Calling all Car leasing Experts

[Mac4life30]

My significant other and I have two leased cars with a lease end date of July 30, 2018

Are there any advantages/disadvantages to returning 6 months prior/3 months prior vs the actual end date?

My car is good currently on miles but my significant other is getting close to 36k (currently at 32k).
Is there anything we need to be cautious about when negotiating another car? We plan to stick to the same dealer and brand of car..
Also wear/tear? how would this get handled.. I been told if you plan to lease another car in our case two from the same dealer that the dealer will overlook wear/dear to make a deal.

 

[Klayfish]

Read the terms of your contract, there is usually a penalty for turning the lease in early. You'll have to find out what it is. Sometimes dealers will offer incentives to turn a car in early and waive/pay those fees/costs, that's part of negotiation.

Wear and tear, yes, a dealer will be more likely to "overlook" it if you buy from them again. That's another negotiation skill you'll need to have. How badly worn is the car?

For what it's worth, as someone insanely into cars (both my hobby and profession), I'd really take a second look at leasing. Leases are cash cows for the dealer, and the consumer is on the wrong end of that. They're usually pretty bad deals. Buy, don't lease. The only cars I'd consider leasing, but the financial terms would have to be very much in my favor (which would likely never happen), would be European cars...BMW, Audi, Mercedes, VW, etc... They're very poor quality and very high repair/maintenance costs. So if you have a 3 year lease you can turn it in and walk away before the warranty expires and it drains your wallet. But you'll sort of pay for that in leasing costs, so it washes out to some degree. I've had over 80 cars...some were old, but many weren't. The only one I ever leased was a Nissan Leaf, and the only reason was it was an unproven technology at the time, and the incentives offered by the federal and local government made it super cheap to lease (the incentives covered a huge portion of the lease cost).

 

[tvguy]

Read the terms of your contract, there is usually a penalty for turning the lease in early. You'll have to find out what it is. Sometimes dealers will offer incentives to turn a car in early and waive/pay those fees/costs, that's part of negotiation.

Wear and tear, yes, a dealer will be more likely to "overlook" it if you buy from them again. That's another negotiation skill you'll need to have. How badly worn is the car?

For what it's worth, as someone insanely into cars (both my hobby and profession), I'd really take a second look at leasing. Leases are cash cows for the dealer, and the consumer is on the wrong end of that. They're usually pretty bad deals. Buy, don't lease. The only cars I'd consider leasing, but the financial terms would have to be very much in my favor (which would likely never happen), would be European cars...BMW, Audi, Mercedes, VW, etc... They're very poor quality and very high repair/maintenance costs. So if you have a 3 year lease you can turn it in and walk away before the warranty expires and it drains your wallet. But you'll sort of pay for that in leasing costs, so it washes out to some degree. I've had over 80 cars...some were old, but many weren't. The only one I ever leased was a Nissan Leaf, and the only reason was it was an unproven technology at the time, and the incentives offered by the federal and local government made it super cheap to lease (the incentives covered a huge portion of the lease cost).

Very well put.
Recently I've heard some folks having issues because of very detailed end of lease requirements.
A co-worker leased a BMW. Tires had to have a certain amount of tread left, so she replaced them, only to find out the lease said the replacement tires had to be the same brand and model as came on the car.
She scraped a pole and had body work done, and and the lease specified only a BMW body shop could do repairs, they wanted the work redone.
And someone broke out a back door window, and the glass place put in non-BMW glass, they wanted that fixed.
Luckily her dad is a very skilled attorney and car buff.
He wrote them a letter telling them that if they pursued legal action he would point out the tires they put on the car we higher rated and more expensive that the originals from the factory. The body work was done by a body shop that the BMW dealer sublet their more challenging body work to. And there was no BMW glass available, and BMW dealers were substituting the same brand of glass in their repairs. BMW decided they would take the car back in the condition it was in without requiring the things they originally demanded.

 

[longboard55]

I bought two cars this year, both times with the"internet Price" which is a bit of a joke. What they really like is for you to come in for the internet price and end up leasing, its quite a battle to get them to actually sell a car for the price they have on the internet. You can tell they make a lot more off a lease

 

[tvguy]

I bought two cars this year, both times with the"internet Price" which is a bit of a joke. What they really like is for you to come in for the internet price and end up leasing, its quite a battle to get them to actually sell a car for the price they have on the internet. You can tell they make a lot more off a lease

Yup. First, they make money on you. 2 or 3 years later they make money selling that car as a used car. And maybe make money on you again if you lease or buy from them again. And YOUR payments paid all their interest costs, depreciation, and profit.

