| Author |
Message |
    
CageyD
Citizen
Username: Cageyd
Post Number: 690
Registered: 6-2003
| | Posted on Wednesday, May 31, 2006 - 10:26 pm: | 
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Hi all, I need a new car and cannot stomach the thought of sinking hundreds a month into the hole that is a car. So, I'm thinking about leasing for the first time with the plan to take the extra money I'm not putting to a 5 year car payment and instead putting it towards my retirement.
But, I imagine there are all kinds of do's and don'ts with car leases. If anyone has advice or guidance it would be appreciated - everything from first signing to terminating the lease.THanks |
Ralph Furley
Citizen
Username: Fstewart
Post Number: 2
Registered: 11-2005
| | Posted on Thursday, June 1, 2006 - 6:41 am: |
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There are some special cases where leasing a car makes good economic sense, particularly if you use it for business. But in most circumstances, car leases are a convenient way to have a new car every few years. If you want to save money, but a good used car and keep it for ten years or more. |
Brett
Citizen
Username: Bmalibashksa
Post Number: 2362
Registered: 7-2003
| | Posted on Thursday, June 1, 2006 - 8:01 am: |
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I lease a new car every 2-3 years. Right now the Saab Lease is for 24 months and works well for me. My commute is ½ mile, so I don’t worry about miles. The reason I do it is that I NEVER want to deal with repairing, maintaining, or selling a car. |
Bob K
Supporter
Username: Bobk
Post Number: 11684
Registered: 5-2001
| | Posted on Thursday, June 1, 2006 - 8:33 am: |
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1. Once you start leasing you will always have a car payment every month. You won't get that nice feeling when the car is paid off and you have some spare cash in your jeans.
2. Offsetting that is that you aren't making a big down payment and since you are "buying" only a couple of years of use of the car the payments should be less.
3. For 99% of us leasing doesn't make economic sense. However, it is convenient and having a new car every few years is great.
4. Leasing is complicated and their are 1,000 ways for the dealer to structure the deal. It is easy to overpay. I have spent a lot of time trying to figure out residuals, money factors, etc., but have found the best way is just to shop until you drop.
5. Always know what you want before going to a dealer and know the dealer cost.
6. Scan the auto websites for deals. Often manufacturers subsidize (called "subvent") certain models to move inventory with low interest rates or an artificially high residual value. Even then, you should be able to get a lower monthly price because these deals are often based on MSRP and the dealer will come off this. |
LilLB
Citizen
Username: Lillb
Post Number: 1737
Registered: 10-2002
| | Posted on Thursday, June 1, 2006 - 8:40 am: |
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Found this lease/buy calculator which may help with the decision
http://www.bloomberg.com/analysis/calculators/leasebuy.html
Some more food for thought:
http://www.leaseguide.com/lease03.htm |
Miss L Toe
Citizen
Username: Miss_l_toe
Post Number: 503
Registered: 10-2003
| | Posted on Thursday, June 1, 2006 - 8:44 am: |
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Also check out the very informative leasing section on this brilliant website:
http://www.carbuyingtips.com |
peteglider
Citizen
Username: Peteglider
Post Number: 1982
Registered: 8-2002
| | Posted on Thursday, June 1, 2006 - 8:59 am: |
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The "trick" in finding a lease that is truly competitive with buying is to find a "sub vented" lease -- where the manufacturer is subsidizing the cost.
Finding those is tricky -- Edmunds.com used to provide all that incentive information. Not anymore (but its still one of the better places to start, I think).
To find those, look at edmunds, kbb, etc and check out the links and lease information for models you're interested in.
And remember -- because you lease -- you have to negotiate even harder on the deal -- 1) the purchase price, 2) the money factor, 3) the buy out price at the end. The lower you can get all 3 of those, the lower your payment.
