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Auto Leasing 101
- Thread starter maflynn
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Hi, everyone, I arrived late to this thread so I would just add:
A lease also allows you to, with the same monthly payment (and same initial down payment, be it 0 or something else), to afford a more expensive vehicle. As you don't pay for the whole unit, but only for its use over a certain period of time, your payments are smaller if you lease a vehicle rather than owning it. It is like either paying $20,000 for a new car (and owning it until you sell it) or leasing a $40,000 car for 3 years for $20,000 (and you will only have a car for the said 3 years).
Of course, you don't own it and at the end of the lease you have to return it with at a certain pre-specified condition. This implies a certain level of dings/wear and a specific mileage/kilometers among other things (like doing a specific maintenance schedule).
The fundamental difference is really the ownership, the owner gets to decide what happens with the car. If you lease it, you can't modify it. You can't add turbos to the engine. You can't paint it, you can't change the exterior or the interior. For example, if your car didn't have an apple CarPlay unit and for some reason you get a free carplay unit, you won't be able to add it in (or more precisely, you can add it in as long as when you return it, you take it out and you put the old radio back).
There are some advantages to this. When you lease it, you don't have to worry about many things about the car, like what happens to the car at the end of your lease. You don't have to worry about the car losing its value. If a car model you chose is not to your liking or you see it doesn't appeal to you as you thought it would, you just return it at the end of the lease and forget about it. No need to worry about being a money pit and looking for a buyer.
If you have a certain usage in mind, you can find a lease that will accommodate it and have a brand new car every couple of years.
Lastly, I would add that just like a regular loan, the terms of a lease depends on the buyer's credit. If you have a good financial and credit history you would get a very good interest rate and by the same principle, good lease terms. The lease is just a fancy loan that is a car rather than money. As such, it is a tool and certainly has its advantages. And as with any tool, it is better to do research in advance and never, ever on the spot and with a salesman.
A lease also allows you to, with the same monthly payment (and same initial down payment, be it 0 or something else), to afford a more expensive vehicle. As you don't pay for the whole unit, but only for its use over a certain period of time, your payments are smaller if you lease a vehicle rather than owning it. It is like either paying $20,000 for a new car (and owning it until you sell it) or leasing a $40,000 car for 3 years for $20,000 (and you will only have a car for the said 3 years).
Of course, you don't own it and at the end of the lease you have to return it with at a certain pre-specified condition. This implies a certain level of dings/wear and a specific mileage/kilometers among other things (like doing a specific maintenance schedule).
The fundamental difference is really the ownership, the owner gets to decide what happens with the car. If you lease it, you can't modify it. You can't add turbos to the engine. You can't paint it, you can't change the exterior or the interior. For example, if your car didn't have an apple CarPlay unit and for some reason you get a free carplay unit, you won't be able to add it in (or more precisely, you can add it in as long as when you return it, you take it out and you put the old radio back).
There are some advantages to this. When you lease it, you don't have to worry about many things about the car, like what happens to the car at the end of your lease. You don't have to worry about the car losing its value. If a car model you chose is not to your liking or you see it doesn't appeal to you as you thought it would, you just return it at the end of the lease and forget about it. No need to worry about being a money pit and looking for a buyer.
If you have a certain usage in mind, you can find a lease that will accommodate it and have a brand new car every couple of years.
Lastly, I would add that just like a regular loan, the terms of a lease depends on the buyer's credit. If you have a good financial and credit history you would get a very good interest rate and by the same principle, good lease terms. The lease is just a fancy loan that is a car rather than money. As such, it is a tool and certainly has its advantages. And as with any tool, it is better to do research in advance and never, ever on the spot and with a salesman.
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I'll pass thanks.
I follow the advice of Martin Lewis (money saving expert in the UK) who says rather than insure purchase and take out extended warranties etc, save the money they would have cost you.
Then when something does need repairing you have the money to get it repaired. If it doesn't break down you are quids in. Law of averages says not everything you buy will fail in your ownership.
