Who has leased a car?

[utrecht]

If you've leased a car, did you get hit with any hidden or unexpected fees when you turned it in?

[Lakewood90712]

Read the fine print about vehicle condition when you turn it in at end of lease. Thing like having" 4 matched tires, same brand/model with X tread left, no unusual wear," "reconditioning" fees etc.

You can avoid these nasty surprises by spending a little money yourself if needed, getting the vehicle looking like it can go straight on the used car lot. Repair scratches, chips in the paint, having a detail shop do whatever tricks to things like scuffed plastic interiors parts, to make them look new.

Look seriously at "Gap insurance" . You don't want to get in the middle of a situation of a vehicle repaired after a major accident, then the lease co. wants an outrageous fee for " Diminished value" because a accident is on the vehicle records.

[marko]

Higher end vehicle leases tend to have minor issues/damage/etc overlooked, especially when a new lease is in the wings from the same dealer.

I turned in my last car with a pretty bad ding on the bumper. Really thought they'd hit me for it. They never mentioned it. But then I was getting another new lease so, I suspect they just let it go.

I had also reached my mileage limit with several months still on the lease; the dealer just took back the car, ate the extra months and got me a new car. Actually he had contacted me with that plan. "Don't pay the mileage penalty...let me get you a new car"

Obviously they were eager to move some vehicles.

[utrecht]

I'm talking to a leasing company about leasing a car from them. They can get any car you want and tailor a lease for you, as opposed to getting it from a specific dealer and leasing it from them. The main benefit to doing it this way is that at the end of the lease you can lease another car from the same company but it can be any brand. You dont have to stick with the same brand or start a new relationship with a new dealership and new sales guy.

Of course the sales guy at D&M leasing is giving me horror stories about leasing from the dealer including stories about people getting gouged when they turned the car in and didnt lease another car. I suspect hes exaggerating wildly. Most people Ive talked to have said they didnt get hit with excess wear and tear fees. If they did, I would guess leasing wouldnt be as popular as it is. We havent talked numbers yet but he admits his leases are $50 / month or so higher than a dealer. One of the reasons is because his leases include gap insurance. He says I could turn the car in with a huge dent and still wouldnt be charged anything because of the gap insurance (which of course Im paying for)

He also claims that the dealers inflate their residual values to give you lower payment. Unless my math is off, that makes no difference to me unless I want to buy the car at the end of the lease. Hes trying to tell me that I could be upside down at the end of the lease and have to write a big check because the residual value was inflated up front. I admit that I dont fully understand leases, but I dont think thats right. Once the monthly payment and up front costs are established, I pay nothing at the end of the lease other than the surrender fee and any excess wear and tear, correct?

[jerome len]

I would ONLY lease a car through an authorized dealer of the car manufacturer. Many times cars like BMW, Cadillac, Audi as well as volume brands place low interest rates and/or incentives on their leased cars.....often time you lose these incentives when you go to an aftermarket leasing company. I like new cars and have leased more than I bought. Sometimes if we love the car, we'll keep it or buy it for a family member. Othertimes, especially if it was fixed after an accident, we'll just turn it in. Half the stuff you've been told is pure Bulls..t. Dont believe them. I've been doing this for over 20 years and have never paid any unexpected fee.....not once. Good luck!

[VaCollector]

Leased a Mazda Millennia 15+ years ago and while I was pretty sure there would
be "something"....they looked it over...said "great", signed off and that was it!

[Bamaman]

I once managed one of the largest lease fleets in the U.S. for a major auto manufacturer, and would consider myself a auto leasing expert. I could write you a book on this subject, but I'll keep it as short as possible.


Leasing is essentially balloon financing--small monthly payments with a large payment at the end. The lease payoffs are slow to come down, and Gap Insurance is to payoff the car if it's a total wreck and the insurance company will not pay it in full.


Leasing is not for everyone. It's best for relatively low mileage users that like to keep a late model, trouble free vehicle. When the lease is up, turn it in and get another. If you're always going to have a car payment, go for the payment that's cheaper. And in many states, sales taxes are kinder being paid on a monthly payment rather than on the full price of a vehicle (on a purchase.)


Most dealerships are "selling" retail leasing as an alternative to purchasing--and the auto manufacturers "buy" the lease from them and do all administration. The manufacturer's finance company is responsible for the lease end value, and it's out of their pocket if the car's not worth the projected value in 24-30-36 months. Auto manufacturers will often subvene the interest rate or give sales incentives on retail leasing--sweetening the deal.


Wholesale leasing is when the dealer has his own in house leasing company. They're usually doing fleet leasing and not dealing with individuals. The dealer will also finance the cars with the manufacturer's financing arm usually and might pay 1.5% amortization per month plus a balloon payment in 24 or 36 months + interest on the declining balance. Since the dealer's responsible for the lease end value, dealers will be conservative on LEV. Utrect was quoted this kind of lease, and it is not for an individual. The dealer's profits are when the car's sold at the lease end.


Please just realize that most lease payments are being quoted on the list price of the vehicle. Lease customers are not negotiating on price, but on monthly payment. When you're quoted a lease payment, begin negotiating for a lower payment.


Some vehicles have a wide MSRP vs. cost spread, and the dealer has room to negotiate payments. Some cars like Honda's and certain Toyotas have a high resale value and that can attribute to very low lease payments. Just don't allow the dealer to sell you any other service--GAP insurance, etc.

[Greencheese]

Very interesting... I leased a car 3 years ago due to mine getting totaled and I'm turning it in at the end of the year. I'm hoping it goes fairly smoothly since I have no interest in obtaining another vehicle after this.