 

[Mac4life30]

so then if you have scrapes/dents is better just to use it as dealing chip if you want to lease another car with the dealer? Seems if I take care of it on my own I might be worse off if i dont go through them.. next question? giving money down to lease .. yay or nay?

 

[Klayfish]

Yes, you can try to leave the dents and scrapes as a dealing chip, but you also then leave yourself open to them quoting outrageous prices for the repair. Not too many manufacturers get super antsy about where the car is fixed, it's mostly the Germans. If it's fixed properly, it's not all that big of a deal. Just don't have it done poorly, any trained eye will see it.

As for the money down vs no money down question, for a lease it really doesn't matter. Again, leases are nothing but money makers for dealers...at your expense. You're not going to get a good deal no matter how you slice it. I'd strongly suggest not leasing, but if you absolutely insist on it, I'd even more strongly suggest reading up on how leases actually work. In essence, you're paying for the depreciation in the cars' value over the life of the lease. Think of it this way...You're "buying" the car for $xx,xxx, and in 3 years the dealer "promises" to buy it back for $xx,xxx. The difference in those two numbers is what you're basically paying...plus you must promise to bring it back in mint condition, with a certain number of miles on it, and then pay all the fees they add in (restocking fee, end of lease fee, I-want-your-money-because-I'm-greedy fee, etc...). So the best way to "negotiate" a lease is to work with those two numbers I mentioned above. How much are you paying to "buy" the car, and how much is the dealer going to "promise" to buy it back for. That, and try to negotiate the fees. Put those together and you'll get your final cost. From there, putting money down vs not putting it down is just personal decision as to how you want to spread out your costs over the term of the lease.

 

[Cannot_Wait_4Disney]

The leasing experts all work for the dealer. They're experts at taking your money. On the consumer side, there is no such thing as a leasing expert, only fleecing avoidance experts.


As for your questions in the op

Advantages to returning it early. Generally no. You're probably not going to come out ahead by returning it early other than being out from under a fleece. Warning: There can be huge disadvantages depending upon the terms of the particular fleece.
Wear and tear. Yes the dealer will put that into the new deal. No. It's not really overlooked. You are paying for it whether the dealer itemizes it or not.
Is there anything to be cautious about. Yes. Be cautious about signing up for another fleece. In fact be more than cautious. Don't do it.

 

[sonnyjane]

Just agreeing with those that say leasing is a mistake...

 

[Mac4life30]

Why the negativity towards another lease? are we talking being out of money because of always having a car payment? Car payments for me are like bill I am always going to have.. I can trade the car in every 3 years for a new one an never have to worry about when the car starts to break down.. so aside from always having a payment.. what truly is the down side?

 

[ronandannette]

Just agreeing with those that say leasing is a mistake...

Disagree - strongly, based on our own personal priorities. I'm no "leasing expert" by any means but between DH and I we've leased 12 vehicles over the last 20 years. We like to drive new cars - we have no interest in in older vehicles or in paying for both maintenance and repairs and a car loan at the same time. (This can be common depending on the terms of the loan and the length of warranty).

We both have vehicle allowances through our work and have happily driven a variety of cars/trucks, all for payments substantially less than we'd have made for a reasonably-lengthed loan on the same car. Some we've turned in early to either the same dealer or to a different one altogether; we've never once had an issue with the condition of the car (all of which have normal wear and tear that you'd find after 3 years). We choose a new vehicle and the dealer works out whatever they need to work out to get us the payment we find acceptable. We see driving as an expense and we control that expense by leasing which provides us with a limited, predictable payment and a comfortable, reliable vehicle at all times. We understand we're paying for that "service" and we're fine with it.

 

[sonnyjane]

Why the negativity towards another lease? are we talking being out of money because of always having a car payment? Car payments for me are like bill I am always going to have.. I can trade the car in every 3 years for a new one an never have to worry about when the car starts to break down.. so aside from always having a payment.. what truly is the down side?

Disagree - strongly, based on our own personal priorities. I'm no "leasing expert" by any means but between DH and I we've leased 12 vehicles over the last 20 years. We like to drive new cars - we have no interest in in older vehicles or in paying for both maintenance and repairs and a car loan at the same time. (This can be common depending on the terms of the loan and the length of warranty).