Good luck -- Pete |
jet
Citizen
Username: Jet
Post Number: 1129
Registered: 7-2001
| | Posted on Thursday, June 1, 2006 - 11:46 am: |
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I've been leasing cars & trucks since the early 90's , I have never repeat never turn a vehicycle in that was worth more than the residual. Since the early 90's all I have ever done was change the oil & rotate the tires. You go long a 66' Vette , you rent a 06' Tahoe. |
Bob K
Supporter
Username: Bobk
Post Number: 11692
Registered: 5-2001
| | Posted on Thursday, June 1, 2006 - 1:17 pm: |
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Pete, manufacturers websites usually have a section for current "specials" and their is often an ad in the papers. Also, the higher the residual (what you call buyout price) the lower the payments. |
John Caffrey
Citizen
Username: Jerseyjack
Post Number: 272
Registered: 11-2005
| | Posted on Thursday, June 1, 2006 - 3:09 pm: |
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Remember, this is New Jersey where no one walks.
Make sure your driving pattern will not take you over the alloted milage when the lease is up or you will be owing sometimes thousands of dollars at the end of the lease. |
greenetree
Supporter
Username: Greenetree
Post Number: 7879
Registered: 5-2001
| | Posted on Thursday, June 1, 2006 - 3:25 pm: |
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Leases are just car loans with a balloon payment at the end. Any money you save up front, you'll pay at the end. Unless you like to get a new car every 2-3 years, in which case you will have a new monthly car payment. As others have said, it's personal preference in terms of car ownership.
The disclosure laws for leases are different than for loans; as someone said, there are 1000s of ways to structure it. The best way not to get screwed is to do the research, pick the car, determine the best price and then go shopping. Use the total price of the car, not the monthly payment, to determine how you will finance. The price of a product should not change based on the method of purchase.
If buying means that your car payment is more than the lease payment, consider that you won't owe any money once it is paid off and you can then put your car note into savings for a few years until you need to replace the car.
We still have our 1991 Mazda; we use it only for around town errands and going to the train station. But we haven't had a note on it since 1994. My current car will be paid off in a couple months, and I will drive it for as many years as possible. With any luck, we'll have a 2-3 year period with no car notes at all & will translate into additional savings. |
Bob K
Supporter
Username: Bobk
Post Number: 11694
Registered: 5-2001
| | Posted on Thursday, June 1, 2006 - 3:41 pm: |
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Greenie, do you really put your car payment money into savings after you pay off the loan? Very few of us do and then all of a sudden coming up with another 400 or 500 a month hurts a little.
ps: We have a 1997 Mazda Protege (named the shitbox delux by Mrs. K) that we will probably keep until it falls apart, is stolen or I get so upset with it struggling over South Mountain I drive it off a cliff.
If you put the former car payment of $400 a month in a savings account in four years you will have around $20,000 to put down on your new Bimmer.  |
greenetree
Supporter
Username: Greenetree
Post Number: 7880
Registered: 5-2001
| | Posted on Thursday, June 1, 2006 - 4:07 pm: |
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Well, with the Mazda, we did for the first 3 or 4 years. That's my plan with the VW, although, deep down, I don't know that the Mazda can hold out that long. It may be more like a year or two.
I'm pretty neurotic about saving. Although, I should have a lot more to show for it than I do. Seems like the house sucks up all my good intentions. We don't call it The Sponge for nothing....  |
newone
Citizen
Username: Newone
Post Number: 385
Registered: 8-2001
| | Posted on Thursday, June 1, 2006 - 4:14 pm: |
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www.carbuyingtips.com
very informative web site. |
sportsnut
Citizen
Username: Sportsnut
Post Number: 2436
Registered: 10-2001
| | Posted on Thursday, June 1, 2006 - 4:33 pm: |
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I have a spreadsheet that can help you calculate the amount of the payment based on the money factor (interest rate), capitalized cost and residual. Its very accurate - I used it a few times before I finally decided to get off the leasing carousel. PL me if you'd like it.
I agree with what others have said. The best deal is to purchase a low mileage used car as it is almost always a better deal to purchase rather than lease. |
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