Buy vs Lease - Travel Car

[brewer12345]

Johnnie, get what you like. If you want to lease, do it. Pick something comfy. Econoboxes may get high mileage, but many of them are a chore to drive for a long distance.

 

[rescueme]

Johnnie, get what you like. If you want to lease, do it. Pick something comfy. Econoboxes may get high mileage, but many of them are a chore to drive for a long distance.

Except Johnnie was not the OP, who posed the original question.

We know that Johnnie buys what he wants, when he wants (everybody's different). It's his money (even though I don't necessarily spend it the way he does he can certainly do what he wishes).

As to the OP's question? I would rent for the trip; but of course, that's only me and what I would do, based upon my previous comments relating to leasing.

As to the question of do you have to return the car to the same rental location in the US? No. DW/me have done that often (along in Euroland/UK/Republic of Ireland) many times. There might be an additional charge if you are droping off the car at a remote location (they have to pay to "reposition" the vehicle) but even so, it's better than purchasing another vehicle, IMHO.

 

[Texas Proud]

For all you folks that are saying leasing is a bad investment and the only way to save money is to either buy new and if not that, at least a good used car. And for all you folks that insist on driving a car till the wheels fall off, just to save some money, I'll say this for one last time, I'M NOT TRYING TO SAVE MONEY WHEN I BUY A CAR. I'M EXPECTING TO SPEND MONEY.

I do not see where anybody quoted you and then said anything negative on leasing... but you seem to be taking it personally for some reason...

The OP ASKED which is better and why... so people are giving their opinions... you gave yours... others are giving theirs... why the hostility

 

[Midpack]

I do not see where anybody quoted you and then said anything negative on leasing... but you seem to be taking it personally for some reason...

The OP ASKED which is better and why... so people are giving their opinions... you gave yours... others are giving theirs... why the hostility

+1.

 

[brewer12345]

Except Johnnie was not the OP, who posed the original question.

Ah, well, whaddaya want before the second cup of coffee?

 

[rescueme]

Ah, well, whaddaya want before the second cup of coffee?

As a (coffee?) "brewer", I thought you were up to the task ...

Yeah, these things happened (I also responded incorrectly this AM on another thread, and I had my coffee!)...

 

[ERD50]

I guess it's OK to side-jack the thread a bit at this point...

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 think that idea gets stuck in peoples head once they realize just how a hybrid works. A hybrid captures the energy lost from braking, stores it in the battery, and then uses that energy to help with acceleration. So it seems reasonable to think that it can't help on the highway with little braking, but...

What that misses is with the battery helping out with acceleration, the engine can be smaller. Most of engine size is there for acceleration, a very small engine can keep you moving at 65 mph. So a hybrid can get better highway mpg in the same way a 6 cyl can get better mpg than an 8 cyl. That's offset a bit from the weight of the electric motor and batteries.

However, though I own a hybrid, even with our current high gas prices the payback to offset the upfront cost of a hybrid takes 5 to 10 years to break even.

I saw this in the Sunday paper, and was surprised. I thought hybrid owners were rabidly loyal:

Few hybrid vehicle owners are repeat buyers - chicagotribune.com

Only 35% of hybrid owners chose another one when they bought a new car last year, automotive research firm R.L. Polk & Co. says. ... If you factor out the super-loyal Toyota Prius buyers, the repurchase rate drops to less than 25%.

They may not have accounted for hybrid buyers who bought EVs, but I would think that would be a small number.

-ERD50

 

[Idnar7]

Thanks for the discussion

Didn't realize this would be so polarizing :^). I appreciate all the feedback. Lease sounded maybe too good, which is why I wanted to know the other side of it. I hadn't really considered renting, but when I think back I often did that for vacations with young children and a beater car. Just using the SUV is also a viable option. As long as it is well maintained no reason to be concerned with higher mileage. JOHNIE36 I hear your thoughts on this and agree with them for you. Thanks all.

 

[JOHNNIE36]

We have a 7 yo SUV with 80k and a 17 yo truck with 150k. Now in retirement we are looking for a comfortable, reliable vehicle for road trips visiting grown children in CA, TN , and TX (we live in MN). This vehicle will be used primarily for this purpose. We are weighing the option of leasing (2 or 3 year) this vehicle for the following reasons:

1. Lower payments
2. Always having a late model/reliable vehicle
3. Minimal maintenance costs
4. Easy to live within mileage limits
5. Easy to re-lease at end of term
6. Once the vehicle is no longer needed it can just be turned in at end of lease

We had previously leased three different vehicles while putting daughters through college, and that worked well (monthly cost $250-350).

