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Old 04-17-2012, 03:51 PM   #41
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Johnnie, driving extra miles on a lease is no more expensive than staying within the limits of the lease. There is a part on your contract that states any miles over the allotted amount are paid for at so many cents per mile.

You can also pay for the extra miles up front. So if the lease is calculated at 15000 a year and you drive 18000 you just add that amount to your monthly payment. Sort of like "you can pay me now or you can pay me later".

The main problem with leasing is the % of the car you are using. The problem is that a car depreciates the fastest in the first few years and that's what you are paying for. Usually it's 50% or more. So if you lease a 30K car you are paying at least 15K every 3 years to drive that car. +tax and fees. You are also paying interest on the total amount of the car for the full term.

One poster stated that you only pay tax on the portion of the car you are using. This is correct but the problem is when you lease your next car you get to pay tax on the portion you are using on that one also. Most people will always need a car so you are always paying and boy do you pay.

If you own your car and also trade it in you also get that tax advantage so that advantage is neutralized.
Hey Super Sport, I don't know how the "excess" mileage works but brother paid the extra cents per mile because he was like 10k over. He said it was a shock to him. Like I said, I'm into low mileage leases. Also, I consider what make vehicle has the best resale value. That's why I leased my 2011 Honda CRV. Also, when this lease is up I might try selling it myself(I hate doing that), paying off the lease and doing something different. The CRV has good residual value. Problem is there are so many of them out there.
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Old 04-17-2012, 04:05 PM   #42
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Your brother used up an additional 10% of the car so that's what he paid for, I don't know why he was shocked. The more of the car you use the more you pay.

Your CRV has a very good residual so buying the car out could cost you some money because the car is worth it. You'll notice that on a lease the dealer doesn't use an interest rate, they use a money factor which you can equate to an interest rate but you need to know the formula. They just raise that to pick up profit if you are negotiating the price or cap cost. So they give you the price or cap cost of the car and whack you on the rate. You have to be paying attention if you are going to lease.

Most people lease because they are getting to drive more car than they can afford. I know that's not always the case but most times it is.

My thought on road side assistance and warranties is this. Buying a warranty for extra years is a lot cheaper than leasing, not even close. As for road side assistance, most credit cards offer this service for free.
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Old 04-17-2012, 04:21 PM   #43
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Before I stopped working I always bought a new vehicle every 10 to 12 years and paid cash. Now that I am an old geezer I am beginning to think that the lease new every two might be the way to go, for me. I could leave the price of the car invested and the earnings would go toward offsetting the lease payments. It would also pretty much eliminate any repair costs and many maintenance items. It may cost a couple of bucks more but, I can pull into the cemetery in style!
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Mileage
Old 04-17-2012, 05:56 PM   #44
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Mileage

On one of our leases we went significantly higher than the annual mileage limit of 10,000 miles. They just wrote it off if we leased a new one. I'm sure we paid for it, but our monthly payment didn't go up that much. Over three vehicles and nine years our payment went up a total of $100/month. Not saying it is a good deal, but there is also the aspect of them wanting to sell/lease a car. Salesmen always wanted to deal. We never had any extra maintenance cost while leasing. At end of your driving life I still think it may be a good option (when cost is not the overriding issue). Thanks again for all the good discussion. Don't recall this topic coming up before.
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Old 04-17-2012, 06:20 PM   #45
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Idnar7 - Have you considered flying? Maybe your home and destinations are not near airports. But maybe there is a fly/drive combo that could work. Sometimes we fly to a major airport, and then rent from there. But if you want to see the sights, driving the entire trip maybe the way to go.
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Old 04-17-2012, 09:24 PM   #46
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Flying

Ronstar, yes flying is an option, but I spent way too much time doing that when w***king. Now retired we kind of enjoy the freedom of a leisurely drive with no schedule or deadline. Nothing like soaking up some of the local culture and stopping for a bit for something that looks interesting. Some days 800 miles some days 100. We often fly/rent when we have a timeline. Thanks for the reply.
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Old 04-18-2012, 06:32 AM   #47
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OP

We leased a vehicle for our son in college because his old car died. $158 a month for a KIA Soul. He did well originally keeping the mileage, but he's graduating, interviewing, driving more for work...

Essentially, he will probably end up buying the car rather than pay a horrendous fee.

