Luckily on all the cars I've purchased and have kept beyond warranty, I haven't encountered substantial maintenance costs. The only "customization" my wife does on her cars is window tint.
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Does car leasing make sense? Seeking car buying experts
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Luckily on all the cars I've purchased and have kept beyond warranty, I haven't encountered substantial maintenance costs. The only "customization" my wife does on her cars is window tint.
It can make sense.
I am leasing a VW CC. The terms of the lease were incredibly favorable for me.
I did the lease because my lifestyle needs further out weren't clear. I was seeing a new girl that I was thinking I was going to marry. Who knows how quickly kids would come into the picture. In that view a 3 year lease with high mileage was a no brainer. From where I am now I have the buy out option on the car based on the depreciated price. I may very well end up doing that.
I am leasing a VW CC. The terms of the lease were incredibly favorable for me.
I did the lease because my lifestyle needs further out weren't clear. I was seeing a new girl that I was thinking I was going to marry. Who knows how quickly kids would come into the picture. In that view a 3 year lease with high mileage was a no brainer. From where I am now I have the buy out option on the car based on the depreciated price. I may very well end up doing that.
And you're probably going to pay a lot more for that car over the long run than if you just bought it from the start.
You might as well buy a brand new car. Especially because you don't want to own a VW once it's out of warranty.
Any time you finance a vehicle you have to consider insurance costs. All loans will include language about the minimum insurance coverage you need to carry during the life of the loan.
I was always vehemently against leasing, and still haven't done it, but have looked into it for the future since I like high end new cars and don't want to pay for them out of warranty.
four things:
1) Put little/no money down on a lease. if you total that car the day after you buy it, whatever you put down is lost.
2) Lease when it makes sense. I'd never lease a car with residuals in the 4X% range after three years. Some cars are better to lease than others, those being the ones with inflated residuals. Negotiate the price too, just like if you were financing.
3) Don't lease something just because you can't afford to buy it. The point of a lease is to get something very cheap, not to get something you couldn't actually afford to buy and max your budget on a lease payment. Seen more than my share of 22 year olds showing off their $800 lease payments at cars n coffee.
4) Never lease a car thinking you'll buy it at the end, these more often than not are the people in point 3 above. If you're planning on buying it at the end, why didn't you just buy it from the start? Who wants to take a loan on a car they've already owned for 2-3 years, benefitted from the cheaper payments, and load the bulk of the payoff on the backend of a car that's already 2-3 years old? If you are going to buy out a car that is at the end of a three year lease, you better plan on paying it off in two years, but then the buyout payments will be enormous, especially if the residual was high (which it should've been if you leased it to begin with). In reality people who do this usually leased a car they couldn't actually afford to buy, then take a 4-5 year loan at the 2-3 year point to keep the payments the same as what they were in the lease (already maxed out to what they can afford usually) and pay on it for a comically long time and pay through the nose for it. If you lease, lease it and turn it in. Buying out a lease is the absolute worst way to purchase a car.
four things:
1) Put little/no money down on a lease. if you total that car the day after you buy it, whatever you put down is lost.
2) Lease when it makes sense. I'd never lease a car with residuals in the 4X% range after three years. Some cars are better to lease than others, those being the ones with inflated residuals. Negotiate the price too, just like if you were financing.
3) Don't lease something just because you can't afford to buy it. The point of a lease is to get something very cheap, not to get something you couldn't actually afford to buy and max your budget on a lease payment. Seen more than my share of 22 year olds showing off their $800 lease payments at cars n coffee.
4) Never lease a car thinking you'll buy it at the end, these more often than not are the people in point 3 above. If you're planning on buying it at the end, why didn't you just buy it from the start? Who wants to take a loan on a car they've already owned for 2-3 years, benefitted from the cheaper payments, and load the bulk of the payoff on the backend of a car that's already 2-3 years old? If you are going to buy out a car that is at the end of a three year lease, you better plan on paying it off in two years, but then the buyout payments will be enormous, especially if the residual was high (which it should've been if you leased it to begin with). In reality people who do this usually leased a car they couldn't actually afford to buy, then take a 4-5 year loan at the 2-3 year point to keep the payments the same as what they were in the lease (already maxed out to what they can afford usually) and pay on it for a comically long time and pay through the nose for it. If you lease, lease it and turn it in. Buying out a lease is the absolute worst way to purchase a car.
