Car Lease Is UP...

[LJSquishy]

If you can afford to buy the car now, do it. You know the full history of it and have been the only owner. That car would last you forever with as little as you drive.

I've been casually looking at used cars but the monthly payments are too high. Over $400/mo for a several year old used car seems crazy to me! My husband said I could get a car if the payment was under $250/mo...yeah, right! I drive a 2000 Nissan Sentra with 150k miles on it and it's had numerous expensive problems. If it has any more major repairs the car will not be worth fixing and I will just do without a car for a couple of years

I have always wanted a brand new car of my own (or even 1-2 years old used) but that will never happen. I was jealous when my husband bought his car new in 2005. It drives so much smoother than my car, even now! I can't even use the speakerphone on my phone in my car because the car ride is too loud and I can't hear the phone. Hehe. We also only have a single car garage so my husband parks his car in there...I've never in my life had covered parking! That would be so nice in the winter!

 

[3happydancers]

A lease is more complicated than just "renting" a car. There's a company making a bet on what the car will be worth after XX months and YY miles. They've got a lot of historical data to make that bet. If they bet low, then they make more money over the term of the lease, but you'll have some equity when you go to turn it in. If they bet high, you save more money and they get stuck with a less valuable car than they expected.

In your case, it looks like you could sell your car for ~$16,000 yourself. The lease company has already agreed to a $15,400 price, which is what you'd owe if you purchased the car. You could try to sell it yourself to make that $600 difference. Since your trade-in value is probably closer to $14,000, the dealer won't give you any trade-in credit for buying another car.

Should you pay $15,400 for this car? If it's a good car and you like it and can afford it, sure. But, based on the mileage you've put on the car, you'd be better suited with a much less expensive used car.

A few days ago there was a great thread on the community board that explained leasing that I had never heard before.

http://www.disboards.com/showthread.php?t=3234820&highlight=car+leasing

Thanks for the thread. I am on it!

 

[3happydancers]

That sounds like a good price for a 3 year old RAV, I would buy the one you have. We have been looking at RAVs and CR-Vs so that I can give DD who is just getting her license my CR-V. Used RAV and CR-Vs seem to hold their value, I didn't see anything close to $15,400 for a 3 yr old car with 11,00miles on it. That is why I am getting a new one and giving her mine.

Leasing usually doesn't give you equitity so I think it sounds like a fair deal, just don't lease again.

Off topic: How do you like the RAV??? I LOVE my CR-V but the new one is $4000 more than the RAV.

Agreed. We really do not want to lease again. The reason we did was we had a 6 year old Sonata that turned out to be a huge headache and Hyundai refused to do the right thing. There were over $5000.00 worth of problems with the vehicle so selling it privately was not an option yet we were not prepared to buy a new car. The only thing left was to trade this clunker in for a solid, reliable family vehicle. I could not afford a car payment at the time (too high) so we leased. We love our Rav. Last year during storm Nemo while everyone else was stuck along our major roads, including the expressway, my Rav got me home safely and without a single problem. My DD is turning 16 and talking about driving and would feel very comfortable having her drive the Rav; good updated safety features!

 

[Egdisney]

If you can afford to buy the car now, do it. You know the full history of it and have been the only owner. That car would last you forever with as little as you drive. I've been casually looking at used cars but the monthly payments are too high. Over $400/mo for a several year old used car seems crazy to me! My husband said I could get a car if the payment was under $250/mo...yeah, right! I drive a 2000 Nissan Sentra with 150k miles on it and it's had numerous expensive problems. If it has any more major repairs the car will not be worth fixing and I will just do without a car for a couple of years I have always wanted a brand new car of my own (or even 1-2 years old used) but that will never happen. I was jealous when my husband bought his car new in 2005. It drives so much smoother than my car, even now! I can't even use the speakerphone on my phone in my car because the car ride is too loud and I can't hear the phone. Hehe. We also only have a single car garage so my husband parks his car in there...I've never in my life had covered parking! That would be so nice in the winter!

Your husband sounds kind of... Mean. What kind of car are you looking at? I am waiting for my husband to get home from A business trip so I can buy a new van. A brand new van with 0 miles on it. The payments will be $430.

 

[3happydancers]

If you can afford to buy the car now, do it. You know the full history of it and have been the only owner. That car would last you forever with as little as you drive.

