Am middle aged and want to drive my "dream car" just for fun and frolic for a while but maybe not forever.

Is my thinking flawed here:

1) if I lease for 3-years the bank still owns the car as I make the lease payments.

2) if I buy for 3-years the bank still owns the car as I make the purchase payments.

I may not want the car after 3 years or so and may want to move onto another vehicle of some sort.

I have never leased a car before but a smaller downpayment is attractive and it kinda feels that I'm essentially "renting" the car for 3-years which is kinda ok by me.

I've also learned of people at the end of the lease leaving "equity" on the table as they walk away from the lease that they should have received back and that the dealer didn't tell them about was rightfully theirs.

This would not be a high-mileage driven car as well so I'm not worried about having to pay and "mileage overage" costs/charges at the end of the lease.

Anywho just wondering if you have any horror stories of leasing a car and/or should it just be done under certain circumstances etc?

Thanks in advance for any first-hand goood or bad experiences.

***Anytime you can finance a car at 0% is a time to buy rather than lease, no matter what.***


Short of that it can be complicated but not overly so. Since you know you only want the car for three years, it wouldn't be too difficult to 'math-out' each scenario and see which one is cheaper.

Here's something you don't know for sure, how much mileage you will use. We may think we will only use such and such, but things happen. You might not want to be in a place 2 years from now where you are 'mathing-out' extra mileage costs.

I used to lease my vehicles when interest rates where higher and didn't want to be strapped to a long term payment. Doing so lowered my monthly out of pocket costs, thus allowing me to drive a newer, nicer vehicle. The down side? At the end of a decade I built no equity or ownership.

If you're able to get a decent deal on a used vehicle, obtain a low interest rate, and avoid an instant depreciation hit? You won't be tossing a$$ets to the wind.

Just my thoughts.

Buy lease return vehicles. By then the big depreciation is over and you can afford a really nice car - if you shop around and are selective you can get a great car for a lot less than new. You may not be able to get 0% interest, but you can get pretty low rates at a Credit Union. Get a pre-approval from them, even if you don't end up using them you can use the letter as leverage.

I could have leased trucks for my farming operation but the restrictions on use and mileage just didn't make economic sense. So I bought older trucks and drove 'em 'till they fell apart.

Ron Burr

Just try to do your own math in a 3 year term.

A car lease is basically renting a car. You pay $400 a month and at the end of the new car lease, you turn it back in. If you want to buy it, you are buying it for what they estimate at the beginning of the lease to be the market value. At the end of the lease, it’s called the residual value. If you pay $400 a month for 60 months, you pay $24,000 before turning it in. The car will not have gone down in value more than that, because the car companies would lose money if it did. When they get the car back, you will have paid them more than the car has depreciated during that time.

During that time, you’re maintaining the car as if you owned it. You’ll get charged for excessive wear and tear, or if you put too many miles on it. If you rent it for $24,000 and it went down $15,000 in value, then it cost me $9,000 to rent this car for this period of time. That is their profit during that time.

Another thing is that the interest rates on a vehicle lease are not disclosed because the Federal Trade Commission has determined that this is not a debt, so there is no federal disclosure involved. Therefore, you have no truth in lending disclosure sheet. The interest rates you get charged are unbelievably high. That’s where you’ll realize you got screwed over.

People get sold automobile leases because they are told that it’s what sophisticated people do. But as it turns out, the car companies make more money on leasing you the car than if you bought the car with cash, according to the National Auto Dealers Association. Broke people think ‘how much down and how much a month’. Rich people think ‘how much’ period. But don’t lease a car.

As an idividual?

No Pros, only cons.

Never lease unless you are a business with tax reasons to lease.

As an individual?

Never lease, it's almost as bad as financing your purchase, but it's still worse.

If you cannot afford a new car, save your money until you can afford it.

Period.

^this.

Leasing is always a way for dealers to make more money off you.

The down payment on a lease is usually very high. Do the math. You should only lease if you like changing cars every 2 or 3 years. Some rich people like to do this. If you plan to drive the car longer than the lease period, buying is usually a better deal.

I leased two Mercedes in a row. Drove a nice car for six years. Negotiated an excellent payment, with zero down and it was only fifty bucks more than a top of the line Accord. This was during the 'downturn' and dealers were eager to get a car out the door.

On the second one we went over on the mileage, so we sold it privately and walked away with a few bucks in our pocket.

Leasing a car with high depreciation is a bad idea because you can't sell for a profit and are stuck giving it back to the dealer. Also, you have to take very good care of the car so it is sellable by private party for a good price.

So the big question that nobody has asked: What is your dream car (that you might lease)?

Mine would be a 2015 Challenger SRT with the Hellcat engine. I could have some fun in a car like that.

Get yourself in the position in life that you do not finance or make payments of any kind for things that depreciate.

This is difficult when you are younger. You must save and live well below your means to accumulate enough to buy cars with cash when you are older.

If you lease a car, you put money in, (even at 0%) every month and at the end, you don't have the car that could last many years free.

On the other hand, the money you pay for a car up front could have been earning interest that could be more than the payments.

Investments can be hard to predict to weigh what is more cost effective when it comes to buying a car.

I would not ever lease. I'd rather own something well below what I can afford and accumulate. I have accumulated multiple cars this way. I have not made a car payment in decades.

Weigh and study your financial plan in life. Remember the most important tip: benefit from compounding interest by starting young to save and invest. A car depreciates. Lease payments are money out the window. Invest in yourself first.

OTOH, people have been successful with all kinds of money management approaches, including leasing cars.

My advice is worth what you pay for it. :-) Zilch.

I bought an '08 Silverado 2500HD in January with 125K miles on it that had been very well treated for 25% of what a new one sells for. I'll drive it until it's worn out.

Ron Burr

yet another mid life crisis

Still not willing to lease....
I don't like the sound of it.

If its not about money, go ahead and lease it to see if its everything you dreamed of.

I'm currently in a lease on my 2013 Ford Focus. I own my own business so I get some tax benefits there. The mileage restriction is a bit annoying, but overall I've been happy with it. I'm single and don't have children so keeping it in good shape isn't too difficult. Prior to this car, I drove a 1997 Honda Civic for 13 years... so for me, this is an upgrade.

Pros:
- Tax write-off (if applicable)
- Full factory warranty/service agreement (I don't have to pay for any maintenance. This is pretty comforting, actually)
- Get to drive a new vehicle (I really like the way it looks and drives)
- Leasing lets you get more vehicle for less (adding two-tone leather seats, nice wheels, etc only added marginally to the per-month payment)
- I think this model of the Focus will hold it's value well.
- My neighbor works for Ford so he was able to set me up with a good deal

Cons:
- Mileage restrictions
- Cost (relative to other options--I was initially planning on buying a used 3-5 year-old car)

Again, overall I'm happy with my setup... but it's definitely not for everyone.

Cheers