Gap insurance is a little different, but basically I pay them and they will only pay out if the insurance company value the car low and if I write it off. Thats not very likely given my track record and low milage.
Martin Lewis is great!
yep as a cash buyer (just re-read your post) but anything else GAP with zero (low) deposit makes sense. I'm sure Martin would say the same if there was a 'shortfall' and the buyer was liable to pay that 'shortfall'.
yg17 before who was spot on
'not having GAP is a huge mistake. You may have a clean driving record, but there are plenty of idiots out there on the road, and if they wreck your car, you'll be responsible for the difference between the insurance payout and the loan amount, even if it was 100% their fault.'
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The money on those type of policies is pure profit, so its in the dealership's best interest to push for such services.
What the hell's the point of gap insurance if you're not financing? They must really think people are stupid if they try to sell it to cash buyers.
They get their commission either way, so they don't care.
But yes I agree what's the point if your a cash buyer.
Of course car salespeople probably also make commission on leases and financing, so they must hate me!
In the UK it depends on your insurer some replace or pay out like for like some don't, so if the States is the same thats one reason the salesmen sell it.
i.e.
'if you pay £15,000 for a new motor, it will start losing value the moment you drive it off the forecourt. If you crash on your way home and write the car off, you might only get £12,000 from the insurer, which means you’d have to stump up at least another £3,000 of your own cash if you wanted to replace your car with a new equivalent model.'
As I say its important to check with your insurer if they give you the £15,000 above & for how long after buying the car (in the UK).
cheers
While probably sales people receive a commission for selling gap insurance, it is still of use for cash buyers:
As the price of the car gets more expensive, it is very likely that in the event of catastrophic loss, the insurance claim will NOT make you whole. i.e. if the car gets involved in an incident that demands major repairs, some insurance companies would rather write it off rather than pay for the repair. Depending on the car, the write off will be according to their calculations and will most likely NOT allow you to get the same type of car. This is true as the car gets more expensive (and parts are ridiculously expensive).
If you spent $X on the car, cash, it is very unlikely the insurance company will give you exactly $X back, cash. More so, if a new car is actually more than $X for the newer model, that is one way where gap insurance comes in.
As the price of the car gets more expensive, it is very likely that in the event of catastrophic loss, the insurance claim will NOT make you whole. i.e. if the car gets involved in an incident that demands major repairs, some insurance companies would rather write it off rather than pay for the repair. Depending on the car, the write off will be according to their calculations and will most likely NOT allow you to get the same type of car. This is true as the car gets more expensive (and parts are ridiculously expensive).
If you spent $X on the car, cash, it is very unlikely the insurance company will give you exactly $X back, cash. More so, if a new car is actually more than $X for the newer model, that is one way where gap insurance comes in.
Same in the UK as my post before, as I say some insurers will replace like for like for a certain time.
It worth checking before purchase, if the car was written off or stolen, what they would offer.
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Ah, in the US, gap only applies if you finance.
So you buy a $15,000 car and finance all $15,000, wreck it on the way home and your insurance pays $12,000, gap will cover the remaining $3,000 on the loan (otherwise you'd have to pay that difference ASAP). If you paid cash, you'd just be out that 3 grand, gap won't help you there.
In my case, I bought a $30,000 car and financed $20,000, so I didn't need gap since I'll never be upside down on my loan. My loan balance is around $15,000 now but the car's still worth something in the mid-20s. But if I totaled my car on the way home from the dealer and got, say $28,000 from insurance, $20,000 would pay off the loan and I'd get $8,000. So I'd have been out $2,000 of my downpayment.
Some good reading here. http://leasehackr.com/
Looks like you missed a good deal on the Jeep Wrangler last month - but I would guess that the Wrangler generally leases well because they hold their value very well - one of the keys to getting a good lease deal. They also have an active forum where you can request the residual, money factor, and incentives on a particular vehicle which is crucial for making sure you get a good deal.
Yup, you can see some residual values in this thread http://forum.leasehackr.com/t/2016-jeep-wrangler-unlimited/570/24 and as expected for the Jeep Wrangler they are insane - high 60's to even high 70's! Anything above high 50's generally leases well.
