Car Leasing

[outoforder]

Fleasing is for old people who don't want to maintain a car and have extra cash laying around. Financially speaking, I don't see a case where fleasing is preferable.

1. Let's say a good lease deal is $100 a month with $1500 down with 12,000 miles a year limit for 3 years. Total at end of lease is $5100.

2. You buy a $5000 car and drive it for 3 years totaling 36,000 miles. This car could probably be resold for $3500. Net cost to owner owner of $1500.

There are certainly circumstances where fleasing is more convenient, but financially speaking, it is a loser. That being said, there are those who enjoy always driving a newer car and it's impossible to put a price tag on enjoyment.

 

[Nate1979]

Wow, where do you find a car that you can either lease or buy for only $5k? China?
Originally Posted By: outoforder
Fleasing is for old people who don't want to maintain a car and have extra cash laying around. Financially speaking, I don't see a case where fleasing is preferable.

1. Let's say a good lease deal is $100 a month with $1500 down with 12,000 miles a year limit for 3 years. Total at end of lease is $5100.

2. You buy a $5000 car and drive it for 3 years totaling 36,000 miles. This car could probably be resold for $3500. Net cost to owner owner of $1500.

There are certainly circumstances where fleasing is more convenient, but financially speaking, it is a loser. That being said, there are those who enjoy always driving a newer car and it's impossible to put a price tag on enjoyment.

 

[outoforder]

$5000 will get you a 10-12 year old compact sedan with less than 120,000 miles at a dealer. Even cheaper if you go private party. As far as the lease, I don't know that you can get a car for $5000. I was just being generous with numbers to make a point.

 

[daves87rs]

Originally Posted By: outoforder
$5000 will get you a 10-12 year old compact sedan with less than 120,000 miles at a dealer. Even cheaper if you go private party. As far as the lease, I don't know that you can get a car for $5000. I was just being generous with numbers to make a point.


Then one could end up with high repair bills anyways. So it may or may not work for everyone....

 

[andrewg]

It all boils down to what the consumer is willing to pay to basically rent a new car for three years. For one person it may seem a rip-off....for another, a good deal. One big truth here is that leasing AND buying both have advantages and disadvantages. It comes down to what the consumer wants. I know that I have never leased a car. but after becoming bored with a few new car purchases after three to four years....sometimes it would have been nice to have just leased.....or at least to have put a much bigger down payment initially (which some see as a disadvantage due to a huge cash outlay).

 

[Silverado12]

Originally Posted By: daves87rs
Originally Posted By: outoforder
$5000 will get you a 10-12 year old compact sedan with less than 120,000 miles at a dealer. Even cheaper if you go private party. As far as the lease, I don't know that you can get a car for $5000. I was just being generous with numbers to make a point.


Then one could end up with high repair bills anyways. So it may or may not work for everyone....


That and if you make a decent check, why drive junk?

 

[Quattro Pete]

Originally Posted By: outoforder
$5000 will get you a 10-12 year old compact sedan with less than 120,000 miles at a dealer.

If you need dependable transportation, then you can see how this would be a lot less appealing than a brand new vehicle. Plus, you will have no unexpected out-of-pocket repair expenses with a brand new vehicle.

 

[Vikas]

Leasing makes sense when you always want to drive no older than 3 years vehicle and your commute is short and well-predicted. Obviously you pay for the privilege of being able to do that. In that circumstances, leasing might make sense rather than trading in every 3 years.

Realistically speaking, between 3 to 6 oil changes is all that needed in the first 3 year of the vehicle ownership. All other factory scheduled required maintenance consists of "inspect this" and "inspect that". Essentially, extremely minimal other costs to drive the vehicle. You are renting the vehicle. I can understand how some people find that approach not only attractive but sensible and cost effective.

Would we do it personally? Most likely not at this stage in our life but we might change our mind later in our life.

 

[hattaresguy]

Originally Posted By: outoforder
Fleasing is for old people who don't want to maintain a car and have extra cash laying around. Financially speaking, I don't see a case where fleasing is preferable.

1. Let's say a good lease deal is $100 a month with $1500 down with 12,000 miles a year limit for 3 years. Total at end of lease is $5100.

2. You buy a $5000 car and drive it for 3 years totaling 36,000 miles. This car could probably be resold for $3500. Net cost to owner owner of $1500.

There are certainly circumstances where fleasing is more convenient, but financially speaking, it is a loser. That being said, there are those who enjoy always driving a newer car and it's impossible to put a price tag on enjoyment.


Your assuming that nothing breaks and a $5k car needs nothing. Now throw in if the owner is not mechanically inclined and must take all work to a mechanic. Every time a car goes into a shop its usually $400+, if a transmission goes its $2k. Simply dropping a used car at a shop for fluid changes when you buy it, which most people do when buying a used vehicle will run $500+. Now a set of tires $500...

Now if your mechanically inclined, have a garage with tools, and know how to spot a good vehicle you can make out.

My sister is a perfect example of someone who I'm going to push towards a lease when her current car dies. Neither her or her fiancee are able to do much beyond check the oil, and they lack the capital for a big repair. IE a transmission. Right now my dad and I are their warranty providers if something big goes wrong. So a $100 a month lease on say a Versa is perfect for her. She can have a vehicle under warranty, and budget for the payment and not have any financial surprises.

