ugcs93
ugcs93
6/3/11 1:21 p.m.

I turned in a leased Lincoln LS 3 years ago for a leased Mustang. I'm in the process of looking for a new leased car and just discovered there's such a thing as "trade in" value. I know - I should have done my homework. Now - and I know there's nothing I can do about it - but I'd love to know what the trade in value on a 2005 Lincoln LS would have been 3 years ago. I just need to know how badly to slander the car dealer!

jrw1621
jrw1621 SuperDork
6/3/11 1:31 p.m.

To "trade in" a lease car, you first have to buy the car and here in my state of Ohio that means a nearly 7% sales tax has to be paid. Now that you own it you can sell it but 7% of any profit has already been eaten up.
Leasing is renting a car and the worst part of the deal is you are renting in during the period where it depreciates the most.

ugcs93
ugcs93 New Reader
6/3/11 1:36 p.m.

In reply to jrw1621: I really don't know much about this - but the car dealer we are going to lease from are going to buy the mustang.

pigeon
pigeon Dork
6/3/11 1:58 p.m.

I've traded in a lease vehicle once - if the car is worth more than the buyout amount, which should be close to but somewhat less the sum of the residual and the remaining payments, then you have "equity" in the car to apply to the deal.

Duke
Duke SuperDork
6/3/11 1:59 p.m.

If you go through either Kelley's - or probably Edmunds, who I like better anyway - website, they have an email address where for free you can email them the car specs and condition and the requested date of valuation. In about 24-48 hours they will email you back with the estimated value on that date. They were very helpful when we were trying to determine the previous value of my mother's car several years after the date she died.

ugcs93
ugcs93 New Reader
6/3/11 2:19 p.m.

Thanks Duke - I'll do that.

Does it matter that I was returning a Ford Lincoln for a Ford Mustang? Different dealers. Or is it still my equity?

Javelin
Javelin SuperDork
6/3/11 2:25 p.m.
ugcs93 wrote: In reply to jrw1621: I really don't know much about this - but the car dealer we are going to lease from are going to buy the mustang.

Wait, what? You don't own the Mustang, so they can't buy it from you. You didn't own the Lincoln either.

Please stop leasing.

ugcs93
ugcs93 New Reader
6/3/11 2:28 p.m.

I should probably just stop now before I look totally ignorant! But both the Honda and VW dealer appraised the Mustang, knowing it's leased, said they would buy it, and that I have $1,000 equity

AngryCorvair
AngryCorvair SuperDork
6/3/11 2:31 p.m.
ugcs93 wrote: I just need to know how badly to slander the car dealer!

instead, slander yourself for paying the depreciation on a commodity you don't own.

AngryCorvair
AngryCorvair SuperDork
6/3/11 2:34 p.m.
ugcs93 wrote: I should probably just stop now before I look totally ignorant! But both the Honda and VW dealer appraised the Mustang, knowing it's leased, said they would buy it, and that I have $1,000 equity

this is Mustang season. they want it for the road-side spaces at their lot, to generate traffic, and they'll take $1k off the price of your new car (purchase?) to get it. you probably wouldn't get that deal in November, LOL.

pete240z
pete240z SuperDork
6/3/11 2:46 p.m.

Dave Ramsey sums it all up. Car Leasing is 100% Stupid.

http://www.daveramsey.com/index.cfm?event=askdave/&intContentItemId=115934

Duke
Duke SuperDork
6/3/11 7:36 p.m.
pete240z wrote: Dave Ramsey sums it all up. Car Leasing is 100% Stupid.

...unless you can write the car off as a business expense. That's about it.

<~~~~ never leased a car in his life because I don't own a business.

BoneYard_Racing
BoneYard_Racing Reader
6/3/11 9:50 p.m.
pete240z wrote: Dave Ramsey sums it all up. Car Leasing is 100% Stupid. http://www.daveramsey.com/index.cfm?event=askdave/&intContentItemId=115934

Dave Ramsey sums it all up: Dave Ramsey is out of touch with the world. His only recomendation there is to not drive a car you cant stroke a check for while Ill say that is the best method most people couldnt afford a car doing that. Car loans are a way of the world if you dont like them dont take one.

Leasing is not evil, leasing is not a scam, leasing is not a cover up, leasing is not intended as a way for us (the dealer) to make more money, Leasing began as a way to protect the consumer from an evolving market. Its too bad that during the begining the bad dealers saw a new way to take advantage of people and ever since lease has become a bad word.

There is one trick to keeping your head above water on a leased car is the LEV on the contract? As long as it is you just bought a car in the smartest way possible.

For those of you who say "you never own it" you are correct here is a secret MOST PEOPLE WHO LEASING WORKS FOR NEVER OWN ANYTHING, they take 60-84 month car loans and trade between 36-48 months, they take variable rate home loans for 25+ years and move within 10, everything they own is disposible. If you have come to terms with the fact you will always have a car payment leasing is the way to do it you get a new car in half the tiem and your payments stay fairly consistant.