That means that some of these $30k Wranglers should lease for about $300/month with zero down all taxes/fees included even if you don't negotiate a cent off MSRP.
Looks like you missed a good deal on the Jeep Wrangler last month - but I would guess that the Wrangler generally leases well because they hold their value very well - one of the keys to getting a good lease deal. They also have an active forum where you can request the residual, money factor, and incentives on a particular vehicle which is crucial for making sure you get a good deal.
Yup, you can see some residual values in this thread http://forum.leasehackr.com/t/2016-jeep-wrangler-unlimited/570/24 and as expected for the Jeep Wrangler they are insane - high 60's to even high 70's! Anything above high 50's generally leases well.
That means that some of these $30k Wranglers should lease for about $300/month with zero down all taxes/fees included even if you don't negotiate a cent off MSRP.
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awesome link, that's really helpful. I'm reading it now
I can't say that I'm surprised, as Jeeps are a popular vehicle that retains its value
Leasing puts you into an endless cycle of buying brand-new cars, eating the initial high depreciation and trading them back way too soon. Not a good life plan.
This is an extremely simplistic point of view likely coming from someone who doesn't understand leasing very well. All car ownership has a cost. A lease can be a good or bad deal depending on the specific deal, just like a purchase can also be the same.
A lease is really just a purchase where you pay an agreed amount for the depreciation of the portion of the car's life you will use while letting the bank assume all risk of change in that estimated depreciation. If the actual depreciation turns out to be worse than expected, you turn the car in and the bank eats the loss. If it's better than expected, you can sell the car and pocket the profit. A purchase locks you in and leaves you with all the risk of depreciation - for better or for worse.
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It's the same poor financial decision as buying a new car every 3 years and trading it in with low miles, isn't it? And isn't depreciation risk built into the formula when you lease?
It can be, but most of the time it's a bit more complex than that.
For one, most people don't buy a new car every 3 years, but they do take out loans for 5-6 years or more. In fact the average loan term in the US is marching towards 72 months. So the reality is that most people always have a monthly payment anyways as they'll move from one lengthy loan to another.
Second, since most cars free maintenance and/or warranties begin to run out about 3 years in, you have to add in those costs to the cost of the loan. In my experience most people don't monitor those associated costs very closely - tires, oil changes, brakes, etc. When you turn over a lease every 3 years you never pay for any of those costs.
Third, there are a lot of other factors that go into car ownership than simply the payment. If a vehicle begins to require maintenance, you have not only the cost of the maintenance, but the cost of your time in dealing with it, and possibly needing to own or rent another vehicle to cover for the down-time. For someone who commutes daily and spends a lot of time in their car, having a new, reliable car that doesn't break down, has the most modern safety equipment, and the most modern conveniences brings a lot of additional value. For other people, being able to budget a fixed amount every month for car ownership might work better for them than the uncertainty of owning an older car.
There is no one answer. I have monitored every penny of our car ownership for over a decade now, and have a perfectly maintained 30-year old car, a perfectly maintained 18-year old car, a 6 year old car that we bought used, and a 3 year old car that we lease. The lease doesn't cost us appreciably more or less than any of the other vehicles, but it does require a lot less effort on my part to keep on the road.
I'll keep it short and sweet:
1) Always lease with minimal/zero down, that downpayment is gone if you total it as soon as you leave the lot.
2) Consider leasing if the residual is high, don't bother if the residual is low. The point of a lease is cheap payments, which are directly related to the selling price of the vehicle (NOT the MSRP) and the residual, which is a percentage of the MSRP (NOT the negotiated price). In an ultra simplified example without tax or interest or BS fees etc, your payments are effectively determined by negotiated selling price minus residual dollar value divided by term in months. Better negotiated selling price and a high residual means a cheap lease payment, which is what you want. A low residual means a high payment which defeats the purpose of a lease, you may as well just buy it then.
3) As you can glean from 2) above, negotiate the price of the car just like a purchase.
4) Interest rate on a lease is just the "money factor" multiplied by 2400.