We both have vehicle allowances through our work and have happily driven a variety of cars/trucks, all for payments substantially less than we'd have made for a reasonably-lengthed loan on the same car. Some we've turned in early to either the same dealer or to a different one altogether; we've never once had an issue with the condition of the car (all of which have normal wear and tear that you'd find after 3 years). We choose a new vehicle and the dealer works out whatever they need to work out to get us the payment we find acceptable. We see driving as an expense and we control that expense by leasing which provides us with a limited, predictable payment and a comfortable, reliable vehicle at all times. We understand we're paying for that "service" and we're fine with it.

Yes, that's the downside. I am on my second Honda Civic. The first one lasted me 14 years, and I hope that this one will last me just as long if not longer. Once you pay it off, it's like winning a small lotto jackpot! The annual maintenance on my car is less than a single month's payment - every 30,000 there's a bit more, but still less than 2 month's payments. If you're ok with spending money you don't have to, then I guess it isn't a "mistake".

And for @ronandannette, if you get a vehicle allowance through work and always enjoy driving a new car, that's a very, very different situation. Not many have the luxury of getting a vehicle allowance.

 

[tvguy]

Yes, that's the downside. I am on my second Honda Civic. The first one lasted me 14 years, and I hope that this one will last me just as long if not longer. Once you pay it off, it's like winning a small lotto jackpot! The annual maintenance on my car is less than a single month's payment - every 30,000 there's a bit more, but still less than 2 month's payments. If you're ok with spending money you don't have to, then I guess it isn't a "mistake".

And for @ronandannette, if you get a vehicle allowance through work and always enjoy driving a new car, that's a very, very different situation. Not many have the luxury of getting a vehicle allowance.

Exactly. Leasing buys you peace of mind, and we all will put a different dollar value on that. A modern car should go 10 years and 100,000 miles with no repairs. So as a buyer, i have 3 years of car payments, 7 years I have no auto expenses except the normal oil change costs that you would have with a leased car too. 10 years older and on, you may have repair expenses.
I have had my family car 30 years. 1987 Chevy Suburban. It has cost me $10,000 in repairs (yes, I have all 30 years of receipts). 2 transmissions. 1 ac compressor. 2 water pumps. 2 radiators. 1 Power Steering pump. 1 new turn signal/cruise control/windshield wiper control stalk. 1 Radio. 1 tailgate window regulator. 1 AC/heater fan. That works out to $333 a year in repair costs averaged over 30 years, less than one months car or lease payment.
From an unemotional, black and white, numbers perspective, leasing is the most expensive way per mile driven to have a car.

As for Honda Civics. Several of my under 30 co-workers are leasing Civics from the same dealer. That dealer is in the habit of signing you up for a 3 year lease, then after 1 year, offering to let you out of that lease at no cost, put you in a new Civic for the same payment on a new 3 years lease. So these folks never have a car with more than 8-12,000 miles on it, and the dealer has a nice stock of used 1 year old Civics with 8 to 12,000 miles on them.

 

[ronandannette]

Yes, that's the downside. I am on my second Honda Civic. The first one lasted me 14 years, and I hope that this one will last me just as long if not longer. Once you pay it off, it's like winning a small lotto jackpot! The annual maintenance on my car is less than a single month's payment - every 30,000 there's a bit more, but still less than 2 month's payments. If you're ok with spending money you don't have to, then I guess it isn't a "mistake".

And for @ronandannette, if you get a vehicle allowance through work and always enjoy driving a new car, that's a very, very different situation. Not many have the luxury of getting a vehicle allowance.

Our allowances permit either purchase or lease or just go in the pocket of anybody who owns their vehicles outright. It's a nice benefit, for sure, but we receive it only because a reliable vehicle is 100% required by our job duties and both our companies use personal allowances rather than operate and maintain a corporate fleet.

Sticker prices on vehicles in Canada is substantially higher than in the US - we wouldn't be able to drive the vehicles we prefer if we'd purchased them. I'm not an evangelist for leasing - everybody has different priorities. I just take exception to those who insist it's a terrible idea under every circumstance.

 

[piccolopat]

It all comes down to the numbers and what you are trying to do. I leased two vehicles in recent years. The first was for a brand that we never drove before. The deposit and monthly payments were relatively low. If we liked the car, our plan was to buy out the lease and during the lease term. We saved enough to buy it out cash so no extra finance charges. If we didn't, our total payments were reasonable for us to walk away. We've now had the car 6 years and no payments for the last 3. Our second lease was for our first crossover. Since we weren't sure that we would like the smaller vehicle (downsizing from a minivan) we leased. Again, we got a good deal on the upfront charges and ultimately bought this car at the end of the lease with cash saved. As long as our total cost was no more than buying the car from the start with a loan, we're fine with leasing.

