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Be prepared to get lectured on the evils of leasing.
LOL. I second this.
Expect the following...."leasing is for suckers!".. "Never ever ever lease"... "You're just throwing your money away"... "It's basically a long term rental"... "Buy cash only and if you cant afford to buy cash then walk until you do"....etc..
I lease and it works great for me. Just make sure you do your research and homework before you lease.
Last edited by louie0406; 03-03-2015 at 08:49 AM..
Would like to learn the pros and cons of leasing a new vehicle for 2 or 3 years.
Any information is greatly appreciated!
Pepperdog
If you don't have neg equity, 2 yr lease can be great. The depreciation is usually much higher, which means you are paying the difference between otd and the depreciated cost. That said, the mf may be higher depending on who you lease through. Most manufacture finance companies sweet spot is around 36 mths, some 39 and a few at 24. Remember if you have a choice in tranny, manual will depreciate more, same with hb if you can choose between sedan and hb.
Also don't worry about the people who want to tell you what to do with your money, most of them are still living in the 60s.
If all you need is transportation and you are returning the car anyway, go for one of those 0/0/0 deals. Some are going on right now. $200 a month is lunch money.
Would like to learn the pros and cons of leasing a new vehicle for 2 or 3 years.
Any information is greatly appreciated!
Pepperdog
2 years lease - Better for someone who is interested in leasing for 2 years
3 years lease - Better for someone who is interested in leasing for 3 years.
Joking aside. Every lease is different. You need to run the numbers based on what your need is.
I suggest you read up on leasing as it can be confusing, if you don't know what your payment consists of.
You have to know the residual value, the higher the better the lower the more your monthly payments.
The money factor is pretty much the interest the Dealer will charge you.
Cap cost reduction is the down payment your willing to put down.
The length of your deal should not be more than 3 years, if its anymore, than your better off buying
instead of leasing. if you put more than 15k miles a year you may want to buy instead of leasing as well.
Again do your due diligence, leasing doesn't work for everybody, a lot depends on your needs and your
priorities. Find out what the lease end fees are as well, sometimes it can be costly.
Would like to learn the pros and cons of leasing a new vehicle for 2 or 3 years.
Any information is greatly appreciated!
Pepperdog
One major thing to be concerned with on a 3-year lease vs a 2-year lease is tire/brake wear and out-of-warranty repairs. You are required to turn the vehicle in with things in good working condition and a certain amount of tread/brake life left.
On average people drive 15K miles/year so with a 2-year lease you turn the car in at 30K miles. With a three year lease that means you might have up to 45K miles on it. Most base warranties are 3 years/36K miles so you will not have basic vehicle coverage for the last 9K miles. If your radio breaks or something like that then you'd have to pay to fix it before turning it back in.
In addition, depending on the driver/vehicle sometimes tires and brakes don't last 45K miles, either. So you might have to replace those before turning the car in, too. It just depends....
So keep that in mind....a 3-year lease will have lower payments, though, so you can still be better off going that way but you have to leave room for some possible repairs in that 3rd year or right before turn-in.
One major thing to be concerned with on a 3-year lease vs a 2-year lease is tire/brake wear and out-of-warranty repairs. You are required to turn the vehicle in with things in good working condition and a certain amount of tread/brake life left.
On average people drive 15K miles/year so with a 2-year lease you turn the car in at 30K miles. With a three year lease that means you might have up to 45K miles on it. Most base warranties are 3 years/36K miles so you will not have basic vehicle coverage for the last 9K miles. If your radio breaks or something like that then you'd have to pay to fix it before turning it back in.
In addition, depending on the driver/vehicle sometimes tires and brakes don't last 45K miles, either. So you might have to replace those before turning the car in, too. It just depends....
So keep that in mind....a 3-year lease will have lower payments, though, so you can still be better off going that way but you have to leave room for some possible repairs in that 3rd year or right before turn-in.
+1 this response.
You need to find the sweet spot in your budget and needs. If you drive less miles, a 3 year may work. I would not lease beyond the manufacturers "bumper-to-bumper" warranty based on time or mileage.
The advice from another poster above that discussed the terms and some of the lease specific wording is great but it really can be simplified. Add up the money you pay up front and the monthly payments and then divide by the number of months. Does the resulting monthly cost make sense for what you want to do?
Leasing takes away risk of owning a depreciating asset and gives you a guaranteed cost for a guaranteed term. Sometimes that may work in your favor, sometimes it may not. You simply make the decision based on the math.
Good luck.
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