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Car lease $150 per month $1,000 down for 2 years

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My wife leases her car.

Its a nice deal for her since:
She only drives about 10k or less miles a year.
I never have to hear about a little something wrong or squeaking on her car.
There is road side assistance in case anything ever goes wrong and she cant reach me. And if she is ever traveling to see family, I know she has a dependable car.
Makes ME look good having my wife driving a new car 😉
She likes having a new car, and pretty much considers car payments to be a fact of life.

Her car was an OK deal, it was basically about $1000 down which I paid and was part of her Christmas, and the lease was on sale from Acura and its only $349 a month, she makes that payment.
 
JZero, what I'm saying is that I don't consider a vehicle an investment. Let's say your car is worht 8k after it's all paid off, what was the cost of the vehicle when you bought it??? Let's say, for argument's sake, it was 20k. You're out 12k. If I were to make a 20k investment and lost that much I'd be pissed!

Also, I don't have to go through the hassle of trying to sell it and I get that new car smell (my favorite smell in the world after fresh cut grass 🙂 ) more often!

*Edit - Ross, sorry for hijacking your thread! 😛
 


<< JZero, what I'm saying is that I don't consider a vehicle an investment. Let's say your car is worht 8k after it's all paid off, what was the cost of the vehicle when you bought it??? Let's say, for argument's sake, it was 20k. You're out 12k. If I were to make a 20k investment and lost that much I'd be pissed!

Also, I don't have to go through the hassle of trying to sell it and I get that new car smell (my favorite smell in the world after fresh cut grass 🙂 ) more often! >>



No it's not a WISE investment, but if you had a choice between getting some of your money back or getting none of it back, which would you choose? It doesn't really matter if you consider it an investment or not--it simply is one. You really just get to choose whether you lose more or less money on the deal 🙂 If you were REALLY cost-conscious, you'd be buying a used car anyway!
But anyway, if I could afford to finance a $20000 car every 3 years and sell it at the end of every 3 years for $8000 and put that money away, in 9 years, I'd be able to pay cash for my next $20000 car and have change to spare. Someone with a lease, OTOH, will still be making payments 9 years later.
Add'lly, based on the link RossMAN posted, on that $20k car over 3 years, you're paying $11000 on $7000 depreciation. If you financed the same car and assume the depreciation is the same, and the interest is the same, you'll have paid ~$22k and be able to sell the car for $13k. You would have only lost $9000

But as I already said 3 times: It works for some people. For some the lower value is made up in the convenience of the lease. Over 2 or 3 years, $2000 is a small price to pay for the convenience of not being stuck with a dog, always having a newish car, and some of the other conveniences tm37 mentions.
 


<< My wife leases her car.

Its a nice deal for her since:
She only drives about 10k or less miles a year.
I never have to hear about a little something wrong or squeaking on her car.
There is road side assistance in case anything ever goes wrong and she cant reach me. And if she is ever traveling to see family, I know she has a dependable car.
Makes ME look good having my wife driving a new car 😉
She likes having a new car, and pretty much considers car payments to be a fact of life.

Her car was an OK deal, it was basically about $1000 down which I paid and was part of her Christmas, and the lease was on sale from Acura and its only $349 a month, she makes that payment. >>



Wow lucky wife!
 


<< OK it's time to dispell the horror stories that come with leases,
Fact - Leasing is the most cost effective way IF you plan on purchasing a new vehicle every 2 or 3 years.
Fact - Leasing can be cheaper IF you plan on getting a new car every 3 or 4 years
Fact - there is accually less risk involved with a lease vehicle than a bought vehicle.
If you are looking at getting a car to drive for two or three years AND don't plan on putting more than 15K a year then leasing can be cheaper.
Turn it in - just walk away (my company does this)
Leasing is not the best option for every one BUT it can be a liability SAVIOR If you are one who can truely benifit from leasing.
Do the math.
BOTTOM LINE DO THE MATH, and assess your risk and what they are worth.
Consumer reports, clark howard, and many other BUYER ADVOCATES say leasing can be good IF you fit the proper profile (ie milage and abusing your car). ANd I will take those opinions over those of a slew of uninformed and closed minded people on an internet board.(you know who you are) 🙂 >>

To summarize, leasing makes sense if you have to have a new car every 2 years if you are concerned about the liability of repair and can guarantee that it will be used for few miles and will receive little wear & tear. So, who here fits into that profile?
1. Why do you need a new car every 2 years? Unless you're a company leasing a fleet of vehicles which requires the 'prestige' of a new vehicle, this does not make sense. Whether you are buying it new or leasing it new, if you only keep it for two years then you've done nothing but make payments on the depreciation of the car and have nothing to show for it.
2. For everyone else here on the boards, you're looking for the best bang for your buck. Factoring in interest, insurance, depreciation, maintenance, every dime down to gas & oil, the best value is going to be a vehicle with more than 100,000 miles on it. $1000 down & $150 a month for 2 years will not get you into anything. That's only $4600, which won't 2 years of depreciation on any vehicle (well, maybe the sub $10K cars like a Daewoo Lanos, Hyundai Accent, Kia Rio, or Toyota Echo. But remember, these cars are cheap for a reason!)

