question about car lease

[QueBert]

My credit's shit and I'm going to get a new car, the dealer said I don't qualify to buy, but I can lease and by the end of the lease my credit will be high enough where I could easily finance the remaining balance. I plan to buy the car so I'm close to going this route. I have 1 question, the dealer sends out notices for required maintenance based off projected millage.

My 2 questions are, I won't be driving close to the 12k a year, are they still going to be firm on when I have the maintenance done? Also, is it required you have the work done at the dealer? I have a shop I've always gone to and would prefer to have them do it. It'll be a lot cheaper and I know and trust them. I'm going to call and talk to the sales person tomorrow, but I'll be a bit wary of what he tells me because his main concern is getting me to lease the car so he can get his commission.

 

[Kaido]

I've never gone to the dealer for maintenance on any of my prior leases - Honda, VW, Saturn, Kia, etc. I also only do bare-minimum maintenance...mostly just oil changes for 3 years. If you're going to keep the car, obviously do all of the maintenance, but I've never had a requirement to do it at the dealership on any of my cars.

The downside to leasing on bad credit is they can really jack up the price, like almost double in some cases, but at least you can get into a new, reliable car, and then if you make all of the payments on time, then your credit can improve and you can buy the car out. Also, some places will base your credit off your payment history rather than your actual credit score. When we got our current Civic lease, we transitioned into the lease pretty easily from our previous Fit lease simply because we were prior customers. Basically just swapped keys & away we went.

 

[PhoKingGuy]

In before AT Garage Dave Ramsey Squad

 

[QueBert]

I've never gone to the dealer for maintenance on any of my prior leases - Honda, VW, Saturn, Kia, etc. I also only do bare-minimum maintenance...mostly just oil changes for 3 years. If you're going to keep the car, obviously do all of the maintenance, but I've never had a requirement to do it at the dealership on any of my cars.

The downside to leasing on bad credit is they can really jack up the price, like almost double in some cases, but at least you can get into a new, reliable car, and then if you make all of the payments on time, then your credit can improve and you can buy the car out. Also, some places will base your credit off your payment history rather than your actual credit score. When we got our current Civic lease, we transitioned into the lease pretty easily from our previous Fit lease simply because we were prior customers. Basically just swapped keys & away we went.

Yeah the interest rate will be a lot higher, but outside of waiting years for my credit to be a lot better I don't have any other ways to get the car. I'll shell out more, which sucks but I'll get a new car and by the end of the lease I should have a 700'ish score. Leasing for 36 months then refinancing for another 36 months isn't ideal for me at all, but this car has captured my love unlike anything in a long time.

Good to know about the maintenance thing, I thought it was absolutely enforced you had it done, but Googling this since I posted it. It looks like if you don't have it done when they tell you, they don't care but if anything fails it won't be covered.

 

[Kaido]

Yeah the interest rate will be a lot higher, but outside of waiting years for my credit to be a lot better I don't have any other ways to get the car. I'll shell out more, which sucks but I'll get a new car and by the end of the lease I should have a 700'ish score. Leasing for 36 months then refinancing for another 36 months isn't ideal for me at all, but this car has captured my love unlike anything in a long time.

Good to know about the maintenance thing, I thought it was absolutely enforced you had it done, but Googling this since I posted it. It looks like if you don't have it done when they tell you, they don't care but if anything fails it won't be covered.

That's the thing, you have to make it fit your situation. And your situation is your situation, not someone else's, so take any advice with a grain of salt. I've been stuck in crappy car situations before and you just have to deal with reality until you are in a position to make things change.

Yeah, the maintenance thing...back in the day I leased a Saturn ION sedan. I ended up really loving the car & bought it out on lease, all I had really done was the oil changes and stuff. I think they may have checked it over before I bought it, but I didn't keep any maintenance records or anything, they were just happy to take my money, haha. There may be certain leases on higher-end cars that require it, but all of my leased cars have been sub-$25k and none of them have required that I do it at the dealership.

RIP Saturn

 

[Kaido]

In before AT Garage Dave Ramsey Squad

I like his stuff in general, because Americans do tend to have money problems & need baby-step help to get out of them, but my only real complaint is that different people have different goals - and he is extremely fixated on his views of his system. A quote on leasing taken directly from his website:

People get sold automobile leases because they are told that it’s what sophisticated people do. But as it turns out, the car companies make more money on leasing you the car than if you bought the car with cash, according to the National Auto Dealers Association. Broke people think ‘how much down and how much a month’. Rich people think ‘how much’. If you can’t pay cash for a car, then ride a bicycle. But don’t lease a car.

