Car Lease question

[Pulsar]

Compare leasing a vehicle for three years to purchasing and trading in after three years. With the purchased vehicle you pay say $150 per month more. At the three year point you have to get $5,400 (a bit more if you include interest paid) more than you owe during trade in to come out ahead from the lease. All the time while paying more each month, and worrying about trade in values.

*stares at the ceiling and taps foot* Seriously? For a couple minutes I considered not even responding. I'm not sure if you're being intellectually dishonest on purpose, or you really just don't get it.

The POINT of a lease is to keep a car a short time. You basically pay for depreciation of a new vehicle over and over. The POINT of buying a car is because you pay for depreciation once, and anything past that is money that is coming back to you. Making a comparison over the first 3 years - the highest period of depreciation - is obviously going to favor a lease. That's just silly to even compare the two.

I'll say it again. If you always want to drive a newer car, leasing is the way to go. If you want to minimize your cash outlay, purchasing is the way to go. Right now, purchasing is an even better option because of the insanely high resale values cars are getting - my 2008 F-150 with 70,000+ miles got me $19k, and I bought 5 years ago for 24k. But it's still not going to beat a lease on an extremely short-term basis.

 

[iamwiz82]

*stares at the ceiling and taps foot* Seriously? For a couple minutes I considered not even responding. I'm not sure if you're being intellectually dishonest on purpose, or you really just don't get it.

The POINT of a lease is to keep a car a short time. You basically pay for depreciation of a new vehicle over and over. The POINT of buying a car is because you pay for depreciation once, and anything past that is money that is coming back to you. Making a comparison over the first 3 years - the highest period of depreciation - is obviously going to favor a lease. That's just silly to even compare the two.

I'll say it again. If you always want to drive a newer car, leasing is the way to go. If you want to minimize your cash outlay, purchasing is the way to go. Right now, purchasing is an even better option because of the insanely high resale values cars are getting - my 2008 F-150 with 70,000+ miles got me $19k, and I bought 5 years ago for 24k. But it's still not going to beat a lease on an extremely short-term basis.

High residuals also help leases. Anything over 1% of the MSRP for a monthly cost is too high in this market. You should be shooting for .05%. With $0 down other than license fees and such. That $20,000 Civic shouldn't cost more than $125/mo with $0 down, IMHO.

 

[Jumpem]

*stares at the ceiling and taps foot* Seriously? For a couple minutes I considered not even responding. I'm not sure if you're being intellectually dishonest on purpose, or you really just don't get it.

The POINT of a lease is to keep a car a short time. You basically pay for depreciation of a new vehicle over and over. The POINT of buying a car is because you pay for depreciation once, and anything past that is money that is coming back to you. Making a comparison over the first 3 years - the highest period of depreciation - is obviously going to favor a lease. That's just silly to even compare the two.

I'll say it again. If you always want to drive a newer car, leasing is the way to go. If you want to minimize your cash outlay, purchasing is the way to go. Right now, purchasing is an even better option because of the insanely high resale values cars are getting - my 2008 F-150 with 70,000+ miles got me $19k, and I bought 5 years ago for 24k. But it's still not going to beat a lease on an extremely short-term basis.

I am just stating how I view leasing versus buying for my situation. I have already stated that due to the over use of road salt I would not keep a car long term where I live. So my view is through a buy new and keep for three years window.

 

[JulesMaximus]

*stares at the ceiling and taps foot* Seriously? For a couple minutes I considered not even responding. I'm not sure if you're being intellectually dishonest on purpose, or you really just don't get it.

The POINT of a lease is to keep a car a short time. You basically pay for depreciation of a new vehicle over and over. The POINT of buying a car is because you pay for depreciation once, and anything past that is money that is coming back to you. Making a comparison over the first 3 years - the highest period of depreciation - is obviously going to favor a lease. That's just silly to even compare the two.

I'll say it again. If you always want to drive a newer car, leasing is the way to go. If you want to minimize your cash outlay, purchasing is the way to go. Right now, purchasing is an even better option because of the insanely high resale values cars are getting - my 2008 F-150 with 70,000+ miles got me $19k, and I bought 5 years ago for 24k. But it's still not going to beat a lease on an extremely short-term basis.

Honestly, the only way buying makes sense is if you're planning on keeping the car well beyond the payoff date of the loan (or if you pay cash for it-which really makes no sense either if you have excellent credit because car loan interest rates are so low 1.9%, 0.9%, etc).

You really need to do your homework when leasing though to see if it makes sense. I would say that if you like having new cars all the time and don't want to hassle with repairs/maintenance then leasing might be the better choice for you.

