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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
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It will be interesting to see if it has an effect on the used car market down the road and car sales in general. I suspect that more people will choose to keep their cars longer when they're no longer forced by the lease to turn them back in every 3-4 years. Everytime I've looked into leasing, it's never come close to making sense. Especially here in Texas where I've learned you still pay sales tax on the full price of the car, not just for the value that you're leasing.
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Replying to: edklein (Jul 26, 2008 5:07 am) Given that many leases were "sub-vented", that is, supported by the manufacturer, by boosting residual values well beyond their actual market prices 2-3 years down the road---that's about as reckless as those sub-prime loans. But it sure makes those monthlies look attractive. Effects of the disappearance of leasing? How might that effect new and used car sales?
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Replying to: Mr_Shiftright (Jul 26, 2008 7:05 am) |
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Leasing is great for the value consumer, because we can pick up a two- or three-year-old car in great condition with low mileage for cheap and put another 100K on it easily. Why more folks don't figure this out is beyond me. Chrysler can end leasing, but I'm not so sure about manufacturers of $50K+ vehicles. Some people can buy 'em, but my impression is that leasing is the only way much of the market can put one in their garage. I agree that the leasing arithmetic never made sense. Let's see, first you pay $3,000 just to get in the game, them you pay X every month while honoring driving restrictions, and at the end of the lease you give back the car and they keep the cash. And this is legal, you say?
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Well, perhaps in their market they can get by without the leasing option, but for some company's, leasing makes up a huge percentage of there overall market. I am not sure all companys, will jump for this option as they would lose many customers. Perhaps Chrysler can get by with not leasing, given there choice though, I do believe that they will lose many. I know many people who lease, and trade in, trade out, and this would put a damper on ways to get cars moving out, as some cannot afford that 5 series BMW, but when coupled with lease deal, then its more within reach. Putting finance only on a car will only limit its market, some models can get by with this, but doing this for every model. This would definitely bring down the average price of what consumers can actually afford on a car, while leaving other cars in the dust, and to a upper end market. This day in age, with the economy, I am not sure why one would make this change at this time, as everyone is just trying to get by, and the company itself would limit its consumers, If you have noticed, every advertisement for a car on TV is based on a lease, and they are getting pretty attractive. They have to do this, because, I am sure they are seeing a slow down in sales, depending on how economic their model line up is. Leasing: The problem is, many people are not careful with their leased cars, and go into it not thinking realistically on how they use the car, how many miles traveled. Then at the end, your hit, and wonder why. Leasing is not for everyone, but I am certain many are signing a lease, just because its a lower price, payment and seems more attractive, but tossing aside the consequences that are to be had at the end of the lease because they were never really fit for the lease from the start. Yes, the rules are pretty strict, stay within miles, keep it looking good, care. But, if you can do all of that successfully and realistically, then it might make for a good option. It is just many don't think about that, or the payment and what your getting totally blurs the reality of it, and that you may not fit well with that kind of rules. Its not worth doing it, if you cannot do this. If other companys opt out of leasing, this will certainly affect me. |
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...as I never leased a car in the first place and most likely never will. Funny thing is, without the ability to lease C-Classes and 3-Series, you'll get to see who really has it together and who the poseurs really are: "Dude, I thought you were getting a 328i?"  "Sorry, couldn't afford it as an entry-level apprentice file clerk. I had to settle for a used Hyundai Elantra." 
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Replying to: saabgirl (Jul 26, 2008 9:01 am) A lease only works if you get a tax benefit. Also, never ever put anything down. If all companies stopped leasing, then I would do what everyone else does: buy a cheaper car.
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Replying to: ponytrekker (Jul 26, 2008 10:13 am) As for high end models, a BMW 7 series let's say, I bet many of them (maybe as much as 50%) are leased. Who would want to lay out $120k+ for a vehicle they'll replace in 2 years, that will lose $50k+ in that time frame. It's easier to invest that money, and get a decent return on it, instead of tie it up in a depreciating asset. SO I think you'll still see hihg end vehicles being leased, but the lowe end stuff, say Kia Rios, Focuses, trucks, etc....they're mostly going to be financed. |
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if we are talking a company vehicle. You can write most of the cost off on taxes. But it still is a lot like renting. You pay a monthly payment for a year of two and at the end you move out and you have nothing to show for your investment. But I suppose if you look at it as paying for your company transportation it would work for some. I simply don't care if they lease or not. |
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I never saw the benefit in leasing. Also, the terms and conditions were so confusing I could never tell if I was getting hosed. I like to keep my car a long time so it never attracted me. I used to think that buying a leased car was a good idea. After all the guy who leases has to take care of the car, right? WRONG! I learned that when a car is returned from lease they make no effort to determine if it had been maintained at all. This means you could end up buying a car that never had an oil change in 36,000 miles. I'd rather buy a rental, at least they have routine maintaince If leasing goes away all together it might make it harder to find a used car as fewer would be coming back on the market as soon.
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