Just consider the possibility you may end up with car. If that's not an issue, then try a lease.
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Old 04-18-2012, 07:29 AM   #48
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Be sure to buy the miles you need up front on the lease. Then, enjoy the car, turn it back in with very little maintenance or repair costs. It's more expensive then driving a car for many years but time has a value, hassle free has a value, not breaking down has a value. I never keep a car beyond its warranty period......and lease when the program is more attractive than a purchase. you should compare the monthly costs, then make a decision. the best part of leasing is not worrying about trade in values if you want a new car every 2 or 3 years. And, you only pay sales tax on the cost of the lease rather than the cost of the car.....a big savings.

Good luck.
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Old 04-18-2012, 09:07 AM   #49
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For you folks who think leasing is a good deal, this is something you should know. Often dealers will just increase the money factor and you have no idea what the interest rate is. This should help you.


Money factor can be converted to annual interest rate (APR) by multiplying by 2400 (Yes, it is always 2400 and is not related to the length of the loan in months). For example, a money factor of .00297 multiplied by 2400 = 7.13% APR
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Old 04-18-2012, 09:10 AM   #50
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Originally Posted by 73ss454 View Post
For you folks who think leasing is a good deal, this is something you should know. Often dealers will just increase the money factor and you have no idea what the interest rate is. This should help you.


Money factor can be converted to annual interest rate (APR) by multiplying by 2400 (Yes, it is always 2400 and is not related to the length of the loan in months). For example, a money factor of .00297 multiplied by 2400 = 7.13% APR

Excellent information... not that I am going to lease, but something I did not know before...
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Old 04-18-2012, 09:13 AM   #51
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DW & I leased a car for her a 1997 Mazda Miata in 1998 for real cheap, like $1K down and $100 a month, they were trying to get rid of them as there was a new model coming out in 1999. We were not sure if a 2 seater would work as we still had one child at home. We called it our one year test drive.

...bought a new 1997 Miata in 1999 for way under MSRP, like 30% off. Still have the car...
The one-year test drive sounds like a good idea. It also let's us do a rough estimate of the economics of leasing.

You spent $2,200 for one year on that lease: $2,200 per year.

The MSRP for the Miata back then was $19,575, so you paid about $14,000, and had it for 13 years: $1,000 per year + maintenance costs.

From this page:

Annual maintenance costs? [Archive] - MX-5 Miata Forum

a rough estimate for annual maintenance is about $800.

Of course, it gets complicated with inflation, etc. But roughly

Lease $2,200/year
Buy $1,800/year

With that math, leasing looks pretty good, because you always have a pretty new car. But I'm sure there are other factors I haven't considered.
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Old 04-18-2012, 09:16 AM   #52
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Two things Al, At some point you will not have a car payment if you buy and always have one when you lease. There is also maintenance on a lease but usually not as much.
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Old 04-18-2012, 09:25 AM   #53
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Of course another option is to occasionally rent a fun car. We used this one for a day:

CrescentBeach.jpg

We much prefer driving the echo versus the mustang. The latter was strong, but felt heavy and less nimble.

In SF, you can rent this Lamborghini for $1,500 (per day -- includes 100 miles):



Dream Cars West | Los Angeles Exotic Car Rentals | the San Francisco Bay area Luxury Car Rentals
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Old 04-18-2012, 09:31 AM   #54
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While it's true that hybrids really excel in city mpg, they also generally get higher highway mpg than gas ICE cars. Where there are models that are sold in hybrid and gas powered (ie, Fusion, Camry, Civic) city and highway mpg are significantly higher. I'm not aware of any gas car that can match a Prius or a Civic Hybrid among others on the highway or city. OTOH diesels CAN match hybrids on the highway, but gas powered cars don't all else equal. Not only EPA ratings, but the various real world mpg sites confirm relatively better mpg for hybrids (and diesels), see for yourself.
I was surprised to find out this is true. I thought hybrids just got "regular" mileage on long highway trips. But I personally drove a Prius 700 miles yesterday at an average speed (not counting gas and bathroom stops) of about 73 mph. We got a little over 46 mpg on the trip. So obviously the highway mileage issue won't be a show stopper if I ever decide to replace the diesel VW. The cost might though.

As an aside, the reason we took my cousin's Prius is that there were three 6'+ guys in the car. The Beetle has a back seat more suitable to our 4 small dogs. The Prius had a surprising amount of legroom in the back, and even more surprising in a modern small car, plenty of headroom. Not bad.
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