[REWahoo]

Quote:

Originally Posted by Greencheese Very interesting... I leased a car 3 years ago due to mine getting totaled and I'm turning it in at the end of the year. I'm hoping it goes fairly smoothly since I have no interest in obtaining another vehicle after this.

Even though you have no interest, I'd suggest entertaining a discussion of a new lease anyway. As someone mentioned above, the lessor is likely to overlook problems with your current vehicle if they are concerned it may interfere with you spending more $ with them. Once all the paperwork on terminating your current lease is signed you can always say "no thanks"...

[kcowan]

Also consider buying and reselling the car, especially if it is low mileage (or high mileage?). The leaseco did not give any credit for low mileage. Yet they penalize for high mileage. So a private transaction may be desirable if you are not renewing. I did this twice. One low mileage and one high mileage.

[Bamaman]

The average new automobile in the retail market is about $32K. We're now seeing fancy pickup trucks running the mid-high $40's--about the same for mid size luxury vehicles. Add sales taxes to such expensive vehicles, and you can see why so many vehicles have to be leased.
$32,000 vehicle payments for 5 years will set you back $575 per month.
$50,000 vehicle payments would be $900 per month.
We're not even talking about a big BMW or Mercedes. Just a common vehicle is just borderline unaffordable for so many people without auto leasing.

[utrecht]

So I went forward with my first lease today. I used the dealership to lease the car instead of the private leasing company. The private leasing company salesman spent way too much time talking about how much better his lease program was than a dealership. We never even got to the point of talking about price. The only advantage he had over a dealership was that at the end of the lease I could lease again with him and get any car, not just the same brand. That would be great if his lease deal cost about the same as a dealership but when I pressed him he admitted that his deal would cost an avg of $50-$75 per month more than a dealership.

I've bought enough cars to know when Im getting a good deal. Its pretty easy now with websites like Edmunds. But Ive never leased before so I did a lot of research (some of it by asking questions here so thanks to everyone who responded).

We ended up with an Audi A5 convertible and man oh man is it awesome. I'm not 100% sure but based on other advertised lease deals I feel like we got a pretty good deal. We got a much better deal than what was advertised on similar vehicles with similar MSRPs.

[kcowan]

Another thing to check is the leasing company used inventory sale. We found a red sports car that had no demand from their usual buyers (it was a special deal for the wife of a regular client) and my son wanted it as his college graduation present. We were able to lease it for 20% less than market rates. They had two other sports cars that had sat in inventory for many months. Check the timing because they send them to auction houses after 4-6 months.

[marko]

My 86 y.o. mom's old car is dying.

I'm seriously considering having her lease a car considering:
1) She doesn't drive more than 2000 miles a year; she's still quite competent behind the wheel.
2) She'd need something reliable
3) She can get a three year lease for about $120 a month (low end Toyota) so the overall max outlay would be under $4K, rather than having her pay $20K+ out of pocket.
4) If she expires before the lease does, I don't have an additional headache on my hands like getting rid of a car. I'd either just keep paying the balance or see if I can turn it in.
5) She acknowledges that "in a few years" she'll be done driving (her words: "one way or another").

[aja8888]

Quote:

Originally Posted by marko My 86 y.o. mom's old car is dying. I'm seriously considering having her lease a car considering: 1) She doesn't drive more than 2000 miles a year; she's still quite competent behind the wheel. 2) She'd need something reliable 3) She can get a three year lease for about $120 a month (low end Toyota) so the overall max outlay would be under $4K, rather than having her pay $20K+ out of pocket. 4) If she expires before the lease does, I don't have an additional headache on my hands like getting rid of a car. I'd either just keep paying the balance or see if I can turn it in. 5) She acknowledges that "in a few years" she'll be done driving (her words: "one way or another").

That's a pretty expensive lease term for 2,000 miles per year. Then add in insurance and she may be paying over a $1 per mile. Crazy. Buy a used Hyundai/Kia/Honda/Toyota and let her drive for a few more years then sell it or keep it for another family member.

[hnzw_rui]

Quote:

Originally Posted by aja8888 That's a pretty expensive lease term for 2,000 miles per year. Then add in insurance and she may be paying over a $1 per mile. Crazy. Buy a used Hyundai/Kia/Honda/Toyota and let her drive for a few more years then sell it or keep it for another family member.

I don't think the lease stipulates 2,000 miles a year. Rather, that's how much his mom drives which should be well under the typical 12,000 miles specified.

[marko]

Quote:

Originally Posted by aja8888 That's a pretty expensive lease term for 2,000 miles per year. Then add in insurance and she may be paying over a $1 per mile. Crazy. Buy a used Hyundai/Kia/Honda/Toyota and let her drive for a few more years then sell it or keep it for another family member.

Quote:

Originally Posted by hnzw_rui I don't think the lease stipulates 2,000 miles a year. Rather, that's how much his mom drives which should be well under the typical 12,000 miles specified.

I think the minimum for mileage might be 10 or 12K.

Regardless. I'm less interested in "dollars per mile" than the convenience of a lease.

For $120 a month, I can set up a lease over the phone, have it delivered at her home and, at expiration, have someone just take it away.

The overall lease would cost about $4K for 3 years rather than tying up $20-25K in a new car. (as someone noted, there is a sales tax advantage to this as well; $1500 new vs $260 total on a lease)

She's never driven a used car (despite keeping her current car a long time) and, even at 86, she'd take my head off at the suggestion!