Ups and downs of leasing a vehicle

Jayhawker

Thinking on getting a new truck...never leased one. Any guidance?

zorba

Don't, it'll cost you far more in the long run. But then I keep vehicles for 1.2 forevers until they break, then rebuild and continue!

jbp-ohio

Once they add tax and title (why you have to pay sales tax on something borrowed is beyond me), the money down is way more than advertised.

Leasing company will dictate how much insurance coverage you must keep on the vehicle. If the state minimum is $10,000/$30,000 the leasing company can say you have to carry $100,000/$300,000

10canyon53

Look very carefully at the amount of mileage per year you are allowed.  They draw you in with a low monthly payment.......and slip in a ridiculously low mileage allowance.  Every mile you drive over the allowance costs you $$.

Personally, I would never lease.

Make_My_Day

I leased for a while. It has its ups and downs. On the plus side you can get a new vehicle every 2 or 3 years without a huge down payment to keep your payments low. On the minus side, you never actually own it. If the vehicle is for business, you can write off the whole amount of the lease payment. Look at it as a long term rental car, but cheaper daily than an actual rental.

jaywapti

When i was thinking about leasing i talked to friends and relatives that lease cars/trucks, we sat down and figured out the total cost, to me it seems the only way you will make out is if you can use it as a write off for a business expense

JAY

mitdr774

Also look at lease termination costs.  When we had to turn in my wifes lease there was a $400 termination fee if we didnt lease or buy a new vehicle.  That kinda pissed me off when her lease payments were only about $180 per month.  

CHIRO1989

On new vehicles, I have spoken to several of the collision repair folks in town and if you nail a deer good with your new vehicle, you will be in the 5 digit range IMMEDIATELY due to all of the electronic "safety" stuff and sensors on new vehicles in the front of the vehicle, lots of electronic gremlins ensue, they can't fix a sensor issues on my 2005 F150 from a deer hit, you can't change the oil on a new one with out splashing oil everywhere, buy late model for cash and don't look back.

jaywapti

CHIRO1989 said:

 you can't change the oil on a new one with out splashing oil everywhere, buy late model for cash and don't look back.

Not trying to change the subject just to add CHIRO'S COMMENT, ON THE WIFE'S 05 Explorer the transmission is a sealed unit, there's no dip stick so one cant check the fluid level, is this a common thing on all the newer cars/trucks ??

JAY

Jay

I believe that is becoming more and more popular and has been for quite a few years now.  I had a 2007 Chevy Cobalt that had a sealed transmission.  Same thing.  No dip stick.  I could change the fluid in it, but you had to know how much fluid to put in it to refill it.  I think there's quite a few vehicles like that now.  Most people driving today wouldn't even know what a transmission dip stick is for or what to do with one, anyway.  And a mechanic doesn't need a dip stick to service one.

As far as vehicle leasing goes, all I've ever heard is that they are financially a bad idea and cost more over the long run.  I don't know.  When I briefly looked into it, I didn't even get as far as looking at the cost of it.  I put around 30,000 per year on my vehicles, so a lease is not even close to being an option for me.  I always buy a year or two old, letting the person who drove it off the lot brand new take the hit on the value.  Pay 30-50% less than the vehicle was originally sold for, drive it 150,000 miles and start over.  Still not a very financially wise way to do it, but a lease isn't an option.  So I keep the cost down as much as I can and consider the monthly payment a luxury fee to be able to drive something decent every day.

zorba

Mercedes tried the sealed transmission bit a number of years back - decided it wasn't a good idea. Of course, a REAL transmission doesn't need a dipstick to start with, just remove the fill plug and make sure a bit of oil comes out!

mitdr774

Most "sealed" transmissions have a level plug some place on them that is used when filling with fluid.  Its a similar concept to filling a manual transmission.  My 2012 Sonic has a "sealed" manual transmission that supposedly never needs the fluid level checked.  I have changed it several times in the almost 80k miles I have on it.


Funny you mention a real transmission not needed a dipstick.  My 98 Z24 with a 5 speed manual had a dipstick on it.  It was much more convenient that the level check plug on my 02 Z24.

zorba

Hmmmm.... interesting. I've never heard of a manual that had a dipstick - although I've seen a few being operated by same! I learned something new today, and that's always a good thing.

