Anyone lease a vehicle?


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My 2011 vehicle is almost paid off, and I've started car hunting, looking at brand new or CPO vehicles with under 25K on them. I could keep driving what I have, but we would like to get into something a little bigger, so now might actually be a good time to upgrade.

 

I like the idea of leasing. Being in a new vehicle every two to three years is a nice thought, but endless payments are less so. That said, I'm a pretty good candidate for a leasing programme, as I've put only about 20K miles on my current vehicle in a span of three years.

 

Anyone leasing their vehicle? What was your justification in going this route? I know car critics like to throw out the phrase: "rent it, lease it, or own it" at the end of their reviews for certain brands and models. I'm considering the Acura MDX, Nissan Pathfinder, and Mazda CX9.

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Never gone this route, but I've always wanted to. I took a couple of car classes in college and the professor was a big believer in leasing for many situations. 

 

Last month, Husband and I said heck with it and paid off our two car loans in one big swoop.  So far it's been a great decision and left us more comfortable for house shopping.

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Backroads, could you expand on the professor's thoughts regarding leasing at all?

 

No car payments is a nice feeling. We have two other vehicles that are paid off, and we're planning on keeping them until the bitter end.

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His thoughts on benefits were:

 

No paying to keep a car "alive", just paying to enjoy a car in good condition. 

You don't have the guilt of committing to a car, i.e.. "I have to keep this car about because I still owe one it or I just paid it off and now I have to keep it to make it all worth it, etc."

There's usually a maintenance perk from the company.

You don't have to get bored with your car.

You're not giving much wear-n-tear to a car.

 

 

It's not for everyone, but there are benefits to it.

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I leased a new truck a few months back. First time. I'll let you know what I think in 3 years. :)  The honest truth is, we could not have afforded the payment if we bought. Leasing was the only choice to get what we wanted. And we don't put a ton of miles on vehicles because I work from home. Downside of leasing a truck... I got it to help serve, meaning moves and service projects and stuff (a lot of people need help with putting yards in in my neighborhood), but with a lease I can't take the chance of banging the thing up too much, so I have to deal with that. But, still, I think it'll be worth it.

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Former co-worker of mine leased . . . said it was an extremely bad idea.  Read the fine print.  It's all good until the lease is up and then according to him things got painful.  

 

It was several years ago when I talked to him about it, but IIRC he mentioned that if you're not careful you get caught in a leasing trap, i.e. to get out of the lease he ended up having to pay like 10k+ (he was leasing a Beamer).  Something about the condition of the car when you return it that in order to get out of the actual lease (i.e. not take a newer vehicle, he had to pay upfront money).

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Former co-worker of mine leased . . . said it was an extremely bad idea.  Read the fine print.  It's all good until the lease is up and then according to him things got painful.  

 

It was several years ago when I talked to him about it, but IIRC he mentioned that if you're not careful you get caught in a leasing trap, i.e. to get out of the lease he ended up having to pay like 10k+ (he was leasing a Beamer).  Something about the condition of the car when you return it that in order to get out of the actual lease (i.e. not take a newer vehicle, he had to pay upfront money).

 

Yeah...it's all about the depreciation. You pay on the assumed depreciation depending on the mileage agreement. If the car depreciates more than assumed, based on either going over on miles, beating the thing up, or just back luck due to the market, then you can owe on it. If you lease the likes of a Beamer that can add up to a pretty penny. On the other hand, if you take care of it, stay under on the miles, and have good luck, you can actually end up with positive equity. Just depends. The only way being upside down on the lease hurts is if you give it back and walk away. Then, yes, you pay for whatever you're upside down. If one's intention is to give it back after the end of the 3 years then this risk is run. If one knows they are planning on either trading it in for another lease, or buying it, then the depreciation overage does not matter.

 

This is not fine print. It's the way a lease works. If you go into a lease without knowing this then it is foolish.

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It's nice to have the new-ish vehicle all the time, if you can afford it; but if you're still trying to watch things in order to meet specific financial goals (save for a house, making your 10% retirement/tithing contributions, build an emergency fund, etc) I'd be sorely tempted to pass on a lease.  A car isn't going to fall apart on you the instant it turns three years old.

 

Just_A_Girl's and my first car was six years old at time of purchase, and we got another twelve years out of it.  That was probably pretty extreme.  But the point is that if you choose your brand well you can buy a three-year-old car, spend the next three years paying it off at one or two hundred dollars a month, and then spend another three years after that with no car payment at all (which would more than cover whatever maintenance you had to do).  Is it really such a bad thing to be seen in public driving a well-cared-for, 2005-model car?

