Ray

Any decent American van, truck or car .. Not Kia's etc....

scrubbedexpat099

Pretty much every thing in the previous comment is he wrong way around.

You may wish to vary the lease by terminating early - do not lease, it will cost a fortune to get out.

A low residual value is BAD news, the depreciation cost is a substantial part of your lease cost.

If you buy a new car you will probably lose a lot of money over 3 years, but if you lease a vehicle you definitely will.

Basically a lease cost includes the cost of borrowing the money to buy the vehicle, the depreciation costs and of course the lease companies profit.

Like any other complicated product, because the component parts are hidden, there is more opportunity to get screwed if you do not fully understand the product.

I do not understand the comment about maintenance, my car came with a 4 year/ 60,000 mile warranty.

Most people I think initially underestimate their likely mileage, do that under a lease and you have big issues.

Bob

you can get a 4 year old Saab 95 with 80K on the clock for $11K easily....so not always have to drop the aspirations...well maybe because there dime a dozen around here *l*

Bob

but you find plenty of them in manual and they bounce quite nicely

Bob

yup, the folks got hit hard a few years back on a lease when they went over milage, they had a nice cheap deal, but they got stung for afters, services etc were covered, but windscreen wasn't and it had a tiny dint in the corner and needed to be replaced before they could return it, and also they were charged a $1 a mile over agreed limit of 12K m, and they had put in 14K on the car in the final year.

frrussre

So you buy a $35k car over 60 months, maybe 72 mts. You need the long repayment period to reduce the monthly payments. If you keep the car for the full time, half of it is without warranty & you are driving an old car. After 6 - 12mths you need to sell the car, suddenly worth $22- $24k (If your lucky, maybe a new model came out) whoops, your short several thousand. I have leased 6 cars from less then $2k per year to $4k per year. For that I get new vehicles & no repair costs. It works for me & millions of others, lots wiser then me. Only reason not to lease, is those who do high mileage.
Reg. Frank R.

Bob

there's any decent cars?

Bob

lot of cars give you 40K, 60K or 80K miles of warranty over a 6 year period if you buy new so it usually ain't an issue...so it does make sense to buy it and if you can't afford the monthly and need to spread if over more time then you can't afford the motor....but definitely if your putting less than 10K miles on the clock a year it's worth a lease.

scrubbedexpat099

Long leases make even less sense, see link fatbrit gave.

A lease is a fixed contract, the longer you run it the more likely something will happen to your disadvantage.

If you want an extended warranty, buy one. I do not as a matter of general principal. Another high profit element that can confuse the financial equation.

Logically high mileage should make no difference to the equation. They will cost more under either basis.

Part of my negativity is that leases are sold as you suggest on so much a month/week whatever which completely occludes the real costs and actual value.

The industry likes it as they can seek to sell other than on price and can profit in other areas like financing. I accept their are limited circumstances where it makes fiancial sense, and their are of course people prepared to pay the extra for the benefits that they see in the product. My guess is that both these are in the minority.

RoadWarriorFromLP

Overall, leasing does NOT make sense for most people. There are a few exceptions:

-The lease is so heavily subsidized by the manufacturers that the effective cost is far lower than ownership (BMW's and Jeeps can fall into this category)

-You are self-employed, and the car is used for business (the full cost of the lease is deductible, and the write-off is more easily calculated for tax purposes)

Otherwise, it is generally a bad idea:

-Poor terms. Usually, leases are great for dealers, not for buyers, who end up paying too much rent for what they get

-Too complicated. The differences in jargon ("money factor" for what is effectively an interest rate, etc.) generally confuses buyers, and helps dealers.

-It is a fixed term. Early termination will cost you dearly.

-No equity. At the end, you own nothing (and you may end up paying extra for cleaning fees, excessive wear-and-tear, etc., particularly if you don't sign a new lease with the same dealer)

If you do choose to lease (and I would generally discourage it), be absolutely sure that you know what you are doing, and don't let yourself get misled or cheated. Leasing is a minefield for many, and it needs to be approached with a good deal of research and even more skepticism. And don't focus on the payments, there are other issues to be considered, i.e. money factor, purchase price of the car built into the lease, down payments, mileage allowances, etc., etc., etc.

scrubbedexpat099

I saw a Mazda deal that fell into the same category. Assuming you qualified for their best rate.

Exception that proves the rule.

frrussre

All I can tell you is, I'm happy. I am driving a fully loaded 2006 Explorer V8 @ $314 per mo. 11 months from now I give it back, get another new car. In 5 previous leases, I have not paid for any wear & tear "pings & dings", never paid any extras at the end. I can also tell you that, there are a lot of happy lease people. Maybe some out there who signed up with a snide 3rd party bank/leasing company, they did not read the contract & got ripped off.
Have any of the posters, who think leases are bad ever had an Auto lease?
Reg. Frank R.

scrubbedexpat099

A guy I used to work with took the Company Car rather than the Cash option, he knew the numbers but was happy to pay the premium.

When I was looking for my car I followed a board specific to it and you would often see comments on the lines of its going to cost me 'x' amount a month and was this a good deal.

Now $314 may be an excellent deal, or not, there is absolutely no way of knowing.

The sort of issues I saw when I was looking for a car on other boards were that people would post exactly this sort of question. Is $x a month a good deal? How could you possibly know.

Often the same people did not factor in all the other costs, Insurance, Tax, Tires (boy racers soon go through tires), excess mileage, dings, scraped wheels etc etc.

The deal I saw often required cash down as well. And of course when the lease was up they had not the cash for another lease.

And then there were those who got in so far over their head that they wanted out and were looking to get out and could not understand why nobody wanted to take over their lease.

There is a radio programme here which focuses on Consumer Issues, the one on Saturday is Auto only, seems a regular issue. My lease says 12,000 miles a year and I am doing 40,000!. Actual case, he was driving some turbo diesel truck and could not afford the fuel, and of course he was going to be stung big time in buying out the vehicle and then trying to sell it. Usually such people do not have the spare cash to do this.

Just seems so many people who do not understand what they are doing that are sold into these products, sad.

Bob

The folks have been doing a lease for years, usually a 24 month lease, only had a bad experience the once when FIL's pick up was written off and they needed to drive down to PA to get my missus from college when she was there....they now lease through a different dealer and get a good deal and are happy with it, but then it is MIL's car, and she only drives about 20 miles to school and back a day, plus the odd short trips, so it works well for them.

I still would have opted to have bought the ugly Viggen when they had the chance instead of a lease as that car goes like the dogs dangly bits.