Please share your experiences with auto leasing.

[RitaZ.]

We've never leased before, but the offers are very attractive. I'm interested in reading your opinions on auto leasing. TIA

 

[snoopy]

DH is very opposed to it....not sure why though.

Some help I am.

 

[bananiem]

It let's you drive a car you can't afford. You pay them for the use of the car, and if you go over the allotted mileage you pay for that too. Then you give them back the car and don't have anything for a down payment on the next one! At least if you purchase a car you can get some money for it.
Also, you pay every month. It's llike never,ever getting rid of a car loan. DH and I buy a car, have a 2-3 year loan, and then drive it for another 3-8 years with NO car payment. Woohoo!
But that's just my opinion.

 

[ziggystardust]

I'm on my second lease (actually this second one is considered a "smart Buy"). I have never had any issues, my monthly payments are really low. But I will say that I hope this to be my last lease ever. I want to actually own something.

If you go ahead, there are 2 types of leases. One is a standard lease, where there is little to no money down. The dealership/bank holds the title. You pay taxes on only what you put down on the car.

The 2nd is a smart buy. This is a new type of "lease" that really isn't a lease. It was created b/c too many people were suing the dealership/bank after accidents since they were the title holders. A smart buy, the costumer holds the title, but you pay taxes on the cost of the car, as you would if you were purchasing a car.

I've had both, both are fine. My only suggestion is to make sure your warranty is for the length of the lease. YOu don't want to have to replace major parts on a car you will be turning in in a few months.

 

[clutter]

If you know you're always going to have a car payment (I do, I generally don't keep a car beyond it's 3 to 5 year warranty period), and you don't drive a lot of miles (well under 15k per year), it can be a decent deal. I had one lease that was no big deal, and another one that I made a good profit on (sold the car for more than the payout, used the difference for a down payment on a purchased car. But I drove around 10k miles per year, and that really increased the value of the car.)

 

[jrydberg]

IMO leasing is generally not the best way to go. At the end of the lease, your payments have given you nothing long-term and you've lost your down payment as well. There are also significant mileage limitations, not to mention that it may be difficult to "trade in" the car before the lease is up.

If you want a new car every few years, don't generally drive over mileage restrictions and don't mind paying a bit of a premium for it (don't forget to factor in the lease down payment as part of the overall cost), leasing is fine. For me, it's not the best option.

 

[RitaZ.]

The 2nd is a smart buy. This is a new type of "lease" that really isn't a lease. It was created b/c too many people were suing the dealership/bank after accidents since they were the title holders. A smart buy, the costumer holds the title, but you pay taxes on the cost of the car, as you would if you were purchasing a car.

Yes, I'm waiting to hear from our bank about this type of lease. You actually own the car, but with the benefits of a lease. I'm curious as to how it really works.

I've always felt that leasing isn't a smart financial decision, being that you own nothing at the end of the lease. The salesman that we are working with said that 70% of the deals done at their dealership are leases. That's a really high percentage, IMO.

 

[ziggystardust]

Yes, I'm waiting to hear from our bank about this type of lease. You actually own the car, but with the benefits of a lease. I'm curious as to how it really works.

I've always felt that leasing isn't a smart financial decision, being that you own nothing at the end of the lease. The salesman that we are working with said that 70% of the deals done at their dealership are leases. That's a really high percentage, IMO.

Like I said, I've had both. The seem pretty similar to me w/ the exception of the taxes upfront and now I actually have a title in my possesion. My rule with leases (either type) is to not pay too much money down. I mean if you had the money to put down, why not buy the car. My car is a $20,000 that I will end up paying $11,000 for. My last car was a 16,500 car that I ended up paying like $7600 (under actually b/c GM has a pull ahead program so I got out of the car really early) So it was a good deal for me both times. I am however sick of a car payment

 

[Towncrier]

We leased a vehicle once and probably won't fall into that trap again. As much as I like to own factory fresh vehicles, I would rather take out a traditional loan on a used car that I can afford than lease a new one that I can't afford.

We didn't have any real problems with the lease (other than having zero equity when we turned the car in), but I was disappointed at the leasing company and the way that the last 3 months of the lease went. We were initially offered a buyout price of over $13,000 for a 5 year old minivan with over 75,000 miles on it. That was crazy. We started shopping around and eventually bought a used minivan and parked it in our garage until our lease was up. During the last three months of the lease, the buyout price kept dropping until they eventually offered to sell me the minivan for $5000. I wish that they had offered me that price in the first place because I would have passed on the used minivan and just stuck with the 5yo lease (since it was in pretty decent condition). Oh well. You live and learn, I suppose. And we learned that we are not a leasing family.

 

[mousiemom]

I love to lease!!! The big deal is if you use a lot of mileage. I'm in a 4yr. lease now and my lease is up next Dec. and my mileage is 33,000. I'm suppose to have 48,000 and the end. I've leased my last 2 cars and I love getting a new car every 3 or 4 yrs. My brother drives a 2003 Jeep Grand Cherokee and he is always in the shop getting something fixed. Your pretty much guaranteed no problems during your lease. If so, just take it to the dealership. There's different warranties you can get. I can't wait to lease my next car next yr. Maybe a van. Right now, I'm driving a Toyota Highlander and love it. Great gas mileage.
Pam

 

[Mishetta]

Hi Rita!