Having been considering leasing a Cadillac ATS, after running the numbers on that and a few other leases frankly leasing is not a great value. If you are looking to upgrade every two years, leasing can be preferable. However, the way I calculated it is that leasing an ATS would end up costing me $17,160 over 39 months. It makes much more sense to me to finance it over 5 years, pay off the ~$35,000, then after 5 years it should still be worth ~$15,000. For those that have no issue selling a car privately, purchasing does seem to be the preferred option. I could either lease the car for roughly three years for $17k, or spend the $35k and drive the car for a 5-year financing period then pocket $10k-$15k afterward. Taking the average of a conservative $10k-$15k sale 5 years later, at $22.5k my annual cost of ownership is $4.5k vs $5.6k on the lease. This should apply to most cars.
Nonetheless I find buying used low-milege cars to be the best deal, although I am very annoyed that many manufacturers don't transfer warranty if a car is resold at a dealer within the warranty period.
Nonetheless I find buying used low-milege cars to be the best deal, although I am very annoyed that many manufacturers don't transfer warranty if a car is resold at a dealer within the warranty period.
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This is so true. The only European car I would have considered owning long term in the old days would have been a Volvo (but not anymore since long term reliability there just doesn't exist).
For a car in it's first three or four years, you won't get a better performer than a German car or a really cool Jaguar. But after that, most of these cars have expensive and frequent breakdown/repair issues.
But for a car long term, you get an OK ride in a Japanese car in those first three or four years, but if you keep it the maintenance costs past that period are low and Japanese cars are more reliable overall than German or English cars in that over-5 year old period, and certainly in cars over 10 years old.
If I had a leasing agreement and kept cars only short term and didn't have to worry about it breaking down due to being old, then go for a nice, luxurious European car.
Sorry to hear that you've had issues. The cost breakdown of leasing then buying is pretty well within line of having bought it new. We reviewed the numbers in our leave contract pretty thoroughly and the difference not even considerable.
Most of the people in my family have owned VW's for many many years and haven't had any issues.
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Cars are a complete waste of money, they depreciate faster than anything. We spend money on cars because we like them and they bring us joy (or its status symbol for some).
If you have the money, then it doesn't really matter if you buy or lease. If you're talking finance, leasing is great if you have way to write some of it or all of it. Otherwise you need to find the balance of financing it in a way that you will find economic value out of it when it is paid off. Leasing doesn't really make sense anymore. You would be better off making friends at a car rental company and having them give you the best corporate rate in exchange for you committing to renting for 12 (or more) months. This way you can cut out the vehicle insurance costs and maintenance but still drive a luxury car and exchange it every so often for something in the same class.
If you have the money, then it doesn't really matter if you buy or lease. If you're talking finance, leasing is great if you have way to write some of it or all of it. Otherwise you need to find the balance of financing it in a way that you will find economic value out of it when it is paid off. Leasing doesn't really make sense anymore. You would be better off making friends at a car rental company and having them give you the best corporate rate in exchange for you committing to renting for 12 (or more) months. This way you can cut out the vehicle insurance costs and maintenance but still drive a luxury car and exchange it every so often for something in the same class.
That is a big reason why I would have to have a LOT of money to ever buy a new car. It is a lot of money just to have something new when a lot can be saved by buying even a slightly used car. I also do not like the idea of monthly payments for years.
