Auto Lease questions.

The problem is those "certain situations" usually have an outside influence that changes the numbers, such as only buying new cars because they are afraid of new cars. Compare that lease that "makes sense" to a CPO car, even with worst-case-scenario maintenance costs added in, and it doesn't make sense anymore. Hence my "never" comments (obviously assuming we aren't talking corporations here). Then again, there's an exception to every rule, even in physics.

In reply to mguar:

Sorry man, I have to completely disagree with you. There is nothing "good deal" about a lease, or even a new car purchase, from a purely financial sense. If a consumer really educated themselves they would wouldn't ever really consider a new car purchase (whether financed, outright, or leased) again.

My brother was selling Toyotas for a few years. He told me to look into the leases, and I'd be surprised. I sure was. You weren't paying much more than depreciation, roughly $10-$20 a month. Not a bad deal for a lot of folks looking at a brand new car. Different story for the enthusiast though.

BoostedBrandon wrote: And yes, I listen to Dave Ramsey. Bite me.

ha ha ha ha. I listen to Dave. He gets annoying but is full of wisdom.

Live like nobody else now so when you are older you can live like nobody else!

Meh. I've tracked every automotive expense on every car over the past 7 years. No matter what beater, it's been between $115-200/month in maintenance+depreciation. If I paid someone to do the work, it would undoubtedly be more money. Or I could drive a (economy) car for $200/month. Is driving a new car worth $85/month? Maybe. Leasing a luxury $600/month auto is silly consumption, but I'd argue that a basic new lease isn't necessarily a bad thing.

Javelin wrote: In reply to mguar: Sorry man, I have to completely disagree with you. There is nothing "good deal" about a lease, or even a new car purchase, from a purely financial sense. If a consumer really educated themselves they would wouldn't ever really consider a new car purchase (whether financed, outright, or leased) again.

I've owned over a hundred cars in the last 30 years, most of them cheap used cars. And I leased my '11 MINI Cooper. I like the lease terms and I like having one new car in the family with a warranty that no one else used before and that I'm only "buying" the part of the car I'm using without concern for depreciation. Was it as financially smart as buying another $500 crapbox? No. But it's what I wanted at the time to go along with the paid off truck, paid off BMW and cheaply financed Mustang.

And I'm frankly tired of the sanctimonious crap spewed by those that simply choose not to lease.

Leasing makes sense if you can write it off as a business expense. Otherwise, not a fan.

And I would not touch that 'sub lease' plan with a ten foot pole. There are WAY too many ways for that to go bad; for instance if the leasing company discovers what is going on oh man will they ever flip out. Sorry for the lady's situation but it was her deceased husband's decision to go for a lease on that overpriced Jokeswagen, not your son's.

About that; unless NY's laws are much different than the ones down here, if her husband was the only one who signed the lease papers it's not her problem. If she cosigned anywhere on there, she's screwed. I think in community property states it is possible for both to be dinged on something like this even though only one signed, but I do not know for sure.

Pete240Z wrote: ha ha ha ha. I listen to Dave. He gets annoying but is full of wisdom.

He's full of something, anyway.

I've also sold cars for a while, back in the day, and there are times where leasing makes fine sense (like business use and writing of depreciation), times where it can be a downright good deal (an incentive money factor or an artificially high residual value), and plenty of times that is not favorable as there are way more ways that the dealer can add profit without telling the customer where it is.

Sure, none of it is as good financially as driving an older car and doing your own work, but some people are willing to pay more to not do that.

But, of course I am wrong because there are some folks on here who are always right, no matter what. It's amazing!

Have her take it to a VW dealer and see if they'd buy out the lease. I sell new VWs and we do that all the time. Normally we can get someone out of a lease without them taking any loss and we get a good used car we can certify out of the deal. Most VW dealers are desperate for certified used car inventory right now.

She's also allowed to trade it in anywhere or just sell it. She's not in anywhere near as bad a predicament as you think, unless they rolled a whole bunch of negative equity into that lease.

She could also try swapalease.com or leasetrader.com

Sonic wrote: I've also sold cars for a while, back in the day, and there are times where leasing makes fine sense (like business use and writing of depreciation), times where it can be a downright good deal (an incentive money factor or an artificially high residual value), and plenty of times that is not favorable as there are way more ways that the dealer can add profit without telling the customer where it is. Sure, none of it is as good financially as driving an older car and doing your own work, but some people are willing to pay more to not do that. But, of course I am wrong because there are some folks on here who are always right, no matter what. It's amazing!

