Tips for Leasing a Car

[Sliver]

Originally Posted by DementedReality

whats the problem with a payment?

even if i had the cash, i would still prefer to dole it out at a rate of 1/48 per month then to hand it all over in one lump sum.

assuming low interest rate enviroment of course.

i guess, i just want as little money out of my pocket on a cash flow basis to run the car. a lease fixes my budget annually, makes it predictable and doesnt tie me to owning a depreciating (non) assett.

to each his own i suppose.

I find it weird you seem so concerned about something logical like the numbers side of things, yet are completely hung up on the emotional side of this, which is "I want a new car." The car you are driving right now is used - used by you, but still used.

Anyway, I'm with bizaro - I like to buy my cars. My daily driver is a 2005 and was originally purchased by some sucker for $56,000. I bought it with 54,000 kms in 2008 for $17,500. I haven't had a monthly payment on the thing ever, maintaining it is relatively cheap ($800 on brakes a few months ago is the only significant money I've put into it aside from regular maintenance and tires).

You putting $400 or whatever a month into renting a car seems crazy to me since your argument centers on it making financial sense.

[Sylvanfan]

Originally Posted by Bring_Back_Shantz

Yeah, fair enough. But when Sylvan was talking about putting money down I assumed he meant the down payment.
When I leased my car the topic of a security deposit didn't even come up.

It wasn't a down payment, it was a security deposit. The more you put down as a security deposit the more it lowered the lease rate, only by like 1.5% if you put down the maximum, but the amount being financed was the full value.

Basically at the end of the lease the dealership claimed that because of kilometers which we were about 10,000 over, and other factors the vehicle was magically worth exactly what my "security deposit" was. When I asked to see their sheet and added up all their fudge factors...it didn't add up to what the security deposit was. So when I did the buyout, the security deposit did get applied towards the previously agreed on residual value. So yeah the dealership considered it a down payment. So at that point the option was buy it out for $11000 or give it back. Other comparable vehicles list for about $18 to 20 grand so I opted for the buyout.

Another one of a series of stupid things I've done thats pretty much ruined me financially. I should have implemented my beater theory back in 2006 I'd have only spent about $7000 on vehicles and maintainance in that time instead of closer to $40,000

[ernie]

Originally Posted by Sliver

I find it weird you seem so concerned about something logical like the numbers side of things, yet are completely hung up on the emotional side of this, which is "I want a new car." The car you are driving right now is used - used by you, but still used.

Anyway, I'm with bizaro - I like to buy my cars. My daily driver is a 2005 and was originally purchased by some sucker for $56,000. I bought it with 54,000 kms in 2008 for $17,500. I haven't had a monthly payment on the thing ever, maintaining it is relatively cheap ($800 on brakes a few months ago is the only significant money I've put into it aside from regular maintenance and tires).

You putting $400 or whatever a month into renting a car seems crazy to me since your argument centers on it making financial sense.

Similar to what we did with our one car. Someone bought it new in 2005 for $69k. We bought it with 50,000 kms in 2009 for $24,000. I've never had a payment on it and other than regular maintenance we've put in about $900 more in a few fixes. Since we bought it we've put on 35,000 miles (yes miles...we moved in that time and that's what the odometer gives me now!). We did buy a new Accord in 2009 as well. Given we had no credit rating in the states at the time and no other dealership would deal with people on visas we had little choice (Hyundai or Honda were the choices we had). We did payments for a year to help with the credit rating (along with our mortgage) and then bought the car out. If I didn't need to build a credit rating I won't do payments (lease or buy) unless it's 0% financing.

Leasing is also not an option for us given the amount of miles we put on our cars. Since we moved down here 2 years ago (in January), we have put over 65,000 Miles on our two cars.

[asifka]

I dont understand "dont buy Brand new. Buy used". If no body is buying brand new, where do you think used cars will come from?.

[DementedReality]

Originally Posted by ernie

...We bought it with 50,000 kms in 2009 for $24,000. I've never had a payment on it and .

but you did have a payment. the opportunity cost of not having your 24,000 in your bank and instead giving it to the car company in 1/48th increments.

to each his own, but I would rather give up 300 a month on a lease and pay it out of the 24k that I still have with no obligation other then that single payment.

[DementedReality]

Originally Posted by asifka

I dont understand "dont buy Brand new. Buy used". If no body is buying brand new, where do you think used cars will come from?.

lease returns!

[go iggy]

A little off topic but is the warranty of a car transferable 100% of the time? if not how do you find out if it is? Run the Vin with the dealership? thanks in advance.

[TylerSVT]

Originally Posted by DementedReality

but you did have a payment. the opportunity cost of not having your 24,000 in your bank and instead giving it to the car company in 1/48th increments.

to each his own, but I would rather give up 300 a month on a lease and pay it out of the 24k that I still have with no obligation other then that single payment.

Minus the fact that you pay interest... but ok.

