F150 - buy out my lease or Lease new?

[coobie]

I am not too familiar with trucks but I have been shopping small vans (Ram Promaster City) and crossovers (Mazda CX5).

I find two year old and three year old vehicles with 20,000 to 35,000 miles on them and a probable trouble free service life of 200,000 miles have depreciated 40%. Many are vehicles off-lease.

With autonomous driving not far in the future people will not pay much for used vehicles.

I find 40% depreciation astounding.

When we tip into recession and repossessions increase, used vehicle prices will decrease further.

Have to disagree on the used car/truck prices.IMHO rural folks will always want to drive there own vehicles verses the autonomous ones.City slickers will love them.

 

[Sheldon Hamblin]

I have done both. Once I leased a fully loaded GMC Suburban, 454, all power etc. at the end of the lease, I purchased it for 1/2 the original purchase price.
Ran that into the ground. Other times I wasn't happy with a vehicle and turned it in. In my opinion, unless you run a vehicle into the ground, you will loose money on it in the trade. If you like having a new vehicle every three years it seems cheaper to lease. I like having a dependable vehicle, so it doesn't pay for me to have a vehicle beyond 150,000 miles.

 

[bspeedy]

Have to disagree on the used car/truck prices.IMHO rural folks will always want to drive there own vehicles verses the autonomous ones.City slickers will love them.

Agreed. We are 30 years away from widespread autonomous vehicle usage. City folks will have it in 10-20 years. Fortunately, I care nothing about their preferences or lifestyle

 

[dalola]

Big decision coming up at the beginning of April. Whether to buy my current lease truck at about $25,000, or lease another new one?

It is a Super Crew 4 x 4 with the 5.0 L engine, the 5.5 ft. box, and the "302A" package which includes the XTR goodies, and I also have a tailgate step, a bedliner, navigation, and 20 inch wheels. It will have about 30,000 miles by April, when I have to make the decision. If I give it up for a new one, I will have to pay about $1500 in excess mileage charges.

If I buy out the lease, I will want to add a warranty, which we cost me an additional $2000-$3000.

Current lease payments are about $680 per month, after-tax. (13% here in Ontario.)

I can borrow the $25,000 for about 4% interest.

So, what to do? The Ads in the Toronto Sun are calling me!

It's really a personal decision, there are pro's & con's each way. Sometimes a dealer will waive the over-miles to keep you in a new lease.

Personally, I get a new lease every 2-3 years. I like trying new vehicles, but I don't want to own them. Let the bank/mfg'r carry all the risk. Never worry about a repair bill, or diminished value should you have an accident. There also may be tax advantages, pending your situation.

Some lease no-no's: Never put money down, don't leave miles on the car (under mileage), Don't go excessively over-mileage (>10K), and keep within your budget.

I'm currently leasing a '15 F150, and really love the truck. Plan to turn it in and lease another '18 later this summer.

 

[Todd727]

I have done both. Once I leased a fully loaded GMC Suburban, 454, all power etc. at the end of the lease, I purchased it for 1/2 the original purchase price.
Ran that into the ground. Other times I wasn't happy with a vehicle and turned it in. In my opinion, unless you run a vehicle into the ground, you will loose money on it in the trade. If you like having a new vehicle every three years it seems cheaper to lease. I like having a dependable vehicle, so it doesn't pay for me to have a vehicle beyond 150,000 miles.

The real question is, how much did you end up paying for the vehicle? Total of all lease costs and payments, plus the total of all the payments to cover the purchase price at the end of the lease. Compare that to how much the total of all payments would've been had you just purchased from the start.

 

[check]

It's really a personal decision, there are pro's & con's each way. Sometimes a dealer will waive the over-miles to keep you in a new lease. Personally, I get a new lease every 2-3 years. I like trying new vehicles, but I don't want to own them. Let the bank/mfg'r carry all the risk. Never worry about a repair bill, or diminished value should you have an accident. There also may be tax advantages, pending your situation. Some lease no-no's: Never put money down, don't leave miles on the car (under mileage), Don't go excessively over-mileage (>10K), and keep within your budget. I'm currently leasing a '15 F150, and really love the truck. Plan to turn it in and lease another '18 later this summer.

The dealer called me again yesterday, and said I could lease a new 2018 for about the same price I am paying now per month. However, now it is a three-year lease instead of a two year. If I go with two year, my payments will go up by about $120 to $30 per month, at over $800. Not going to happen. At a certain point you reach a threshold, and say to yourself "well I think I should buy the current truck". And there is not much new for 2018 anyway.

Nonetheless, I still do have until the beginning of April. Maybe some better deals will come up. Ford comes up with the most amazing incentives, and they tend to come in the spring and in the fall.

 

[dalola]

The dealer called me again yesterday, and said I could lease a new 2018 for about the same price I am paying now per month. However, now it is a three-year lease instead of a two year. If I go with two year, my payments will go up by about $120 to $30 per month, at over $800. Not going to happen. At a certain point you reach a threshold, and say to yourself "well I think I should buy the current truck". And there is not much new for 2018 anyway.

Nonetheless, I still do have until the beginning of April. Maybe some better deals will come up. Ford comes up with the most amazing incentives, and they tend to come in the spring and in the fall.

If you're getting a similar trim '18 model for the same money, that's a fair deal (unless you were paying too much for the first one), especially considering you were over miles. Lease term of 2-3 years shouldn't make much difference to you, other than cost. Always go with the cheaper term, which can vary year to year, model to model. You can always negotiate an early turn-in of a 3 year lease after year 2 anyway.

 

[yomax4]

After reviewing truck pricing that 25K is a pretty good buyout. I'd do that. Most factory certified or low mile 2016 trucks I see are still 36K

 

[check]

If you're getting a similar trim '18 model for the same money, that's a fair deal (unless you were paying too much for the first one), especially considering you were over miles. Lease term of 2-3 years shouldn't make much difference to you, other than cost. Always go with the cheaper term, which can vary year to year, model to model. You can always negotiate an early turn-in of a 3 year lease after year 2 anyway.

That' what the dealer said!

 

[check]

The real question is, how much did you end up paying for the vehicle? Total of all lease costs and payments, plus the total of all the payments to cover the purchase price at the end of the lease. Compare that to how much the total of all payments would've been had you just purchased from the start.

Good point, Todd. But it's real difficult to figure it out, because you need to factor in the fact that the lease purchase price was a bit more because of the "low" lease interest-rate. People think of this interest-rate issue when they buy the trip out right, but most people don't realize that the same issue applies with low lease interest rates. And Ford is fond of using low interest rates on their leases, sometimes as low as 0% or 0.9%. And don't forget, your interest is on the whole value of the truck, even though when you turn it in you do not pay the residual value.

You really have to be sharp to make these decisions, because a lot of the information is not readily offered it to you. You have to drag it out of them, or do the calculations yourself.