But, if you have $4-5K that gives you enough to buy an older car outright with enough money leftover for maintenance. I know that's not what you're looking for, Rossman, but it makes the most sense. And you don't have to worry about being upside-down on it two years from now.
 


<< Leasing confuses me in general but I keep hearing all these great stories about people leasing new 2002 Honda Accord LX V6's for $850 down and $250 a month. >>

My 2000 Blazer is the same deal except I paid $1000 down.
 


<< I don't really understand what the point would be in getting a new car every 2-3 years. 😕 It's not like they're worn out after only 2 or 3 years. :Q >>



Depends on how you use them. My vehicle gets put into park, and back into drive nearly 100 times a day. The door is opened and shut an equal amount. My windows are rolled up and down about 15 times a day. Take that times 365 and multiply it again by 3 and that is a HUGE amount of wear and tear. Not to mention the wear and tear on all other parts of the car. After three years, the vehicle feels like it's about 10 years old.

Leases are ideal for me...but then again I just write them off as a business expense.

Also, depending on the leasing agreement, you may do better in a lease in high milage situations than financing. Just depends on deal. My credit union has a leasing program that only charges my $.10 per mile over my limit. So, for every 1000 over I go, I get tagged for $1000. Many dealers will dock you upwards of $.12 to $.17 per mile over for trade in purposes. The leasing actually comes out cheaper then. But, it really depends on the fine print of your lease agreement.

Oh, and to help Ross out, check out

Toyota's leasing specials. Pretty good deal on the Matrix!
 


<< To summarize, leasing makes sense if you have to have a new car every 2 years if you are concerned about the liability of repair and can guarantee that it will be used for few miles and will receive little wear & tear. So, who here fits into that profile?
1. Why do you need a new car every 2 years? Unless you're a company leasing a fleet of vehicles which requires the 'prestige' of a new vehicle, this does not make sense. Whether you are buying it new or leasing it new, if you only keep it for two years then you've done nothing but make payments on the depreciation of the car and have nothing to show for it.
2. For everyone else here on the boards, you're looking for the best bang for your buck. Factoring in interest, insurance, depreciation, maintenance, every dime down to gas & oil, the best value is going to be a vehicle with more than 100,000 miles on it. $1000 down & $150 a month for 2 years will not get you into anything. That's only $4600, which won't 2 years of depreciation on any vehicle (well, maybe the sub $10K cars like a Daewoo Lanos, Hyundai Accent, Kia Rio, or Toyota Echo. But remember, these cars are cheap for a reason!)
 >>



Some people LIKE driving a new car, after 3 years is when the BIG mantebnce Starts (Shocks, brakes, 45K mile check up)

These repairs can cost thousands of dollars.

True most people look for the most bang for the buck, and NO ONE NEEDS a new car every three years.

Take the explorer for example, IF you had bought an explorer Right before the whole tire issue came up and then tried to sell it 3 years later, You would be TOTALLY UPSIDE DOWN, you owe more than the car is worth. Where as if you had leased the VALUE is predetermained. YOu KNOW what your trade-in value will be in 3 years regardless of what happens.

By leasing you are minimizing risk AND paying a set amount FOR use of said vehicle. YOU don;t own the vehicle you are just renting it. ANd while this may seem to be a Horrible idea to you for some KNOWING what you are going to pay long term is a HUGE DEAL.

When you get a mortgage you can get a varible rate mortgage for a much lower rate than a fixed rate, but it rates go up you are stuck with the higher rate while the fixed rate guy gets his lower rate he locked in to. Leasing is pretty much the same thing. YOU lock into that car for a set period. The leasing company takes most of the risk and you have very little. But if you buy you assume ALL of the risk and the bank takes very little.

These types of things need to be considered AND remember the lowest price isn't always the best DEAL.

Lets take a look at some numbers.

If you are buying a f150 4X4 XTRA cab XLT

With the current rates a 5.9% promo (you lose the rebate.)

With 2K down your payment would be

36 month lease -> 447
60 month purchase-> 475

OR a total difference over 3 years of ->1008 bucks.

At that three year point you decide to trade the car in, and the truck hasn't had any major NEW stories You might get a little more in trade BUT if there has been something to drastically reduse the value of the truck with a lease you can still get out!

Leases are all about MINIMIZING RISK (like insurance is).

 
Buy used & run it into the dirt, the last trip you should take is to the junkyard.

Start running some figures about the cost of a new car every 3-5 years + intrest, tax title license, insurance, over your working life versus buying used & running it into the dirt, you'll save around $200K, enough to buy a brand spanking new Mercedes or high zoot car when you retire...
 


<< Some people LIKE driving a new car, after 3 years is when the BIG mantebnce Starts (Shocks, brakes, 45K mile check up)

These repairs can cost thousands of dollars.

Lets take a look at some numbers.

If you are buying a f150 4X4 XTRA cab XLT

With the current rates a 5.9% promo (you lose the rebate.)

