Edmunds.com | Inside Line | Auto Observer Your Account | Help | Directory
You are here:
![[F]](http://a332.g.akamai.net/f/332/936/12h/www.edmunds.com/media/townhall/webxicons/site.gif){kind=small}
Forums
Automotive News & Views The End of Leasing? And do you care?
95 messages, Last post on Sep 03, 2008 at 4:58 PM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
|
I have always taken an unfavorable view of leasing. It is in some ways the car equivalent of subprime mortgages, especially when the manufacturer inflates the residual value at the end of the lease to get payments down. It's another case of using a financial trick to get something you really can't afford, with the effect being that the overall cost is higher. I've never leased a car, and I probably never will. I own my current car outright. |
|
| ...say they offer you 15K miles a year without penalty. You say, "Fine! I only drive 9K miles a year, so I'll be well under the limit." Your boss at work then says the company is giving you a raise but transferring you to another office which is 50 miles away from your home instead of the 10 miles you've been doing for the past 10 years. Uh-oh! You only have your leased vehicle. Do you risk running up all the miles on your lease or do you end up spending more money buying a hooptie so you don't run out the miles on your lease? You're darned if you do and darned if you don't! | |
that when I see some of these leases like $199 a month for an Altima or $219 a month for an Accord, I get tempted, especially since I don't do that much driving these days. I never really looked into them that closely though. I'm sure the up-front fees are still enough to remind me of the joys of driving a paid-off Intrepid.
|
|
|
Replying to: andre1969 (Jul 27, 2008 2:13 pm) It's been busy in here since I last posted but a couple of things caught my eye when thinking back to dad and his leasing. The one was teh comment that after getting hosed on the one lease he went into another. The comment was that after getting hosed he had to. Craziest thing - he didn't have to. For maybe four consecutive cars he leased DeVilles. At any time he could have bought one outright. He never did. The comments about writing it off as business. This is something he did. I don't know the numbers in it but it made him happy so I guess I can't complain. Heck, he had enough on the ball that he could have bought any of them for cash if he wanted which makes him smarter than me on that count. He was still working up to the age of 87. Basically once he couldn't drive anymore he was done. He's still around at 90 but not going anywhere. |
|
|
|
|
rather than lease, but the few times I have looked into the lease alternative, there has been almost no "savings" in the monthly payment anyway! And of course that completely ignores that I will have at least some equity in my owned car at the end of 3 years, none at all in my leased car. I could never figure out why anyone would lease, so this is an illuminating discussion. As was mentioned above, there is no way the entry-lux companies can afford to stop leasing, that's how they move 50% or more of their volume vehicles off the showroom floor. Ditto BMW from what I have read, and probably Mercedes too. I could see leasing stopping for mondo-guzzlers like the Suburban and Escalade, for instance, as well as many other SUVs. But I bet as full-size pick-up sales drop even further into the abyss, Ford GM and Toyota will be very tempted to offer subvented leases on them. Which of course would be shooting themselves in the foot, as the lease returns on these models will do terribly in the used market. So I hope for their sakes they don't. |
|
| I have heard GM Canada will stop leasing on Aug 1. As, 43% of Canadians lease I suspect you will see an exodus to other manufacturers that still offer leases. Unless, GM, Chrysler lower their pricing more in line with US pricing. Good luck trying to sell a $60,000 Grand Cherokee - even with 0% financing. | |
|
such as these $219/mo Accords and $199/mo Altimas, what would the catch be, for someone like me? I think they're 39 month leases, and they probably limit you to 10K miles per year. I don't do 10K miles per year with all my cars combined, including running the antiques up to Carlisle and such. I guess the biggest issue would be that at the end of 39 months, I'd have nothing, where if I bought the car, I'd simply have a car with 21 payments left.