If your only goal with a car is to spend the lowest amount possible, then yes, leasing does not make sense. But if you have other goals like the fun of having a new car every few years, not having to worry about major maintenance, having the latest safety features, and having an extremely reliable ride, then his narrow-minded system doesn't make much sense. His views come across as extremely arrogant at times - 'ride a bike instead of leasing a car, if you can't pay cash for a car?' Gimme a break. That's coming from a guy who's net worth is $55 million

I mostly like leasing for a couple reasons - first, it's a less expensive way than buying to get into a new, extremely reliable, low-maintenance car, and second, because it gives you a fixed financial number to budget around. I hated having random $700+ car repair bills when I owned a car. I really liked having the fixed $239/mo for my Hondas...$60 a week plus gas/insurance/oil changes and I was set for 3 years, no down payment required. Any major issues & it went back to the dealership. No big surprise bills that you had to shell out for, and since you're not the owner, you're not gambling on a possible expensive emergency fix-it bill. Obviously that's not the case for all people and all cars, but that's not to say that leasing should be written off entirely.

/end leasing rant :biggrin:

 

[Topweasel]

As long as your fine with the mileage unless you see yourself actually getting ut from under a loan (I have in 10 years gone exactly 4 months car payment free). Then there are a lot of plusses to a lease. New car, new performance, opportunity to change it up or continue with the same type, limited to no maintenance or repair costs.

Unless I start commuting again I am not sure I will ever go back to purchasing a car like my last three. All of them I purchased used, used them up to the point of practically trashing them, and wanting to be done with them at the end. Now I get a better car then I could have purchased, am enjoying it much more, and 2-3 years I can decide to tryout another type of car, or just get the latest and greatest of the same thing. All the while refreshing warranty and all the wearable parts like brakes and tires.

 

[jagec]

In before AT Garage Dave Ramsey Squad

:'(

 

[QueBert]

As long as your fine with the mileage unless you see yourself actually getting ut from under a loan (I have in 10 years gone exactly 4 months car payment free). Then there are a lot of plusses to a lease. New car, new performance, opportunity to change it up or continue with the same type, limited to no maintenance or repair costs.

Unless I start commuting again I am not sure I will ever go back to purchasing a car like my last three. All of them I purchased used, used them up to the point of practically trashing them, and wanting to be done with them at the end. Now I get a better car then I could have purchased, am enjoying it much more, and 2-3 years I can decide to tryout another type of car, or just get the latest and greatest of the same thing. All the while refreshing warranty and all the wearable parts like brakes and tires.

I plan to finance and buy it after the lease is up, only thing that might sway me is if that years version is a whole lot better than the current one. But I 99% see myself buying this one, so mileage won't matter when the lease is up. At the moment I drive very little, a 6k lease would work. But I drive a boring old person/family car so I just use it for getting from point A to B. But going to a fun manual sports car I gotta imagine I'll be driving considerably more.

 

[Topweasel]

I plan to finance and buy it after the lease is up, only thing that might sway me is if that years version is a whole lot better than the current one. But I 99% see myself buying this one, so mileage won't matter when the lease is up. At the moment I drive very little, a 6k lease would work. But I drive a boring old person/family car so I just use it for getting from point A to B. But going to a fun manual sports car I gotta imagine I'll be driving considerably more.

I wouldn't but you aren't me. The big question is what the residual is estimated at and what is it actually. For example on my Fusion Ti its rated to keep 71% at 2 years 21000 M. 61% at 3 years 31500 M. That's what it is rated at. But if its selling for less than 17k in three or 22k in 2 years. Than it would be a bad deal to buy it after that unless I killed the miles. Having a high residual value after 2 and 3 years is a new trend for American cars and it keeps the lease payments low. But the problem is if the numbers are high and the payment low then buying out the lease would mean spending more on it then it is worth.

Go into this thinking that you intend to wait and see what the car is worth vs the buyout cost and make a judgement then. It would be that much of a difference between 3 years at that cost and 5-6 years on a new car.

 

[Kaido]

I wouldn't but you aren't me. The big question is what the residual is estimated at and what is it actually. For example on my Fusion Ti its rated to keep 71% at 2 years 21000 M. 61% at 3 years 31500 M. That's what it is rated at. But if its selling for less than 17k in three or 22k in 2 years. Than it would be a bad deal to buy it after that unless I killed the miles. Having a high residual value after 2 and 3 years is a new trend for American cars and it keeps the lease payments low. But the problem is if the numbers are high and the payment low then buying out the lease would mean spending more on it then it is worth.

