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Old 08-04-2016, 10:42 AM   #21
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I don't lease and I've also never had to "deal" with major repairs. Vehicles are built very well these days and swapping every 3 years to avoid a potential repair makes little sense considering that most warranties last 5 years and that most major car brands will go well over 100k before a major repair is needed.

All a lease guarantees is monthly payments forever and for that privilege you will paying over 40% of the car's value to use it for less than a quarter of it's useful life.
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Old 08-04-2016, 11:51 AM   #22
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I've thought about this option for a single vehicle for DW. We have other cars that have anywhere from 25k to 198k miles, so this would be a luxury item in my book and have to evaluate as such. Might be ok since if we had to, can rely on one of the other vehicles that are paid for. What are early turn-in penalties like for Leases?
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Old 08-04-2016, 11:53 AM   #23
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I don't lease and I've also never had to "deal" with major repairs. Vehicles are built very well these days and swapping every 3 years to avoid a potential repair makes little sense considering that most warranties last 5 years and that most major car brands will go well over 100k before a major repair is needed.

All a lease guarantees is monthly payments forever and for that privilege you will paying over 40% of the car's value to use it for less than a quarter of it's useful life.
I will be dead before I do 100k in any car LOL.

Your numbers fail a little. For a $70k car in the example I listed in an above post. It costs you 23% of the total to drive it for 3 years. If you buy it out at the end of the lease, you are not so bad off. In addition you have had a 3 year test drive, and the use of the balance of the funds for 3 years. If you owned it and choose to sell it after 3 years, you will most likely be worse off.

NEWSFLASH! You lose more in the above scenario if you purchased the car.

As I will NEVER own another car for more than 3 - 4 years before replacing it, you have to base all the math on that Scenario. Basing it on the assumption you will drive the car till it drops is a losing proposition.

Also the math works better for more expensive cars. Again, as I have never driven a car in the last 25 years that A) is not new, B) has cost less than $45k (in todays dollars). It works well.

IMHO, it is one of the things I have earned in addition to being FiRED at 55 (62 Now). Some people eat Caviar and Lobster, I like to drive a nice car (at least what I consider to be one) and like filet mignon and Lobster (Do not like Caviar) Hopefully you take the last sentence a little tongue in cheek)
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Old 08-04-2016, 11:57 AM   #24
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I've thought about this option for a single vehicle for DW. We have other cars that have anywhere from 25k to 198k miles, so this would be a luxury item in my book and have to evaluate as such. Might be ok since if we had to, can rely on one of the other vehicles that are paid for. What are early turn-in penalties like for Leases?
You can always lease for 24 months. I do not think it would be a good idea to return the car before lease end.

I have sold many lease cars 90% through the lease, but I typically do 50% of the allowed mileage. Another reason why leasing works for some.

I sold my Jeep for the Lease Buyout + $3000 8 months before it was due. But it had only done 4000 miles in 2.25 years.
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Old 08-04-2016, 08:20 PM   #25
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I've leased cars for years and never thought I screwed up by not just buying outright. Now that I'm turning 80 and my financial situation is changing I decided to purchase this time. Bought what I think is one of the best cars out there, a 2016 Toyota Camry XLE. Got it for 0% interest, nothing down. I'm paying Toyota $500/month and figure in four years it will be paid off and then that $500 payment will be like supplementing my income. We drive about 9k miles a year so it should last me the rest of my life. Can'r remember the last time I "bought" a car.

There are those our there that will argue that leasing for some number like $300/mo forever would work out the same but I have to consider my wife. She wouldn't know the first thing about leasing/buying a car so she was all for doing it this way. Tell me I'm wrong.
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Old 08-04-2016, 08:25 PM   #26
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Old 08-04-2016, 08:26 PM   #27
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I already paid cash for the car and I now intend to drive it until it dies because I am stubborn.
If I post a cheap fix or a workaround for getting the key out during the summer will you be mad at me for taking away your dream of a new leased car?

