Please share your experiences with auto leasing.

[Dan Murphy]

A lease to a dealer is the same as a sale. They are selling the vehicle to a finance company. A reason a lease may be suggested is that a lease payment is generally less than a purchase payment (since you are only paying for the depreciation amount, not the residual) and a lower payment, for some people, may make the difference between ordering the vehicle or not. If there are spiffs from the paper holder of the lease, there are similar spiffs from the paper holders of a financed purchase.

PS: Welcome to the DIS, CG.

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.

 

[Rock'n Robin]

Actually, when we were looking at Saturns, the salespeople told us that with the mileage I drive, I would be better off buying. We leased once and really got burned--I was starting to go over, and all kinds of lease companies were doing special deals for getting a newer car and getting the lease forgiven, but not 5th 3rd bank. When I mentioned the bank the salespeople just rolled their eyes. They are the least willing to work with anyone. We ended up parking the thing for 10 months while I drove another vehicle we bought. I drive 16-17,000 miles a year and it just isn't worth it.
On the other hand, my mom doesn't drive nearly that much and is on her 3rd leased grand prix. For my elderly parents (dad has an 8 year old saab convertible) leasing works great. They always have a newer vehicle they can trust in iffy weather, and very little worries about maintenance.
Robin M.

 

[RitaZ.]

We went to the bank this morning. This is how the "lease/own" loan works:

You make smaller payments for 5 years. When the 5 years are up, you have 3 choices:

1. Make a balloon payment for the remaining amount due on the loan.

2. Turn the car in, just like a lease.

3. Refinance the remaining amount on the loan.


After considering our options, we've decided to finance. The loan officer suggested that we wait until the end of the month to make our deal. She said that's usually the time when dealerships are eager/desperate to sell cars, which hopefully will mean a lower selling price. We'll see.

 

[mudnuri]

Actually, when we were looking at Saturns, the salespeople told us that with the mileage I drive, I would be better off buying. We leased once and really got burned--I was starting to go over, and all kinds of lease companies were doing special deals for getting a newer car and getting the lease forgiven, but not 5th 3rd bank. When I mentioned the bank the salespeople just rolled their eyes. They are the least willing to work with anyone. We ended up parking the thing for 10 months while I drove another vehicle we bought. I drive 16-17,000 miles a year and it just isn't worth it.
On the other hand, my mom doesn't drive nearly that much and is on her 3rd leased grand prix. For my elderly parents (dad has an 8 year old saab convertible) leasing works great. They always have a newer vehicle they can trust in iffy weather, and very little worries about maintenance.
Robin M.

You can change the mileage on your leases...it doesnt have to be the standard 3/36 lease. I had 18000 on both my grand am and envoy leases- becuase I KNEW there was no way I was going to only drive 12K a year. It changed my payment by like $5 a month..which in the end was cheaper than going over @ 5-10 cents a mile

Brandy

 

[Rock'n Robin]

I would have done that but DH set it all up and he was told the payment would go up more (this was in 1999). Our overage charge was 12 cents a mile; now I believe it's up to 15 cents a mile.
Robin M.

 

[ZachnElli]

A lease to a dealer is the same as a sale. They are selling the vehicle to a finance company. A reason a lease may be suggested is that a lease payment is generally less than a purchase payment (since you are only paying for the depreciation amount, not the residual) and a lower payment, for some people, may make the difference between ordering the vehicle or not. If there are spiffs from the paper holder of the lease, there are similar spiffs from the paper holders of a financed purchase.

PS: Welcome to the DIS, CG.

Dan is right, they don't make more money on a lease. Leases are typically 2-3 years, if you buy your loan is usually 5-6 years. They see it as getting you back in the dealership in 2-3 years vs. 5-6 years. The sooner the better for them.