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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: 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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Replying to: tmgeneral1 (Jul 30, 2008 10:50 am) I don't see how my one-year depreciation is going to be any worse (and will probably be better) than someone who put down $2,500 and $350 a month for 12 months and now wants out of a lease. It's really not fair to use sub-vented leases as comparisons, unless you compare it to a heavy incentive on a new car purchase.
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Replying to: lemko (Jul 30, 2008 6:09 am)
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Replying to: Mr_Shiftright (Jul 30, 2008 12:20 pm) Hmmmm... why not? I did compare it to the purchase that was available at the time. The lease was better. Why is that not fair? I didn't set the rules. I just took advantage of them. I mean, I certainly wouldn't cry "no fair" if someone got a great, heavily subsidized purchase deal while the lease deal at the time wasn't so hot. And, really, no matter how good a purchase deal gets, it can't compensate for an overinflated residual like we got on the Pacifica.
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Replying to: qbrozen (Jul 30, 2008 12:33 pm)  It would be fairer to say something like this: "Look I'm a professional stock broker and I can beat the game". Yes you can, with a) your knowledge and b) a market in your favor. Right now, most people have little knowledge of leasing and the market is definitely not in favor of sub-vented leasing. But I'm not doubting that you got a killer deal...that one time....
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Replying to: ponytrekker (Jul 30, 2008 12:28 pm) That does sound like a lot of money for a 2005 vehicle. How many miles do you have on it? I think the most I ever spent on my 2000 Intrepid in a single year was $2,000. And that was just last year...2007. The car started that year with about 128,000 miles on it. I'm into it about $940 so far this year, but the a/c is dying so I have the choice to either throw more money at it or tough it out. And I'm finding that the older I get, I ain't so tough.  I guess one way to look at it though, with your 4runner, is this. That $3200 was probably a freak year. It also amortizes out to about $267 per month. I'm sure a new equivalent vehicle would set you back about $500 per month for a 60-month term and minimum down payment. Possibly more. Now, if you're still making payments on that rig, which is quite possible with it being a 2005, having to throw another $267/mo at it in maintenance/repair does hurt. But everything needs maintenance eventually. Even the most reliable vehicles need brakes, tires, belts, tranny servicings, coolant flushes, etc. So you're always going to be paying more than just the monthly payment, no matter how reliable the thing is.
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Replying to: Mr_Shiftright (Jul 30, 2008 12:52 pm) By the by, my Honda was a pretty good deal, too. ;P absurdly low MF (about 0.9%, IIRC) and overinflated residual, just like the Pac. If only I could stand it enough to have kept it the full term. |
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Replying to: tmgeneral1 (Jul 30, 2008 10:50 am) True, but the statement requires some qualification. The finance company may "own" the vehicle, but it can't restrict you from driving 30,000 miles per year. A lease company can. The financier can't make you pay them more money because of cosmetic body damage. A lease company can. The financier can't keep you from painting the car green with orange flames. A lease company can. So, while a finance company technically "owns" your car until you pay it off, while you're paying, the car is truly YOURS. With a lease, the car is NEVER yours. The company owns it before, during, and after the lease. Plus, they're reasonably certain that you'll lease another car from them when your current lease is over, since you'll have no car and no equity when the lease ends. Lease companies not only get other people to pay for THEIR cars, they create a perpetual market for more of the same. It's a great deal for them, and a sucker's deal for the customers. |
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