This post has pictures of the workaround (which seems typical for GM cars, at least):
Car Hack – Key Stuck in Ignition: Pontiac Aztek | The News Wheel

This thread mentions a fix involving cleaning electrical contacts down below where you spilled a soda on the shifter in year two. Maybe.
Key in ignition won't come out - Discussion on Topix
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Old 08-04-2016, 08:28 PM   #28
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Keep in mind that when you lease a car, you still have to establish what the purchase price is. When you see advertisements for lease deals, these ads are almost always based on paying MSRP for the car. You can always negotiate a discount of MSRP, and usually a substantial one. This will lower the lease payment quite a bit.

Don't think that the monthly numbers in the ads are the numbers you need to pay. They are essentially full price deals with maximum profit to the dealerships, not the numbers they really need to lease the car for.


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Old 08-04-2016, 08:40 PM   #29
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I prefer to buy rather than lease but I did look at leasing earlier this year because Toyota was advertising a $149/month lease on a vehicle that I was considering. However, after considering the up-front cost, gap insurance, acquisition fee, disposition fee, taxes, etc. the price was substantially higher than the $149 advertised. Ask them what your cash out will be at closing, for each month, and at disposition and then divide the total by the number of months so you don't get any surprises.
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Old 08-05-2016, 07:53 AM   #30
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OP. I know that you said you do not like to buy used because of repairs. However, may I suggest you consider purchasing a pre-owned CERTIFIED vehicle. These are usually vehicles sold by the manufacturer that have come off lease. So they are 2 to 3 years old, look to be near new, low miles AND have a manufacturer's warranty (for how long and how many miles depends on car/manufacturer).

But you get what is a clean, late model car, with a warranty where the original purchaser has taken the HUGE depreciation from new. Twenty years ago I would have never considered this approach, but cars now routinely pass the 100,000 mile mark so something with 25,000 to 40,000 miles is just getting warmed up.

Perhaps something to think about...


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Old 08-05-2016, 10:27 AM   #31
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OP. I know that you said you do not like to buy used because of repairs. However, may I suggest you consider purchasing a pre-owned CERTIFIED vehicle. These are usually vehicles sold by the manufacturer that have come off lease. So they are 2 to 3 years old, look to be near new, low miles AND have a manufacturer's warranty (for how long and how many miles depends on car/manufacturer).

But you get what is a clean, late model car, with a warranty where the original purchaser has taken the HUGE depreciation from new. Twenty years ago I would have never considered this approach, but cars now routinely pass the 100,000 mile mark so something with 25,000 to 40,000 miles is just getting warmed up.

Perhaps something to think about...


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You are not the only one with this approach, and its becoming a bit too popular (in Europe, so maybe not the US). In fact, we're seeing deals where these cars are actually about the same monthly cost as brand new cars.

Go figure.
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Old 08-05-2016, 10:37 AM   #32
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We need a Who Leases and who buys poll.
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Old 08-05-2016, 10:40 AM   #33
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Leasing also makes sense when Money is cheap from an Interest rate perspective. I usually lease cars valued between $50 & $70k range.

![/B]

I did not see where you compared your calculations to purchasing and holding the car. I can see where buying a high end luxury car every 3 years may lend itself to leasing but unless someone can show me the calculations where leasing every 3 years is cheaper that purchasing a very nice Lexus (high resale value) every 5 years I will stay with my Lexus or Toyota.
My Avalon 5 years old, has 140,000 miles, drives as good as the day I bought it and I have only changed the oil and bought new tires. My cost per mile has to be less than 20 cents per mile including deprecation. What is the leasing cost per mile? Depending upon how much you drive probably 75 cents per mile, could it even be $1/mile?
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Old 08-05-2016, 10:42 AM   #34
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We need a Who Leases and who buys poll.
Why, leasing does not make sense unless you value you time more than the thousands of dollars you save.
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Old 08-05-2016, 10:42 AM   #35
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If I post a cheap fix or a workaround for getting the key out during the summer will you be mad at me for taking away your dream of a new leased car?