 

[HeXen]

The specific advantage of leasing is a lower monthly payment then a standard loan and you can just off-load the vehicle when you finish the lease.

2015 Civic Sedan CVT LX (MSRP $20,110.00) right now has a $150/month lease for 36/months with $2,500 down payment. the following fine print
"Option to purchase at lease end $11,864.90. Must take new retail delivery on vehicle from dealer stock by September 8, 2015. Lessee responsible for maintenance, excessive wear/tear and 15¢/mile over 12,000 miles/year for vehicles with MSRP less than $30,000, and 20¢/mile over 12,000 miles/year for vehicles with MSRP of $30,000 or more. See your Honda dealer for complete details."

So after 36 months, you've invested $7,900 into your vehicle on payments alone. You also can purchase the vehicle for $11,864.90 or just walk away. The downside of purchasing it is that they will likely hammer the crap out of you for "maintenance & wear/tear" and, you have no choice about where to take it because you don't own it.

By contrast, a loan for a civic for 2015 Civic Sedan CVT LX for special 0.9 APR. But if you cant get a special low rate on a loan, you may pay around 5-10% APR for it. That means your $30,000 car could cost $35,000 or so when your principal balance is paid in full. The car is then yours to keep free & clear.



----------------------To sum it up

- Leasing a car is good for people who constantly want to drive new cars.

- Buying a car is good for people who want to drive the car into the dirt.
------------------

I fit into the buy category because I've owned the same vehicle for 13 years. Leasing a similar vehicle would typically cost $300/month in a good scenario. That's $46,800 in leasing costs, which may not sound terrible, but think of all the added down payments (that are usually in the $2,000-$3,000 range) and other extra payments you have to do with every transaction (taxes!!). So in those 13 years, just imagine how much extra $$$ I would have had to blow 4 times within that same spawn.

So my $35,000 vehicle I bought 13 years ago, I could have spent around $60-70,000 and driven a new vehicle of similar make every 3'sh years. Also, my vehicle has depreciated drastically...but I could easily sell it near $7,000.00.

As long as you don't have a lemon, buying a car and driving it into the ground will always be the more sound fiscal decision. There are some scenarios where leasing could be better, but it's pretty rare.

I leased a Honda Civic once. You can take it anywhere to get serviced or do it yourself. Just keep a record is all. You can buy it at end of lease but that's not a good idea, you pay for all the paperwork, dealer fee's...etc that you normally pay for when you buy a new car, you then have interest which they usually hose you on...so in the end, it's more expensive than to buy it to begin with.

The main thing is to not go over mileage and don't turn in with more than $1500 of wear and tear damage. So if someone hits you, you should get it fixed. If your tires are bald...change them. Otherwise they'll charge a premium...or can anyway. Other than that, you just hand it over and walk away.

Leasing is better if you do no more than 2 year lease. You only drive local. You're not prone to accidents. You normally buy a replacement car after you get your old car paid off anyway. You like always having a newer and reliable car....some cars these days don't last for shit before they nickel and dime you to death on mechanical repairs. And of course you like driving a nicer car than you could normally afford.
That 22 year old kid down the block driving a Mercedes probably didn't buy it. I think that's the biggest draw some have to leasing.

 

[mizzou]

I leased a Honda Civic once. You can take it anywhere to get serviced or do it yourself. Just keep a record is all. You can buy it at end of lease but that's not a good idea, you pay for all the paperwork, dealer fee's...etc that you normally pay for when you buy a new car, you then have interest which they usually hose you on...so in the end, it's more expensive than to buy it to begin with.

The main thing is to not go over mileage and don't turn in with more than $1500 of wear and tear damage. So if someone hits you, you should get it fixed. If your tires are bald...change them. Otherwise they'll charge a premium...or can anyway. Other than that, you just hand it over and walk away.

Leasing is better if you do no more than 2 year lease. You only drive local. You're not prone to accidents. You normally buy a replacement car after you get your old car paid off anyway. You like always having a newer and reliable car....some cars these days don't last for shit before they nickel and dime you to death on mechanical repairs. And of course you like driving a nicer car than you could normally afford.
That 22 year old kid down the block driving a Mercedes probably didn't buy it. I think that's the biggest draw some have to leasing.

And that's really why leasing works so well in the marketplace, because there are people too short-sighted to see that they really can't afford 250-350 monthly car payments in the long term. You should only lease a car that you would be comfortable buying in full. That's my opinion.

The 22 year old pizza delivery kid might be able to throw down that much money for a while...but at some point when he is 30 and has no savings, he might look back and say "Damn, I really should have only spent $150/month max when leasing cars...."

 

[cabri]

The 300-400 does get the chicks that the 150 does not.

For a 20+ year old, that is the priority