Leasing a Car Tonight..

[irish]

Disadvantages of Leasing

 

You don't own the car at the end of the lease- I don't want to own the car when I finance

Your mileage is limited to a set amount, typically 10,000 to15,000 a year- I do very little mileage and I'm a teacher so it's not changing anytime soon.

Lease contracts are confusing, so it makes it difficult to ensure you're getting a fair deal- He drew up the paperwork for me with the other sales manager. My rate was insanely awesome and the residual is terrific in my favor as well.

Leasing is more expensive in the long run - Maybe.

Wear-and-tear charges can add up- One concern I still have.

It's hard to terminate a lease early if your driving needs change- I'm okay here as well.

 

All legit concerns for some, however, none I need to worry about. Lease away!!

Edited February 24, 2007 by irish

[Jimmy Neutron]

My sister's BF is a sales manager and has had many discussions with me on the garbage that goes on at car dealerships. He's told me that if you don't kill a car with mileage and you intend on trading in your car every 3-5 years anyway leasing is a great option. I've leased my last 2 cars and would never finance again.

 

So I was just wondering why you hate leases as I'd love to hear the complaints and then go back to this guy and ask him if they're legit.

 

Leasing simply doesn't make financial sense. If anybody wants to drive a nice car and always have a car payment - leases are perfect for them - IF you don't drive many miles.

 

The fact of the matter is that most of us are not wealthy. I think too many people buy cars they can't realy afford and don't save appropriately because of it.

 

If you want to lease a car - go for it. I'm just saying there are other options that may be beneficial.

[irish]

Leasing simply doesn't make financial sense. If anybody wants to drive a nice car and always have a car payment - leases are perfect for them - IF you don't drive many miles.

 

The fact of the matter is that most of us are not wealthy. I think too many people buy cars they can't realy afford and don't save appropriately because of it.

 

If you want to lease a car - go for it. I'm just saying there are other options that may be beneficial.

 

Well that I can't argue with. Financially, of course it makes alot more sense to buy a good, reliable car and drive it until the repair bills start to outweigh the benefit of not having a car payment. However, the second statement you made is me... If anybody wants to drive a nice car and always have a car payment - leases are perfect for them - IF you don't drive many miles. However, I am begininng to realize, having children will do that, that there are other smarter options out there on how to plan financially.

[Trots]

I leased an '03 Senta Limited Edition

[irish]

 

That's the smaller model bellow the Sentra. And by limited they mean it only has 2 wheels, 2 doors and you use your 2 feet like Fred Flintstone to get around. Duh!!

Edited February 24, 2007 by irish

[Bill Swerski]

 

 

But at least I spelled "Infiniti" correctly.

 

Leasing isn't a bad option if you don't have a long commute and you want to get a new car every three or four years. It'll be under warranty the entire time that you have it and most places are pretty reasonable about wear-and-tear (I had visible scrapes on both corners of my back bumper and they let it go).

 

That said, you often end up paying off more than half the value of the car over the term of the lease. You'll save a lot of money in the end if you purchase the car, pay it off in five years, and drive it until it dies.

[yo mama]

Leasing simply doesn't make financial sense.

Meh. Depends on what perspective you're looking at it from. From a long-term savings and balance sheet perspective, I agree with you. From a month-to-month cash flow perspective, you can generally lease a car for cheaper per month than you can buy it. Yeah, I know: once the car is paid off you don't have a note anymore. But if the person in question wants a new car every 3-5 years then they're always going to have either a note or a lease every month of their lives. If they choose to structure their affairs that way, a lease makes sense. Plus, if you lease every 3-5 years you avoid the typical increase in maintenance costs that tend to pop up as a car gets older.

 

I've only leased one car in my life, but I doubt I'll do it again. Whereas some people place a premium on having a new car every so often (which I can respect) I place a premium on reducing debt and increasing cash flow by not having a car note. So I'll continue to drive my cars until they die: then I'll buy a new one and drive that one until it dies. If the average car lasts me 10 years (a reasonable estimate given how little I drive) that means I'll have a car note for about half the time. And, by my calculations, I pay less total over the life of that 5 year note than I would have if I leased 2 or 3 comparable cars over the same 10 year period. Every year after the 10th the car holds up is basicly bonus money. Plus, I also get the scrap/charitable contribution value of the beater after I'm finally done with it.

 

But I don't get a new car very often, which is significant trade off.

 

My point is, a lease makes sense for some people. Just not those people who place a premium on maximizing car-related economic efficiency.