Or not. Like if you have a 20 mi commute and live in the city where renting a place to park/work on a beater is the same per month as a lease. I know, buy instead, but not if you can't easily afford the new car payments. Higher insurance also cancels out with the increased maintenance of a beater, and you'd be out the time with a beater as well.

of course, if you get a new job that's metro/bus/easy bike commutable 10 months into the lease, that goes out the window...

Is there any way under any conditions to turn a lease in early without it dinging your credit? l put down at least $1200, got a good money factor and it's for 15k mi/year. With these holding their value better than expected, is it something the dealer would consider since i'm now under the mileage by a big enough chunk that what i've already paid in costs is higher than the difference between the original price and what it's value as sold by a dealer is now?

Thanks for the imput guys. I agree that a lease could be a good deal if it were written off with a business expense, by I've seen lease cars come to my buddy's shop at the end of the lease. There's a laundry list of things to fix.

My take (as an adult car owner and a father watching a kid with financial concerns) is buy something for $10k and drive the wheels off it.

But like my old grandpappy used to say "You can't put a 50 year old head on 25 year old shoulders".

Dan

I have 26 year old shoulders. My head says $10,000 is too much car. Then again, I'd also have an FR-S in the driveway if I could afford one. I guess I invalidate my own opinion most of the time

Is there any way under any conditions to turn a lease in early without it dinging your credit?

Yes, as long as you don't "turn it in early". You can sell the car. Many times, a dealership will want to buy that car. This will also greatly depend on what kind of car it is. I know when I worked for Chevy we couldn't even think of buying a car out of a lease, but that was mostly due to the crazy high residuals that GM financial was using to get the payment lower, and it screwed GM hard when they lost $7-8k on every car that came back from a lease. At VW I buy cars out of lease quite often, and usually the trade value lines up pretty well with the lease buyout after a year or so into the lease.

Last month I had a guy trade in an leased Accord instead of turn it in to a Honda dealer so he didn't have to pay the lease termination fee and what would have been a hell of a reconditioning fee (smoker, curbed wheels, dinged up bumpers). He didn't even know he was allowed to do that, and I probably saved him a grand he would have paid just to turn his car in.

njansenv wrote: Meh. I've tracked every automotive expense on every car over the past 7 years. No matter what beater, it's been between $115-200/month in maintenance+depreciation. If I paid someone to do the work, it would undoubtedly be more money. Or I could drive a (economy) car for $200/month. Is driving a new car worth $85/month? Maybe.

Totally agree. I've gone through that math a million times over, and just went through it before I bought my '09 MINI two weeks ago. Yes, in crunching the numbers down to the last penny, a beater is cheaper than a new(er) car, especially if you do all your own work. If you don't, like me, the numbers become a bit more fuzzy but a beater can still be cheaper.

Even still, one thing that seems to be missing from this discussion is "Is it worth the extra money to you?" At what financial point do you say it's worth the extra bucks per month to have a new/nice car? If you knew for a fact that the nice car you really like would only be $25/month more than the old beater, would you go for it? What if it was $50? $75? Where do you draw that line? That's a personal decision that no amount of financial rationalization can account for. I know that my MINI is going to cost more than my '96 Volvo, and after much agonizing over it, I'm OK with that.

As for leasing, I don't know enough about it to make a really strong argument, since I've never done one. But my spidey-sense tells me it wouldn't make a lot of sense for me.

914Driver wrote: I've seen lease cars come to my buddy's shop at the end of the lease. There's a laundry list of things to fix.

skruffy wrote: Last month I had a guy trade in an leased Accord instead of turn it in to a Honda dealer so he didn't have to pay the lease termination fee and what would have been a hell of a reconditioning fee (smoker, curbed wheels, dinged up bumpers).

Thes people would have been out a lot of value had they bought, as well, due to not taking care of their cars. I ALWAYS take exceptional care of my cars and the new ones I've bought were still in like new condition when I sold them 3-5 years later (which is how i get premium money for them when I sell or trade them in). The MINI is leased and it will still be like new (barring a non-at fault accident) when we turn it in at the end of the lease. Even after a year of daily use by my wife and me, there are no door dings, no scratches, and the interior is perfect.

Having driven used cars for many years and always having to fix things at inappropiate times. I turned to leasing as a chep way to have a new car. Some were 4 yrs, most later were for two. Never had any problem. Anyay, for my last car, the buyout was so much less than the car was worth. I bought it. End of story.

Datsun1500 wrote: Back to the original question. Can leasing make sense? Sometimes. Does it make sense to get involved in this lease? No. The rest of the thread is pretty useless.

