Pro's and Con's either way I guess. The wife drives a new top of the line Caddy every two years or less with the lease. They pick up deliver free loaner for service etc. just got the new tags today for her CT5 PL.
Pro's and Con's either way I guess. The wife drives a new top of the line Caddy every two years or less with the lease. They pick up deliver free loaner for service etc. just got the new tags today for her CT5 PL.
Fully agree but wasn't sure I was going to buy it when I purchased the extra miles.Originally Posted by Duece22
Remember you pay tax on a lease every month, probably not in the lease price. You also usually have to have higher insurance coverage. I leased some inside the company where its a dead expense. Its been cheaper and easier to buy overall. Not to mention some lease rates quoted require something down, which is pretty stupid as you are just pre paying them.
It all depends on the terms and residual value of the lease. Also, 4Runners tend to hold their value so that makes it a safer bet. Add up the lease payments, add it to the residual value an see what you come up with. Someone mentioned it already but you will need higher insurance on a leased vehicle. Add it all up and I’d bet you will buy outright. There are good reasons to lease. I have in the past and may do it in the future.
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Back when I sold cars we got paid commission on sticker price on leases. As a salesman I loved them as a consumer I would not lease unless there were tax advantages for my business.
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just what he said,i leased one and the residual was 16k and when i checked book value it was worth 10k i was so happy to turn it in,a buddy of mine leased a silverado and book was 5k more than the residual so he bought it and sold it outright and got the 5k
I had an employee that leased a Dakota in the late 90's. It did not turn out well for him at all.
Toyota will run some crazy good lease specials, I got my wife a Rav4 a few years ago for $199 a month, the residual was crazy high so we just turned it in when we were done. It was the car she wanted... it was just a Camry with a high roof line.
There are reasons to buy your lease at the end, if the residual is lower than the vehicle is worth, that is happening with lots of trucks right now. If you went way over on your mileage and you want to finance that financial burden at new car rates over a few years buying at the end of lease might make sense. I would dump it 100% if it was wrecked and repaired unless you have a dealership willing to trade you more than the residual.
The affective interest rate on a lease is around 14 percent or so. It’s not designated on the lease as an interest rate because technically you are not buying the vehicle. It’s actually represented as a fancy financial term that is called cost of capital.
You can easily back into to the interest rate if you know how to do basic math. Dealerships make a fortune on leasing vehicles. Way more than outright selling a vehicle. The worst car accidents happen on the show room floor.
My father leased a Ford Excursion back when they first came out. It didn’t turn out well for him.
I always love reading financial topics on these forums. It’s the only place I’ve ever seen where you can buy a heavily depreciating asset, run it hard, hang it up wet, and everybody always turns a profit. It’s like the degenerate gambler at the casino or degenerate lottery player, who, when you talk to them, they are always beating the odds and winning a bundle! It would be funny if it wasn’t so sad!
Last edited by D_Wade85; 10-27-2020 at 08:55 PM.
Nothing wrong with a lease but you need to take a close look at the numbers. A lot of times it is cheaper to buy outright but not always. There will be a buy out at the end of the lease. I leased on truck back in 15 and it worked out really well for me. The buy out was low enough and I was able to get a low payment. Three months before lease was out I traded it with equity and was 10k over miles. Best thing to do on a lease is trade it as if you own it and never lease with a large down payment.
Why would you want cheap payments now and then more expensive payments later when the vehicle isn’t shiny and new anymore?
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Regular leases are stupid. Lease specials can be advantageous, but not all of them. The only lease I ever did was done at a negotiated discount price, same as buying outright, there was a insane lease special going on that had an inflated residual and low money factor. That combined with a good price on the vehicle made for a good enough deal for me to lease over buying. You really need all 3 in your favor, no point getting a good price and a good residual if the money factor is .0060... I think, its been a few years, that our money factor was .0013 which is roughly 3% interest, the deal maker was the high residual, it ended up being $4k more than what the car was worth when we turned it in. Also, in my state at the time it was a 10% tax break on the majority of the price of the vehicle, they have graciously reduced our sales tax to 9.95% since then, I am so thankful for my overlords generosity to save .05% on my purchases.
You will end up paying at least sticker price or even a little over......
Leasing is really for businesses. Tax code is silly but you can pretty much write off the full lease amount on any vehicle but if you buy it cash or make payments to buy it you then it depends on the type of vehicle you buy. $90K F350 Limited you get the full write off as technically that's a work truck even if it never does a drop of real work, you but a 90K Luxury sedan and the write off will be likely under 50% and you will owe tax as profits for the amount paid above the write off amount. It varies from car to car there is some crazy table accountants have to use to look up that the IRs puts out after they decide what you can use in your business. Alos it changes from year to year, but if GCWR is over 10K you are usually good as it is considered a vehicle capable of towing work trailer.
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That was not my experience at all. Right out of high school I leased a 2000 Dakota for $113 per month (those were the days). I leased it for two years and then bought it out. My total out of pocket was about $7,000 below sticker.
I did the same thing with a 2008 Sierra and 2017 Sierra. The 2008 worked well, but the 2017 was totaled before the lease was up. I'm now doing the same thing with a 2019 Ram. I would've had payment around $650 for 72 months ($46,800) if I bought it new, but my lease payment is $309 flor 36 months ($11,124) with zero down. At the end of three years I will owe $27,000 to buy it out. Add in the $11,124 I paid for lease payments and the truck cost me $38,124 instead of the $46,800 had I bought it out. The key to making the arrangement work is to not be picky about the color, trim package or options on the vehicle you are looking to lease or buy. I always tell the dealer what vehicle I am looking for, but when they ask about color and options, I tell them it doesn't matter. They then locate the best deal and we work things out from there. This doesn't mean I will put up with some horrendous color with no options, but I'm flexible with what I get.
Ditto
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The way I look at it is you're always gonna have vehicle expenses, might as well have a new vehicle. I haven't had to pay for any kind of maintenance/repair other than oil changes for a longggg time. Plus, that new car smell is about as addictive as the sight and sound of a frog getting blown up.
Not true, I’ve never paid close to sticker on a lease. Purchase price, money factor, both are negotiable. Dealers love to mark up the MF and make a nice profit from it. I won’t pay anything over what the manufacturer sets the money factor at. I just go to another dealer if they try that game. Just know all the numbers such as money factor (interest rate) and residual before you go to the dealer. The residual is set, not much you can do about that except change your yearly mileage. You can go to the Edmunds forum and give them your zip code, mileage, lease term you want, and a guy will give you the MF, residual, etc. If the dealer gives you a MF higher than what the manufacturer set I’d start with negotiating that before doing anything else. It can make a big difference in your payment.
Alot of folks around here lease but they work for Nissian and they get the employee and family discounts.
Get whatever vehicle you can pay cash for.
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