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This is not fine print. It's the way a lease works. If you go into a lease without knowing this then it is foolish.

 

Thanks . . . I couldn't quite remember how it worked.

 

If you are putting that little mileage on it and the car is almost paid off, you might be better off selling it and using that money (3 years and 20k, you'll get a good price on it) to buy a better vehicle and pay off the new vehicle, or buy something that is a year old to avoid the immediate lot depreciate of a new vehicle.

 

From my experiences in life, leasing is really used for company cars, situations where people can't afford to buy, or for people who have a lot of money so they lease really fancy cars b/c it's a status symbol to them and they don't want the hassle of buying/selling.

 

I guess it depends on how you view a car . . . . is it transportation or something else?.  If it's transportation . . . there really isn't a whole lot of difference between cars today and cars made 5-10 years ago (probably the biggest improvement has been in maintenance).  Most of the new bells and whistles can be add-ons to older vehicles.  If one keeps good maintenance of your vehicle it will appear like new for at least 5-6 years.  Maintenance on new vehicles is practically null (1st 100k is change oil, rotate tires, check brakes, flush tranny @ 50k & 100k).

 

I've got a '08 with ~60k on it that is still pretty good and I'll be done with payments in a month.  I'll save that extra cash and use it for a down-payment (or just buy outright when I need a new vehicle).  I've got an '00 w/ ~150k and still runs just fine . . . maintenance is probably. ~1k a year

 

You never know what screwballs life is going to throw you, job loss, serious illness, death, etc.  The best way to be insulated against such events is to have as much stuff paid for in full as possible.  No car payment, no house payment means if heaven forbid something awful happens one has a roof and transportation.  

 

In my life, I will gladly take not having as many flashy things to have that security . . . it has already saved my bacon more than once.  Live below your means so that one day you can life above them.

 

But to each his own, if you feel leasing is the best decision then I'm sure it will work out well.

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You never know what screwballs life is going to throw you, job loss, serious illness, death, etc.  The best way to be insulated against such events is to have as much stuff paid for in full as possible.  No car payment, no house payment means if heaven forbid something awful happens one has a roof and transportation.  

 

Sorry, but I disagree with you.  The best way to be insulated against these events... is to have as much cash on hand (or to be paid to you) as possible.  If you owe $20,000... but you have $100,000 in cash, easily accessible... you have no problem.

 

You can "pay off" things by having enough cash on hand to make payments when life throws those curveballs at you.  Otherwise, just because you accelerate a pay off, doesn't mean that the repo man won't still come if you miss 2 months of payments.  Cash (on hand) is King!

 

 

As for my next car... I plan to buy a used Lexus.  Something that has probably over 100k miles and can be bought for about $5,000.  Yeah, the gas mileage won't be as good, but the car will definitely last.  Lots of these around with 300k-400k miles still going strong.

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Sorry, but I disagree with you.  The best way to be insulated against these events... is to have as much cash on hand (or to be paid to you) as possible.  If you owe $20,000... but you have $100,000 in cash, easily accessible... you have no problem.

 

You can "pay off" things by having enough cash on hand to make payments when life throws those curveballs at you.  Otherwise, just because you accelerate a pay off, doesn't mean that the repo man won't still come if you miss 2 months of payments.  Cash (on hand) is King!

 

 

Good point; but you'll need $2-$3K less in cash per month, if you have your house and car paid off--and will be saving on interest, to boot.

 

I like the Dave Ramsey approach--keep your debt as low as possible and also have a six-month emergency fund.

 

Obviously, the best solution is a mix--

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I got into a 3-year lease on a Toyota 4-Runner back in early 2000.  Big mistake.  I will never do it again.  The monthly payment may be smaller but at the end of 3 years - looking at all the money I have put in the car and getting 0 trade-in value for it, I actually ended up paying more for the car.  And with this worry eating at me all the time - "Oh, I'll have to rent a car to pick up my mom from Houston because I can't afford the miles on this 4Runner"... "dangit, the shopping cart just scratched my paint"... it was like a noose around my neck for 3 years.

 

I bought a pre-leased Cadillac CTS in 2002... kept it until 2012... SOOOO MUCH BETTER.  Paid the car off in 3 years and had 7 years of no car payments.  And I drove that thing hard.  It doesn't matter what year it is - if you do the regular maintenance on a Cadillac, it will be like driving a new car every time.  Yes, lots of people say it's a GM and is a bad car.  I don't have that experience with a Cadillac.  I'm now driving my 3rd Cadillac - (bought it back in 2012... and it will be paid off in December)... all of the ones I've driven had been excellent cars for me.  My husband doesn't do car loans.  He saves up his money and buys the car cash.  If he can't buy it cash, he doesn't buy it.