5) Don't go into a lease thinking you're going to buy it out the lease at the end - in 99% of cases. If you leased smart, that means you leased on something with a high residual, which also means you would surely be upside down on it if you bought it out at the end, because you had small payments for the lease term and would owe a lot more than it's worth on the buyout (you never see people buy out their BMWs with inflated 64% residuals after three years because the residuals make leasing attractive but don't represent market reality on the value of a 3 year old car - what they do is lease another one and get trapped in an endless car payment). Contrast, if you leased poorly, you should've just bought it to begin with. The last thing you want to do is lease a car with the intention of buying it out at the end just because you couldn't afford to buy it outright from the beginning - that means you just plain can't afford it. Remember, the point of a lease is cheap payments; if say, over 5 years, you have cheap lease payments for three years because you leased well, can you afford the disproportionately large payments in years 4 and 5 on a 2 year loan to buy it out? Then you should've just bought it from the start and you would've had medium sized payments for the whole term rather than backloading the heft of the payments on years 4 and 5. Hefty payments on the backend also just means you'll be upside down that much longer, beyond year 3 which is kind of sad. Or do you need to lease the car for three years just to take a 5 year loan on it at lease end and spend 8 years paying on it? Don't do that - I couldn't imagine taking a 5 year loan for my own car I'd already been driving and paying on for 3 years, the amount of money wasted and just the sheer length of the term is disgusting. In VERY RARE cases you can do the math and find that leasing for 3 years and buying for 2-3 years comes out slightly cheaper than buying for 5-6 years from the start. A Tiguan SEL 4MO comes to mind as one of those rare, rare examples, it was about $1800 cheaper to lease it and then buy it when I ran numbers last fall when I was considering one. But for the most part, lease something smartly and plan to walk away from it when you're done. The Tiguan example is a rare one.
6) Wrangler resale is insane. While the residuals are great, the resale overall is so fantastic that you can effectively buy it and sell it at any time and get most of your money back, so you don't really need to lease here, despite high residuals. Also the new JL chassis Wrangler is due in 2018 and will finally have xenon/LED lights as factory options among other things - do a search, spy shots of camo'd 2018s have already been taken, the test mules are out on the roads now. Might be good to wait? Up to you. The current JK is great.
7) You can trade a lease or buy it out at anytime. Most people don't realize this. But again, if you leased smartly with small payments, you'll be upside down on the value and have to give up the car plus X thousand to get out of it. Again, shouldn't be leasing to begin with if you aren't planning on sticking with it for the duration of the term (I realize life situations change).
8) Many leases have a disposition fee of several hundred dollars. This is literally a fee that you pay when you turn in the vehicle. You give up your vehicle, plus have to pay several hundred bucks at that time.
9) Your lease is a contract with the manufacturer - NOT the dealer. Remember this.
10) You'll be on the hook for mileage overages as well as any damage outside of normal wear and tear. Remember, you're renting a car and when the manufacturer takes it back, you'll get charged for any damage just like you would when you return a rental to a rental company. A lease is just a glorified rental in which you pay the new car depreciation.
11) Mileage overages are obscenely expensive, but you said that wouldn't be an issue.
12) Leases have a requirement for tire condition and tread depth upon turn in - they typically have to be 4 matching OEM tires with usually somewhere in the neighborhood of 4/32nds of tread left. At 3 years and 36 miles, you are playing with fire on remaining tread life at lease end. Nobody wants to waste $1000+ on a set of tires just to turn the car in. Depending on what you are leasing though, a lot of guys will change wheels/tires so it can be possible to find used tires online for much cheaper that you can throw on to turn the car in. Problem is this is still a hassle however you look at it between shipping or picking them up and having them mounted/balanced etc. Just another thing to keep in mind.
12) You mentioned wanting cheaper payments than your truck; sure, you might be able to do that with a lease, but you're going to spend 3 years paying on something and walking away with nothing, and then you inevitably need to get into something else, either another lease and an endless payment cycle or 5-6 years of payments on another new purchase if you decide to stop leasing. Would your truck be paid off in 3 years? I wouldn't trap myself in lease payments just to drop a few bucks on the purchase payments on an existing loan that's going to have a final payment where you'll still have a vehicle in the driveway.
