I've never leased, always paid cash for a new vehicle.The truck we'll be buying (Expedition) will not be used that much. In fact our 08 has only about 57k.

So we won't have to worry about excess mileage charges. Does that mean it would make sense to consider leasing? What are the pros and cons?

I do know leasing does not relieve the headache of negotiating. Leasing costs on the same vehicle at the same msrp will vary. Suppose I negotiate my best deal without indicating whether I intend to buy or lease. I won't be trading. So would leasing be advantageous?

Don't know if you're a Dave Ramsey fan, but he calls them "fleeces". Basically, you're paying a monthly payment for something you'll never own.

lease a car/truck if you flew into town but don't live there..

otherwise, buy a used one for cash and it's yours when you drive away.

Leasing works for my wife and I, we just turned in a Altima and leased a Rogue.

We are close to her work so mileage is a non issue. The monthly payment is about the same as our cell phone bill.

I struggled with it when we did our first one, but it is not that bad of a deal. There is no winning in cars, even if you get one for free there is maintenance. My daily driver has 180,000 miles one it and needs about $2500 in repairs, plus tires.

It's going to cost us $8600.00 to drive the Rogue for three years. Anything goes wrong it's under warranty. Sure when you turn it in you have nothing. What do you have at the end of a two year cell phone contract, that's right nothing.

If you have a great score you can do the lease with no money down.

They do inspect them before you turn them in, so be careful with it.

Leasing doesn't make good sense unless you can expense the lease charges. In other words, if you are operating a business and they will be expenses that reduce your taxable income.

If you don't, buying is better. Unless you absolutely must drive a more expensive car than you could afford note payments on. Lease payments are usually a little lower.

Ok...let me qualify this before I start. There are exceptions, significant ones.

However, in the overwhelming majority of cases leases are not your best option from a purely financial point of view.

I have built several financial models and in every one I built the best option is to buy. The reasons are systemic to the environment. In all models the consumer pays for the overhead of managing and administrating the lease. In a purchase those costs are non-existent (cash) or significantly reduced (financed).

Do what you feel is best for your situation but understand that there will be a financial cost for leasing. Be sure you are receiving additional value (service, convenience, etc) in return.

quote:

Originally posted by Hammer1967:
What do you have at the end of a two year cell phone contract, that's right nothing.

Huh?

I'm just not getting the comparison.

I bought a truck in '09 on 36 months no interest. I had the money, but it was earning income. When my truck was paid off, I had-uh-a truck. I still have it. And at the end of a 2 year cell phone contract I have a phone. Almost every model I have run concludes buying is a better deal. Buying used cash is a good option, buying new and running the vehicle is another. But do what works for you.

I love the people that say "with leases you never own anything", on a buy you don't own it until you pay the last payment either, and the vast majority of people never pay off the car they're "buying" because they trade it in with negative equity to buy the next vehicle. And, buy the time they actually paid off the vehicle and own it, it's an old POS.

Lease is another form of ownership or purchasing a car. Some vehicles leasing comes out a lot cheaper, more than half of the time not. You really have to look at your lifestyle. A german car-LEASE.

The good thing about leases is, the payment you agree on is all you pay. Almost always will the car be under warranty, all wear items are new, so you basically drive, change the oil and turn it in at the end. Some cars lease exceptionally well. Leases work well if people know they're going to get a new car every 3 years. ALSO, you can always buy the lease vehicle for the residual value in your lease contract and a small paperwork fee. So if you're over the mileage, really like the car, or it's worth a lot more than the residual, buy it when the lease is up. Also another advantage is if the car gets totaled, you're never upside down on it, just go lease another car.

Buys work better for high mileage drivers, people that like to keep the car a very long time, people that abuse the crap out of a car.....etc. But unless you're going to keep a vehicle for over 9 years, you're best leasing (money-wise usually). You about break even on paper between a buy and a lease by owning 7 years, but then when you figure in the extra repair expenses, it comes out to 9 years as the break even in most cases.

Pros / cons like anything else... without knowing all the details it's tough to say for sure.

In general - the best thing to do is buy a moderately priced reliable car and keep it as long as possible - well past the point the car payments are gone.

But leases can make sense in some cases. Just depends.

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It has always griped me that a leasing company requires me to pay the personal property tax on something I don't own.
When I was younger, an older wiser man told me, "lease anything that depreciates and buy anything that appreciates".Good advice but works better if you buy a Ferrari or a Rolex, instead of a Chevy and a Timex .

quote:

Originally posted by NK402:
It has always griped me that a leasing company requires me to pay the personal property tax on something I don't own.
When I was younger, an older wiser man told me, "lease anything that depreciates and buy anything that appreciates".Good advice but works better if you buy a Ferrari or a Rolex, instead of a Chevy and a Timex .

That's not the leasing company that requires you to pay the personal property tax, that's the state mandating that. The state ALWAYS gets their tax.....

quote:

What do you have at the end of a two year cell phone contract, that's right nothing

A cell phone

I think it depends on whether you keep your vehicles or have to have a new vehicle.
As a person who has owned his F150 since new 18yrs ago, I see the equity in my vehicles as something I don't want to give up.
After 13yrs without a truck payment I can not see the benefit of a lease.


If a person is leading a car just so that they can put a vehicle in their driveway that they otherwise could not afford, I think it's a bad idea !

My wife & I are "Pay it off Quick" folks.
We paid off our home after 9yrs.
Own four of our 5 vehicles (the motorhome is yet to be paid off).
Paying them off is like giving yourself a raise.
Or you can invest the money for your next vehicle purchase.

Some lease deals are better than others.

Years ago, Ford ran Taurus leases for 23 months at $199 per month. Over the years, we did 5 of these at roughly the same price. The residuals were great and at the end of each lease, we bought the car and immediately sold it.

We usually made around $1,000 over the cost of the residual. That cheapened the cost to about $150 per month for ownership. I don't know how we could have been much cheaper for a new car under warranty for a total of 10 years.

We now buy because the great lease deals seem to have evaporated.

Mike

Virginia is rated as a terrible state to lease in. I'm pretty sure you'll pay sales tax on the msrp even though you're only leasing.

Heck I bought a left over Silverado HD last August. Got 11.5k off the sticker but still paid sales tax on the msrp. You gotta keep feeding the parasites.

Every time that I've looked into leasing it really didn't make sense for me. A 3 year lease was cheaper than conventional 3 year financing but hardly anyone finances for that short a time because the payment is too high. Most people finance for 5 to 6 years but a lease for that long doesn't really make sense because the vehicle will likely be out of warranty and you don't want repair bills on a car you can't sell and after 6 years you probably want some equity out of your investment.

What's wrong with the '08 with 57,000 miles that you already own?

And remember at the end of the lease period any damage above "normal" wear and tear, like door dings, minor scuff on a bumper, you may be oaing to repair it. And if tires are below a certain depth you will be paying for a new set.

I used to work in new car dealerships parts departments and I never felt that leasing was the right decision for us. If I could not afford to buy new, I would buy used.

quote:

Originally posted by jhe888:
Leasing doesn't make good sense unless you can expense the lease charges. In other words, if you are operating a business and they will be expenses that reduce your taxable income.

If you don't, buying is better. Unless you absolutely must drive a more expensive car than you could afford note payments on. Lease payments are usually a little lower.

This sums it up nicely.