With 2K down your payment would be

36 month lease -> 447
60 month purchase-> 475

OR a total difference over 3 years of ->1008 bucks.
 >>

You consider brakes & shocks to be big maintenance? And they cost -thousands- of dollars? You can buy brake pads for all four wheels for less than $200, shocks are less than that. Unless you insist on driving well past the scheduled maintenance and wear out the pads & then tear up the rotors, calipers, etc., there is no way you're going to spend "thousands". And even if it did cost you $2000 grand a year in maintenance, that's still less than you lose on the depreciation of a new car. But if you insist on getting that new truck:

Using your example, you will have paid $17,100 (principal and interest) + $2000 down = $19,100 after three years towards the truck on a 60-month loan with a remaining balance of $11,400. The value of the truck at this time is going to be somewhere around $16-18K, so you will have about $6000 in equity in the truck.

With the lease, you will return the vehicle with nothing to show for it other than the $1000 you saved on monthly payments, which you're likely going to pay to the leasing company anyway for excessive mileage. But let's assume that you're a good boy and don't get any penalties:

Over the three year period, the extra $1000 you have 'saved' on your lease has cost you $6000, for a net loss of $5000 compared to buying the truck directly.

To put that into terms that you might understand more directly, that's 50 pairs of brake pads ($67.69 at carparts.com) and 95 shock absorbers ($16.95ea) that you could buy for your truck to get you through the remaining two years.
 
I am thinking about leasing a new Honda Civic LX 2 door. THere is a promotion going on now for $1300 down and $189/month for 36 months. What do you think about this? THanks
 
Tip of the day:

Those who buy new cars and drive them for most of the car's life-10 or so years-can retire an average of 5 years earlier than those who buy/lease new cars ever 2-3 years.
 
i think leasing is dumb..especially for cheap cars like the civic geckojohn is thinking of.. think about it.. after 3 years you would've paid them $8000 just to rent the car, and at 45k miles, the civic is just barely broken in.. so for another $8000, he could've owned that car and drive it into the ground, probably 15 years/250-300k miles, whichever comes first... THEN be able to sell it for another $1000 or so... doesn't make sense at all... because a civic is just a civic.

 


<< Tip of the day:

Those who buy new cars and drive them for most of the car's life-10 or so years-can retire an average of 5 years earlier than those who buy/lease new cars ever 2-3 years. >>



<< i think leasing is dumb..especially for cheap cars like the civic geckojohn is thinking of.. think about it.. after 3 years you would've paid them $8000 just to rent the car, and at 45k miles, the civic is just barely broken in.. so for another $8000, he could've owned that car and drive it into the ground, probably 15 years/250-300k miles, whichever comes first... THEN be able to sell it for another $1000 or so... doesn't make sense at all... because a civic is just a civic. >>


Ditto, ditto.
 


<<

<< Tip of the day:

Those who buy new cars and drive them for most of the car's life-10 or so years-can retire an average of 5 years earlier than those who buy/lease new cars ever 2-3 years. >>



<< i think leasing is dumb..especially for cheap cars like the civic geckojohn is thinking of.. think about it.. after 3 years you would've paid them $8000 just to rent the car, and at 45k miles, the civic is just barely broken in.. so for another $8000, he could've owned that car and drive it into the ground, probably 15 years/250-300k miles, whichever comes first... THEN be able to sell it for another $1000 or so... doesn't make sense at all... because a civic is just a civic. >>


Ditto, ditto. >>



To add a little fuel to the fire....

If I already sock away 40% of my income into long term investments, and STILL have enough money left over easily cover a lease payment, am I still "dumb"?
 


<<

<< Tip of the day:

Those who buy new cars and drive them for most of the car's life-10 or so years-can retire an average of 5 years earlier than those who buy/lease new cars ever 2-3 years. >>



<< i think leasing is dumb..especially for cheap cars like the civic geckojohn is thinking of.. think about it.. after 3 years you would've paid them $8000 just to rent the car, and at 45k miles, the civic is just barely broken in.. so for another $8000, he could've owned that car and drive it into the ground, probably 15 years/250-300k miles, whichever comes first... THEN be able to sell it for another $1000 or so... doesn't make sense at all... because a civic is just a civic. >>


Ditto, ditto. >>



What he said.

For another $5k you could OWN the Civic, why waste $8k just renting it?
 


<< To add a little fuel to the fire....

If I already sock away 40% of my income into long term investments, and STILL have enough money left over easily cover a lease payment, am I still "dumb"? >>

Yo, you're probably doing alright, if you make plenty of money. It's yours to spend or save as you see fit. Saving 40% is pretty smart. I assume you're including payments on your house in that 40%. That's OK, because you've borrowed for an appreciable asset.

But it still makes more financial sense to buy a car as infrequently as possible. There are arguements for leasing, but none of them are about saving money in the long run.
 
I think you guys are right... i'll take your advice. I know that I'll probably want a new car every few years or so. Will buying a car still be the best option? If I don't lease a Civic, I was thinking about buying a used Acura Integra or Honda Prelude 1997+. What do you guys think I should do... I can afford lease or loan payments of about $250/month....
 
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