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Old 03-15-2018, 07:36 AM   #41
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The answer is like this.... Yes, no, maybe. No one right answer for everyone.
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Old 03-15-2018, 07:41 AM   #42
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Originally Posted by jw72 View Post
I have never leased, but I do watch swapalease.com. They have short term leases wth lots of miles that look interesting. I would love to get a caddie with a 6 month lease and 15k miles and drive that thing all over the country in style.
Swapalease is great. I have never pulled the trigger but there sometimes are some nice looking deals on a car with a year or so left.

Another good place to look for incredible deals, on new leases, is leasehackr.com They often have brand new cars for about $150/month by taking advantage of certain incentives and negotiating a decent deal.
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Old 03-15-2018, 07:43 AM   #43
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Swapalease is great. I have never pulled the trigger but there sometimes are some nice looking deals on a car with a year or so left.

Another good place to look for incredible deals, on new leases, is leasehackr.com They often have brand new cars for about $150/month by taking advantage of certain incentives and negotiating a decent deal.

I took a quick gander at the website and I was amazed at HOW MUCH some of these folks are paying to lease a car! Granted, it's been a long time since I financed a car (and have never leased)..but damn!

So, no. I will not be leasing a car anytime soon.

I am not so sure how good a deal it would be here in Georgia. I am not sure how the title tax is figured on a "swapped lease", but I do know that for a purchase, that will cost you 7% of the FMV.

Edit: In Georgia, you will be taxed 7% of the lease payments. Still a decent chunk of money IMHO.

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Georgia passed a revision of its tax law in 2017 that changes the way TAVT is calculated for leased vehicles. House Bill 340 which is effective as of January 1, 2018 taxes only the sum of lease payments, not the entire value of the vehicle as before — a much more fair tax for leasing consumers in Georgia.
https://www.leaseguide.com/glossary/georgia-car-lease/
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Old 03-15-2018, 07:50 AM   #44
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Remember, as interest rates rise, leasing becomes less desirable, unless the leasing company makes concessions. Mercedes is notorious for charging higher interest and having lower residual values on their leases. that is why I changed from Merc to BMW. And YES they can be negotiated.
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Old 03-15-2018, 08:03 AM   #45
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I took over a lease a number of years ago when I was working. The vehicle was a business expense for tax purposes.

Two outcomes at the time. On a pre tax basis it was not the best alternative. On an after tax basis it was financially advantageous to me so we moved forward with it. It may not have been so good at the start of the lease. I assumed the vehicle in month 19 of a three year lease. Turned out to be a good deal for us since we also took advantage of a lower than market end of lease buyout.
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Old 03-15-2018, 11:13 PM   #46
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Anyone know of a good auto lease vs. buy calculator?

I understand that it's complicated - and I doubt any calculator would capture all the factors - but it could provide one data point to help quantify the dollar difference.
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Old 03-16-2018, 12:10 AM   #47
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We have typically been buy and hold owners keeping cars more than 10 years, but 2.5 years back we decided our son needed AWD on the car he had at school, so he inherited mine. After doing some research on my options and the recommendation of a friend at work, I took a plunge into a 3 yr lease. At the time it seemed technology was advancing quickly in the cars, but the charging infrastructure and range of full electric cars were not yet to the tipping point to go that route. I was able to find a car that had been driven by the owner of a dealership with about 5K miles on it and was being offered at over 20% off the sticker price, so some of the initial depreciation had already been factored into the price to me. The car still had a decent residual value, so the the 20% off made for very low payments vs a typical lease.

But a few months back I accelerated my retirement plans, and it seems my DW and I don’t both need cars, she almost never drives by herself since I am around... I am thinking to just turn in the leased car in 6 months and walk away without hassles; if I could turn it in tomorrow and avoid the remaining payments, I probably would.

So lessons for me are 1) leasing a demo can be a decent deal financially, but 2) things change and the new life situation may not match up exactly with the end of the lease.

Guess I will be waiting a few more years for an electric car. Heard the Tesla 3 series has a waiting list of 1.5 years and having a lot of problems getting quality parts to support demand, so maybe it will be a few more years before I think about the next car purchase...
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Old 03-16-2018, 04:43 AM   #48
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Anyone know of a good auto lease vs. buy calculator?

I understand that it's complicated - and I doubt any calculator would capture all the factors - but it could provide one data point to help quantify the dollar difference.
A calculator will give you the dollar difference and, as you note, one data point.

It won't provide the intangibles --more car for less money, less worry, etc-- as noted within this thread.

I suspect that if the dollars alone are one's criteria then leasing will not be a winner.
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Old 03-16-2018, 05:48 AM   #49
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Part of the reason I hold onto cars more than 5 years is partly economics, partly familiarity with a reliable car, and partly because I hate the selling process. I hate selling it myself, and that's not a good option anymore anyway because I live pretty remotely. I feel like a take a beating when I trade in at a dealer or try to sell someplace like CarMax.

Does that make me a better candidate for leasing if I'm ok with the economics of a new car every 5 years? Or are you just locking in taking that beating on a trade-in by leasing?
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Old 03-16-2018, 06:09 AM   #50
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I'll also say that leasing seems a bit like an annuity to me. I don't know if I can understand exactly what I'm getting into, and feel like I could get what looks like a great deal, only to find out I locked myself into a bad deal. Is there a good place to really understand all the ins and outs of leasing, so you know what to look for in a contract?

