pa_muddin_xj
NAXJA Forum User
- Location
- Pennsylvania
Have any of you ever leased a vehicle. i was wondering about the pro's and con's of doing it. Thanks
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Leasing a vehicle?
- Thread starter pa_muddin_xj
- Start date
old_man
NAXJA Forum User
- Location
- Loveland, Colorado
Leasing can make sense, but not for me. We put an average of 55k miles per year. The excess mileage fees would kill us. I do all my own maintenance and routinely put 250k on a vehicle with very few problems.
If you like new cars, don't drive many miles, don't do your own work, it MIGHT make sense.
If you like new cars, don't drive many miles, don't do your own work, it MIGHT make sense.
red91
NAXJA Forum User
- Location
- exact location unknown
if you do. Make the sales manager suffer while you read each and every line in the contract.
If you don't understand it, read it again.
Nothing like keeping them waiting for 1.5-2.5 hrs so that you understand, somewhere in the fine print, you'll be taking it in the shorts.
If you don't understand it, read it again.
Nothing like keeping them waiting for 1.5-2.5 hrs so that you understand, somewhere in the fine print, you'll be taking it in the shorts.
Dookie
NAXJA Forum User
- Location
- Shore-town, WA
if you enjoy having a new rig every few years, don't drive TOO much, and negotiate on purchase price instead of lease payment - leasing is an excellent alternative to purchasing.
and yeah - read the contract.
and yeah - read the contract.
Definitely read the contract, and understand each and every provision.
IMHO, leasing makes sense if, and only if, ALL of the following conditions are met:
1) You will absolutely, positively, turn the vehicle in at the end of the lease.
2) No mods. Vehicle has to remain stone cold stock.
3) Under the mileage limit.
You have to remember that leasing companies make money by long term rents, and selling the equipment afterwards. They don't do this out of the goodness of their hearts.
IMHO, leasing makes sense if, and only if, ALL of the following conditions are met:
1) You will absolutely, positively, turn the vehicle in at the end of the lease.
2) No mods. Vehicle has to remain stone cold stock.
3) Under the mileage limit.
You have to remember that leasing companies make money by long term rents, and selling the equipment afterwards. They don't do this out of the goodness of their hearts.
IXNAYXJ
NAXJA Forum User
- Location
- Wherever the next race is.
Leasing is a great tool for the right people, and really bad for the wrong people. Leasing allows someone to a have a lower payment than a conventional loan, because you are really only financing a portion of the car.
When you lease a car, you finance a Guarenteed Future Value, or residual, that is a percentage of a vehicle's MSRP. Depending on the term of the lease (usually 24-48 months) and the strength of the car's resale value, the residual will be different. Typically foreign cars work better due to their better resale value, but some US manufacturers will artificially inflate the residuals to make them more appealing.
I just helped my aunt lease a 2006 Cobalt for 36 months with nothing down for $240 a month, for instance.
The biggest thing to remember is that you MUST keep the car for the entire term...it's next to impossible to get oput of a lease before it's over. So be prepared for the long haul. Also it only really works on new cars. As mentioned, no mods on the car, and got to watch the miles you drive, as leases all have 12,000-15,000 limits on yearly mileage. There are some high-mileage leases available, but they don't pencil out as well.
PM me aytime if you (anybody, really) want a couple easy tips on buying a car. It'll make your experience a lot easier and get you a better deal. Good Luck-
-----Matt-----
When you lease a car, you finance a Guarenteed Future Value, or residual, that is a percentage of a vehicle's MSRP. Depending on the term of the lease (usually 24-48 months) and the strength of the car's resale value, the residual will be different. Typically foreign cars work better due to their better resale value, but some US manufacturers will artificially inflate the residuals to make them more appealing.
I just helped my aunt lease a 2006 Cobalt for 36 months with nothing down for $240 a month, for instance.
The biggest thing to remember is that you MUST keep the car for the entire term...it's next to impossible to get oput of a lease before it's over. So be prepared for the long haul. Also it only really works on new cars. As mentioned, no mods on the car, and got to watch the miles you drive, as leases all have 12,000-15,000 limits on yearly mileage. There are some high-mileage leases available, but they don't pencil out as well.
PM me aytime if you (anybody, really) want a couple easy tips on buying a car. It'll make your experience a lot easier and get you a better deal. Good Luck-
-----Matt-----
YELLAHEEP
NAXJA Forum User
- Location
- Littleton, Colorado
All of the above is great advice. I've leased 3 vehicles and fortunately, each has turned out to be a good experience for the most part. Definitely don't lease if you put more than the typical 12k - 15k miles per year - that will REALLY get you in the end when it comes time to turn it in.
Leasing will get you into a "better" car for the money when comparing purchase vs. lease. However, if you are thinking you'd consider buying your leased vehicle after the lease, look at the contract about it's residual value and purchasing fees - many times you'll end up paying more for your own vehicle than if you'd bought a similar used one.
Also, you really do have to keep the leased car in VERY good condition. The leasing banks will stick it to ya for dings, scratches, stains, tears, cracked windshields, rock chips and tire condition at time of turn in. If you have kids and can't garage the leased vehicle, you're already running an uphill battle...
My best lease experience with with my '02 Dodge Ram Cummins 3500. Leased it for 4 years, and my residual value was going to be $18K and change. These trucks really hold their value and when my lease was about 6 months from the end, I went shopping to compare new trucks vs. buying my '02. Turned out that my '02 had a re-sale value of $26K!!! I was ahead of the game either way - buy it for $18K and have equity, or take that equity and put it down on a new truck. I bought a similar '04 truck in March '05 (caught a year end close out that wasn't moving) and now have brand new paying only 2/3rds the dealer invoice.