 

[99Saturn]

Originally Posted By: hattaresguy
Originally Posted By: outoforder
Fleasing is for old people who don't want to maintain a car and have extra cash laying around. Financially speaking, I don't see a case where fleasing is preferable.

1. Let's say a good lease deal is $100 a month with $1500 down with 12,000 miles a year limit for 3 years. Total at end of lease is $5100.

2. You buy a $5000 car and drive it for 3 years totaling 36,000 miles. This car could probably be resold for $3500. Net cost to owner owner of $1500.

There are certainly circumstances where fleasing is more convenient, but financially speaking, it is a loser. That being said, there are those who enjoy always driving a newer car and it's impossible to put a price tag on enjoyment.


Your assuming that nothing breaks and a $5k car needs nothing. Now throw in if the owner is not mechanically inclined and must take all work to a mechanic. Every time a car goes into a shop its usually $400+, if a transmission goes its $2k. Simply dropping a used car at a shop for fluid changes when you buy it, which most people do when buying a used vehicle will run $500+. Now a set of tires $500...

Now if your mechanically inclined, have a garage with tools, and know how to spot a good vehicle you can make out.

+1

I'd add to this the time lost/issues with work/frustration when a repair comes up too.

 

[outoforder]

Originally Posted By: bobbob
Please help, a friend of mine always get hammered at the dealers. Please give me a
couple of hints she can use to get a better deal on a lease. Most grateful


Apologies to the OP, I got a bit off topic. I've never leased and have only negotiated one new car purchase in my life. However, I would assume negotiating a lease vs a new car is similar. Contact several dealerships and tell them you want to lease a car in the next few days. Give them your email address and tell them to submit their best offer in 48 hours. I did this with a new car on a Monday, had my best offer by Wednesday and signed paperwork on Thursday.

 

[IndyIan]

Originally Posted By: outoforder
Originally Posted By: bobbob
Please help, a friend of mine always get hammered at the dealers. Please give me a
couple of hints she can use to get a better deal on a lease. Most grateful


Apologies to the OP, I got a bit off topic. I've never leased and have only negotiated one new car purchase in my life. However, I would assume negotiating a lease vs a new car is similar. Contact several dealerships and tell them you want to lease a car in the next few days. Give them your email address and tell them to submit their best offer in 48 hours. I did this with a new car on a Monday, had my best offer by Wednesday and signed paperwork on Thursday.

I think your strategy is a good one for leases too, but the issue with leases is many people don't get what the important numbers are. Time, mileage allowance and total cost.
If they can pin the sales guy to down to these number and how any changes to the deal affects the final numbers, I think many people would be fine leasing.

 

[JTK]

I know when I leased my 2012 Subaru Legacy back in late 2011, I did it because of 3 things. The particular deal they had at the time, my mileage was very predictable at the time and because I generally only keep my vehicles ~3yrs.

The lease was for 3yrs/45Kmi. Things got really busy at work and my mileage got crazy. At 28 months I wound-up at ~43K miles. Options were, ride out the lease and buy it for the ~$14K buyout, with 55-60Kmi on the ticker, needing tires, brakes, etc, or do the financially irresponsible thing and turn it in now and buy something else.

I chose option 2, dealership bought out the ~$16K I owed on the Legacy and I started from scratch, buying the 2014 XV Crosstrek.

Obviously I lost in the end. Had I owned the Legacy, that $16K would have been a trade-in allowance as opposed to a buy-out. That would have been an additional $1400 in my pocket in sales tax savings. Sales tax for me is 8.75%.

I've leased twice. It wasn't a horrible experience, but I won't do it again.

 

[hattaresguy]

Originally Posted By: outoforder
Originally Posted By: bobbob
Please help, a friend of mine always get hammered at the dealers. Please give me a
couple of hints she can use to get a better deal on a lease. Most grateful


Apologies to the OP, I got a bit off topic. I've never leased and have only negotiated one new car purchase in my life. However, I would assume negotiating a lease vs a new car is similar. Contact several dealerships and tell them you want to lease a car in the next few days. Give them your email address and tell them to submit their best offer in 48 hours. I did this with a new car on a Monday, had my best offer by Wednesday and signed paperwork on Thursday.


They run specials on certain models as well. BMW the 528XI for example and Mercedes the E350 4Matic. If you deviate from those models the monthly payment skyrockets. For example the 528 should run around $600 a month, but if you want say a 535 than your $700-$800 a month almost into base 740I territory. They push certain volume models, I suspect to keep the overall CAFE numbers up.

In regards to time Audi seems to encourage 39 month leases where as BMW and MB are happy with 24-36.

On GM's website at least they are smoking dope on CTS leases, but that will change when they have to make their sales numbers.

Leasing a high end car makes a lot of sense. Why should I tie up $60k from day one when I can put $1k down and pay $618 a month over three years than dump it. Your still eating the depreciation either way, the difference is your out the cash on day 1 vs a lot less three years down the road.

Cars are a waste of money either way.