Leasing vs. Buying

[Diamondpilot]

And some more cash for the inspection when returned. If the car is not up to par, it will cost you to bring it back up. Example, may need new tires, brakes, etc. All costs to factor in when leasing. The return can cost you a small fortune.

I say buy!!

For that reason I only do 24 month leases. Have done at least 10 that way and never had a single issue on return. I never put money down also. Just want to walk in, make first payment, and leave.

Just like you said it has all changed. I will not lease again until its like the good old days.

Chris

 

[Mike Costello]

I leased a minivan for my wife as her job required much travel. The lease terms were 5 years and no more than 75,000 miles to turn in. I thought this was quite generous of the bank(one of the majors) and happily went my way.
It turned out to be a major mistake on the bank's part and they wound up eating a lot of leases because the residual values didn't hold up.
Since I take care of my vehicles, I offered them fair market value for the van and they still wouldn't let me buy it. They carried their lease fiasco down to the bitter end with me and a lot of other people. The result was most of the vehicles went to auction at givaway prices.
I never leased any vehicles again, but later found out the bank had taken a loss of upwards of 250 million dollars on their lease programs. I'm sure heads rolled on that one.

 

[Diamondpilot]

I leased a minivan for my wife as her job required much travel. The lease terms were 5 years and no more than 75,000 miles to turn in. I thought this was quite generous of the bank(one of the majors) and happily went my way.
It turned out to be a major mistake on the bank's part and they wound up eating a lot of leases because the residual values didn't hold up.
Since I take care of my vehicles, I offered them fair market value for the van and they still wouldn't let me buy it. They carried their lease fiasco down to the bitter end with me and a lot of other people. The result was most of the vehicles went to auction at givaway prices.
I never leased any vehicles again, but later found out the bank had taken a loss of upwards of 250 million dollars on their lease programs. I'm sure heads rolled on that one.

I am in the same situation. Leased a 2007 F-150 4X4 5.4L loaded with FX4 package, tow package, leather, sun roof, sat radio, power sliding rear window, center shift, running boards, and a bed liner. No money down, 24 months, $299 per month. Actually with tax and such its $324. Anyway the buy out is $25,000. Just turned 20,000 miles Saturday. It has to go back on April 17th. I have offered to buy it for $18,000 but they said no, they want $25,000.

Anyway 24 months at $299 comes out to $7,176. Add that to the $25,000 they want and it equals $32,176. The sticker on the truck was $39,000, so not to bad of a deal but I can get one for 18ish around here. I love this truck but not 25K worth. I am now having to search for a new truck.

I was told that if they sell them for less than the residual value its called a short sell. If they send them to auction and lose money on them which they always will they can right it off as a loss. Much better on the books for them this way. Kind of like the mortgage fiasco.

Chris

 

[Alan L.]

People who sell leasing give out misleading information. They talk about how cars depreciate and that is why you should never "buy" one. What they fail to mention is that depreciation is built into a lease, as well as interest. If leasing was always better, then how do leasing companies make a profit buy buying vehicles and then leasing them out?

It makes sense to lease in 2 situations. Number one, you don't want to worry with or deal with the value of the car at the end of the lease, since it is agreed upon ahead of time. You either buy at that price or return it. The other reason to lease is because you can't afford to buy, and you can get more car for the same payment. The lease is less because you have nothing of value at the end.

Sometimes the so-called guaranteed value at the end is not, because your idea of normal wear and tear vs the leasing company's idea may be different. Only problem is, your opinion doesn't count.

I think the leasing industry is pretty sleazy, they way they mislead customers. As long as you understand it, go for it, otherwise, buy.

 

[Diamondpilot]

People who sell leasing give out misleading information. They talk about how cars depreciate and that is why you should never "buy" one. What they fail to mention is that depreciation is built into a lease, as well as interest. If leasing was always better, then how do leasing companies make a profit buy buying vehicles and then leasing them out?

It makes sense to lease in 2 situations. Number one, you don't want to worry with or deal with the value of the car at the end of the lease, since it is agreed upon ahead of time. You either buy at that price or return it. The other reason to lease is because you can't afford to buy, and you can get more car for the same payment. The lease is less because you have nothing of value at the end.

Sometimes the so-called guaranteed value at the end is not, because your idea of normal wear and tear vs the leasing company's idea may be different. Only problem is, your opinion doesn't count.

I think the leasing industry is pretty sleazy, they way they mislead customers. As long as you understand it, go for it, otherwise, buy.

I agree and disagree. Some leasing companies are sleazy, some are not. My sister-n-law got caught up in a bad deal on a Cherokee. Now I look over and go with her on anything she buys.

Leasing can be a good option if you do not plan on keeping the vehicle and the deal is good. For example I leased my F-350 then bought it out. Did not plan on buying it but it never gave me any problems to speak of so I figured it was a keeper. The lease equaled about $12,000 and I bought it for $28,000. The truck stickered for $48,000. I probably could have talked them down to $42,000 but I now have $40,000 in it. Plus if it was giving me problems I could have just turned it in.

The other situation that is good is for a business. You do not have to concern yourself with major maintenance or replacing items like tires or brakes if you do a 24 or 36 month lease. I would never do any more than 24 months myself. The company I work for leases 100's of cars for the executive and sales staff plus the maintenance vehicles that support or 18 sites. They actually give the employee driving the vehicle the first option to buy it then they become available to all employees through a sort inter office craigs list. I have not personally bought any but know quite a few fellow employees who have with good results.

Chris