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School Me On Leases

Old 08-09-2019, 07:30 AM
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So I've only leased a vehicle once and that was over a decade a go and didn't really know much about. I'm looking at getting a new truck to replace my 2013 Tundra. I'm either just going to buy a 2020 Tundra since I know what I'm getting with Toyota and am willing to just buy and hold on longer or i am toying around the idea of leasing something else. Perhaps one of the new GMC 1500 AT4's. I've read through some other posts here on the subject in the past regarding cap costs, residuals, etc. i think my main question is around trading in and down payment money. I see a lot of leases saying you need to put a few thousand down at lease signing but from what I read here most say you shouldn't have to put anymore down than a first months payment. Is this accurate? also, if I should be putting little to nothing down, does it make sense to still trade my Tundra in, or just sell it privately and not put that money towards the lease? I am thinking I would do a 3 year lease at 15k miles a year (i know that would add a bit to the payment doing higher miles). I guess my main concern would be, if i trade my Tundra in and have all that money down, my payment will be much lower now, but what happens in 3 years if I decide to lease again? I would want to be able to give the current truck back and get into a new one at a similar payment. However since i wouldn't have a trade in at that point wouldn't the cost to get into a new lease go up substantially?

Also, while I do really like the GMC, does any other brand lease much better? From what I also read, from brand to brand you could have a truck with a similar price but have very different payments. If I did a lease i would be looking at something that's probably in the 60-65k range (before negotiating off MSRP) so I'm curious to what others are paying for more highly equipped trucks. Thanks in advance for any insight.
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Old 08-09-2019, 07:48 AM
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This might help.

Vehicles, when to buy and when to lease?
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Old 08-09-2019, 07:53 AM
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Leasing is great for someone who wants to always have a new car. Your lease payments will equal the total between sale price and residual value so money down or not that delta over a period of time is what you will pay pulse milage buy up, fees and what not.

My my dad always does a three year lease on a new Mercedes, it seems to cost him about $10K and $600/month for three years. Once the lease is up itís just rinse and repeat.

Is always is having something new worth always having a payment? Donít know, the answer is different per the individual.
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Old 08-09-2019, 11:05 AM
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Leases are great for throwing away thousands down while paying 15% interest to rent a car you're still responsible to maintain, and then bending over at return time for every scratch, dent, ding, etc. on the car.
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Old 08-09-2019, 12:36 PM
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No money down on a leased vehicle ever! If you want to learn what you need to know on how to negotiate a deal on a leased vehicle, hit up edmunds.com. A world of knowledge, plus they have a specific forum for each car/truck make and model.
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Old 08-09-2019, 02:10 PM
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Originally Posted by halfwaythere View Post
No money down on a leased vehicle ever! If you want to learn what you need to know on how to negotiate a deal on a leased vehicle, hit up edmunds.com. A world of knowledge, plus they have a specific forum for each car/truck make and model.
Trade equity and down payment are sunk costs on a lease, if you want to lease I recommend pricing it with 0 cap cost reduction, youíll likely still have to pay the first month payment up front and possibly a security deposit. Captive lease companies are easiest to deal with at the end of the term, some banks and leasing companies will fee you to death if you donít purchase it. Itís funny in the northeast and upper midwest Ford does 35-50% leasing, versus the Atlanta market does maybe 7-8%! If youíre shopping itís simple to do 0 down and compare what youíre paying on similar vehicles, sometimes the factory will raise residuals and lower rates to lease more and itís a good deal, sometimes itís not so hot! It depends on your market area as well.
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Old 08-09-2019, 04:50 PM
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Originally Posted by N747JB View Post

Trade equity and down payment are sunk costs on a lease, if you want to lease I recommend pricing it with 0 cap cost reduction, youíll likely still have to pay the first month payment up front and possibly a security deposit.
!00% spot on. Money you put upfront on a lease besides first payment can be money down the toilet. Once you drive that vehicle off the lot, if you were to have an accident or it was stolen and it was a total loss, you would be out the amount you put "down" on that lease. Your insurance and GAP insurance would pay, but you would not be reimbursed for your down payment.
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Old 08-09-2019, 05:29 PM
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Originally Posted by Misterfu02 View Post
Leases are great for throwing away thousands down while paying 15% interest to rent a car you're still responsible to maintain, and then bending over at return time for every scratch, dent, ding, etc. on the car.
This is total misinformation - I'm a finance manager at one of the country's largest jeep dealerships and the interest ("money factor") on most leases is typically waaaay lower than normal financing rates. Also due to the rebate structure iit s sometimes cheaper to lease and then buy than it would be to finance from the get go because of much higher rebates on the lease. As far as putting money down on a lease most manufacturers aren't charging a security deposit these days, and the only thing required to be put down is the first month and DMV fee. Any money that's put down above that is at risk in the event of a total loss. The leasing company is the titled owner of the vehicle and the insurance check goes to them. They will not return one cent of any monies put down to you
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Old 08-10-2019, 09:04 AM
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Originally Posted by Misterfu02 View Post
Leases are great for throwing away thousands down while paying 15% interest to rent a car you're still responsible to maintain, and then bending over at return time for every scratch, dent, ding, etc. on the car.
have you ever actually leased a car?
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Old 08-10-2019, 11:18 AM
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Originally Posted by rdiesel01 View Post
This is total misinformation - I'm a finance manager at one of the country's largest jeep dealerships and the interest ("money factor") on most leases is typically waaaay lower than normal financing rates. Also due to the rebate structure iit s sometimes cheaper to lease and then buy than it would be to finance from the get go because of much higher rebates on the lease. As far as putting money down on a lease most manufacturers aren't charging a security deposit these days, and the only thing required to be put down is the first month and DMV fee. Any money that's put down above that is at risk in the event of a total loss. The leasing company is the titled owner of the vehicle and the insurance check goes to them. They will not return one cent of any monies put down to you
Jeep is a great example of why itís better to buy than lease. Jeep Wranglers have one of the highest resale values if not the highest around. Itís not uncommon to be able to trade it in after 3-4 years and get 70% of what you paid for it. Sell it outright, and youíd be doing better than that. Iíve done this with my Tacomas for years. Then you manage your equity and use it how you like. With a lease, after paying your monthly payments you have nothing, and quite possibly owe some $$$ at the end of your term.
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Old 08-10-2019, 02:09 PM
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Originally Posted by 787337 View Post


