What do you guys think about leasing cars?

[vi edit]

Jesus that is terrible. My previous car took a shit on me and I only had $2500 to spare for a new one. It was either get a complete piece of shit that might die on me (just moved to an area that I have no friends/family), or get a brand new 2010 Mazda 3S. After everything was all said and done, I'm paying $8,000 over 36 months.

A lease on a Camry LE from Toyota in my area is $2400 down (includes first month payment) and $209 a month for 36 months. Total payments are around $9724. Buyout at the end is $13,291. The car originally MSRP'd for $23,865. You are basically driving it interest free for 3 years.

 

[rcpratt]

WTF are you talking about? Leasing doesn't have an interest rate.

Hahah. Just because they call it a "money factor" for leases doesn't mean that leasing doesn't have an interest rate.

As for the actual OP, it depends. Because I can get better than employee pricing and a low interest rate, I get a great deal on my '11 Fusion. Nothing down, $302/mo for 24 months for a $33k car.

 

[bignateyk]

If you're the type of person who likes a new car every 2-3 years then leasing is a much better option than buying. My dad leases all his cars just because he likes a new one so often.

If you are going to get a car and drive it till it dies then you are much better off buying a slightly used car outright.

I leased my first car out of college (2008 RAV4). After the lease I turned it in and just bought a used 2004 Jeep Liberty. For me I don't need a fancy new car all the time.

I had a dented bumper on the RAV4 that they wanted $1200 for, so I went and found one at a junk yard for $200 and put it on myself. Other than that I didn't have any problems turning it in.

 

[mvbighead]

I can see what vi is saying in reference to different strokes for different folks...

me personally, I'd rather buy slightly used and drive it for a good long while without a payment. Your bank account gets to look really nice when you don't have 200-300 coming out every month for a car payment.

 

[amdhunter]

Also - this might be a bonus on a lease, but when the car is auctioned off, you may make a profit. My GLi sold for a lot more (~$18k) than the buyout (~$12k) and I got a nice $3000 check from VW. 🙂

Not sure how common this is, but I wasn't complaining.

 

[ElFenix]

A lease on a Camry LE from Toyota in my area is $2400 down (includes first month payment) and $209 a month for 36 months. Total payments are around $9724. Buyout at the end is $13,291. The car originally MSRP'd for $23,865. You are basically driving it interest free for 3 years.

yeah but you used MSRP for your cap cost, when cars direct will sell me a 2011 for more than $2000 off MSRP with no negotiation.

 

[vi edit]

yeah but you used MSRP for your cap cost, when cars direct will sell me a 2011 for more than $2000 off MSRP with no negotiation.

Even at $21,000 and 0% interest you are looking at $350 a month for a 60 month loan.
350 * 36 = $12600

With a lease you only paid around $9724.

You are still effectively renting it at zero pecent or better.

 

[Via]

Leasing for convienience I understand.

But imo buying gives you so many more options after a few years, not to mention not having to worry about mileage if your situation were to change.

You could sell that 2011 Camry three years from now, take the $5000 or so you'd be left with and buy a cheap old car if your decide you don't want a car payment anymore.

 

[GuitarDaddy]

Buying is almost always a better financial option than leasing. Leasing companies are in the business to make money, they basically make their money selling convience. If you must have a new ride every 3yrs and don't want the hassle of financing and selling your cars and don't mind paying a premium in the long run then lease.

But if you have decent credit and and are a halfway saavy buyer you will save quite a bit of money buying vs. leasing. And if you don't mind driving a car for more than a few years you can go through periods of several years with no car payment which is priceless.

 

[Doppel]

Buying new vs old is the bigger consideration.

Anyway, those truly 100% against leasing instead of buying simply are not up to date with the historically high used car prices and tax and incentive implications that sometimes make leasing extremely attractive.

Last year for example a new camry LE could be had for under $200/month with only tax, title, tag out the door. Same thing on the Prius. Earlier this year Altimas were also at that price.

If you can get a low purchase price combined with a high residual leasing can be attractive. At the end of the three years you have the option to buy, or you dump the car no questions asked no hassle. And since the lease rate is based on a purchase price, if you can get a lease money factor (its interest rate) low enough then there is literally no reason whatsoever to "purchase" if you're buying new. All that does is simply lock you into the vehicle and you have to sell it yourself later should you want to instead of throwing it back at the dealer free and clear if it were a lease. There are occasional exceptions like states that make you pay purchase price on the entire vehicle amount (a rarity).

In the past I only bought used cars but anybody who's tried to buy a used car recently knows that their prices are totally ridiculous and in many cases you only buy it if you're philosophically opposed to buying new or you have crap credit. Otherwise you get new. Depends on the car, too.

 

[Doppel]

A lease on a Camry LE from Toyota in my area is $2400 down (includes first month payment) and $209 a month for 36 months. Total payments are around $9724. Buyout at the end is $13,291. The car originally MSRP'd for $23,865. You are basically driving it interest free for 3 years.

Me, too. Bout a year ago I looked and almost leased a new camry at $189/month (give or take $10). No money down, just the taxes, title. They were $100/month cheaper than they are now. Rav4s were something like $199. Going into a dealership with $1500 and coming out with a brand new car at $200/month, as long as deals like that exist I will never stop leasing. Even a car you "own" you're paying each month in depreciation a huge amount and that isn't even addressing repairs/maintenance (you'll have only fluid changes and one set of tires on a leased car, they won't even go through a set of brakes).

If you look at the leasetrade websites some people get SCREWED. And this is their fault. You must be willing to look around and be flexible on the vehicle you want.

 

[vi edit]

Even a car you "own" you're paying each month in depreciation a huge amount and that isn't even addressing repairs/maintenance (you'll have only fluid changes and one set of tires on a leased car, they won't even go through a set of brakes).

And if you lease a Toyota 2/3 of the maintenance (oil changes, rotations, ect) is covered under the 2 year/25k mile Toyota care.

 

[Jumpem]

Leasing is the way to go if you don't drive alot. Your payments are about two thirds of what they would be buying. No worries about trade in value when the time comes either. Just return it, and lease soemthing else.

The downside to leases is that they force you to keep a car for three years.

 

[Doppel]

Your payments are about two thirds of what they would be buying.

Mine are right at about half 🙂 In fact, at this rate I can lease for 10 years and be out not that much more than if I financed the car over 5 years but kept it for 10. And after ten years in the second case, yes I have a car worth some marginal amount whereas 10 years of leasing leaves me with nothing, but I also had the maintenance/repairs over those 10 years, plus missed out on whatever new features are introduced standard into that line of vehicle at years 4 and 7. That is only on extremely good lease rates, though. Until last year I don't even think such deals were available as they have been recently and, should they go away again, the math would change once more.

Lease can easily be extended to 18,000/year and many cars have only a $.15/mile penalty for overage.