13) I believe bankrate.com has leasing calculators, I know they have auto loan calculators. Good to play with numbers.
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Your post is a little hard to follow, but if I understand it right, you traded in a car that was worth $5500 but owed $12000 on? And you figured that because of that you had to lease? Whether you bought or leased, that negative equity got rolled in. Yes the dealer "paid off" your $12000 loan, because they have to in order to get the title to sell it to someone else. But they didn't give you $12000 for it, they gave you $5500 and rolled the other $6500 in negative equity into your lease payments, just like they would've done on a purchase.
I'm saddened by how many people think the dealer is doing them a favor paying for their financial mistakes by "paying off" their severely upside down vehicles. In no case are they giving you more than the car is worth - they are rolling the negative equity into the new purchase or lease, be sure of it.
This is not correct and has nothing to do with GAP insurance. GAP coverage is to cover the difference between the insurance valuation and the amount owed on the loan, nothing more. What you are describing is a payment for the difference between the insurance payout and the replacement cost, which is not the same thing, and not what GAP is for.
Also, never buy GAP from the dealer when purchasing a car (you may be required to in a lease? Not sure). They will sell it to you at a flat rate for the term of the loan, which is stupid because you aren't going to be upside down on the loan in years 4 and 5, even with minimal/no down. Your auto insurance company will sell you GAP coverage for about half the cost of the dealer on a monthly basis, and you can drop it as soon as you determine you are right side up on the loan. VW wanted to sell us 5 years' worth of GAP on my wife's '12 Beetle for like $700, which is like $12 a month. My insurance company gives it to me for $6 a month and I can drop it anytime, so it's really like a quarter of the cost since it was dropped halfway through the loan. Also, if I had needed it, I sure as hell wouldn't have wanted to have a third party involved; I'd rather just have my insurance company value the car and pay the GAP, rather than having two entities trying to fight about the value and the GAP payout and all that back and forth.
1) Always lease with minimal/zero down, that downpayment is gone if you total it as soon as you leave the lot.
2) Consider leasing if the residual is high, don't bother if the residual is low. The point of a lease is cheap payments, which are directly related to the selling price of the vehicle (NOT the MSRP) and the residual, which is a percentage of the MSRP (NOT the negotiated price). In an ultra simplified example without tax or interest or BS fees etc, your payments are effectively determined by negotiated selling price minus residual dollar value divided by term in months. Better negotiated selling price and a high residual means a cheap lease payment, which is what you want. A low residual means a high payment which defeats the purpose of a lease, you may as well just buy it then.
3) As you can glean from 2) above, negotiate the price of the car just like a purchase.
4) Interest rate on a lease is just the "money factor" multiplied by 2400.
5) Don't go into a lease thinking you're going to buy it out the lease at the end - in 99% of cases. If you leased smart, that means you leased on something with a high residual, which also means you would surely be upside down on it if you bought it out at the end, because you had small payments for the lease term and would owe a lot more than it's worth on the buyout (you never see people buy out their BMWs with inflated 64% residuals after three years because the residuals make leasing attractive but don't represent market reality on the value of a 3 year old car - what they do is lease another one and get trapped in an endless car payment). Contrast, if you leased poorly, you should've just bought it to begin with. The last thing you want to do is lease a car with the intention of buying it out at the end just because you couldn't afford to buy it outright from the beginning - that means you just plain can't afford it. Remember, the point of a lease is cheap payments; if say, over 5 years, you have cheap lease payments for three years because you leased well, can you afford the disproportionately large payments in years 4 and 5 on a 2 year loan to buy it out? Then you should've just bought it from the start and you would've had medium sized payments for the whole term rather than backloading the heft of the payments on years 4 and 5. Hefty payments on the backend also just means you'll be upside down that much longer, beyond year 3 which is kind of sad. Or do you need to lease the car for three years just to take a 5 year loan on it at lease end and spend 8 years paying on it? Don't do that - I couldn't imagine taking a 5 year loan for my own car I'd already been driving and paying on for 3 years, the amount of money wasted and just the sheer length of the term is disgusting. In VERY RARE cases you can do the math and find that leasing for 3 years and buying for 2-3 years comes out slightly cheaper than buying for 5-6 years from the start. A Tiguan SEL 4MO comes to mind as one of those rare, rare examples, it was about $1800 cheaper to lease it and then buy it when I ran numbers last fall when I was considering one. But for the most part, lease something smartly and plan to walk away from it when you're done. The Tiguan example is a rare one.