 

But but but... Cadillacs are expensive!  Well... the Cadillac CTS I bought in 2002 was the same price as a Toyota 4Runner.  The one I drive now is an SRX and is more expensive than the CTS but I had 7 years of car payments saved up for a big chunk of downpayment (even after my husband bought his car cash)...

 

My sister does the same thing with her Hondas.  Hondas lasts forever if you follow the maintenance schedule.  My brother does the lease thing - he leases all his Hondas because he likes new cars every 3 years and doesn't want to have to go through selling his old car.   My sister has my 1996 Mazda Protege.  I gave it to my dad who lived with her for a while.  My Protege still runs like it is brand new.  So, okay, it doesn't have a plug for the iPod or rear-view camera or any of these new-fangled gadgets... But, the thing rides corners like it's on rails... it has super smooth gear shifts (manual - it was my racing car) and is very stable on 95mph... Okay, so my 1993 MX6 was better, but I sold that baby to come up with the upfront lease payment for the 4Runner.

 

In my opinion... (sorry TFP!), if you're leasing because you can't afford to buy it on loan, you bought more car than you can afford.

 

Leasing is for people like my brother who pays the cost of not having to worry about selling a used car every 3 years or for people who run fleets... my brother doesn't worry about mileage or dings, he's not in it to be "cheaper"... because at the end of the leasing period, it's not really cheaper on a lease versus a trade-in.  He's in it for the no-hassle feature.

 

But hey, this is just my opinion.

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In my opinion... (sorry TFP!), if you're leasing because you can't afford to buy it on loan, you bought more car than you can afford.

 

*shrug* You're probably right. I'll let you know how I feel about it in 3 years.

 

I should rephrase a bit though. "Couldn't afford" isn't absolutely accurate. "Shouldn't" is probably more correct.

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I have a wierd perspective on "affordability" so my views are not "mainstream".  Let me explain it using my shoes.

 

A friend of mine told me I'm showing off my "wealth" because my shoes cost $150.  He said it's wasteful to buy shoes more than $30.  This was in response to a post about women putting fashion over comfort showing a girl wearing 4" heels.

 

I wear high heeled shoes.  It's my style.  Half my shoes are 4" heels.  So, I posted a spiel on what to look for in 4" heels.  I can run with my 4" heels.  I don't buy them unless they are of perfect balance with ample support for my type of foot.  To be able to run on 4" heels, the shoes must be a platform so that the front of the foot is at 1.5-2" and the arch only has to rise up 2-2.5".  For this to be comfortable, it has to be of proper balance with a substantial platform so that when your foot lands on the ground on a heel to toe motion, the shoe lands solid and keeps the support from the heel all through the toe so the foot does not teeter.  Everybody have different strides, so one shoe may be comfortable for me and might be imbalanced on another.  Then it has to have the proper straps so the shoe doesn't fall out of place on the top of a stride.  You can tell if the shoe is not comfortable because when you're walking on it, your knee can't straighten out on the stride.  I have seen Angelina Jolie walk with bended knees on her Louboutin stilettos that are not properly balanced in one of her movies.  Unfortunately, it is very rare to find a well-balanced shoe in places like Payless Shoes, Target, Walmart... the places that sell $30 shoes.  But I found 4" Steve Maddens that was a good shoe for about $30 in a department store... so it's not impossible.  But, I found that Michael Kors carry a lot of shoes that are perfectly balanced for my foot.  And yes, they sell $150 shoes...

 

Now, I have Michael Kors shoes that are 10 years old.  I can run on them still.  I'm not one to follow seasonal fashion trends.  Because when a shoe is perfectly balanced on your foot, the shoe lasts longer.  And... you don't need pain killers or podiatrists to fix your foot.  I can wear one of my 4" heels to go to the office all day long.

 

So, on affordability - a $150 shoe that I can wear for 10 years or more to many places is cheaper than the $30 Payless Shoe that gets discarded after a year... I just need to wait until I've saved up $150 to buy the shoe.  But a lot of people can't do that because... they would need to walk barefoot while waiting to save $150, and even then, they just can't come up with $150 unless they swipe it on a credit card.  So, yes, I understand this method is not for everybody and people do what they gotta do...

