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leasing a car?

Old 07-20-2012, 01:36 PM
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Dont know anything about leasing a car. What are the advantages of leasing over owning?
Insurance?
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Old 07-20-2012, 01:46 PM
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Please provide more information.

Do you plan on keeping the car for more than 3-4 years?
How many miles per year do you drive?
Do you like to have things paid off or do you mind always having a car payment?
Are you looking to keep your monthly payments low but have nothing to show for it after the end of the lease?

I have done both. The main reasons that I have leased in the past was that my wife would typically want a new car every 3-4 years. I also needed to keep the monthly payment "manageable". We have since purchased her off-lease Ford Explorer since we like the truck and will keep it for a while longer. It probably would have been cheaper to just buy it in the first place.

I looked into leasing my current car (2011 Hyundai Genesis). Since I plan on keeping the car for at least 5 years or so, it made more sense for me to buy it. The only downside is that the lease payment would have been around $400/month and the buy payment is $730/month.

Also, some cars may be better to lease than others. Those with a higher residual value would typically be best. Remember, you are really paying the difference between the negotiated selling price and the value of the car stated at the end of the lease. Since cars suffer from higher depreciation in the earlier years, you are typically paying for at least 1/2 of the car in the first 3 years.
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Old 07-20-2012, 03:24 PM
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I have always bought everything at auction. Never had new. Wife just asked about it and i told her it must be deal for someone or it wouldn't be popular.
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Old 07-20-2012, 03:30 PM
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I think the appeal is the low monthly payments. Probably doesn't make sense financially but you get to drive a nice car that you like.
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Old 07-20-2012, 03:34 PM
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I leased for awhile at the advice of my lawyer.

Bad time in my life... divorce, immediately followed by bankruptcy. The lawyer handled both. I asked why in the hell, having two vehicles that were paid for and being in financial dire straits, I should go lease a vehicle? Simple, he said. Lease a new vehicle now while your credit is still good. It will be crap after the bankruptcy and you will not be able to buy a new car for a decent interest rate. The bankruptcy court will make you sell one of the vehicles you already own. However, they have to honor contracts, which a lease is -- you do not "own" the vehicle, the leasing company does. So, he said, go lease yourself a new car, truck, whatever now. His advice proved to be spot on.

After my 2nd lease, I went and bought a new truck and would probably never lease again. It's okay for the right situation and if you can stay within the mileage limits. Insurance was no different than if you owned the vehicle, except the leasing company was named as the loss payee and you had to have full coverage.
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Old 07-20-2012, 03:59 PM
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Advantages

new car
little to no money down
lower monthly payment

Disadvantages

you don't own it - no equity in the car
mileage cap
love it or hate it you are stuck with it until the lease contract expires
end of lease costs

Lease amount among other things is based on vehicle price, so negotiate the price. Most dealers base lease payments off MSRP and most people don't bother to negotiate the price. Put as little money down as possible, pref $0 down.
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Old 07-20-2012, 05:34 PM
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Leasing is great if you meet the right parameters: you want a new car every 3-4 years; you drive between 12,000 & 18,000 miles a year; you want to avoid the hassle of selling the car; and you don't want to lay out any money -- it can be a huge added bonus if you can write it off as a business expense, which is far better than $0.55/mile.
We lease two of our four cars/suvs - the wife fits the scenario perfectly and all hers are Honda's, which are cheap to lease (good resale), and I have a work vehicle that I write off 98%, so it is far cheaper than owning; the other two fall into the classification of limted use collector cars, so leasing is not an option.
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Old 07-20-2012, 06:00 PM
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My daughter leased because she wanted a new car with low monthly payments. Bad decision. The dealership offered to take it back before the lease expired. She could not wait. They tagged her pretty bad on turn in even though she was under the mileage and the car was kept in good condition.. Considering the turn in costs, the down payment and monthly payments she learned it is better to buy a good used car.
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Old 07-20-2012, 06:25 PM
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Lease- No down payment.
Drive a car you couldn't buy.
If you lease then you need to keep leasing.
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Old 07-20-2012, 06:42 PM
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Thanks guys i will keep going the way we are going. Buy cheap at auctions
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Old 07-20-2012, 07:40 PM
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I just leased a car for the for the first time ever.

Admiral had a 2005 honda pilot that she bought new because she was driving 20k+ miles a year and depended on the car 364 days a year. Excellent vehicle and averaged over the 7.5 years she owned it, paid about $275 a month for it, not including maintenance or consumables. (which was probably $15-20 a month)

Suddenly that stopped. Now she's driving 10-12k miles a year. Perfect lease range.

So now we go and lease a basically identical 2012 Pilot No maintenance costs. No repair costs. No tires, brakes, etc. The monthly cost of ownership is $375 a month.

At the end of the 3 years we'll have the option to buy the vehicle if it's been trouble free, or if for the slightest reason she doesn't like it, can give it back to the dealer and we know exactly what the cost of ownership for 3 years will be, up front.

So basically, even though she did very well with the first pilot, she'll be paying $100 a month extra to never have a car that is out of warranty or need significant maintenance, with the option to buy the car when the 3 years are up.