Don't recall any discussions about leasing cars on this forum. Anyone else done this? Does this sound reasonable or why not? Thanks for input

I need to apologize for "shouting" in my posts about my stance on leasing. Although I may not have said it, I agree that leasing is not the most economical way to drive a car. For me it's just the best way. And, going back to the OP, the points mentioned all lean to leasing except for #4. From what I understand from my brother, you don't want to go over the alloted miles. He did and paid dearly. We don't drive over 10K a year so I always go for the low mileage lease.

Idnar7, I think your point #4 would take you out of leasing. It just looks like you will be driving more than 12k miles a year.

 

[REWahoo]

All states are not equal when it comes to comes to the cost of leasing. Tax laws make TX one of the worst:

[FONT=Arial, Helvetica, sans-serif]Texas laws require that the lessor (the lease company) pay sales tax on the full value of any vehicle they buy from a dealer and lease back to a lessee (you and me). This is different from most other states in which no such tax is charged to the lessor, or the tax is administered in a different way.[/FONT]

[FONT=Arial, Helvetica, sans-serif]Of course, Texas lessors don't want to absorb the cost of the tax. If they did, there would probably be no leasing in Texas. Therefore, the lease company simply passes along the tax bill to the leasing customer. The leasing customer therefore pays full sales tax just as if he was buying the vehicle, not leasing.[/FONT]

Texas Auto Leasing - Why Car Leasing is Not Better in Texas

 

[FinanceDude]

I need to apologize for "shouting" in my posts about my stance on leasing. Although I may not have said it, I agree that leasing is not the most economical way to drive a car. For me it's just the best way. And, going back to the OP, the points mentioned all lean to leasing except for #4. From what I understand from my brother, you don't want to go over the alloted miles. He did and paid dearly. We don't drive over 10K a year so I always go for the low mileage lease.

Idnar7, I think your point #4 would take you out of leasing. It just looks like you will be driving more than 12k miles a year.

My 82 year old father has done 2-year leases on Ram pickups for about 16 years now. This from a guy who has enough money to pay cash for a whole fleet of them. He likes having a warranty and roadside assistance. He knows it costs a lot more but does not care.........

 

[73ss454]

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.

 

[Texas Proud]

All states are not equal when it comes to comes to the cost of leasing. Tax laws make TX one of the worst:

Texas Auto Leasing - Why Car Leasing is Not Better in Texas

I remember reading that in other states they charge property taxes on leased vehicles... as far as I know, Texas does not...


I do wonder why other states do not charge a sales tax IOW, it seems that Texas is doing it correctly.... making the company that bought the car pay the sales tax on the car... I would think that Hertz and Avis have to pay a sales tax on the cars they lease....

 

[REWahoo]

I do wonder why other states do not charge a sales tax IOW, it seems that Texas is doing it correctly.... making the company that bought the car pay the sales tax on the car... I would think that Hertz and Avis have to pay a sales tax on the cars they lease....

Not sure how rental equipment is taxed - does the local grocery store pay sales tax when they buy a carpet cleaning machine to place in their rental fleet? Or does the consumer pay sales tax when they rent the machine?

 

[Texas Proud]

Not sure how rental equipment is taxed - does the local grocery store pay sales tax when they buy a carpet cleaning machine to place in their rental fleet? Or does the consumer pay sales tax when they rent the machine?

Good point... I do not know...


Looking up in my sales tax book... it is imposed on sales of 'taxable items' except for sales for resale... since a rental is not a resale, I would think that there would not be any taxes... I do not see rental on the services list...


Opps... I just saw that Hertz and Avis may not have to pay a sales tax.. there is an exemption for motor vehicles rented for re-rental... hmmm, but they buy them don't they?...

 

[JOHNNIE36]

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.

 

[73ss454]

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.

 

[poorgeezer]

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!

 

[Idnar7]

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.

 

[Ronstar]

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.

 

[Idnar7]

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.

 

[seraphim]

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.

 

[jerome len]

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.

 

[73ss454]

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

 

[Texas Proud]

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...