Completely agree with you that cars are a waste of money due to their rate of depreciation. I'm trying to figure out how to lessen that impact. Keeping a car past payoff period is more or less out of the question, my wife doesn't want to keep a car "that long". She (we) like a car that is 2-3 years old, low miles and like to keep it for 2 years before trading it in for another 2-3 year old vehicle and around the cycle goes. Like I mentioned before, if I get a good trade in offer from the dealer, I have around $1500 in positive equity but then again I also paid almost $500/month in payments for the past 25 months. If I choose to lease this time around and choose a 2-3 year lease for the car we want, we end up paying around $350/month and end up with $0 equity at the end. The way i've been thinking about those numbers is that if I purchase and pay the higher premium, i'll end up with equity but at the expense of a much higher payment. The lower lease payment "saves" me money at the expense of positive equity.
I am going to assume that the $350/month payments are after trade-in? Consider this: for your next car, since you will have no vehicle to trade-in the payments will likely be doubled. So do consider the future as well following this two-year lease.
That ballpark number was not including the trade in. I do know that the lease deal wants a small chunk of change up front at lease signing; i'm wondering if I can use my positive equity towards those up front lease fees i.e. first months payment plus whatever else it includes.
Good point though, if I go this route and get into a new lease after 2 years, the up front lease costs of 2-3k would be out of pocket. Hmm.
I see $685/month for a base 2015 Q50 on a two-year 24k mile lease. Unless the $350 includes a high down payment if you were quoted that price you are getting an amazing deal.
As nice as their cars are, they have an awful-looking site. Wow, they offer a 60-month $512/lease: they'd need real suckers for that one.
Where did you pull those numbers from, just curious? I have been reading on an Infinity forum regarding deals people have been receiving lately to get an idea of what to expect.
They have a payment tool on their site that lets you calculate pricing. If the Q50 is indeed going for a $350/month lease that'd be a steal but I'm going to assume that members of the Infiniti forum are calculating in a major down payment.
The current promo is a 39 month, $309 plus tax (~$20-30), with $3199 down. I believe the OP was looking at something shorter, but that may be what those folks are talking about[?]
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Yeah, once you start into the lease path, even if you initially have some equity in a trade (to offset that OOP money down), you’re going to get hit with it on subsequent leases. BTW, if you had a paid off car, or significant equity, I wouldn’t trade it against a lease, I’d sell it, put that cash in your pocket.
When we were leasing our BMWs, the promo was a low down payment (one time I believe it was just an additional payment!) making it even more attractive as a pay-as-you-drive sort of model.
Just factor that in - down, monthly + tax, total cost vs. traditional finance, and estimated value over the same duration (you can even use lease residuals as a way to estimate this).
You have quite a bit of knowledge in leasing it seems, can you elaborate to help me make an educated decision? If you want to post or PM or email, that's fine. Maybe public posting here will help people in the future too.
That's a surprisingly favorable lease at ~$5k annual cost (factoring in the down payment) for a $38k vehicle.
I would trade it for the sake of not having to deal with lowballers or the hassle of selling privately, and just have the dealer cut me a paper check for the value of the car rather than applying it to the lease (they can do this, you don't have to apply a trade towards a new car at all if you don't want).
In October, I entered a lease agreement for the first time. I got a 2015 Nissan Leaf for $285 per mo and 15,000 mi per year for 3 years. I will not have to pay for gas, oil changes or maintenance. This was almost exactly the amount I was paying in gas per mo for my old SUV. The cost of repairs on my SUV was also crushing me. So far, it's been a wonderful experience. While an electric car is certainly not for everyone, I'd highly reccomend it for those with a short commute and an alternative transportation option for road trips.
Yep, see all my previous posts regarding time and effort for private sales. My “not trading” was suggesting not to roll the equity against a lease, i.e. the mechanism you use to “sell it” (including to the dealer) is irrelevant, just put that money in your pocket.
re: selling (“trading”) to a dealer: had a friend that did that very thing, converted from a traditional finance with lots of equity to a lease, covered the down, and drove out with a check ($15K) for the difference.
FYI, the same guy made an offer on the car after the lease expired, lower than the residual, but they didn’t want stock, the projected value had done down, and they took his offer (it was a pretty big difference, around $5-6K IIRC). It was all in his favor, take offer or take the keys.