 

[Cannot_Wait_4Disney]

Why the negativity towards another lease? are we talking being out of money because of always having a car payment? Car payments for me are like bill I am always going to have.. I can trade the car in every 3 years for a new one an never have to worry about when the car starts to break down.. so aside from always having a payment.. what truly is the down side?

The downside is a fleece is the most expensive way to operate a car. Don't believe me check out consumer reports or money magazine. They aren't even subject to lending disclosure rules so you really end up with no idea what interest rate you are in effect paying.

A well maintained car doesn't break down. I drive a 96 Nissan Sentra with over 250,000 miles on it. The only time it broke down was in 2010. And it was my fault. It was the battery. And seeing that it was the factory battery, I'd obviously never changed it out. That is 100% my fault. Not the car's.

Our allowances permit either purchase or lease or just go in the pocket of anybody who owns their vehicles outright. It's a nice benefit, for sure, but we receive it only because a reliable vehicle is 100% required by our job duties and both our companies use personal allowances rather than operate and maintain a corporate fleet.

Sticker prices on vehicles in Canada is substantially higher than in the US - we wouldn't be able to drive the vehicles we prefer if we'd purchased them. I'm not an evangelist for leasing - everybody has different priorities. I just take exception to those who insist it's a terrible idea under every circumstance.

If you wish to operate a car in the most expensive way possible, I've no problem with that. But it is the most expensive way to get a car.

 

[ronandannette]

The downside is a fleece is the most expensive way to operate a car. Don't believe me check out consumer reports or money magazine. They aren't even subject to lending disclosure rules so you really end up with no idea what interest rate you are in effect paying.

A well maintained car doesn't break down. I drive a 96 Nissan Sentra with over 250,000 miles on it. The only time it broke down was in 2010. And it was my fault. It was the battery. And seeing that it was the factory battery, I'd obviously never changed it out. That is 100% my fault. Not the car's.



If you wish to operate a car in the most expensive way possible, I've no problem with that. But it is the most expensive way to get a car.

I don't just wish to operate a car. I guess you didn't read my posts. Getting from point A to B in whatever old beater would make the trip is not satisfying to us. We want to drive new(ish) cars we like with absolutely no concern for maintenance or repair costs. Dollar-for-dollar, we could not finance a new vehicle every 3 years (for what they cost in Canada) for anywhere near as small a payments and we'd take a bath on trading in.

 

[Klayfish]

The one "upside" to a lease is that you would be able to afford to drive a car you wouldn't be able to purchase outright. So if you really want to drive a luxury car, but can't afford the purchase payments, then leasing could let you do that. But financially, you take a bath...badly. Think of it like this. Let's imagine a car is $30,000 brand new. Two years from now, the car is a $20,000 car. If you lease it, you're paying that $10,000 depreciation over the two years, that's your lease cost. Plus you're paying all the other fees the dealer buries into a lease, and you must return the car in perfect condition. At the end of the two years, you hand the keys back and walk away with nothing. If I buy that same $30,000 car brand new and sell it in two years, yes, it's still only worth $20,000. However, I've been making payments on the car for two years and have that equity in it. Plus I have no restocking fees, no rip-you-off-because-I-want-to fee, etc...

I see why people would want to lease, but financially, it's about the worst way to have a car. It doesn't mean you need to drive an old beater that's purely point A to point B. But even for a new and nice car, leasing is a complete rip off for the consumer. You're far, far, far better off buying and then when you're ready for a new car, sell or trade it in. Yes, the dealer will try to take you for a ride on trade in, but truth is that the same "trade in" value is often the value of the car you get from the dealer when you turn a lease in. The only difference is with the purchase, you've been building equity. In a lease, you've got nothing.

I don't even buy new cars often. I let someone else take that huge depreciation hit. I'm shopping for my next car (I'm always shopping). One of the top cars on my list was $75,000 when it was new in 2014, but is now starting to fall under $20,000.

 

[Squirlz]

All the ads and commercials push their low low lease prices. Do people think they do that because it's in OUR best interests?

There are dealers that lease USED cars. How big a sucker would you have to be?

 

[tvguy]

I don't just wish to operate a car. I guess you didn't read my posts. Getting from point A to B in whatever old beater would make the trip is not satisfying to us. We want to drive new(ish) cars we like with absolutely no concern for maintenance or repair costs. Dollar-for-dollar, we could not finance a new vehicle every 3 years (for what they cost in Canada) for anywhere near as small a payments and we'd take a bath on trading in.

Yup. You are willing to pay a higher price for peace of mind.