car. Mine on the other hand has been paid off for 6 years now.
I'm leasing a 2008 Prius and I think I got ripped off. I had a trade worth something like $3500, so that was my "down payment" or cap cost reduction on the lease. It's a 60 month lease, so I have a year to go, but the payments are $350 a month. The original value of the car was about $21K.
You kidding right? Assuming a 6% sales tax, 4% interest rate over 60 months, with a $3,500 trade in on a $21,000 car you could have purchased the car for $337 a month and OWNED it a the end of 5 years. Something is not adding up there. Maybe you have really lousy credit and your paying a high interest rate.
You kidding right? Assuming a 6% sales tax, 4% interest rate over 60 months, with a $3,500 trade in on a $21,000 car you could have purchased the car for $337 a month and OWNED it a the end of 5 years. Something is not adding up there. Maybe you have really lousy credit and your paying a high interest rate.
No, I have excellent credit- last check it was around 800, same when I leased the car. I think I'll try a different dealership next year!
I prefer a newer car and to change cars at least every 5 years. Plus I don't put many miles on my cars, so I'd like to lease again.
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I'm sure you mean 40 to 50 thousand.