Go into this thinking that you intend to wait and see what the car is worth vs the buyout cost and make a judgement then. It would be that much of a difference between 3 years at that cost and 5-6 years on a new car.

Yeah and it's amazing the differences. It was like thousands of dollars difference between my Kia Soul & Honda Fit, which were around the same price. They could sell the Honda a lot easier than the Fit based on market value, I guess.

 

[Midwayman]

Its a trap. Don't do it. Any financing you're getting on bad credit it going to be horribly unfavorable. Better off buying whatever used car you can for cash.

 

[QueBert]

Its a trap. Don't do it. Any financing you're getting on bad credit it going to be horribly unfavorable. Better off buying whatever used car you can for cash.

Buying used will do nothing for my credit though, I paid cash for the only 3 cars I've owned. My credit's so rinky dinky I can't even get a decent credit card. I have one with a $300 limit which they said they'll raise after a year of on time payments. Raise how much? Not a whole lot. Definitely not enough to make a difference. Overpaying a lot or not, a car's really the only thing I can do to get my credit to where it's usable to buy a home or something in a reasonable amount of time.

That will still probably take 3 years of leasing, but it's better than waiting 7-10 years of credit card payments *shrug* Plus I'm dying to get the Scion FR-S, which just came out last year. So a used one would only be a few thousand off retail.

 

[Kaido]

Buying used will do nothing for my credit though, I paid cash for the only 3 cars I've owned. My credit's so rinky dinky I can't even get a decent credit card. I have one with a $300 limit which they said they'll raise after a year of on time payments. Raise how much? Not a whole lot. Definitely not enough to make a difference. Overpaying a lot or not, a car's really the only thing I can do to get my credit to where it's usable to buy a home or something in a reasonable amount of time.

That will still probably take 3 years of leasing, but it's better than waiting 7-10 years of credit card payments *shrug* Plus I'm dying to get the Scion FR-S, which just came out last year. So a used one would only be a few thousand off retail.

Yeah, and again - you have to look at your situation, not the Ramsey-style "what would be best in an imaginary world". If you have a pile of money lying around for a used car, great, but I'd imagine most people would fix their credit with it, and in the meantime, would still need a car. And there a lot of car places that will work with bad or no credit, just at a higher monthly payment. Even if you buy a less-expensive used car for a few thousand bucks, that still covers an entire year of leasing a brand-new, 100% reliable, safe, more fuel-efficient car. And it's a lot easier to come up with an extra hundred bucks or two per month than to have to save up to acquire the thousands it would take for a decent used car, if you're starting from scratch.

I say, if you're going to be stuck paying for it, you might as well get something you want

btw what color :awe:

 

[QueBert]

Yeah, and again - you have to look at your situation, not the Ramsey-style "what would be best in an imaginary world". If you have a pile of money lying around for a used car, great, but I'd imagine most people would fix their credit with it, and in the meantime, would still need a car. And there a lot of car places that will work with bad or no credit, just at a higher monthly payment. Even if you buy a less-expensive used car for a few thousand bucks, that still covers an entire year of leasing a brand-new, 100% reliable, safe, more fuel-efficient car. And it's a lot easier to come up with an extra hundred bucks or two per month than to have to save up to acquire the thousands it would take for a decent used car, if you're starting from scratch.

I say, if you're going to be stuck paying for it, you might as well get something you want

btw what color :awe:

I have money laying around, I could buy a pretty decent used car outright like I have with my last 3. Only problem that helps my credit zero. If I had 25k laying around tbh I'd rather make payments than outright buy. Even if it's at like 15%. The only way to remedy my bad credit is to buy something that requires years of paying. So I get screwed by Scion and end up giving them way more than the cars worth. But on the flip side I'll have a sweet new ride, and by the end of the lease my credit will be over 700 and I can get shit at crazy low rates.

It's not ideal, but I don't know if there is an ideal way for a person like myself to get a new car, or something expensive on credit. And regardless what I end up getting I'll surely be paying a stupid % rate.

it's the Whiteout color

 

[smitbret]

I plan to finance and buy it after the lease is up, only thing that might sway me is if that years version is a whole lot better than the current one. But I 99% see myself buying this one, so mileage won't matter when the lease is up. At the moment I drive very little, a 6k lease would work. But I drive a boring old person/family car so I just use it for getting from point A to B. But going to a fun manual sports car I gotta imagine I'll be driving considerably more.