I too have to agree with those that oppose leasing. We had one salesman that tried his darndest to get us to lease & my DH was almost falling for it, but I stood up & said "I'll be out waiting in the car when you're done" to my DH & left. I would speak & the salesman would just look at my DH as if I wasn't there! Anyway, I don't believe in leasing because you have nothing to show for it in the end. Kind of like renting. I hated renting an apartment too.

Anyway, I watch Suze Orman sometimes & she is totally against leasing. She gave good reasons not too but I don't remember them, I just remember that I thought we'd never lease after hearing her discussion. Therefore, we buy used vehicles. We would rather own used than lease new. But each family has to make a decision based on what's best for them. With that, I wish you good luck in deciding what to do in securing your next vehicle! Will I see it in December?

Rose

 

[Disney-Kim]

I think leasing is a great way to go for some, like me.
I don't put a lot of miles on my car and do not want to drive it more than 3-4 years. I do NOT want to own it and drive it for 5-10 yrs. thats me.
Just do NOT put a lot of money down because your basically "renting" the car and thats out of your pocket. Our car is under warranty for the whole time we will drive it too. nice.
If you want to own a car for longer than 3-4 years and you put a lot of mileage on your car...then its a bad idea.

it depends on your situation. but for us its been great.

 

[ZachnElli]

We always lease. My dh is in the car business, so we always get really good deals. Dh wants us in new vehicles every 2-3 years because it's good advertisement (and I won't argue with that )and we don't drive many miles. If you drive alot of miles, it is absolutely not for you. My dad wanted to do a lease and dh wouldn't let him, he puts to many miles on his vehicles to have it work for him.

 

[antmaril]

I've been leasing my car for years. I never put any money down and I drive a new car every two years. I never go over the mileage, payments are affordable and my car is always under warranty. I decided years ago that I would always have a car payment. I don't want to drive a car long enough to pay for it and even if I did, I would just sell the car and use the money to buy another car. What do I have really - nothing.

This way I'm always in a new car (and, by the way, I'm not driving more car than I can afford).

Another thing I like about leasing is that I NEVER have to sell a car - I hate that.

It's work for me. My husband doesn't care at all about driving a new car and, therefore, his car is several years old and paid for.

 

[RitaZ.]

Towncrier, that was a lousy deal.

Rose, I'll let you know.

I can see why leasing is so attractive to many folks. My brother leases a new car every 3 years, he doesn't want to deal with repairs and doesn't care about having a car payment forever. We're still leaning toward financing, maybe it's our conservative nature.

My philosophy on major purchases is: it has to be good quality, last a long time and must be inexpensive. DH thinks that I'm nuts expecting so much. I hate car shopping!

 

[Towncrier]

Another thing to consider. The lease deal you get will depend a lot on your credit score. Some of those sweet lease deals might be like those zero percent car loans that come around every now and again. The best deals are reserved for the people with ultra high credit scores.

BTW - I hate shopping for cars too. The last three times I've walked into a dealer showroom, I have driven home with a different car. My wife knows that I'm a buyer and not a shopper.

 

[RitaZ.]

I'm not worried about not qualifying for the best deals. There are no special incentives right now, maybe we should wait for that. I just want to get the lowest price possible.

The first quote we were given was below what most people are paying for the specific vehicle in our area. As the haggling continues, we are now below invoice price. The first sales manager that we spoke to said he was giving us a good deal; then as we were ready to walk out he dropped the price. Then, we went to another dealership and they beat the other dealership's quote. The first dealership called yesterday and beat the other dealership's price. I'm starting to get dizzy... They know we are not in a rush, I don't have to "have" the car now or ever, for that matter. The problem is that I have all these salespeople calling my house, as I was typing this another one called.

 

[Dan Murphy]

If you use your car for business, and can depreciate on your tax return, the IRS code often leans in favor of leasing vs buying, since 1986. My belief is that you pay every month for a car, some way......financed payment, lease payment, depreciation, saving money to pay cash in the future, repairs, something every month........plus intangibles out there long term, such as aggravation. I do not consider it desirable to own something that needs to be replaced as often as cars do, and when time to replace, if owned till they theoretically 'fall apart', are of little real value. Additionally, service costs on cars today, component repairs of computers, chips, integrated modules and all are so costly that I personally do not want to be 'out of warranty' on a car.

All that said, I have leased 8 cars for myself since 1990, and even though for her, not depreciable for business, I think 6 cars for Marie in that same time period, primarily for all the other reasons listed above, plus the intangible, convenience. I have leased from the same dealer, same sales person all those years. I know what I want, they know how I deal, what they need to do to make it work.

You do have to know your driving needs up front, a lease can bite you, leasing is not for everyone. And again, a business depreciation helps a lot in the decision for me. However, if I was retired, not able to depreciate, I would still very seriously consider leasing. It, like everything else in life, has pluses, and minuses.

Good luck, Rita.

 

[mudnuri]

I've never put money down to buy or lease..

I leased my 03 grand am SEII, no money down and less of a payment than owned- about 232 lease- 400 own.

lease my 04 Envoy- 312 a month no money down........same situation...

Even got out of my 03 lease with no penatlies, because it was GMAC to GMAC

I do 18000/ miles per year, and have never gone over........

Brandy

 

[California Girl]

Dealer's push leases extra hard because they make more money on the lease. Has anyone ever had a salesperson say, "No, Mr. So and So. You really shouldn't lease this car. Buying is a much better deal." If you run the numbers, you will never come out ahead.