Car Lease question

[isekii]

I got a 24 Month lease and I have about 6 months left.
Weird thing is I got hit with additional Sales and Use Tax. Anyone familiar with this?

Is it normal for the sale and use tax to increase?

 

[Jumpem]

I wouldn't think so.

 

[OutHouse]

http://www.leaseguide.com/lease09/

why lease? do you enjoy car payments every month?

 

[dave_the_nerd]

why lease? do you enjoy car payments every month?

People who were alive in the '70s sometimes refuse to drive a car with more than 40k miles or which is older than three years. Something about transmissions that turn into pumpkins? I don't know. Doesn't make any sense to me.

Just means more gently used cars available for me, I guess.

Dear OP, please lease a new Ford Taurus SHO, maroon, with a sunroof and leather seats. PM me when you're ready to turn it in.

 

[Jumpem]

why lease? do you enjoy car payments every month?

I view a car payment as just another monthly expense the same as an electric or cable bill. Cars rust here where they use too much road salt. I want to drive it for three winters, and then get rid of it. I don't want to purchase a car and have the trade in value plummet due to rust.

 

[JSt0rm]

http://www.leaseguide.com/lease09/

why lease? do you enjoy car payments every month?

Its nice having a new car every 3 years for a fraction of the cost of buying?

 

[mizzou]

http://www.leaseguide.com/lease09/

why lease? do you enjoy car payments every month?

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.

 

[mizzou]

Its nice having a new car every 3 years for a fraction of the cost of buying?

Just remember that you are nowhere near "having" a car while leasing for 3 years. You are simply borrowing it and paying what amounts to a pro-rated monthly rate for the car's full purchase price. So in reality, you pay the full pro-rated cost of buying and in the end, don't even own the car.

BUT...if you really enjoy driving a new car all the time, it is a very attractive option.


The big downfall in the leasing business (and why REPO men are still around), is because people get bought into the "Wow, I could never buy a BMW...but look I can drive one for $275.00 month on a lease!" get into real trouble in the long term. People waste so much of their income on vehicles this way.

 

[dave_the_nerd]

"If it flies, floats, or fucks, it's cheaper to rent."

Doesn't say anything about driving.

 

[Slew Foot]

I lease because I can write it off as a business expense

 

[JSt0rm]

Just remember that you are nowhere near "having" a car while leasing for 3 years. You are simply borrowing it and paying what amounts to a pro-rated monthly rate for the car's full purchase price. So in reality, you pay the full pro-rated cost of buying and in the end, don't even own the car.

BUT...if you really enjoy driving a new car all the time, it is a very attractive option.


The big downfall in the leasing business (and why REPO men are still around), is because people get bought into the "Wow, I could never buy a BMW...but look I can drive one for $275.00 month on a lease!" get into real trouble in the long term. People waste so much of their income on vehicles this way.

You can negotiate the cost of the car as if you are buying it when leasing. Never put any money down and negotiate the shit out of the purchase price.

 

[boomerang]

I got a 24 Month lease and I have about 6 months left.
Weird thing is I got hit with additional Sales and Use Tax. Anyone familiar with this?

Is it normal for the sale and use tax to increase?

We've been leasing our cars since 1990. I've never experienced this and it couldn't happen unless it's spelled out in your contract.

 

[Tweak155]

I just recently did another lease... it's a good option for people like me who get bored of vehicles and want something new and low maintenance all the time. Sure, you pay a price for it, but as long as you get the value from it there is no problem.

Also the guy wanting the Taurus... if you can wait about 3-5yrs I can probably hook you up

 

[Blanky]

I lease because I can write it off as a business expense

I lease because I drive brand new sedans for about $200/month. I snicker at people who denigrate it as some evil financial stupidity, meanwhile they are driving something either ancient or paying 2X the amount I do each month to "own" their vehicle because they financed-to-buy.

Vehicles are overheads. You can either finance that overhead at near 0% with current lease rates, or you can pay it up front via purchase or payments. No approach is inherently smarter than the other, though in fact if you can lease at or near 0% it is generally smarter to do so than buying the car over 60 months because it gives you options.

 

[boomerang]

I lease because I then have transportation at a low cost. No money down, low payments, covered under warranty the entire time I'm driving it and oil changes and tire rotations are free for the life of the lease. Also, because I lease cars designed and engineered to not require it, there is no other scheduled maintenance during the lease. At the end, I give them their car back. No muss, no fuss.

Daily driver cars are not investments, they are in fact exactly the opposite. Why take on high costs when you can enjoy low costs?

 

[gorcorps]

http://www.leaseguide.com/lease09/

why lease? do you enjoy car payments every month?

If you can afford it, it's nice to have a new car every couple years and never be out of warranty. Some people don't care about that though

 

[Genx87]

Owning a car comes out if you drive it after paying it off. Or if you drive a lot of miles. I put on ~18K miles a year. Most leases are 12K miles\year. Never work out for me.