[ernie]

Originally Posted by DementedReality

but you did have a payment. the opportunity cost of not having your 24,000 in your bank and instead giving it to the car company in 1/48th increments.

to each his own, but I would rather give up 300 a month on a lease and pay it out of the 24k that I still have with no obligation other then that single payment.

Yes I had one payment..you have a 48 payment obligation not a single payment. And then you have the next 48 payment obligation and I have no obligation if I keep my car for 8 years. And you know what? if I lose my job (a possibility in todays economy) I still have a car. I still have car to get my kids to where they need to go be it the zoo or the doctor. I have a car to look for that next job.

It's about choices. Your choice is to lease or make monthly payments. My choice is to make sure I minimize my obligations (outside of my mortgage) and reduce my active debts so that if something happens (hospitilization, loss of job) it minimizes the risk to my family. And we are paying down the mortgage as quick as we can to get out from under the one debt we have.

[ernie]

Originally Posted by go iggy

A little off topic but is the warranty of a car transferable 100% of the time? if not how do you find out if it is? Run the Vin with the dealership? thanks in advance.

I believe the basic warranty that comes with the car is transferrable (in country). However, some extended warranties are not (we had a Nissan at one time and the extended warranty we had did not transfer....despite Nissan originally telling us it would. Needless to say we won't be buying Nissan anytime soon).

Country to country transfer may or may not happen.

[GreatWhiteEbola]

What is required from your employer for a person to write-off lease payments? Just a T2200? I work as an employee, however, I am required to use my car for business. Up until this year (leasing or financing a car in April), I have not had car payments. Thank you for your help.



EDIT: I found a good guide if anyone else has similar questions.

Employment Expenses

[DementedReality]

Originally Posted by ernie

Yes I had one payment..you have a 48 payment obligation not a single payment. And then you have the next 48 payment obligation and I have no obligation if I keep my car for 8 years. And you know what? if I lose my job (a possibility in todays economy) I still have a car. I still have car to get my kids to where they need to go be it the zoo or the doctor. I have a car to look for that next job.

It's about choices. Your choice is to lease or make monthly payments. My choice is to make sure I minimize my obligations (outside of my mortgage) and reduce my active debts so that if something happens (hospitilization, loss of job) it minimizes the risk to my family. And we are paying down the mortgage as quick as we can to get out from under the one debt we have.

if you lose our job, wouldnt you prefer to have that lump sum in the bank to draw from instead of looking at it sitting in your drive way?

cant buy food by selling your rear view mirror for money.

again, another reason why i lease, i keep my money in a bank and not in metal and rubber.

[psicodude]

Originally Posted by TylerSVT

Minus the fact that you pay interest... but ok.

Plus the fact that you take the $24,000 and invest it at hopefully a higher rate than your lease is.

[Winsor_Pilates]

Anyone spot any good lease rates, deals lately?

[ernie]

Originally Posted by DementedReality

if you lose our job, wouldnt you prefer to have that lump sum in the bank to draw from instead of looking at it sitting in your drive way?

cant buy food by selling your rear view mirror for money.

again, another reason why i lease, i keep my money in a bank and not in metal and rubber.

No because while you're making that monthly payment I'm not and have that money to draw from. Not as much as that lump sum but enough....and I have a car to get to the groceries.

[Dion]

Disadvantages of car leasing

Early Termination of the Car Lease - There are most likely fees involved in the early termination of a lease, fees for which you will be responsible to pay. Early termination can be involuntary as well. If the vehicle is stolen and not recovered, or totaled in an accident, the lease is forced to end. Very often your insurance reimbursement will not cover the entire balance due on the lease. Therefore you pay the rest. However, many leasing companies offer gap insurance, which provides you financial protection in such an event.

Also, when paying a car lease, you are paying for the depreciation plus interest. The depreciation is calculated as the difference between the cap cost and the residual value. While the depreciation is paid off evenly over the lease term, the depreciation of a car is not linear. The difference in the actual depreciation and the paid depreciation is known as the gap amount, and will also be paid in a prematurely terminated lease.

Additionally, some leasing companies will require you to pay off the remainder of the car lease contract before releasing you from the lease. Others will require a flat rate termination fee. Make sure you read all the fine print before signing your lease contract.

Insurance Costs - Leasing a car can bring on higher insurance rates since you may require more coverage than you're used to paying. Contact your insurance agent to get an idea of what you insurance costs will be before signing a lease.

Car Mileage - Most leases have a limit on the number of miles you may drive, usually anywhere between 12,000 and 15,000 allowable miles per year. Excessive mileage equals more money, usually about 10 to 15 cents per mile over the agreed upon yearly figure. This can add up fast, especially if you drive a lot.

Wear and Tear - Like mileage, there are limitations on the wear of a vehicle under a lease. Exceeding these wear limitations may result in more fees.

Credit worthiness - Since the car you will be driving belongs to someone else, that someone else needs to be confident that you will keep the car in good condition and make your payments on time. This means that credit requirements are more stringent on potentially leasing a car. Therefore, if your credit history is spotty, your chances of getting approved for a lease will be spotty as well.

http://www.automotive.com/auto-loans...sing-faqs.html