This post has pictures of the workaround (which seems typical for GM cars, at least):
Car Hack – Key Stuck in Ignition: Pontiac Aztek | The News Wheel

This thread mentions a fix involving cleaning electrical contacts down below where you spilled a soda on the shifter in year two. Maybe.
Key in ignition won't come out - Discussion on Topix

I don't think those will work for my case. My car is a Saturn Ion. I had both Saturn and Chevrolet (after Saturn went away) mechanics try to fix it and they never could.

No spilled beverages. This was basically a known design flaw in the car from what I read on the internet years ago.
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Old 08-05-2016, 10:44 AM   #36
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Keep in mind that when you lease a car, you still have to establish what the purchase price is. When you see advertisements for lease deals, these ads are almost always based on paying MSRP for the car. You can always negotiate a discount of MSRP, and usually a substantial one. This will lower the lease payment quite a bit.

Don't think that the monthly numbers in the ads are the numbers you need to pay. They are essentially full price deals with maximum profit to the dealerships, not the numbers they really need to lease the car for.


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Thanks, i will definitely keep that in mind. I would be happy with the two nationwide deals I mentioned earlier as is, but I will try and haggle it down as much as I can.
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Old 08-05-2016, 10:45 AM   #37
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Why, leasing does not make sense unless you value you time more than the thousands of dollars you save.
To YOU maybe. We all did not retire early by making rash financial decisions. (unless some of us won the lottery, I did not) I like to drive a NEW nice car every 3 years. It works all things being equal.
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Old 08-05-2016, 10:55 AM   #38
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You are not the only one with this approach, and its becoming a bit too popular (in Europe, so maybe not the US). In fact, we're seeing deals where these cars are actually about the same monthly cost as brand new cars.

Go figure.

Actually I've yet to do it. Historically we've bought new and held for ten years or so. Never leased a car and don't think I ever will. Though I could see a scenario where cars start to change so fast (become obsolete quickly because of technology) where leasing might make sense in the future (think cutting edge of driverless cars). That having been said I am seriously thinking our next "new" car will be a certified. Use to be new cars seemed to drop $5 thousand a year in depreciation. Just had our X5 BMW at dealer and it looks like in 4 years it has lost more like $8,000 to $10,000 pa. So the hit on new cars is getting bigger and bigger!


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Old 08-05-2016, 10:57 AM   #39
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OP. I know that you said you do not like to buy used because of repairs. However, may I suggest you consider purchasing a pre-owned CERTIFIED vehicle. These are usually vehicles sold by the manufacturer that have come off lease. So they are 2 to 3 years old, look to be near new, low miles AND have a manufacturer's warranty (for how long and how many miles depends on car/manufacturer).

But you get what is a clean, late model car, with a warranty where the original purchaser has taken the HUGE depreciation from new. Twenty years ago I would have never considered this approach, but cars now routinely pass the 100,000 mile mark so something with 25,000 to 40,000 miles is just getting warmed up.

Perhaps something to think about...


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I will definitely consider that. I'm leaning towards trying leasing this next time just to see how I like it though.

My very first car was used (not a junker, but not great either) I paid cash for and drove until it died (about 4 years). My current car I bought new in cash and have had it almost 11 years thus far. I didn't even own a car until almost 25 as I made due with walking and public transportation.

There is a non-monetary factor involved this time. I basically never do anything nice for myself my entire life. I'm 40 and have lived like a broke college student the last 22 years. Maybe this is a mid life crisis for an FI/ESR wannabe. Instead of getting cheapest thing possible as I usually do, maybe over spend this time.
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Old 08-05-2016, 12:58 PM   #40
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Realistically, there is no real difference between a brand new car and one 3 years old...especially if the model line hasn't been updated.
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