I've been casually looking at used cars but the monthly payments are too high. Over $400/mo for a several year old used car seems crazy to me! My husband said I could get a car if the payment was under $250/mo...yeah, right! I drive a 2000 Nissan Sentra with 150k miles on it and it's had numerous expensive problems. If it has any more major repairs the car will not be worth fixing and I will just do without a car for a couple of years

I have always wanted a brand new car of my own (or even 1-2 years old used) but that will never happen. I was jealous when my husband bought his car new in 2005. It drives so much smoother than my car, even now! I can't even use the speakerphone on my phone in my car because the car ride is too loud and I can't hear the phone. Hehe. We also only have a single car garage so my husband parks his car in there...I've never in my life had covered parking! That would be so nice in the winter!

Wow! I don't know what to say to this.

 

[3happydancers]

A lease is more complicated than just "renting" a car. There's a company making a bet on what the car will be worth after XX months and YY miles. They've got a lot of historical data to make that bet. If they bet low, then they make more money over the term of the lease, but you'll have some equity when you go to turn it in. If they bet high, you save more money and they get stuck with a less valuable car than they expected.

In your case, it looks like you could sell your car for ~$16,000 yourself. The lease company has already agreed to a $15,400 price, which is what you'd owe if you purchased the car. You could try to sell it yourself to make that $600 difference. Since your trade-in value is probably closer to $14,000, the dealer won't give you any trade-in credit for buying another car.

Should you pay $15,400 for this car? If it's a good car and you like it and can afford it, sure. But, based on the mileage you've put on the car, you'd be better suited with a much less expensive used car.

I do like the idea about possibly selling the car and making a few bucks!

 

[LJSquishy]

Your husband sounds kind of... Mean. What kind of car are you looking at? I am waiting for my husband to get home from A business trip so I can buy a new van. A brand new van with 0 miles on it. The payments will be $430.

He's not mean at all, I promise! LOL He is amazing, really. I'm just complaining because I've always wanted a squeaky clean nice new car that is truly "mine", not someone else's.

I am a housewife so we have a strict budget as it is with only one income. We are hoping to buy another house in a couple of years (basically as soon as we can sell our current house and at least break even) so all of our extra money goes into savings toward a future down payment -or- for infertility treatments we're currently going through or future adoption. We needed a reliable car back in 2005 so he bought it for himself since he drives to work. It's the nicer car so it goes in the garage. I just wish I didn't have to scrape off ice and snow every time I want to go somewhere! I've never had a choice of car before, just whatever is available at the time. My first car was a Mercury Tracer which stranded me on the freeway many times, and my dad sold me this Nissan Sentra when he bought a new car (he's had 2 new cars since then) because my old car was totally dead after numerous repairs. Unfortunately we've put thousands into the Sentra as well. I really want a Rav 4 or Subaru Forester but they are just too expensive even used. I told my husband I'd rather not have a car at all than to have another unreliable one. I am hoping to get another 5 years out of the Sentra so that by then I can hopefully get one of the models I want.

 

[Kellydelly]

I would not buy this car, you will get ripped off. A $350 turn in fee isn't that bad.

 

[tvguy]

He's not mean at all, I promise! LOL He is amazing, really. I'm just complaining because I've always wanted a squeaky clean nice new car that is truly "mine", not someone else's..

My wife is the same way, Biggest mistake I made was buying her a perfectly good $4,000 used car (7 year old Dodge with 31,000 miles on it) when her 16 year old car (that she got brand new) needed $4,000 in repairs. She would have much preferred putting the money in the car that she was the only owner of.
When we could afford a new car, we got ride of the used one, that was 14 years ago and it just turned 100,000 miles and she has made it clear she'd like to put at least another 100,000 miles on it.

 

[TinCup]

My 2 cents. If the car is worth more than the buyout amount, then I would buy it rather than turn it in. Given the low miles this is probably the case. You also know the history of the car which is better than buying a used car with higher miles and an unknown history. If you are planning on keeping whatever car you buy for many years/until it dies, what you are buying is miles and time. The leased car only has 11K miles. If you bought a used car it would probably have considerablly more than 11K mile on it. So the used car probably won't last as long as the leased car. Given your current driving habits that could mean several additional years that the leased car will last over buying a used car with higher milage. JMHO, I hope this helps.

 

[benniecooper]

I would not buy this car, you will get ripped off. A $350 turn in fee isn't that bad.

She will absolutely not get ripped off to buy out her lease. She has a Toyota with 11k miles. The buyout will be a clearly stated residual value that was put into the original lease contract. To turn this car in and not buy it would be the rip off.

 

[3happydancers]

I would not buy this car, you will get ripped off. A $350 turn in fee isn't that bad.

Please explain. Not sure how this would happen and I would any and all thoughts. Thanks.