Jeep is a great example of why itís better to buy than lease. Jeep Wranglers have one of the highest resale values if not the highest around. Itís not uncommon to be able to trade it in after 3-4 years and get 70% of what you paid for it. Sell it outright, and youíd be doing better than that. Iíve done this with my Tacomas for years. Then you manage your equity and use it how you like. With a lease, after paying your monthly payments you have nothing, and quite possibly owe some $$$ at the end of your term.
The fact that the Wranglers hold they're value is also why they lease out so well. You're paying for a much smaller portion of the vehicle, and not everybody is in your shoes to be able to afford the much higher payment to finance
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Old 08-10-2019, 04:25 PM
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Remember, advertised leased rates are based on MSRP.

So unless you like paying MSRP, negotiate the price of the vehicle like you were buying it. Do not even tell them you are leasing.
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Old 08-11-2019, 04:46 AM
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Originally Posted by rdiesel01 View Post
The fact that the Wranglers hold they're value is also why they lease out so well. You're paying for a much smaller portion of the vehicle, and not everybody is in your shoes to be able to afford the much higher payment to finance
In a lease, youíre not paying less than the 30% that I would in my scenario. And I built that equity over time by trading in cars when the value to debt ratio was at its best. Leasing puts you in to a car you really canít afford and at the end of the lease youíre worse off than you were when you started.
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Old 08-11-2019, 05:36 AM
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Rather than turn them back in and depending on the residual, I have sold leased cars for several grand more than the buyout amount.

Depending on the money factor, terms and manufacturer, sometimes leasing is good way to go.

Last edited by Fish'nFool; 08-11-2019 at 06:12 AM.
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Old 08-11-2019, 08:09 AM
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Originally Posted by Fish'nFool View Post
Rather than turn them back in and depending on the residual, I have sold leased cars for several grand more than the buyout amount.

Depending on the money factor, terms and manufacturer, sometimes leasing is good way to go.
So youíre paying the buyout and then pocketing the difference by reselling for more? How much are we talking? A few grand?
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Old 08-11-2019, 12:47 PM
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Originally Posted by 787337 View Post


So you’re paying the buyout and then pocketing the difference by reselling for more? How much are we talking? A few grand?
I am not paying the buyout, the vehicle is sold like any other vehicle that has debt on it. Buyer cuts a check for the buyout amount and the difference to me. It has worked out to a few grand and then some. My last BMW I traded in on the purchase of Tundra and in that case I negotiated with the dealer to pay more than just a few grand above the buyout.

Of course it is vehicle dependent and this strategy will not work on every vehicle, in demand cars with good residuals and high resale values work best.
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Old 08-11-2019, 01:02 PM
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I’m on my second lease. First one was a 2014 Silverado. At the end of the lease, I wanted a Ram so I took the Chevy to the ram dealer and they treated it like any other used vehicle. Living in the Keys, I put very low miles on the vehicle so I ended up with under 20k miles after three years. That changes the residual value a good bit, in my favor. The truck was worth more than they expected when they wrote the lease. So they bought the truck from me, cut me a check for the difference in value, and I drove away with a new Ram. Next year I expect to do the same. I have 13k miles on the truck right now.

I also tinted the windows, added a bedliner, changed all of the lights to LEDs, and had a nice ding in the tailgate. They made zero mention of any of that.
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Old 08-11-2019, 01:34 PM
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Thanks for the insight folks. Some thinks to think about over the next few months.

I would assume youíre best bet for working out a good lease deal is if they have the vehicle you want in the lot
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Old 08-11-2019, 05:11 PM
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Check out leasehackr.com - some very interesting information - I just emailed someone on the site for quote on Tacoma and amount he was able to negotiate was about $80 per month lower than I was getting
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Old 08-11-2019, 09:43 PM
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Used a broker for a lease on an Infiniti. I am a member on lease hackr and contacted this broker through the site. It was the absolute best. No hassle, no aggravation. I would do it again in a heartbeat. I saved $100 per month over the next best offer.
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