Good summary.

Ian's going to pass on the Lease, but thank the nice lady for thinking of him.
Probably going to buy my friend's 2003 SAAB 9-5 Aero Wagon. It's a well maintained car for a very fair price.

Thanks again for the insights.

Dan

skruffy wrote:

Is there any way under any conditions to turn a lease in early without it dinging your credit?

Yes, as long as you don't "turn it in early". You can sell the car. Many times, a dealership will want to buy that car. This will also greatly depend on what kind of car it is. I know when I worked for Chevy we couldn't even think of buying a car out of a lease, but that was mostly due to the crazy high residuals that GM financial was using to get the payment lower, and it screwed GM hard when they lost $7-8k on every car that came back from a lease. At VW I buy cars out of lease quite often, and usually the trade value lines up pretty well with the lease buyout after a year or so into the lease. Last month I had a guy trade in an leased Accord instead of turn it in to a Honda dealer so he didn't have to pay the lease termination fee and what would have been a hell of a reconditioning fee (smoker, curbed wheels, dinged up bumpers). He didn't even know he was allowed to do that, and I probably saved him a grand he would have paid just to turn his car in.

THAT is exactly the sort of thing I was hoping to learn. Especially for a car that's had to have been parked on the city street and the paint looks accordingly. The worst is someone (I just KNOW it was a E36 M3head cabby) made a big scrape on the left rear bumper/quarter panel seam. Better to pay to fix that first at a shop or just try it as-is at a dealer who may be interested?

sidenote: The bright Kia blue looks awesome but you can scratch it with your fingernail.

Datsun1500 wrote: Back to the original question. Can leasing make sense? Sometimes. Does it make sense to get involved in this lease? No. The rest of the thread is pretty useless.

Isn't that the norm for this forum ?

914Driver wrote: My take (as an adult car owner and a father watching a kid with financial concerns) is buy something for $10k and drive the wheels off it.

If there are financial concerns, I wouldn't even go that high in price. I'm on a tight budget, and with the exception of my wife's dd, I've never surpassed $4000xx. Get a car for 1k and drive the wheels off it and don't worry about car payments.

Datsun1500 wrote:

mguar wrote: In reply to Datsun1500: If that's what you got from my posts you must be green with envy.. Well thank you.. It comes from hard work..

I am not envious of you at all. Those that know me, know why. I worked hard too. Some people have more than me, some have less, as long as I am happy with my place in life I don't need to play big shot on the internet.

Jesus Christ people, it's a lease question; why is it so contentious in here?

There goes the shrimp.

mguar wrote: In reply to Javelin: Javelin; How wrong you can be. There simply is no one solution for car ownership. From a pure financial sense I doubt you can own cars as inexpensively as I can.. (less than a nickle per mile) Because of my job I tend to put 60,000 plus miles per year on a vehicle.. The companies I work for have a large variety of ways of compensation for the miles I drive. Adjusting to those is what determines the best approach.. I have bought new and used in my lifetime and in most cases new costs less than used. (if you buy right) There are exceptions clearly. But not as many as most people think.. Want a couple of examples? how about my currant daily driver? it's cost* me $.0475 cents per mile in purchase and depreciation. (plus normal fuel and maintenance) Add maintenance and depreciation to a used car purchase and I doubt you'll find many cheaper examples.. * actually my profit in owning that truck after mileage compensation netted me $160,000 During that whole time I've sold tens of millions of dollars worth of equipment using that truck. Hauled home hundreds of tons of wood, stone, and other building materials, not to mention hauled equipment and trailer-ed the race car all over the country and even overseas.. It's still the most comfortable vehicle I've ever owned and I would drive it anyplace without one minutes concern.. I Leased a New Corvette and with the terms I worked out on the lease profited over $150 a month over and above what it cost me to own. (including insurance, fuel, and maintenance) I paid cash for an older Buick (7 years old at the time with less than 50,000 showing) in maintenance alone I would have been better off taking a limo everywhere I went.. (talk about a lemon) plus I took a major income hit because I couldn't be counted on to show up on time. In very real terms owning that car for slightly over a year cost me well in excess of $100,000 between maintenance and loss of income.. Now it helps that I sold cars for a while in my youth and less than a year ago had a brief 4 month refresher course. During that period I could make 3-4-$5000 profit on each used car. When my average new car profit per deal was under the $150 they paid me.. That was dealer net including HOLDBACK..

Congrats on your job! I know you've been looking hard for a couple years i think you've said a few times? What'd you land?