|
|
|
|
|
Replying to: andre1969 (Jul 29, 2008 9:53 am) And for you, who wouldn't do all the miles if he leased, there would be no refund for the miles you didn't use, which you may or may not care about. And if you really liked the car, you would have to pay a totally inflated residual to buy it from the leasing company. All the promo leases with big ads in the weekend papers and on TV have inflated residuals to get the monthly payment down, and most still involve a largeish down payment. The $199/mo Camry lease includes a down payment of $2999 plus taxes and fees. They will let you finance all that into the payment if you want and your credit is good enough, but then your payment is like $319/mo, not $199. And $319/mo to drive a base model Camry for 3 years, then hand it back with nothing to show? Not a very good deal IMO. You have to have one of the specific reasons for leasing that some posters have mentioned above. It's curious that GM Canada is stopping all leases soon, and GM USA is not following suit. GM has been getting killed for years on these lease-returns.
|
|
|
Replying to: nippononly (Jul 29, 2008 3:57 pm) In contrast, my Intrepid was $2000 down and $347.66 per month...and that was, almost 9 years ago! Hard to believe it's been that long! Plus, I'm a bit irritated with my fleet right now. The LeMans flooded, the Catalina killed a battery, and the Intrepid's a/c is little more than a lukewarm breeze. Having something new is tempting, but it's probably more economical to just blow the $500 or so on the Trep's a/c, the $100 or so the LeMans probably needs for a tuneup and some carb/choke work, and, well, I just blew the $88 for the Catalina 's battery today. Besides, I dunno if I'd be cut out for leasing. The idea of paying on something that I know really isn't MINE at the end of the day, might not set too well with me. And at the end of 36 months, I'd still have nothing and would have to make a decision to buy the thing or get something else. Whereas if I kept the Intrepid, chances are it would still be running in 3 years. Sure, I'd have to dump some money into it...especially for the air conditioning. But I'm sure there's no way that the Trep would set me back, in the course of 3 years, whatever $2999 + $199 per month comes out to! I might actually be able to get by with something smaller than an Altima the next time around, too. Back when I bought my Intrepid, I don't think there was a small car out there that I could tolerate. They were just too cramped for me. Although oddly, I felt comfy in the Neon, but it had enough other issues that I was smart enough to stay away!  Nowadays though, the Civic feels like it's grown enough to be fairly comfy for me. The Corolla's still a "10 minute" car (as in, I really want to get out of it and stretch after about 10 minutes). The Sentra and Versa aren't too bad. I think the Mazda3's actually pretty comfy, although if I get a little car I'm going to focus on fuel economy, and it seems more performance-oriented. And while most people seem to hate it, I'm actually impressed with the front seat room in the Cobalt. But again, it's not that fuel efficient for a small car.
|
|
|
|
|
Replying to: andre1969 (Jul 29, 2008 5:24 pm) So the question becomes: are you suuuure you are going to want to give it back after 3 years? Because that is the only way you profit from the lease. If you might want to keep it because it is a low-mileage car that you have had since day one, or if your circumstances are such that you will not be able to get a new car (happens to the best of us), or whatever, you will have to pay the inflated residual (the exception to this is folks trying to buy out their leased large SUVs and trucks right now: the manufacturers and leasing companies are giving them WHOPPERS of discounts to keep their vehicles rather than have to take them back). In that case, you will have made the wrong choice. Even when the residuals are reasonable, leasing to own is usually a bad idea, just a way to extend payments beyond the duration of a normal car loan, beyond the end of the car's warranty, and sometimes beyond the end of its useful life. And don't forget the downsides of a lease: you are locked in for the term of the lease regardless of if you still want/need/can afford the car, and if it is damaged/totalled/stolen your down payment and all the monthlies are gone - you don't get paid by the insurance company on a leased car. It doesn't belong to you.
|
|
You are here:
Forums
Automotive News & Views The End of Leasing? And do you care?
New? Join Now!
Forum Tools
Search Forums
Browse by Vehicle
Browse by Board
Browse by Topic
Today's Chats