6) Wrangler resale is insane. While the residuals are great, the resale overall is so fantastic that you can effectively buy it and sell it at any time and get most of your money back, so you don't really need to lease here, despite high residuals. Also the new JL chassis Wrangler is due in 2018 and will finally have xenon/LED lights as factory options among other things - do a search, spy shots of camo'd 2018s have already been taken, the test mules are out on the roads now. Might be good to wait? Up to you. The current JK is great.
7) You can trade a lease or buy it out at anytime. Most people don't realize this. But again, if you leased smartly with small payments, you'll be upside down on the value and have to give up the car plus X thousand to get out of it. Again, shouldn't be leasing to begin with if you aren't planning on sticking with it for the duration of the term (I realize life situations change).
8) Many leases have a disposition fee of several hundred dollars. This is literally a fee that you pay when you turn in the vehicle. You give up your vehicle, plus have to pay several hundred bucks at that time.
9) Your lease is a contract with the manufacturer - NOT the dealer. Remember this.
10) You'll be on the hook for mileage overages as well as any damage outside of normal wear and tear. Remember, you're renting a car and when the manufacturer takes it back, you'll get charged for any damage just like you would when you return a rental to a rental company. A lease is just a glorified rental in which you pay the new car depreciation.
11) Mileage overages are obscenely expensive, but you said that wouldn't be an issue.
12) Leases have a requirement for tire condition and tread depth upon turn in - they typically have to be 4 matching OEM tires with usually somewhere in the neighborhood of 4/32nds of tread left. At 3 years and 36 miles, you are playing with fire on remaining tread life at lease end. Nobody wants to waste $1000+ on a set of tires just to turn the car in. Depending on what you are leasing though, a lot of guys will change wheels/tires so it can be possible to find used tires online for much cheaper that you can throw on to turn the car in. Problem is this is still a hassle however you look at it between shipping or picking them up and having them mounted/balanced etc. Just another thing to keep in mind.
12) You mentioned wanting cheaper payments than your truck; sure, you might be able to do that with a lease, but you're going to spend 3 years paying on something and walking away with nothing, and then you inevitably need to get into something else, either another lease and an endless payment cycle or 5-6 years of payments on another new purchase if you decide to stop leasing. Would your truck be paid off in 3 years? I wouldn't trap myself in lease payments just to drop a few bucks on the purchase payments on an existing loan that's going to have a final payment where you'll still have a vehicle in the driveway.
13) I believe bankrate.com has leasing calculators, I know they have auto loan calculators. Good to play with numbers.
[doublepost=1466286318][/doublepost]
Your post is a little hard to follow, but if I understand it right, you traded in a car that was worth $5500 but owed $12000 on? And you figured that because of that you had to lease? Whether you bought or leased, that negative equity got rolled in. Yes the dealer "paid off" your $12000 loan, because they have to in order to get the title to sell it to someone else. But they didn't give you $12000 for it, they gave you $5500 and rolled the other $6500 in negative equity into your lease payments, just like they would've done on a purchase.
I'm saddened by how many people think the dealer is doing them a favor paying for their financial mistakes by "paying off" their severely upside down vehicles. In no case are they giving you more than the car is worth - they are rolling the negative equity into the new purchase or lease, be sure of it.
This is not correct and has nothing to do with GAP insurance. GAP coverage is to cover the difference between the insurance valuation and the amount owed on the loan, nothing more. What you are describing is a payment for the difference between the insurance payout and the replacement cost, which is not the same thing, and not what GAP is for.
