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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
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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.
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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.
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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.
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Replying to: andre1969 (Jul 29, 2008 5:24 pm)
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Replying to: edklein (Jul 26, 2008 5:07 am) I've been waiting for that for nearly 20 years. It hasn't really happened like I thought it would and used car prices have remained fairly high. I have NEVER recommended a lease for personal use. The only time a lease makes any sense is when you can write off the payments as a business expense. It's much easier to write off a lease than it is to write off the purchase of a vehicle. But since most people do not use their vehicles primarily for work, leasing doesn't makes sense for them. I've purchased all of my cars. I've always recommended that my friends, relatives, and business collegues buy their vehicles. It's just a smarter move in most cases.
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Replying to: hudsonthedog (Jul 30, 2008 6:19 am) I'm still one who holds onto the car forever so it doesn't much matter to me.
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Replying to: fezo (Jul 30, 2008 6:30 am) If you lease a first year model car that turns out to be a DOG of a car, that is bad enough to disappoint you but not bad enough to quality under Lemon Law, you get to dump it at the end of 36 months if you can't turn it in under a lemon law. If you had owned it, perhaps it would have such a bad reputation after 36 months, you couldn't give it away and would have to sell at a huge loss. Who wants to buy Consumer Reports' "Worst Car"? One thing that leasees don't seem to grasp is that money "up front" you are asked to pay is like throwing your money out the window of the car while you are on the freeway. You're just making advance payments on your monthly dues. Like paying extra rent in advance to your landlord and thinking you got a bargain when he lowers your monthly rent by $50 a month.
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Replying to: nippononly (Jul 29, 2008 7:18 pm) As long as you take care of your car, dont put any additional money down, and don't drive more that 15,000 miles a year, a lease is almost always better than buying when it comes to a NEW CAR. The only way buying makes sense is if you are willing to buy a 1 or 2 year old vehicle with most of the depreciation factored out. By the way, if your "owned" vehicle is not paid off, you do not OWN it. The financing company owns your vehicle until it is sold or paid off.
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Replying to: tmgeneral1 (Jul 30, 2008 10:50 am) I will say my buddy with the Subarus swears by his method. It helps I suppose that he picks slow depreciating cars. |
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I honestly think those that are so adamantly against leasing either don't understand it or wound up having a bad experience because they didn't do their homework. I can see why Chrysler would stop if they wrote alot of lease deals like we had on our '05 Pacifica. We got about $8k off sticker, had about a 50% residual ($18k on a $36k vehicle). Lease rate worked out to about 0.79%. 3 years and 45k miles later, the vehicle was worth around $12k, but we got to turn it back to the dealer and walk away. We ALMOST purchased it, but the low rate of the lease convinced us otherwise. I am every so thankful we leased! Saved us $6k in depreciation and several hundred in interest. |
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