Edited February 24, 2007 by yo mama

[Bill Swerski]

IIRC, businesses can use leased vehicles as tax deductions. But it's my understanding that private citizens cannot.

[yo mama]

IIRC, businesses can use leased vehicles as tax deductions. But it's my understanding that private citizens cannot.

true. But businesses can also depreciate cars they purchase, instead of lease.

[Bill Swerski]

businesses can also depreciate cars they purchase

 

I'm not sure I'm following you here.

 

EDIT: I see what you're saying now. I didn't know that businesses could deduct value depreciation.

Edited February 24, 2007 by Bill Swerski

[yo mama]

I'm not sure I'm following you here.

A business can take as a deduction the cost of lease payments.

 

However, if a business buys a car (instead of leasing one) it can divide the cost of the car over its "useful life" (generally 5 years) and deduct that amount on an annual basis. That's the cliff notes version, at least.

 

Therefore, a business gets tax benefits either way. However, from a non-tax perspective many businesses prefer to lease vehicles.

[Sugar Magnolia]

My motto since I bought my first car at age 20 is, if you can't afford to pay cash for the car-you can't afford the car. When I had little money, I bought my first used car for cash. I then put the equivalent of the car payment for a new car I wanted in a savings account every month. When I had enough in the savings account to buy the car (a 1983 Tercel AWD wagon), I bought it. I;ve paid cash for my cars ever since.

 

It is very expensive to make car or lease payments over the course of 20-30 years. I don't want to be making payments or paying interest on a depreciating asset. It doesn't make economic sense to me. But that just me.

[HowboutthemCowboys]

I don't want to be making payments or paying interest on a depreciating asset.

 

while most of what you said makes sense, ALOT of automakers offer 0% interest deals at some point during the year.

[Puddy]

I don't want to be making payments or paying interest on a depreciating asset. It doesn't make economic sense to me. But that just me.

 

 

Not knocking your philosophy of paying cash. However, the car is going to depreciate at the same rate whether you make payments or pay cash. Will still be worth the same amount after 5 years. Avoiding the interest isn't a bad call, but most Americans can't plunk down 30 grand for a new car.

[Azazello1313]

My advice on leases - don't.

 

 

eh, it's not such a bad option IF:

1) your only other option is financing

2) you're not willing to drive one car more than 3 years or so and you want it to be new

3) you don't put a lot of mileage or wear and tear on a vehicle

 

if you meet those 3 criteria, you should give serious thought to leasing a vehicle. if you don't meet all 3, it's probably a bad idea.

 

if we're talking about what makes the most financial sense, that would probably be buying a used car, 2-5 years old, paying cash, and driving it into the dirt.

[Duchess Jack]

the only reason we were looking at leasing was the crazy $169 a month deal (after 2k down). Well - the deal went away so we started looking for something to buy....

 

but the wench was talking to her father... and got a bug in his ear about buying a new car. so, low and behold - he did so and offered his '99 protege for its trade-in cost of $1070 (75K miles). Well.... that's around 4 car payments, so while the wench wanted something new - and deserves something new - we are going to go this route. Makes too much sense not to.

[Kid Cid]

the only reason we were looking at leasing was the crazy $169 a month deal (after 2k down). Well - the deal went away so we started looking for something to buy....

 

but the wench was talking to her father... and got a bug in his ear about buying a new car. so, low and behold - he did so and offered his '99 protege for its trade-in cost of $1070 (75K miles). Well.... that's around 4 car payments, so while the wench wanted something new - and deserves something new - we are going to go this route. Makes too much sense not to.

 

Now's the time to get a head of the game. Take the deal from dad, then like Sugar Mag said, keep takinng the money you would make in payments and put it in a savings account each month. This way when the car dies, you'll have a sizeable down payment on a new vehicle for the Wench.

[Piles]

My advice on leases - don't.

 

 

 

I think this is good info. I would go so far as to say don't ever buy a new car. I think you get the biggest bang for your buck by buying a used car that is a couple of years old with low miles on it and driving it until it dies. Cars are simply the worst investment ever if you could even call it an investment.

 

I will say that while Swerski had issues with his Senta, err Sentra I have never had an issue with my Maxima which I foolishly bought new. I've moved several times, started and stopped automatic withdrawal from my checking acct and they even offered to allow me to stop making payments for a couple of months when our area got hit with a huge storm with no issues whatsoever Not to mention the car has 75k and has all original parts except for brakes and tires. I've been extremely happy with Nissan and would recommend one, used of course, to anyone.