Now, compare to me - I usually buy lightly used (2004 Dodge in 2006, $20,000) and sell slightly more used (in 2011, $14,000) but my maintenance costs are high for repairs improvements etc. I only paid ~$140 a month for that vehicle while I owned it - but any unexpected major repairs would have me pushing $160-180 a month or more.

Leasing isn't the cheapest way to get a car, by any means - but I think it is the most straightforward in terms of what it costs you. You know EXACTLY what you're getting into when you sign the papers.

Last edited by Flot; 07-20-2012 at 07:52 PM.
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Old 07-20-2012, 07:42 PM
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I leased a car when I was in college and knew I wouldn't want the car after I graduated. It fit the budget and my hort term needs. Worked out well for the 3 years.
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Old 07-20-2012, 07:49 PM
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Originally Posted by ebg18t View Post
I leased a car when I was in college and knew I wouldn't want the car after I graduated. It fit the budget and my hort term needs. Worked out well for the 3 years.
Hmmm, that could be 'short' or 'horn'.

Both work.
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Old 07-24-2012, 11:28 AM
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Originally Posted by Johnny Dreamer View Post
Hmmm, that could be 'short' or 'horn'.

Both work.
Suppose to be short. Damn iPad corrects the weirdest things.

---------

All of cars now were new purchases since we wanted to keep them long term. Don't think I will lease again unless she has twins or triplets or something crazy like that.
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Old 07-24-2012, 12:46 PM
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I lease my comapny vehicles.........buy my personal vehicles (usually 5 vehicle transactions a year)

A lease requires some money down (I make it $1,000 max) and the payment is "rent" on the vehicle. A business cannot write off the entire puchase price of a vehicle but instead only fixed amounts each year. The business can however write off the entire payment amount of a lease. The tax difference often overrides what is actually a price increase in leasing vs buying a vehicle. Since an individual isn't facing tax differences either way, I always buy my personal vehicles as that is often the better deal.

(my opinion is true in most cases but not 100% of them.....you have to decide yourself)
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Old 07-24-2012, 01:26 PM
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I lease both of my cars. We both like new, warrantied vehicles. Neither of us have the patience for creaks, groans, or visiting the local mechanic.

I just leased her a new loaded 2012 VW Passat and for 3 years of complete worry free maintenance, warranty, and a car with less than 36k miles the total outlay is just shy of 10 grand. To me paying $3,300 a year fixed for a nice, new,reliable, warrantied car is a no brainer. Also we both get loaners if our cars need work which is huge because there isnt any downtime at work due to car trouble.

My Lexus would have been $250 a month more had I purchased and I plan on getting a new one (or better one) anyways in 3 years so the lease made sense. Some think I am crazy for paying so much to "rent" my car but at the end of the day I could have made payments on a purchase and been upside down in 3 years anyways.

I am not drinking the leasing kool aid and do see the value in long term car ownership, but it is great if you fall within the mileage parameters and enjoy a new car every 3 years.
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Old 07-24-2012, 02:51 PM
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Driving is dangerous, hire a pro.
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Old 07-24-2012, 04:05 PM
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Originally Posted by baypro21 View Post
Driving is dangerous, hire a pro.
what kind of contractor is that and what kind of lic should I look for
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Old 07-24-2012, 04:23 PM
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Originally Posted by Flot View Post
I just leased a car for the for the first time ever.

Admiral had a 2005 honda pilot that she bought new because she was driving 20k+ miles a year and depended on the car 364 days a year. Excellent vehicle and averaged over the 7.5 years she owned it, paid about $275 a month for it, not including maintenance or consumables. (which was probably $15-20 a month)

Suddenly that stopped. Now she's driving 10-12k miles a year. Perfect lease range.

So now we go and lease a basically identical 2012 Pilot No maintenance costs. No repair costs. No tires, brakes, etc. The monthly cost of ownership is $375 a month.

At the end of the 3 years we'll have the option to buy the vehicle if it's been trouble free, or if for the slightest reason she doesn't like it, can give it back to the dealer and we know exactly what the cost of ownership for 3 years will be, up front.

So basically, even though she did very well with the first pilot, she'll be paying $100 a month extra to never have a car that is out of warranty or need significant maintenance, with the option to buy the car when the 3 years are up.

Now, compare to me - I usually buy lightly used (2004 Dodge in 2006, $20,000) and sell slightly more used (in 2011, $14,000) but my maintenance costs are high for repairs improvements etc. I only paid ~$140 a month for that vehicle while I owned it - but any unexpected major repairs would have me pushing $160-180 a month or more.

Leasing isn't the cheapest way to get a car, by any means - but I think it is the most straightforward in terms of what it costs you. You know EXACTLY what you're getting into when you sign the papers.
In terms of total cost of ownership, buying after leasing is the most expensive. Leasing hides some of the costs (think "amount due at signing" is like a down payment even though your renting) and unlike buying a car, you will always have a payment since it's never yours.

That said, if you are the type who wants a new car every 3-4 years anyway, a lease can be attractive. Car companies push leases because they make more money off a lease than they do from outright purchases. The corollary to that is if they make more, you are saving less. People mention about the maintenance, but realistically, how much maintenance do you have during the first three years of a car?
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