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Old 03-04-2015, 08:42 AM
 
Location: Houston Metro
1,133 posts, read 1,996,659 times
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I took the cash and put it towards the purchase of a Jeep Wrangler Rubicon

Quote:
Originally Posted by louie0406 View Post
Nice! . Out of curiosity, did you take the cash and jump into another lease or did you buy it out?
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Old 03-04-2015, 08:42 AM
 
Location: East TX
2,116 posts, read 3,020,475 times
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Quote:
Originally Posted by louie0406 View Post
I may not be designed to benefit a buyout at the end but there are times where it does. I've known quite a few people who end up with equity at lease end. Its all about doing your homework and choosing the right vehicles to lease.

Friend of mine leased a Subaru Forester a few years back and ended up with almost $3k in equity.
Agreed. Do the homework. As I said, it is never designed to be bought out. It is designed to get you back in the door of the dealer in a set amount of time so they get another swing at putting you in a new car.

If you know there is equity, use it to your advantage and either buy it or negotiate to gain some of that equity back from the dealer towards a new deal.
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Old 03-04-2015, 08:47 AM
 
Location: Woodfield
2,086 posts, read 4,100,513 times
Reputation: 2319
Quote:
Originally Posted by HappyRider View Post
Then how do you explain this. I negotiated a lease for a 2014 RAV4 Limited(for my son) back in September. The end deal was this. $3600 down+$225/mo for 24 month with a residual of $21000 or so. The MSRP for the vehicle was $30K, which is exactly the sum of all payments. There is not even room for finance charge in there (although I am sure the dealer has incentives built-in). The book value for a 2 year old RAV4 is almost certainly more than $21K. He will come ahead if he buys decides to buy at the end of the lease. Now, 4 months later we leased a Highlander and that didn’t come out as good.
There's nothing wrong with leasing and then buying out as long as one understands the cost. Using this as an example, assuming all things are equal, a 3% interest rate for lease and loans, the new price of the car is $26,500 lease or loan (yep, you got a deal on the price!), by leasing for two years then buying with a five year loan, you end up paying about $6,000 more TOTAL than if you just bought it out right at the beginning on a five year loan.

Of course then the payments are $447 instead of the $225 lease (and then the $341 for the subsequent loan).

I've leased and bought, nothing wrong with either but once you know how a lease is calculated you're loath to do it again!
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Old 03-04-2015, 09:11 AM
 
5,481 posts, read 8,496,431 times
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Quote:
Originally Posted by ToyYot View Post
There's nothing wrong with leasing and then buying out as long as one understands the cost. Using this as an example, assuming all things are equal, a 3% interest rate for lease and loans, the new price of the car is $26,500 lease or loan (yep, you got a deal on the price!), by leasing for two years then buying with a five year loan, you end up paying about $6,000 more TOTAL than if you just bought it out right at the beginning on a five year loan.

Of course then the payments are $447 instead of the $225 lease (and then the $341 for the subsequent loan).

I've leased and bought, nothing wrong with either but once you know how a lease is calculated you're loath to do it again!
Right now I'm towards the end of my lease on one of my vehicles which is a 2012 Nissan Rogue. The residual buyout is $13,000. The vehicle is still in great condition and the book value is showing to be between 1k-2k higher than buyout. My fiancé is the one who drives the rogue and we are currently in the middle of closing on a home where she will be MUCH closer to work. Her commute will literally be less than 10 minutes. For this reason alone we see no value in jumping into another lease and instead just keeping the Rogue since its mechanically sound with an affordable buyout price. Not to mention it will still be under warranty for another 20k miles.
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Old 03-04-2015, 09:42 AM
 
Location: Woodfield
2,086 posts, read 4,100,513 times
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Quote:
Originally Posted by louie0406 View Post
Right now I'm towards the end of my lease on one of my vehicles which is a 2012 Nissan Rogue. The residual buyout is $13,000. The vehicle is still in great condition and the book value is showing to be between 1k-2k higher than buyout. My fiancé is the one who drives the rogue and we are currently in the middle of closing on a home where she will be MUCH closer to work. Her commute will literally be less than 10 minutes. For this reason alone we see no value in jumping into another lease and instead just keeping the Rogue since its mechanically sound with an affordable buyout price. Not to mention it will still be under warranty for another 20k miles.
Absolutely a good decision. Once you're at the point of lease-end the best decision IMO is to buy it out, its likely the cheapest way into another comparable car and you know its service history. The last car I leased I didn't buyout because it was a Ford with that infernal Microsoft infotainment system, Piece of junk, glad to get rid of it. Loved the car and would have kept it otherwise.
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Old 03-04-2015, 01:51 PM
 
2,776 posts, read 3,951,107 times
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2 year leasing worked for me - then I bought the vehicle as it was still relatively new, didn't show signs of any issues, and I knew its entire history ;-)

In retrospect, I should have financed to own, but at the time the 2 year lease seemed right for me. If I was going to lease again I would do the shorter of two available terms. That way I could either trade-in and find another better vehicle or buy it outright sooner rather than later.
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Old 03-05-2015, 07:55 AM
 
2,600 posts, read 8,721,109 times
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1. A lease is a joke and you'll get burned !!!

2. The difference is 12-months !!!
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Old 03-05-2015, 08:39 AM
 
3,483 posts, read 6,218,212 times
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I would rather have a two year lease, I get tired looking at my car after the third year
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Old 03-05-2015, 09:31 AM
 
4,833 posts, read 5,670,687 times
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Not here to argue lease vs buy but in some states the registration fees are pretty exorbitant (Colorado for one). So you do take an additional hit if you constantly register new or newer cars. We're talking $500-$1000 a year for registration fees on brand new cars. Goes down a bit each year as the car ages.
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Old 03-05-2015, 10:00 AM
 
Location: East TX
2,116 posts, read 3,020,475 times
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Quote:
Originally Posted by louie0406 View Post
Right now I'm towards the end of my lease on one of my vehicles which is a 2012 Nissan Rogue. The residual buyout is $13,000. The vehicle is still in great condition and the book value is showing to be between 1k-2k higher than buyout. My fiancé is the one who drives the rogue and we are currently in the middle of closing on a home where she will be MUCH closer to work. Her commute will literally be less than 10 minutes. For this reason alone we see no value in jumping into another lease and instead just keeping the Rogue since its mechanically sound with an affordable buyout price. Not to mention it will still be under warranty for another 20k miles.
Again, do the math. If you like the vehicle then buying may be a reasonable option and it may be affordable. Before you sign that contract, look at the new lease numbers. If fiance' is commuting less, there may be a lower mileage lease that could put her in a new vehicle for less money, and extend the amount of time you won't need to repair or maintain the vehicle. Either option may work for you, but know the choices before you decide.

Be careful of "book" value. There are many books and most are written by/for people who are not looking out for your best interest. Look online at autotrader, cars.com, and even eBay to see what the comparable vehicles are actually selling for. Then decide if it is a good idea.
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