Also, never buy GAP from the dealer when purchasing a car (you may be required to in a lease? Not sure). They will sell it to you at a flat rate for the term of the loan, which is stupid because you aren't going to be upside down on the loan in years 4 and 5, even with minimal/no down. Your auto insurance company will sell you GAP coverage for about half the cost of the dealer on a monthly basis, and you can drop it as soon as you determine you are right side up on the loan. VW wanted to sell us 5 years' worth of GAP on my wife's '12 Beetle for like $700, which is like $12 a month. My insurance company gives it to me for $6 a month and I can drop it anytime, so it's really like a quarter of the cost since it was dropped halfway through the loan. Also, if I had needed it, I sure as hell wouldn't have wanted to have a third party involved; I'd rather just have my insurance company value the car and pay the GAP, rather than having two entities trying to fight about the value and the GAP payout and all that back and forth.
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Hi
Good read thanks.
The importance of 'GAP' was mentioned earlier.
I can see the benefits of zero deposit for a stolen or written off lease vehicle.
In the UK some companies now offer inexepensive 'GAP' that includes covering the deposit the buyer has paid.
I'm sure if we have it here in the UK its something that is available in the States.
cheers
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By continuously leasing, you are also paying sales tax forever, in most states. In Pennsylvania, our sales tax rate is 6%, but the car lease rate is an astronomical 9%.
I also find 5, 6 and 7 year loans objectionable. If someone can't pay off a car in 4 years, then they cannot afford that vehicle. Get something cheaper or buy a used car. Don't fool yourself by getting a lower monthly lease payment.
As far as maintenance worries after warranty... Most modern cars require minimal maintenance up to 100,000 miles.
The Wrangler is really built for off road use (the on road driving experience is pretty bad), but I would be reluctant to take it off road if it was a leased vehicle. You know they're going to nail you for every scratch and ding.
I also find 5, 6 and 7 year loans objectionable. If someone can't pay off a car in 4 years, then they cannot afford that vehicle. Get something cheaper or buy a used car. Don't fool yourself by getting a lower monthly lease payment.
As far as maintenance worries after warranty... Most modern cars require minimal maintenance up to 100,000 miles.
The Wrangler is really built for off road use (the on road driving experience is pretty bad), but I would be reluctant to take it off road if it was a leased vehicle. You know they're going to nail you for every scratch and ding.
That's not how lease taxes work in most states. I've never heard that there is a higher lease tax rate in PA. That may be. There are a few states where you have to pay the tax on the entire price of the vehicle when leasing, which can make a lease a bad deal, but in the majority of states you pay the regular sales tax only on the amount of your lease payments, which can be a significant savings over buying and selling somewhat regularly where you have to pay the full tax every time you buy, and only recoup some of it if you take the indirect loss of trading in at a dealer.
Cars are generally reliable these days, but there are still consumables over the course of 100,000 miles which would typically include things like ~3 sets of tires, 2-3 sets of brakes, 10-15 oil changes, several sets of windshield wipers, a couple sets of headlamps, and other service intervals that may include things like fluid changes (DSG services, Adblue refills, etc). Most cars will likely have an unexpected repair or two by 100k as well. Those are exactly the kinds of costs that tend to get glossed over in the 'buying makes more financial sense than leasing' camp. But if you lease, you may never pay for a single one of those things, (or at least absolutely minimize them) which can add thousands of dollars of savings over 100,000 miles of driving.
whelp,
I pulled the trigger. I was semi-serious heading to the dealership yesterday afternoon, but I was prepared to walk if the deal wasn't right for me.
I'm incredibly thankful for the information that @zhenya and others provided. The salesman who was nice enough, but clearly did not have a full grasp of the ins and outs of leasing (and let me be blunt, nor do I). The info provided in this thread though gave me what I needed.
I don't think people need a blow by blow description of my negotiating skills (or lack there of), but I'm thankful to the Lord for opening the doors to allowing this, and my wife who wasn't even there but with her on the phone she gave the thumbs down a couple of times, and that was enough motivation for the manager to make another offer. They seemed to be hungry, and were really willing to deal.
