Luxury Car Lease

[wumarshall82]

Turn it in

[BarqCider]

just buy a new one and return this one in. you're wasting money in the long term, unless you pay it off in 2-3 years max.

[smarterguy]

I've always wondered about the people I see driving the new luxury cars around here...

[PK12]

Originally Posted by smarterguy

I've always wondered about the people I see driving the new luxury cars around here...

Lol I am one of em.

The monthly lease payment and insurance fit within my budget, all maintenance except for state and emission inspections is covered, and I get to drive a new car every three years.

#YOLO

[NC211]

Maybe I missed it somewhere in this thread, but OP, the KBB isn't the price of the car. It's whatever the number is in your lease contract, known as the "residual value". That's the price to buy the car. Add that number to the total of your payments so far and your down payment and then see if it's worth buying or not. Then ask yourself if a 3 year old luxury german car with only 14,000 miles is worth that price?


Leasing isn't stupid if done right. I leased an SUV nearly 3 years ago for my wife. My negotiations were based upon that residual value the most. Basically when all summed up together, assuming I buy the car in the next few months when the lease ends (which I will), I paid what I could've bought the car for via Costco discount 3 years ago. When I leased the car, the residual value ended up being over $3,500 LESS than what that exact same model was then selling for in the market as a 3-year lease turn-in, with 50,000 miles. Lease payment is an amount that would've financed the car with a unrealistic low interest rate at that time. Down payment was $0. And, I was able to get out of the garbage car I needed to replace (Volvo XC90) whole. It was a very good deal for me. Especially at that time when I was watching the wallet a little tighter than I have to do now, three years later. We'll buy the car no question about it. It's been under our ownership since day 1. Checking today, I could buy the car at the end of the lease for the residual, and then turn around and trade it in with actual equity available.


Check your contract for the residual value, not the KBB value.

[kevinm]

Originally Posted by NC211

Maybe I missed it somewhere in this thread, but OP, the KBB isn't the price of the car. It's whatever the number is in your lease contract, known as the "residual value". That's the price to buy the car. Add that number to the total of your payments so far and your down payment and then see if it's worth buying or not. Then ask yourself if a 3 year old luxury german car with only 14,000 miles is worth that price?


Leasing isn't stupid if done right. I leased an SUV nearly 3 years ago for my wife. My negotiations were based upon that residual value the most. Basically when all summed up together, assuming I buy the car in the next few months when the lease ends (which I will), I paid what I could've bought the car for via Costco discount 3 years ago. When I leased the car, the residual value ended up being over $3,500 LESS than what that exact same model was then selling for in the market as a 3-year lease turn-in, with 50,000 miles. Lease payment is an amount that would've financed the car with a unrealistic low interest rate at that time. Down payment was $0. And, I was able to get out of the garbage car I needed to replace (Volvo XC90) whole. It was a very good deal for me. Especially at that time when I was watching the wallet a little tighter than I have to do now, three years later. We'll buy the car no question about it. It's been under our ownership since day 1. Checking today, I could buy the car at the end of the lease for the residual, and then turn around and trade it in with actual equity available.


Check your contract for the residual value, not the KBB value.

.. plus you are buying a used car that YOU know the history of.

[Tish Thompson]

Originally Posted by rome99

I leased a German luxury car 3 years back. I gave $6K down and monthly payment is $625. New car price is about $55K. My lease is going to end soon. As per the lease agreement allowed mileage per year is 12K. It has only done 14K miles so far. The condition of the car is excellent.
My question is what should I do with this car?

1. Return the car - if I choose to return will they come up with any other charges to draw more money?
2. Buy the car - As per KBB, the used car value is $35K. I have already spent about $30K. If I buy it, I ended up paying about $65K!

Thanks.

First in response to another post, only fools think fools lease cars. People typically mock what they don't understand. Now that I work in the automotive industry and understand leasing, I don't see why more people don't do it. We are conditioned to believe that we should only pay for a car for a certain amount of time. Or that we should own something that never adds to our personal bottom line. One way or another, you have to pay to use a car...so why not pay for one that you'll NEVER have to cover major maintenance on?

What is best for your situation? Sounds to me like you don't want to finance the car that you're currently leasing. Unless you wrecked the car, went over the mileage, missed payments or whatever, you won't have to pay anything when you turn the car in.

The contract that you signed when you originally leased the vehicle tells you what you will pay at the end of your lease if you want to buy the car. One of my biggest pet peeves is the way people sometimes misinterpret the way a lease works then make it seem like they're being overcharged after the fact for their leased vehicle. My mother tells people something similar to what you mentioned in your post...but she went ahead an bought her car anyway. I love her to death, but if she felt she was being ripped off and went through with the deal regardless and bought her previously leased vehicle. So to tell people that leased her car for 3 years then was surprised with the buyout number at the end of the lease tells me she's either not very smart or not telling the truth. But anyway, if you end up paying $65K for the car, it's because you leased a $65K car. As you indicated, you've spent $30K on lease payments...so to buy the car, you'd have to finance $35K. There are no fees added to the end of the lease unless you agreed to that up front.

A car is not a house. You don't get your down payment back in terms of cash, but it most likely will prevent you from being underwater...a HUGE benefit of leasing over financing. Remember, your down payment is money you put into the deal to basically buy your monthly payment down a bit, cover taxes, deposit requirements, initial monthly payment, etc. There IS a limit to the amount you can put down on a lease. $6000 may seem like a lot of money and that you should get some type of credit at the end of your lease, but from my experience leasing cars, your money more than likely only covered taxes and first month's lease payment.

[boyd888]

The correct lease down payment is $0. Putting a lot of money down on a lease is a bad idea and means the person either had crap credit or can't negotiate. If the car is stolen/totaled early on in the lease you could lose all of your down payment even with GAP insurance. Everything should be rolled into the lease as much as possible...taxes, fees, etc. If you have extra money you want to put down it is likely better being used for multiple security deposits (if offered).