Anyone have a positive experience leasing a car?

ESRwannabe said:
I already paid cash for the car and I now intend to drive it until it dies because I am stubborn.
Click to expand...

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
 
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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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.
 
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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LARS said:
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...


Sent from my iPad using Early Retirement Forum
Click to expand...

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.
 
ShokWaveRider said:
Leasing also makes sense when Money is cheap from an Interest rate perspective. I usually lease cars valued between $50 & $70k range.

![/B]
Click to expand...


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?
 
Htown Harry said:
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
Click to expand...


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.
 
Ready said:
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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Click to expand...


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.
 
Blueskies123 said:
Why, leasing does not make sense unless you value you time more than the thousands of dollars you save.
Click to expand...

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.
 
Totoro said:
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.
Click to expand...


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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LARS said:
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...


Sent from my iPad using Early Retirement Forum
Click to expand...


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.
 
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.
 
LARS said:
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!
Click to expand...

Then the US market must be very different then. Out here depreciation is at an all-time low. The new-car dip has all but vanished. Lease rates are dropping too.

Although it is less true for the premium segment (Like the X5) vs. compact cars, the trend still holds.

Two caveats though, also here: 1) Don't buy consumer price, wait for the great deals and 2) if you buy young second-handed: don't pay for guarantees you already have. The manufacturer typically has guarantees as well, up to seven years on KIAs for example on the engine, so it makes no sense to pay for added guarantees on that same engine.

I saved 800 euros on my car by skipping on a 'guarantee' pack since it covered what already was covered. Pure profit for the dealer.
 
REWahoo said:
You can't get a peace of mine, no matter how much you want it... :LOL:
Click to expand...


But I guarantee I can give "a piece of mine"... :)


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LARS said:
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!


Sent from my iPad using Early Retirement Forum
Click to expand...

While the depr. to you maybe $5K per year the next buyer does get $5K off the purchase of the used car. I think you will find that you will be paying close to the price of a new car. Dealers make more money off of used cars than new cars. For me the price difference between a 2 year car with 30,000 miles and a new car is not worth buying the used car. But then I keep them a long time, much longer than 3 years.
 
Blueskies123 said:
While the depr. to you maybe $5K per year the next buyer does get $5K off the purchase of the used car. I think you will find that you will be paying close to the price of a new car. Dealers make more money off of used cars than new cars. For me the price difference between a 2 year car with 30,000 miles and a new car is not worth buying the used car. But then I keep them a long time, much longer than 3 years.
Click to expand...


High end autos the differential between new and 3 year old certified is huge. Can easily be 40 % and even 50%, which works out to tens of thousands of dollars.


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I look at any kind of dealer financing (leasing or buying with payments) as one more chance for them to extract more money from me. All the lease lingo mentioned above is not only foreign to me, but also confusing. I suppose it really isn't once you know what it all means. My point is that I prefer simple to complicated. For this reason, I have become a fan of buying used with no payments (cash only.)

I really do understand OPs desire for a nice new car for which he is not making a "life-time" commitment. I understand the view point that "Hey, I've scrimped and saved and now it's time for the pay-off of getting what I want." Having said this, I still think a 2 or 3 year old "nice" used car could be traded for another 2 or 3 year old nice used car if the first one doesn't work out. BUT - we all have our own way of looking at things. If we can afford it, who is to say what is good, better or best. As always, YMMV.
 
For any that are curious I ended up paying $5k cash for a used car.
 
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