This is the worst plan to ever put in motion. Never lease a car with the intention of buying it when the lease is up. You will end up paying an astronomical amount over the course of 6-8 years. You would be better off dumping it at the end of the lease and buying a different one. Not to mention, if you are buying a reputable brand that holds its value, you will probably have some equity in the lease that can be applied as down payment if you really are staying far below the 12000 miles/year of the lease parameters.

 

[QueBert]

This is the worst plan to ever put in motion. Never lease a car with the intention of buying it when the lease is up. You will end up paying an astronomical amount over the course of 6-8 years. You would be better off dumping it at the end of the lease and buying a different one. Not to mention, if you are buying a reputable brand that holds its value, you will probably have some equity in the lease that can be applied as down payment if you really are staying far below the 12000 miles/year of the lease parameters.

I'm putting $7500 down and will be paying about $290 a month for 36 months. I should be right around $10k paid + the 7.5k I put down. If I refinance the remaining balance at 1.9%'ish for 24 months it shouldn't be all that bad? I'm horrible with math so that's why I'm asking, but I can't see how going from 3 years of payments to dumping it and getting a brand new model of the same car as being a cheaper or better way to go.

 

[OILFIELDTRASH]

I'm putting $7500 down and will be paying about $290 a month for 36 months. I should be right around $10k paid + the 7.5k I put down. If I refinance the remaining balance at 1.9%'ish for 24 months it shouldn't be all that bad? I'm horrible with math so that's why I'm asking, but I can't see how going from 3 years of payments to dumping it and getting a brand new model of the same car as being a cheaper or better way to go.

$7500 down and a job will get you into a new car bypassing the lease altogether. Some car makers are hungrier than others. Maybe Honda would pass but Chevy or Dodge would bite.

 

[TheFamilyMan]

I'm putting $7500 down and will be paying about $290 a month for 36 months. I should be right around $10k paid + the 7.5k I put down. If I refinance the remaining balance at 1.9%'ish for 24 months it shouldn't be all that bad? I'm horrible with math so that's why I'm asking, but I can't see how going from 3 years of payments to dumping it and getting a brand new model of the same car as being a cheaper or better way to go.

Even with shitty credit, you should be able to get a decent rate paying that much down on a car. Put down 40% or 50% in cash if you have to.

I've seen car dealerships work miracles for people with shitty credit but a bag full of money for a down payment...mid-550's credit score got a 25k car at a relatively low % when 10-grand in cash was plopped down as a down payment.

 

[QueBert]

$7500 down and a job will get you into a new car bypassing the lease altogether. Some car makers are hungrier than others. Maybe Honda would pass but Chevy or Dodge would bite.

They would, but the payments would be a lot higher, $290 a month works for me, with 7.5k down and buying instead of leasing, the payments would be around $450 a month for 60 months, which I can't swing at the moment. $350's my realistic high end, but I'd like to keep it around $300.

 

[DietDrThunder]

$7,500 for a down payment, you can go buy a Hyundia new for around $15K plus TTL. That would be around 50% down and I'd think they'd give you a loan. Pay it off in 3 years and your credit should be better.

 

[OILFIELDTRASH]

They would, but the payments would be a lot higher, $290 a month works for me, with 7.5k down and buying instead of leasing, the payments would be around $450 a month for 60 months, which I can't swing at the moment. $350's my realistic high end, but I'd like to keep it around $300.

You can't swing $450 yet you want a 30k car?

 

[Doppel]

I just leased my fourth car in a row.

But Fking hell, OP, it sounds like you need major financial advice and GET THE IDEA OF THE SCION OUT OF YOUR HEAD RIGHT NOW. Put it down.

$7500 down on a lease is a terrible idea.

Do you know what your money factor is? No, you don't. Do you even know what a money factor is? No, you don't.

This is why you need to step back until you know these things and you can figure out truly what you're getting into.

Good credit can come with time, if you don't mess up over the next three years it will get better anyway, without getting raped on a lease.

 

[Phanuel]

Anything more than $0 down on a lease is a baaaaaad idea.

 

[ponyo]

Terrible idea. It's easy to see why you have bad credit. Leasing with the intent to buy is generally stupid. It's quite obvious you can't afford this car. You say you want to improve your credit so that's why you're going to lease. That's just BS excuse. Time will take care of your bad credit problem. Take $5,000 cash and deposit it in a bank and apply for their secured credit card. You can get secured credit card from a bank and that will improve your credit. Take the $2,500 and buy a beater and drive it for 3 years and save some money and improve your credit. You'll be in much better position to lease or buy a car in 3 years if you don't buy now.