My 2 cents. If the car is worth more than the buyout amount, then I would buy it rather than turn it in. Given the low miles this is probably the case. You also know the history of the car which is better than buying a used car with higher miles and an unknown history. If you are planning on keeping whatever car you buy for many years/until it dies, what you are buying is miles and time. The leased car only has 11K miles. If you bought a used car it would probably have considerablly more than 11K mile on it. So the used car probably won't last as long as the leased car. Given your current driving habits that could mean several additional years that the leased car will last over buying a used car with higher milage. JMHO, I hope this helps.

Thanks for sharing. This is what DH says. And I appreciate everyone's thoughts and experiences. Sharing and listening could result in learning something I don't know and ideas I haven't thought of

 

[3happydancers]

She will absolutely not get ripped off to buy out her lease. She has a Toyota with 11k miles. The buyout will be a clearly stated residual value that was put into the original lease contract. To turn this car in and not buy it would be the rip off.

Ah, you and TinCup have the same thoughts. DH wants to purchase this car and more and more listening to everyone's feedback, it appears purchasing the Rav would be a GOOD idea!

Thanks to everyone's feedback. You have all been a GREAT help!!!

 

[wdwmom0f3]

My contract says the buy out is about 15,400.00. Toyota was the one who said the car had 0.00 equity. Do I believe them?

Take the car to carmax and see what they will give you for it. Anything above your buyout amount would be your profit, right?

I leased a Honda Accord years ago but i needed a bigger car when my son came along so I sold it for a profit, I paid my buyout off and I had a few thousand for a down payment. It doesn't always work like that but I got lucky. You may be able to do the same.

ETA, I was to late but clearly keeping this car would make a lt of sense too! My FIL did that with his Honda Ridgeline and its still going strong.

 

[mrodgers]

Edmunds tells me $15,651 trade-in, $18,348 retail, and $17,049 private party values. As a current Rav4 owner, I would definitely buy it at the end of the lease for $15,400.

If not, then you should be able to get $17k easy for it selling outright yourself, probably get someone to pay more because of only 11,000 miles. Heck, that's only 6 months worth of driving to me as we put 23,000 on ours and just bought it February 20th last year.

 

[3happydancers]

Take the car to carmax and see what they will give you for it. Anything above your buyout amount would be your profit, right?

I leased a Honda Accord years ago but i needed a bigger car when my son came along so I sold it for a profit, I paid my buyout off and I had a few thousand for a down payment. It doesn't always work like that but I got lucky. You may be able to do the same.

ETA, I was to late but clearly keeping this car would make a lt of sense too! My FIL did that with his Honda Ridgeline and its still going strong.

I am not familiar with CarMax at . How does this work? Is it an online thing or do they have establishments that I can visit?

 

[3happydancers]

Edmunds tells me $15,651 trade-in, $18,348 retail, and $17,049 private party values. As a current Rav4 owner, I would definitely buy it at the end of the lease for $15,400.

If not, then you should be able to get $17k easy for it selling outright yourself, probably get someone to pay more because of only 11,000 miles. Heck, that's only 6 months worth of driving to me as we put 23,000 on ours and just bought it February 20th last year.

These figures sound promising, especially if we buy it and then turn it over. The Rav is in great condition. I've kept every receipt for regular maintenance visits and well, the very low mileage speaks for itself!

 

[3happydancers]

Take the car to carmax and see what they will give you for it. Anything above your buyout amount would be your profit, right?

I leased a Honda Accord years ago but i needed a bigger car when my son came along so I sold it for a profit, I paid my buyout off and I had a few thousand for a down payment. It doesn't always work like that but I got lucky. You may be able to do the same.

ETA, I was to late but clearly keeping this car would make a lt of sense too! My FIL did that with his Honda Ridgeline and its still going strong.

I just looked up CarMax. The closest one to me is in Conn.; not too close but I took note of their phone number and will give them a call. It might be worth a drive over the weekend with DH! Thanks for the tip!

 

[undertheradar]

Since you know the vehicle history and you have a lease purchase option that is below what you could purchase the same vehicle for at retail, the best option is to purchase the vehicle. You will have registration costs and new tags probably, but why buy something else used when you know the vehicle that you have?

 

[3happydancers]

Since you know the vehicle history and you have a lease purchase option that is below what you could purchase the same vehicle for at retail, the best option is to purchase the vehicle. You will have registration costs and new tags probably, but why buy something else used when you know the vehicle that you have?

This was DH's thought. The dealer was trying to talk us out of purchasing.