Thanks to the True Car app, I was armed with what others were paying, which for most people was at MSRP for Jeeps.
I got as close as I could in the app to 39,000 MSRP, which this image shows, and I was able to get 36,000 which is in the exceptional category - I'm very happy with that I highly recommend this app, regardless if you're leasing or buying
I'm still not quite sold on the whole leasing concept, but I got a vehicle, that I'd probably not even consider, given the high expense, the question is, after the lease, and I'm ready to trade it in, how will I feel about leasing
I pulled the trigger. I was semi-serious heading to the dealership yesterday afternoon, but I was prepared to walk if the deal wasn't right for me.
I'm incredibly thankful for the information that @zhenya and others provided. The salesman who was nice enough, but clearly did not have a full grasp of the ins and outs of leasing (and let me be blunt, nor do I). The info provided in this thread though gave me what I needed.
I don't think people need a blow by blow description of my negotiating skills (or lack there of), but I'm thankful to the Lord for opening the doors to allowing this, and my wife who wasn't even there
but with her on the phone she gave the thumbs down a couple of times, and that was enough motivation for the manager to make another offer. They seemed to be hungry, and were really willing to deal. Thanks to the True Car app, I was armed with what others were paying, which for most people was at MSRP for Jeeps.
I got as close as I could in the app to 39,000 MSRP, which this image shows, and I was able to get 36,000 which is in the exceptional category - I'm very happy with that
I highly recommend this app, regardless if you're leasing or buyingI'm still not quite sold on the whole leasing concept, but I got a vehicle, that I'd probably not even consider, given the high expense, the question is, after the lease, and I'm ready to trade it in, how will I feel about leasing
Enjoy your new jeep. Even more so if you got a good deal.whelp,
I pulled the trigger. I was semi-serious heading to the dealership yesterday afternoon, but I was prepared to walk if the deal wasn't right for me.
I'm incredibly thankful for the information that @zhenya and others provided. The salesman who was nice enough, but clearly did not have a full grasp of the ins and outs of leasing (and let me be blunt, nor do I). The info provided in this thread though gave me what I needed.
I don't think people need a blow by blow description of my negotiating skills (or lack there of), but I'm thankful to the Lord for opening the doors to allowing this, and my wife who wasn't even there
Thanks to the True Car app, I was armed with what others were paying, which for most people was at MSRP for Jeeps.
I got as close as I could in the app to 39,000 MSRP, which this image shows, and I was able to get 36,000 which is in the exceptional category - I'm very happy with that
View attachment 636835
I'm still not quite sold on the whole leasing concept, but I got a vehicle, that I'd probably not even consider, given the high expense, the question is, after the lease, and I'm ready to trade it in, how will I feel about leasing
One other tip a few of the guys at work who lease say, is always get minor scratches and dents repaired yourself before you return it.
Otherwise you pay through the nose for it.
Post a picture when you get delivery.
whelp,
I pulled the trigger. I was semi-serious heading to the dealership yesterday afternoon, but I was prepared to walk if the deal wasn't right for me.
I'm incredibly thankful for the information that @zhenya and others provided. The salesman who was nice enough, but clearly did not have a full grasp of the ins and outs of leasing (and let me be blunt, nor do I). The info provided in this thread though gave me what I needed.
I don't think people need a blow by blow description of my negotiating skills (or lack there of), but I'm thankful to the Lord for opening the doors to allowing this, and my wife who wasn't even there
Thanks to the True Car app, I was armed with what others were paying, which for most people was at MSRP for Jeeps.
I got as close as I could in the app to 39,000 MSRP, which this image shows, and I was able to get 36,000 which is in the exceptional category - I'm very happy with that
View attachment 636835
I'm still not quite sold on the whole leasing concept, but I got a vehicle, that I'd probably not even consider, given the high expense, the question is, after the lease, and I'm ready to trade it in, how will I feel about leasing
Congrats but...where are the pics??