[Sugar Magnolia]

Not knocking your philosophy of paying cash. However, the car is going to depreciate at the same rate whether you make payments or pay cash. Will still be worth the same amount after 5 years. Avoiding the interest isn't a bad call, but most Americans can't plunk down 30 grand for a new car.

 

 

I couldn't afford my first brand new car either. It cost a whopping $7500 (this was 1983) which was more than half my income at the time. That would be equivalent to a person making $55,000/yr, and buying a $30,000 car. I kept my clunker car another three years and saved $200 a month for three years. After I bought that car, I continued to put payments into a money market account, and 4 years later I bought another new car, and so on.

 

We don't exactly do this now, but we budget $500 a month as our new car budget. We buy a new car every 5 years so that would give us a $30,000 every 5 years.

[wiegie]

if we're talking about what makes the most financial sense, that would probably be buying a used car, 2-5 years old, paying cash, and driving it into the dirt.

 

As the proud driver of a 13 year-old Toyota Tercel, I completely agree with this.

 

(I was on the phone with my brother last night and he was telling me that he is getting ready to trade-in his 3 year-old car for a new one. And when I asked him why, he said that he wanted to trade in his car before it went down in value too much. I tried to reach through the phone to smack him upside the head.)

 

(He and his wife make about $70,000 per year and they each have about $400 monthly car payments and they are looking to buy a home soon. He sobered up really quickly when I when to a mortgage calculator website and calculated how much of a mortgage they could take on. I told him to sell his car and go buy a 2-3 year-old used car and then drive it completely into the ground.)

[H8tank]

Exactly zero - it is one trap I have avoided like the plague.

 

 

 

Figured! So the people here who have in general have a favorable opinion, and people that have never worked in a dealership nor ever leased a car are supposed to give them advice on something they have never done? Got it!

[xMRogers]

Cars are simply the worst investment ever if you could even call it an investment.

 

 

 

here's where I think us lease guys vs the buy guys get caught up. I never think about a car as an investment because it's a TERRIBLE one. Only way it works (outside of rare/non-driving cars) is to buy either moderately used, and get rid of while still relatively moderately used, or buy WAY used and then just sell for something.

 

I consider it a real expensive appliance....and i like shiny new appliances with gadgets that I know I don't have to worry about. Not saying I won't end up there, but at least for now, I'm much happier with new cars under warranty and an ongoing payment than I would with no car payment but a 6 year old car with 70k on it...

 

Just my take - for some, anythign that you are paying monthly for is looked at as an investment, so a car is an economic transaction, not something your picking up at the store.

 

I will say this - I used to HATE when people that rented an apartment would tell me I was dumb for leasing a car - i know a lot of people can't necessarily buy a house, but a lot can and don't (I still kick myself for the years I waited to buy for stupid reasons). To each their own on that, but if you rent real estate (which should always be considered an investment as well as a dwelling), do not give me advice on leasing a car....

[H8tank]

I have never had an issue with my Maxima

 

Yep, meh life partner has an '02 Maxima SE, one of the best cars on the road, amazing what you get for so little $$.

 

Senta boy bought a little tincan ricer car and is complaing out his a-hole.

 

Nissan rated among the best: http://www.jdpower.com/autos/nissan/maxima/2006

[Bill Swerski]

I will say that while Swerski had issues with his Senta, err Sentra I have never had an issue with my Maxima which I foolishly bought new. I've moved several times, started and stopped automatic withdrawal from my checking acct and they even offered to allow me to stop making payments for a couple of months when our area got hit with a huge storm with no issues whatsoever Not to mention the car has 75k and has all original parts except for brakes and tires. I've been extremely happy with Nissan and would recommend one, used of course, to anyone.

 

Apparently Nissan has become Japan's answer to Ford in that you have to pay $30,000+ for a reliable vehicle. No thanks. I'll go with Toyota or Honda next time.

 

The one big bonus to leasing is that you can get rid of a problematic vehicle before the warranty is up. There's nothing worse than shelling out $1,000/year in repairs on a vehicle that you've already paid off. Other than that, you're better off buying.

[Bill Swerski]

Senta boy bought a little tincan ricer car and is complaing out his a-hole.

 

Sorry, but a car with a sticker price of $19,000 shouldn't die in the middle of a highway when it's barely two years old. The back window also shouldn't spontaneuosly shatter when the vehicle is only 3 1/2 years old. I'm sure that Maximas have slightly better craftsmanship, but one shouldn't have to pay $30K for a car that doesn't go to crap in its first four years.

Edited February 24, 2007 by Bill Swerski