BTW be nice to the dealer it will get you where you want to be. There is nothing that upsets me more than someone else blaming their decision on me I dont make you do anything I provide you with information. The value of your Lincoln was on the contract if you leased 5ish years ago the residual (LEV) was 45+% of MSRP (on our GM cars it was closer to 70% ) from every Lincoln LS Ive priced you made out pretty well

nicksta43
nicksta43 Reader
6/3/11 10:28 p.m.

I agree with Ramsey.

Curmudgeon
Curmudgeon SuperDork
6/4/11 6:26 a.m.

Leasing bites for an individual. It's generally a way for someone making $30K a year to buy a (insert luxury brand here) and wind up with zip, zilch, nada, zero when all is said and done. Me, I'd rather buy that off lease vehicle that Mr or Ms Living Beyond Their Means took the gigantic depreciation hit on and pay it off quick.

1988RedT2
1988RedT2 Dork
6/4/11 7:02 a.m.
BoneYard_Racing wrote: Dave Ramsey sums it all up: Dave Ramsey is out of touch with MY world. His only recomendation there is to not drive a car you cant stroke a check for while Ill say that is the best method most people couldnt afford a car doing that.

Call me radical, but there are plenty of cars available for very little money. Granted, they are used cars, and not new cars, but one of them is within the reach of nearly everyone.

iceracer
iceracer Dork
6/4/11 8:42 a.m.

I leased cars for years. It worked for me in that every 4or2 years. I got a nice new car, true it is never paid for. Finally, after the two year lease on my ZX2SR was up and there was nothing new that interested me and I liked the car, the residual was lower than the acctual value of the car, so I bought it and drove it for 8 more years.

carguy123
carguy123 SuperDork
6/4/11 9:23 a.m.
pete240z wrote: Dave Ramsey sums it all up. Car Leasing is 100% Stupid. http://www.daveramsey.com/index.cfm?event=askdave/&intContentItemId=115934

Well that was an absolutely wonderful article, it said absolutely nothing. Way to go Dave! Once again you're making sense.

I don't like leasing and have never done it. My kids have and have regretted it. I have paid for cars and they never did, that is until they quit leasing.

But an awful lot of Dave's advice is just blather to make money for him and isn't the best advice for you.

pete240z
pete240z SuperDork
6/4/11 9:34 a.m.

I pick and choose Dave Ramsey's ideas. Does it all work for me? No. But I take what does work for me and apply it and use it for my family. Some of his ideas are basic and simple and I knew about many years before I heard about Dave. I also don't like his plan to sometimes "stiff" people on what you owe.

But I will admit my parents lived like Dave talks about (pay cash) and have more money than they can spend now. I know people in retirement owing $175,000 on a house they paid $45,000 for back in 1975. Why?

BoneYard_Racing
BoneYard_Racing Reader
6/4/11 6:41 p.m.
1988RedT2 wrote:
BoneYard_Racing wrote: Dave Ramsey sums it all up: Dave Ramsey is out of touch with MY world. His only recomendation there is to not drive a car you cant stroke a check for while Ill say that is the best method most people couldnt afford a car doing that.

Call me radical, but there are plenty of cars available for very little money. Granted, they are used cars, and not new cars, but one of them is within the reach of nearly everyone.

True enough for people like us, my current DD cost a wopping $100. The most expensive car Ive bought was the SRT4 for about $9900 financed 7.49%(thin credit porfolio) and a year and a half later I owe $4800

71% of title transfers occur on the private market however a large portion of the USA will only shop dealers for cars and as of now the used car market is insane today I gave $5000 for an 03 park ave. with 100k in bad shape and it will sell around $8000 the same car on the private market could be had for $3000 but with no warranty or financing or cleaning.

As car guys we do it the right way most of the time ie paying cash. For almost everyone else leasing is a pretty good idea.

Oh and you can form an LLC for $500 and have a free car for the next 3 decades

alex
alex SuperDork
6/5/11 6:29 p.m.
BoneYard_Racing wrote: Oh and you can form an LLC for $500 and have a free car for the next 3 decades

Can you expand on this? I have a new business (LLC organized about 6 months ago) and could really use a new delivery vehicle.

Timeormoney
Timeormoney Reader
6/5/11 6:54 p.m.
alex wrote:
BoneYard_Racing wrote: Oh and you can form an LLC for $500 and have a free car for the next 3 decades

Can you expand on this? I have a new business (LLC organized about 6 months ago) and could really use a new delivery vehicle.

Its not free, it just means you can expense the vehicle against your revenue. You still are going to need revenue to make the payments and maintenance. It is just that since those are all expense items now they lower your taxable income. You still need to do a Return on Investment calculation on how much the delivery vehicle will make verse how much it will cost. The "Free" part might be the additional usage you can get out of the vehicle beyond its business purpose. However consult your accountant on the tax implications.

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