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Smart Shopper Leasing vs. Purchasing
517 messages, Last post on Sep 17, 2009 at 12:47 PM
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With the steady increase of gas prices I am thinking that the hybrids will become more available soon (limited selection in the midwest) as well as alternate fuels and higher mileage vehicles. Since I am going to be in need of a new car soon (next 3-6 months) I have been wondering as to the wisdom of leasing instead of buying since I anticipate that in 3 years time there will be many more options. I do not want to buy used especially with all the flooding we have been having in the midwest, so that is not really an option. Is this something that anyone else has been giving some consideration to?
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Replying to: goetze (Jul 14, 2008 6:14 pm) The captive lease banks have been writing leases for hybrids, but not always at a nice rate. If the hybrids are flying off of dealer lots due to high gas prices then there is little incentive for them to offer you a discount on the car or a nice lease rate and residual. Trying to buy or lease something that is a hot seller normally results in paying too much. Now if you are looking at one of those guzzler hybrids, like an SUV that still drinks the gas (just not as bad as the non-hybrid model) they probably can make you a deal on one of those. One hybrid thing to note, if you don't drive them in an efficient manner they do not return a lot of savings. Even you drive a non-hybrid in an efficient manner you may be able to boost your mileage by quite a bit. So keep that in mind along with the extra cost of the hybrid. If you were buying, most take 100k miles or more to recover the extra money you have to sink into them. If leasing and getting a good lease deal on one, you might be able to save enough in the course of the lease to break even. But you have to run the numbers and see, but I would think on a normal 24-36 month lease term the hybrid would cost you more to operate (gas + payments) then a non-hybrid would. Dennis |
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A lease is usually based on 12-15k miles per year. High-mileage leases get expensive quickly, which makes them less attractive. So if you drive tons of miles, leasing is probably not going to work, and if you don't, gas may not be the deciding factor.. The only good thing about leasing is that many lenders in the past have been downright stupid about residuals and have based everything on "if present trends continue," which they usually don't. So if hybrid resale is super-high now, you may be able to find a great deal. You just have to evaluate it carefully. Most of the real chumps are out of the business, though... independent leasing is way down. Good luck, -Mathias |
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I read almost everything I can about the difference between these 2, but there's information not talked about in the articles. Right now, I need a vehicle for work. My company is going to reimburse me for miles which is currently .585/mile. I generally put between 30-35K on my cars/year. This year, I am thinking of LEASING a new car, getting the lower mileage allotment, and then, at the end of the lease, just simply buying out my car. Even if I put 90K in the car in 3 years, I think buying it and then finacing it at the lower rate would be more beneficial to me as long as it's a vehicle I envision owning and it's reliable. Am I out of my head here? My example is that I want to get a Nissan Murano, Toyota Highlander, or Honda Pilot. All hte vehicles, after negotiating the prices, would make my payments at least $600/month with $2K down. However, the lease on these vehicles reduces my payment dramatically, making it more affordable. However, the lease mileages are 15K/year and I will double that. Like I said, if I plan on buying the car, does it really matter how many miles I put on it? PLEASE HELP!! Time is running out for me!! Thank you! |
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Replying to: pasell3 (Jul 15, 2008 2:36 pm) The lease co isn't going to give you a break on the price because you miled out the car, and the book value is going to nose dive. Banks are already leery of financing SUV's at book value as it is. You may end up having to put a substantial amount of money down when you buy out the vehicle. |
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Replying to: pasell3 (Jul 15, 2008 2:36 pm) Of course, most banks have gotten smarter. But it might be worth checking if some captive finance co. is charging super-low mileage rates. "[..] if I plan on buying the car, does it really matter how many miles I put on it?" Of course not. But that's hardly the question. The question is, is it cheaper than buying outright? If you know what the lease costs and what the car's price is new, you should be able to sort this out, no? The actual cash value of the car at lease end is hard to know upfront, but it does not enter this particular calculation. -Mathias |
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Replying to: pasell3 (Jul 15, 2008 2:36 pm) Well.. we'll leave that to your therapist... But, leasing with a low mileage allowance, then planning on buying the car when the lease is up, seems like a dangerous plan.. What happens if you lose your job a couple of years in? As mentioned above, what if you can't get a loan to cover the residual amount, because of the high mileage? If you are driving 2500 miles/month, then your employer is giving you $1462.50 for driving expenses.. Assuming 20 mpg and $4.00/gallon, then gas will be around $500 per month... Another $600/mo. for a car payment still leaves you over $300 month for insurance and maintenance.. I do have a couple of suggestions... 1) Look for something besides an SUV!! An Accord would save you an easy $150/mo. just in fuel... 2) If I'm wearing out a car in 3-4 years, I'm going to drive something cheaper than a $30K-$35K vehicle (see Accord above.. or maybe even a one-year-old Taurus). Contrary to popular belief, you can lease a car for 3yrs/90K miles... Yes, the payment is high, but it may be cheaper than trying to sell a 3 yr old, 90K mile unit.. Not that I'm suggesting you do that, but you might be surprised at the payment.. Good luck! kyfdx visiting host |
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Replying to: pasell3 (Jul 15, 2008 2:36 pm) 1. If you want to lease and then buy, it MUST be on a vehicle with strong lease support and weak financing support. Otherwise, it makes no sense at all. 2. Since #1 must be true, then it makes no sense (in your case) to NOT take the highest mile/year lease you can. It will make your buyout far lower and you will be paying off more of the vehicle using the leasing company's fantastically low interest rate (money factor). 3. I couldn't agree more with the suggestion that you get something very fuel efficient. It is money in the bank when your company is paying you the same whether you drive a 20 mpg vehicle or 35 mpg vehicle. Hell, at that number of miles you'll be driving, I wouldn't be surprised if you could get yourself a very efficient car that your company pays you for AND have enough from the allowance left over to pay for a car you'll actually enjoy for personal use. 4. Don't forget uncle sam. I'm not a tax expert by any means, but I do know my father receives a W2 at the end of the year for his vehicle allowance and has to pay taxes on it. Ouch! |
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Thinking of leasing a Ford Flex. I can get X plan pricing and hope for good value on my trade in. I know I shouldn't put money down up front but I can't imagine selling a car in the current market. (I live in the Metro Detroit area.) Anyway I was hoping to get some comments about leasing a new model. Does anyone have any comments on leasing vs buying a new model where the residual values are truly unknown?
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Replying to: bmmiller (Nov 04, 2008 1:41 pm) I don't believe it matters much. If the residual is set too high, then you get to cut and run at the end of the lease. If it is truly too low, then you can buy it and trade or sell at the end.
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