Jermanator

Make_My_Day said:

Look at it as a long term rental car, but cheaper daily than an actual rental.

That is pretty much how I felt when we leased a car for my wife. We ended out buying it toward the end of the lease.

mitdr774

Part number 90.  Upper right hand side.  That was a great thing to have on the transmission.

zorba

I wouldn't buy a new MBZ either - entirely too much market driven "technology". I put about $17K into my car last year - and  yea, I could have bought a new car for that. Not an equivalent, but a new car. I don't want a new car, I don't like new cars, and old Mercedes diesels like mine are just about the most reliable cars on the planet overall - so I'll keep it. We rebuilt darn near everything - although I wasn't expecting to have to rebuild the engine at only 300K miles, but things happen. It should have gone another 50 to 100K at least. If it breaks down again, it'll be relatively minor (power steering pump and alternator haven't been touched), so even if it costs a month's payment, so what?

Mercedes is now driven by the bean counters, and not the engineers like it was years back. I mainly blame Lexus for that.

BigDanS

The only way leasing a new vehicle makes financial sense is if you lease it through your company and get a 100% write off.  If you are in a 33% or 25% tax bracket, a $500 lease has a monthly effective cost of either $334 or $375 a month, plus you get to write off all insurance, gas and maintenance, if the vehicle is “100%” Business use.  Otherwise, own it.  My 2005 Tundra will be 14 in May, no payments for 10 years and low maintenance costs.  Best financial vehicle I have owned.

D

KMT2

Jayhawker,
If you don't mind keeping to 750 to 1000 miles a month they are good. I had many that way.
 But and a big but here is they will pile drive you when you go over , and may rape you if there is damage deemed not normal wear and tear. 
But since you like them toy jobs, it should be cheap enough.
 If not I have a few late models I have found at reasonable prices while out doing work.
 

jaywapti

Most of the trucks I bought new and paid cash, all had over 250,000 miles when i sold them, a lease would never work for me as they all have been modified.

JAY

1hogfan83

Never never never buy a new car.  As soon as you sign the paper it's used and looses about an 8th of its value.  You can buy a 3 year old certified ride with a 100k warranty that already took the initial deprecation loss.  Read and do your research and look at blue book values.  

Big Chief

I dunno, but are leases easier to get approved than car loans?

bisley

I leased a new Ford in 1984. At the end of the lease, I found that my cheapest way out was to purchase it for about what a similar Ford certified used vehicle would have cost me. It was a good vehicle, and I drove it for another four years, so I came out OK. But, I wouldn't do it again, because who wants to shell out for a new vehicle, but still have to drive the 'old' one that you have had for several years?

So, instead, I pay too much for a very good 'almost new' vehicle, and keep it for ten years or more, if it is a good one. It feels like a better deal, whether it really is, or not.

bisley

I was not that astute, in 1984. I could haggle pretty good on any kind of cash deal, but if I had to borrow money, they had me over a barrel, and knew it. It took me another 30 years to start winning a few of those battles, and I still get skinned occasionally by slick operators.

zorba

I bought my share of new and almost-new cars over the years. Now, I buy a used car from a new car dealer's used lot. Not Schmoes Used Cars, and never from a private party. Why? Because the new car dealer's used lot has ONLY cars that are felt to be in decent shape because they've been checked out, otherwise they're passed on to Schmoe. Private party sales are even less trustworthy.

But whatever you buy, drive it until the wheels fall off as the saying goes; to which I'll add "Then weld them back on and keep going!".

IMO, you should keep a car between 15 and 20 years to get your full value out of it - then its a matter of determining if it will be cost effective to rebuild things and keep going as I did with the MBZ (at 32 years old). I expect to get another 300k to 400k miles out of that car - which means my daughter will drive it home from my funeral.

bisley

zorba said:

I bought my share of new and almost-new cars over the years. Now, I buy a used car from a new car dealer's used lot. Not Schmoes Used Cars, and never from a private party. Why? Because the new car dealer's used lot has ONLY cars that are felt to be in decent shape because they've been checked out, otherwise they're passed on to Schmoe. Private party sales are even less trustworthy.