Worst experience was a '98 GMC Jimmy. 5 year lease, residual was $16K and current market was only bringing $13K at best.... and ours only had 35K miles on it after the full 5 years. These Jimmy's are a dime-a-dozen so this meant no equity to put down on a new purchase. We started the lease already upside down on our trade in and financed $3k into the lease.... HUGE mistake. On top of that, the leasing bank tried to get us to pay $1800 in "excessive wear" to the vehicle - rock chips to the hood paint, a ding on the rear bumper and a peeling decal....... We had to fight for 3 months to get them to realize that in Colorado, rock chips are unavoidable, the ding was the ONLY body damage on a 5 year old vehicle, and the decal was an unreasonable issue. We had to harp on the fact that they were getting a vehicle that was 40K miles UNDER what it should have had at lease end.... we won that one.
If you do end up leasing, the best advice I can give you is TAKE PICTURES OF THE CAR THE VERY DAY YOU TURN IT IN AT THE END OF THE LEASE! This saved our ass on the above mentioned Jimmy because our pictures showed that the smashed rear bumper on the Jimmy when the bank received it from the dealer, wasn't there the day we turned it in. The "ding" was a 1" circular dimple in the bumper, but the leasing bank said the rear bumper was pushed in, folded and needed replaced. The leasing documents did say that we agreed to turn the vehicle over to the bank directly at the end of the lease, but the dealership said they'd take care of the delivery to the bank..... a common practice, but you can see how you could be hanging out with having not followed the agreement.
Leasing will get you into a "better" car for the money when comparing purchase vs. lease. However, if you are thinking you'd consider buying your leased vehicle after the lease, look at the contract about it's residual value and purchasing fees - many times you'll end up paying more for your own vehicle than if you'd bought a similar used one.
Also, you really do have to keep the leased car in VERY good condition. The leasing banks will stick it to ya for dings, scratches, stains, tears, cracked windshields, rock chips and tire condition at time of turn in. If you have kids and can't garage the leased vehicle, you're already running an uphill battle...
My best lease experience with with my '02 Dodge Ram Cummins 3500. Leased it for 4 years, and my residual value was going to be $18K and change. These trucks really hold their value and when my lease was about 6 months from the end, I went shopping to compare new trucks vs. buying my '02. Turned out that my '02 had a re-sale value of $26K!!! I was ahead of the game either way - buy it for $18K and have equity, or take that equity and put it down on a new truck. I bought a similar '04 truck in March '05 (caught a year end close out that wasn't moving) and now have brand new paying only 2/3rds the dealer invoice.
Worst experience was a '98 GMC Jimmy. 5 year lease, residual was $16K and current market was only bringing $13K at best.... and ours only had 35K miles on it after the full 5 years. These Jimmy's are a dime-a-dozen so this meant no equity to put down on a new purchase. We started the lease already upside down on our trade in and financed $3k into the lease.... HUGE mistake. On top of that, the leasing bank tried to get us to pay $1800 in "excessive wear" to the vehicle - rock chips to the hood paint, a ding on the rear bumper and a peeling decal....... We had to fight for 3 months to get them to realize that in Colorado, rock chips are unavoidable, the ding was the ONLY body damage on a 5 year old vehicle, and the decal was an unreasonable issue. We had to harp on the fact that they were getting a vehicle that was 40K miles UNDER what it should have had at lease end.... we won that one.
If you do end up leasing, the best advice I can give you is TAKE PICTURES OF THE CAR THE VERY DAY YOU TURN IT IN AT THE END OF THE LEASE! This saved our ass on the above mentioned Jimmy because our pictures showed that the smashed rear bumper on the Jimmy when the bank received it from the dealer, wasn't there the day we turned it in. The "ding" was a 1" circular dimple in the bumper, but the leasing bank said the rear bumper was pushed in, folded and needed replaced. The leasing documents did say that we agreed to turn the vehicle over to the bank directly at the end of the lease, but the dealership said they'd take care of the delivery to the bank..... a common practice, but you can see how you could be hanging out with having not followed the agreement.
pa_muddin_xj
NAXJA Forum User
- Location
- Pennsylvania
Thanks guys. i never realized there was so much to consider when leasing a vehicle. I was wondering do you have to have better credit o get a lease or to get a loan?
pa_muddin_xj
NAXJA Forum User
- Location
- Pennsylvania
and to yellaheap the things with the dings and stuff is really what i was worried about. here in western pa the dot goes overboard during the winter. the vehicle i drive now has so many dings and a cracked windshield cause of that.
IXNAYXJ
NAXJA Forum User
- Location
- Wherever the next race is.
pa_muddin_xj said:
Typically, better credit is required to get into a lease than a conventional loan. However, sometimes when a manufacturer is trying to push a certain model factory lease standards are relaxed.
What kind of vehicle are you considering?
-----Matt-----
skeptic_always
NAXJA Forum User
- Location
- Utah
Leasing can get you into a vehicle you might not otherwise be able to afford, but in the end you get to hope you can give it back without being charged more or buy it as a used vehicle.
Perhaps I'm wrong and someone can point it out, but financially it doesn't make sense to lease. Then again, I'm one of those people that think if you are struggling to afford car payments you should have bought a cheaper car. Ok, I'm actually one of those that thinks you should only buy a car with cash, not finance it, but I have given in and bought something I couldn't afford to buy outright a few times.
Perhaps I'm wrong and someone can point it out, but financially it doesn't make sense to lease. Then again, I'm one of those people that think if you are struggling to afford car payments you should have bought a cheaper car. Ok, I'm actually one of those that thinks you should only buy a car with cash, not finance it, but I have given in and bought something I couldn't afford to buy outright a few times.
