Lease or Buy?

[Sylvus]

So I've had my car for 2.5 years, and I'm debating getting a new one.

I keep mentioning to friends that I want to lease a car, and they keep saying "why would you want to lease??" To which I reply "why wouldn't I want to lease?"

Historically, I've always bought. I've never kept a car for as long as the life of my loan, and all of my cars have been worth about what I owed or possibly just a little bit more, I don't think I've ever walked away with more than like $1000 toward a new car. Common sense tells me that with cars depreciating the second you drive off the lot, and no car retaining *that much* value, that a lease is a good idea for me.

First off, I'm not at all handy, and it is my belief that a lease is generally under warranty the whole time you own it? I see that as a plus, not to mention that most new cars shouldn't need that much service in the first couple years you own them. My current car I've owned for 28-30 months and haven't put 30k miles on it yet, so I'm not real worried about limited mileage every year, 15k should be plenty for me. Are there other concerns that I'm not seeing?

I was hoping to lower my payment by getting a lease, though the car I was looking into (a new Mercury Mountaineer - yeah I drive SUVs, save it) ended up raising my payment a little, so I think I'll hold off on getting that one. Also, is there a good website to find lease quotes or anything, or do you have to go through individual dealerships?

[Aslanna]

I base my response on no actual firsthand information... But I'd say if you keep a car less than 3 years and don't put on more than 12k a year leasing is probably the better option. I used to drive a lot somileage was always the lease-killer for me.


PS - Thanks for killing the environment with your SUV!

[Neost]

Consider finding a used car of the make and model you want. I never bought new, always bought used until I bought my current truck. I bought it new because I figured I'd drive it until the wheels fall off and regret doing so. GMAC loves me for it though.....

[Zver]

I get sick of driving the same car for more then a year so i lease all my cars for 24 month. This site LeaseCompare.com has a lot of good information. You don’t necessarily get the best price from them, but it will give you a ballpark numbers.

[Aabidano]

if you keep a car less than 3 years and don't put on more than 12k a year leasing is probably the better option.

That's the rule of thumb I've heard.

I don't like the idea of resigning myself to an eternal car payment which is what a lease amounts to.

Last couple I've bought new and kept for far too long so it's not a good option for me.

[Funkmasterr]

Something to also keep in mind sylvus (I don't think this will be an issue for you, but i'll mention it anyway) is that if you lease a car, they don't let you do anything like put a new cd player/subs/etc.

But if that isn't an issue, you put very few miles on your car, and you don't plan on having it for more than a few years, the lease would really be your best option.

[Knarlz]

".... I've never kept a car for as long as the life of my loan,...."

This makes you a lease candidate. Inless there is any chance you go over the miles allowed. Typicaly 12k per year (sometimes only 10k!). The fee for overage is huge per mile, fiddy cent per mile or more. Also, you can get pimped for scratches or dings at shop rates, i.e. ouch!
Also, that awsome lease rate you see on TV typically requires a down payment that comes out to be 60-75% of what the remaining monthlys add up to.
Your choices on vehicals with good lease offers may be a bit limited but the same applies on good deal on purchases.

None the less, since you turn cars around in less than 4 years, you read the fine print and save 100 or more a month.

The frugal way to get cars....
Buy a 1 year old fleet rental and drive it for 9 more years!!

[Aslanna]

I would never buy a car that was used as a rental. People beat those things!

[Chidoro]

You are definitely a lease candidate. The downside is that you're always making payments, the upside is that they will be lower than finance payments and you'll have a new car every couple of years. You'll always be driving a car w/ the most current safety equipment as well as all of the bells and whistles that become standard for every car once it filters through the luxury segment.

I like to browse the Edmunds forums for most of my car info. The are very active and the leasing threads go into a lot of depth about the things to look for in a lease whether it's the payments or the T&C's.

And I agree, fleet cars are crap that are treated as such. You don't get a big discount without there being a reason.

[Fash]

If you're going to get a nice car, lease it.. but consider getting a pickup truck and buying it. I have a silverado, short box, standard cab, nothing fancy, but I expect to get at the very least 2 good years out of it after it's paid off, 2 years during which i will very much enjoy not having a car payment.

[Aabidano]

I would never buy a car that was used as a rental.

I've never heard of anyone having a bad experience after buying a fleet car, but I know how I treat them. I'm gentle compared to a lot of our folks, there's no way I'd buy one

[Pherr the Dorf]

Lease for 3 simple reasons

1. Save on tax... in a lease you only pay tax on the part of the car you are using. If you buy a car with an MSRP of $20k for say $19k, the residual is 50% then you only pay tax on $9k and save the tax on the $10k you never used. Almost a grand savings right there.

2. The car is never not under warranty, hello no brainer.

3. Gap is included in most leases (make sure you check and be sure) and most car companies allow $1500 worth of damage with no single incident of more than $500.

3 Reasons not to lease a Mountainer.

Residual, residual and residual.

If you need an SUV or even just desire one look at the Pilot, Highlander or Pathfinder simply because the difference in residuals is about 10-12%. You would rather pay a car down into the 50's than into the 40's, point one above comes into more play here as well.

[Zver]

Lease for 3 simple reasons

1. Save on tax... in a lease you only pay tax on the part of the car you are using. If you buy a car with an MSRP of $20k for say $19k, the residual is 50% then you only pay tax on $9k and save the tax on the $10k you never used. Almost a grand savings right there.