 

[mizzou]

I lease because I then have transportation at a low cost. No money down, low payments, covered under warranty the entire time I'm driving it and oil changes and tire rotations are free for the life of the lease. Also, because I lease cars designed and engineered to not require it, there is no other scheduled maintenance during the lease. At the end, I give them their car back. No muss, no fuss.

Daily driver cars are not investments, they are in fact exactly the opposite. Why take on high costs when you can enjoy low costs?

I think people have made some very poignant observations about why leasing exists, especially in the luxory car market.

But you are not enjoying low costs when leasing, in the end you are doing everything at a higher cost, even if your car is covered under warranty. Unless you would be offloading cars every 3-5 years even if you didn't do a lease...then you are probably doing the right thing cost wise as well

 

[Jumpem]

Owning a car comes out if you drive it after paying it off. Or if you drive a lot of miles. I put on ~18K miles a year. Most leases are 12K miles\year. Never work out for me.

You can lease while driving 18k miles per year. That is what I do.

 

[isekii]

found out what the issue was.

They changed my address effectively changing my sales tax rate. They have no clue what it happened, but it's fixed now.

 

[Midwayman]

Leases are just paying for the most expensive part of a car's depreciation over and over again. I guess it can be fine if you're the sort who never wants to drive vehicle out of warranty. However compared to buying a used car and especially long term ownership you are just throwing money away. If you're going to trade it in every 3 years anyways its more about the specific deal. (And especially if you're willing to sell your cars privately.)

 

[boomerang]

found out what the issue was.

They changed my address effectively changing my sales tax rate. They have no clue what it happened, but it's fixed now.

Well that's confidence inspiring. Glad it was a simple fix though.

 

[Pulsar]

I lease because I drive brand new sedans for about $200/month. I snicker at people who denigrate it as some evil financial stupidity, meanwhile they are driving something either ancient or paying 2X the amount I do each month to "own" their vehicle because they financed-to-buy.

Vehicles are overheads. You can either finance that overhead at near 0% with current lease rates, or you can pay it up front via purchase or payments. No approach is inherently smarter than the other, though in fact if you can lease at or near 0% it is generally smarter to do so than buying the car over 60 months because it gives you options.

I don't think that word means what you think it means. We've had this discussion many, many, many times. Not once have I ever seen a lease end up being more cost effective than purchasing a vehicle for the owner.

If you are saying (by your 'options' comment), that it's more important to you to be able to always drive a new car than save money, that's fine. If that's what people want then more power to them. But at least man-up (or woman-up) and come out and SAY that.

Some people believe it's smarter to save money. Those people purchase. Others would rather have newer cars and not deal with maintenance. They lease. Neither is 'smarter' than the other.

 

[Jumpem]

I don't think that word means what you think it means. We've had this discussion many, many, many times. Not once have I ever seen a lease end up being more cost effective than purchasing a vehicle for the owner.

If you are saying (by your 'options' comment), that it's more important to you to be able to always drive a new car than save money, that's fine. If that's what people want then more power to them. But at least man-up (or woman-up) and come out and SAY that.

Some people believe it's smarter to save money. Those people purchase. Others would rather have newer cars and not deal with maintenance. They lease. Neither is 'smarter' than the other.

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.

 

[JulesMaximus]

Just remember that you are nowhere near "having" a car while leasing for 3 years. You are simply borrowing it and paying what amounts to a pro-rated monthly rate for the car's full purchase price. So in reality, you pay the full pro-rated cost of buying and in the end, don't even own the car.

BUT...if you really enjoy driving a new car all the time, it is a very attractive option.

The big downfall in the leasing business (and why REPO men are still around), is because people get bought into the "Wow, I could never buy a BMW...but look I can drive one for $275.00 month on a lease!" get into real trouble in the long term. People waste so much of their income on vehicles this way.

Not true. You are not paying the full purchase price.

We leased my wife's Lexus for 2 years. Her old car needed $5k worth of work and we didn't want to put that much money into an 8 year old car with 120,000 miles on it so we asked what they would give us for her car on trade in. With the money they gave us on trade in vs what we would have spent in repairs and maintenance it was almost exactly the same amount as what the lease will end up costing us over the 2 year period except we get to drive a brand new car with zero maintenance costs.

The payoff on her lease at the end of the 2 years is $27k so we could buy it at that point or just give it back and get something else.

We have 1 year left on the lease and when that is up we will probably look into getting her a new GS350. Her friend has one and she loves it. My wife prefers the GS too. We would buy that though, no more leasing. It made sense for us at the time but it makes more sense for us to buy.

I cannot lease. I put too many miles on a car to lease.

This is my wife's car.