But whatever you buy, drive it until the wheels fall off as the saying goes; to which I'll add "Then weld them back on and keep going!".

IMO, you should keep a car between 15 and 20 years to get your full value out of it - then its a matter of determining if it will be cost effective to rebuild things and keep going as I did with the MBZ. I expect to get another 300k to 400k miles out of that car - which means my daughter will drive it home from my funeral.

I agree, but as I age, I don't want to learn new technology (twenty year old technology is new to me). My current ride is 18 years old, and I will keep it another year, before moving into the 2014 Ford pickup that my wife drives. If the engine and transmission lasts, I'll drive it till the kids start hiding the keys from me.

But, I agree that it makes sense to keep driving them, if you are up to doing your own maintenance, or even if you have a good mechanic who won't gouge you. The latter is hard to find, these days.

Jayhawker

zorba said:

I bought my share of new and almost-new cars over the years. Now, I buy a used car from a new car dealer's used lot. Not Schmoes Used Cars, and never from a private party. Why? Because the new car dealer's used lot has ONLY cars that are felt to be in decent shape because they've been checked out, otherwise they're passed on to Schmoe. Private party sales are even less trustworthy.

But whatever you buy, drive it until the wheels fall off as the saying goes; to which I'll add "Then weld them back on and keep going!".

IMO, you should keep a car between 15 and 20 years to get your full value out of it - then its a matter of determining if it will be cost effective to rebuild things and keep going as I did with the MBZ (at 32 years old). I expect to get another 300k to 400k miles out of that car - which means my daughter will drive it home from my funeral.

My cousin has the same kind of thinking...His F250 just turned over 620,000 miles...

Michakav

Paid $2400 for a 2005 Buick Lacrosse with 52K on it 6 months ago after finally parking my 1994 Olds 98 . Put $160 into lights and an ICM and will run it until it dies. Not even the brake lines have rust on them. I figure even IF I had to put $500 a year into it I am still WAY ahead. Deals are out there that make way more sense than leasing or buying new. They can take a little searching to find though. But that's how I roll.

zorba

I didn't know the LaCrosse was made in '05 - I thought it only came out after the Lucerne was discontinued. I had to go and look it up, but it actually first came out in '04!

kansashunter

I have only looked at one lease and it wouldn't work for me. A new car is going to lose value and you are going to pay that whether you own it or lease payments. It's going to depend on what your plans are. How long are you keeping it, how many miles, paying cash or payments ect. I just add up the total cost of ownership for however many years you think you will keep it and pick what suits you best. As for never buying a new car I can guarantee that sometimes it is the cheapest. I just wish I could buy a new jeep. 

Michakav

zorba said:

I didn't know the LaCrosse was made in '05 - I thought it only came out after the Lucerne was discontinued. I had to go and look it up, but it actually first came out in '04!

Been great so far. Couple of known issues that I have rectified or am keeping an eye on. Runs and rides great. Couldn't beat the price with the mileage. Little old ladies car from Florida. My new "ride or die" LMAO.

Varmintmist

Unless you can write it off in a biz, and even if you can, a lease is a bad idea financially. If you want to keep changing cars, then it works, but it is still a bad idea financially. The write off makes it do-able, not a good idea, just transferring the pain to the overhead costs instead of the net.

My truck is 11 years old. I put a lot of money into it this year. By a lot, I mean about 2 new truck payments worth. I will probably put 4 new tires on it soon, which with a F250 SD, is a bit less than 2 new truck payments. 2 years ago I put about 2 months worth of new truck payments in it.

So will have driven it for 4 years for the equivalent of 6 payments.

She is not new, but since I wash wax and clean it once or twice a year, change the oil and filters regularly and grease things the wonderlubes miss, the mechanics pretty much always tell me that its a nice truck. She has some character marks on her and 2 years ago I decided bondo was enough for a truck with over 100K on the clock. I do sand it and paint it and it looks ok.

Due to some things going on, it WILL run for another 5 years min before I look for a replacement. As a bonus, I have been picking up OT every Sat so the boss is letting me home garage the company truck. I spent more on fuel for the generator during the power outage this month than I have put in the truck.

If I lived out of the snow belt, I would figure on another 10 years, but the rust will likely be taking over by 5.