Not all states lets you pay partial tax, but most of them do.

2. The car is never not under warranty, hello no brainer.

Furthermore, BMW is maintanence free for the first 4 years. That includes oil changes, brake pads, wiper blades, inspections etc

And you are right about residual - you dont want to lease an american car/truck becasue their residual value is CRAP...If you want an SUV, look at Infinity(FX) or BMW(X5), i think both of those trucks have 75% residual on a 2 year lease.

[Aabidano]

look at Infinity(FX) or BMW(X5), i think both of those trucks have 75% residual on a 2 year lease.

Wouldn't the total costs on either of those 2 year leases nearly equal the cash price of a Mountaineer?

[Aslanna]

You get what you pay for! Who would want a Ford/Mercury product anyway. I am boycotting Ford. Everyone should! Quality is Job 1? I don't think so.

[Zver]

look at Infinity(FX) or BMW(X5), i think both of those trucks have 75% residual on a 2 year lease.

Wouldn't the total costs on either of those 2 year leases nearly equal the cash price of a Mountaineer?

Depending on options, it would cost around $650 month (total $15600). Not sure how much Mountaineer costs, i'm guessing around $30k?
Eitherway, you can not compare a Ford to a BMW.

[Aabidano]

You get what you pay for!

Penix jousting rights in those two cases.

[Chidoro]

look at Infinity(FX) or BMW(X5), i think both of those trucks have 75% residual on a 2 year lease.

Wouldn't the total costs on either of those 2 year leases nearly equal the cash price of a Mountaineer?

Depending on options, it would cost around $650 month (total $15600). Not sure how much Mountaineer costs, i'm guessing around $30k?
Eitherway, you can not compare a Ford to a BMW.

You should compare a total leasing cost to a total leasing cost for one. For two, why compare a vehicle that is designed for utility first and driving second to ones that are designed for driving first and utility second? Neither the FX nor the X5 are trucks. True comps are the Explorer/Pilot/Durango/etc

[Pherr the Dorf]

Sylvus also whatever car you are buying get online quotes for. Talk to a minimum of 5 dealers (use edmunds and change the zip code if you need to to get more quotes) and then ask the local dealer to come close (within $300) to the best price. Always buy local unless they won't play at all, then fuckem. You can probably save 30-50 bucks a month just by getting internet quotes. Let me know if you need any help running the numbers, I can get you prices and lease structures on most any car.

[rhyae]

I would never buy a car that was used as a rental.

I've never heard of anyone having a bad experience after buying a fleet car, but I know how I treat them. I'm gentle compared to a lot of our folks, there's no way I'd buy one

My first car was a fleet car, a Corsica (remember those?) I drove it for 8 years and never had to do anything to it (except oil changes, and wipers and tires.)
Now I have a Civic I bought new, had it for 8 years, never had to do anything to it.
I love not having a car payment.

You are definately a good lease candidate though. And when you get tired of leasing you can go back to buying, not any big deal.

Best line a car salesman used on me when I was looking for a new car but didn't want to have a high payment "Honey, you should lease a car, you won't have to worry about the mileage fee because you'll be having babies soon and not driving so much."

[Waran]

Something to also keep in mind sylvus (I don't think this will be an issue for you, but i'll mention it anyway) is that if you lease a car, they don't let you do anything like put a new cd player/subs/etc.

That's not entirely true.

If you're up front during the leasing process and ask them about aftermarket products, they'll usually tell you you can, however what they expect is the car to either retain your add-ons after the lease(yeah right) or be returned at the end of the lease how it was when it left the lot (i.e. factory parts reinstalled).

I had an after market Alpine headunit, new kit, XM Radio and an ipod adapter put in my leased Civic and removed it all and they never had any problems or deductions.

I guess it all amounts to what your car company prefers. Honda has been overwhelmingly excellent to me.

[Pherr the Dorf]

Something to also keep in mind sylvus (I don't think this will be an issue for you, but i'll mention it anyway) is that if you lease a car, they don't let you do anything like put a new cd player/subs/etc.

But if that isn't an issue, you put very few miles on your car, and you don't plan on having it for more than a few years, the lease would really be your best option.

I missed this post but it is flat out wrong. In fact things like a CD changer would be a hard add and would add value to the car. Other examples would be fogs, spoilers, rims, leather etc..

[Funkmasterr]

I am just going off of what I have been told specifically when I have asked at dealerships. The woofers were the biggest no I got, because to install them you need to drill a hole through the firewall and they were absolutely against the idea (pretty much every car dealer you can think of.) That alone is a deal breaker for me, although I realize that probably isn't the case for most.

[Canelek]

I am just going off of what I have been told specifically when I have asked at dealerships. The woofers were the biggest no I got, because to install them you need to drill a hole through the firewall and they were absolutely against the idea (pretty much every car dealer you can think of.) That alone is a deal breaker for me, although I realize that probably isn't the case for most.

Some will tell you that, and I can see the point where excessive drilling/firewall punching can be a problem. However, like others have said, often it will add value. I have been a Toyota driver since the beginning, and they generally take your trade in, fix it up, and sell it used. Good aftermarket gear is a huge reselling point for some.

Best thing to do is have a chat with the dealer and see what their turnover process is.