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Super great feedback!

 

We've never leased, stayed away from it because of the horror stories, but I do have friends that do it and it's so appealing! The obvious reason being a brand new car every few years. FUN. I talked it over with my husband, and he's not a fan, granted he's the breadwinner footing all the bills. I agree that choosing your brand wisely, will help with vehicle longevity, but of course there are no guarantees. Still, a good track record is important. I know Hondas and Toyotas (and their sister companies) are generally long lasting.

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Leasing is just another finance method.  I can't lease economically because I drive too many miles.  If you are a low mileage person, you can actually do fairly well leasing.  I've seen a lot of cases where the lessee has been able to sell the lease car for more than the residual value at the end of the lease.  Those would be either "luxury" or low mileage cars.

 

One thing I've learned in life (and I'm a senior citizen) is that I'll always have a car payment.  I want a reliable, comfortable, modern car. That way if I decide to take a road trip of 500+ miles, I can just jump in the car and go.   And since I drive a lot of miles, after 5 years of payments, my car is now old, and I'm ready for something more modern.  Technology has done a lot just in the past few years what with Navigation, Bluetooth systems, MP3 devices etc etc.  My current car, bought last year, doesn't even have a CD option at all.  It assumes everything is MP3!

 

Drive by wire, sophisticated adjustable suspension systems, and now lane detection and HUD systems have added a whole new layer of safety.

 

Added benefit to leasing--Who cares if your car is long lasting???  You're turning it in anyway! :P

 

I'm not afraid of a payment because I've arranged my life so that I have sufficient cash flow that my lifestyle is never affected by any reasonable payment.  I own four vehicles and three are currently paid for.  So life is not too bad. :)

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Hi Anatess,

 

Yes, your shoe comparison is very good.  Well made shoes won't lead to foot problems.

 

I recently sent my Mephisto shoes back for full refurbishment.  It cost $140, but I've had these shoes for almost 5 years, and they'll be good for another 5.  At which point I'll send them in again!!! :)

 

Over the last twenty years, I've only bought shoes twice!!! :eek:

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  • 3 years later...

Just wanted to resurrect this thread after....4 years...and update my view.

Leasing is by FAR the better way to go (if you can afford the monthly) for driving newer cars.

It's a highly controversial view, with strong opinions on both sides, but I fall strongly on the pro-lease side of things now-a-days (having gone through 3 leases now (yes, that's right...3 in a matter of 4 years. Trapped in a lease, my foot.)

Obviously there's no getting around the fact that driving older, cheap cars is cheaper than driving newer ones, so that comparison isn't really what needs to be made. If one is willing to drive older cars, then one is willing. But...if one is going to drive newer cars and that is a priority, leasing wins, hands down, imo.

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If you want a new car every 3 years and you keep your miles under 12k/year, then leasing is the way to go.

I like a good car,  but I am not willing to pay for new and take the new car hit.  I usually go for cars that are 5-7 years old, in great condition and have low miles.  These generally will need some upfront work...  New tires, brakes, struts, air filter, fluid changes, etc,  but most of this stuff can be had for $1500 or less.  

Basically have a car that will last at least 10 years with not a lot of maintenance and your average cost of ownership is around $100- $120/month.  No lease is going to touch that.  Insurance is much cheaper as well.  After 5 years, I take collision of the policy.  I figure if it gets totaled, get another car.

But then again I have 5 cars...  Do what I can to keep those costs down.

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My car-buying-style is not compatible with lease options but I'm gonna take this opportunity to share my story.

I bought a slightly used Cadillac - only had less than 10,000 miles when I got it.  I SUPER LOVE THAT CAR.  I named it and everything.  The car now has 180K+ miles on it, paid off many years ago.  It's still a fancy car even for today's standards.  My husband asked me if I want another car because the new Cadillacs have bells and whistles that mine doesn't have like a well integrated mobile to dash and he's not sure if we should continue to take my car when we travel all over the country.  I sniffled.  Made me sad.  Then my husband thought about having car payments again and he shuddered... made me smile.  Hah hah.  His fancy sportscar is also hitting 150K+ miles, paid off many years ago, and he couldn't get himself to trade it in either.  We look at pictures of our tiny kids in the car and laugh... it's like a part of our family life story, like the dogs.  Hah hah.

So, this is my story - I bought a fancy expensive car but in the long run, it wasn't really that expensive because it's still going strong without problems 170K miles later and I haven't felt a tiny bit of car envy for all those miles. 

Edited by anatess2
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