With an outright purchase, it's one check and I'm done with them unless I need warranty work done. I don't do the loan deals or extended warranties or service plans.

I will check out that Leasehackr site. I see they have a "Leasing 101" link. If there's a better learning site, point me to it.
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Old 03-16-2018, 06:54 AM   #51
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If you carry a GM card in your pocket, and can tolerate GM vehicles, you can use the points toward your lease or purchase.
My older card allows a max of 3500 points (dollars) to be applied, while some of the newer issues give you less. I get about 4 bonus offers during the year where they will increase your stash nicely if you buy within a certain period, usually 6-8 weeks.
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Old 03-16-2018, 06:58 AM   #52
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I leased one vehicle about 10 years ago and won't do it again. I didn't have a terrible experience, but also didn't really understand what I was getting into until it was over.

IMHO, leasing rarely, if ever, makes economic sense. Leasing companies count on customers' love of convenience and get you two ways:

1) Leasing companies do not have to disclose the APR on a lease, as is required by truth in lending laws if you buy a vehicle (the FTC does not consider a lease a debt). Because of that, you almost always have a higher interest rate on a lease vs. a purchase. Leasing companies reference something called a lease or money factor, but most people don't know or understand what this is.
2) When you lease a car, you are essentially renting it for a specific term. The basis amount you are financing is based on the estimated residual value of the car at the end of your lease term. The amount they use to calculate your lease payment is always more than what history has shown is their exposure at the end of the lease. Otherwise, they would be losing money on the lease and they never lose money. So - you are financing more than the fair market value of the vehicle over the lease term.

There may be some tax advantages to leasing if you own your own business that I don't fully appreciate or understand. But - for the average Joe who is considering options when looking for a new vehicle, I think it's a high price to pay for the perceived convenience of a lease.

Just my 2 cents.
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Old 03-16-2018, 07:17 AM   #53
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I leased one vehicle about 10 years ago and won't do it again. I didn't have a terrible experience, but also didn't really understand what I was getting into until it was over.
Like anything else, such as buying a house, choosing area to live, investment strategy, one needs to do their homework. Leasing is a strategy, once understood it CAN be an effective tool to lower your out of pocket costs.
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Old 03-16-2018, 07:30 AM   #54
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...with the lease you are only paying for the depreciation you're using, not to mention avoiding the lump sum sales tax amount.
Avoiding sales tax on the full price of a leased vehicle isn't always possible. Some states charge sales tax on the entire price, making leasing in those states a very costly way to finance a ride.
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Old 03-16-2018, 07:38 AM   #55
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no >>>>>>>>>
I buy and hold, leasing for me doesn't make senses financially to me. I do like a lot of the thinking why people do lease though.
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Old 03-16-2018, 07:45 AM   #56
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I agree, if your state charges tax on the whole amount, it is pointless leasing. In fact, if so, you should move from your Tax gauging state to some place else, as they will be getting you in other places also.... (Joke).

Leasing is ONLY good, if you like cars of ~$60k and up and Like to change every 3 years and can secure a good "Money Factor" (Interest rate, Remember IR is =sum(MFx24) ). (3 year leases are the leasing "Sweet Spot"). Currently I fall into that category, that may change.

I also pay my 3 year lease(s) in one go. "One Pay" as it saves quite a bot of interest.
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Old 03-16-2018, 09:02 AM   #57
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Leasing is ONLY good, if you like cars of ~$60k and up and Like to change every 3 years and can secure a good "Money Factor" (Interest rate, Remember IR is =sum(MFx24) ). (3 year leases are the leasing "Sweet Spot"). Currently I fall into that category, that may change.
This is not always true. You can find some sweet deals on lower cost vehicles. Look at Leasehackr site and you'll find lots of really good deals on lower priced cars. There is currently a deal to be found on
  • GM Terrain ($29K MSRP) for $180 plus $1,152 cash due at drive off).
  • Acura ($36K MSRP) for $342 plus $1,103 cash due at drive off).
  • Camry ($25K MSRP) for $207 plus $1,365 due at drive off).
As a real life example ---- My daughter was looking for a new car, negotiated a deal on Chevy Equinox for her, MSRP of $29.975. Total of lease with ZERO out of pocket for 24 months was $197/mo (tax included). It was all about the available incentives and MF rate that made this all work. And this entire deal was negotiated via email, dealer also offered to deliver vehicle to my house (they were 3 hours away from me).

Also just negotiated lease on Escape ($33K) for $280/mo, 39 month (36 would have cost $20+ more per month), with $0 out of pocket.

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I also pay my 3 year lease(s) in one go. "One Pay" as it saves quite a bot of interest.
That really depends on the MF. If you have a really good MF then one pay doesn't make sense. Using my example above, my total lease payments would have been $4,728. A "one pay" would have been $4,650, a savings of only $78 which is under 1%.

Each lease deal needs to look at it's own merits. Finding available incentives from manufacturer is usually key. Finding additional incentives just really makes the deal work. In my case GM was having "bonus tag" vehicles they were trying to move, had significant discounts. There was promotion through Costco which gave $1,000 additional discount. And then there was $500 "conquest" rebate. GM also has a very low MF (.00070). And then surprisingly had a pretty good residual. And then there's incentives to the dealer, find the right dealer who needs to move a few vehicles at the end of month for their additional incentive and it all just comes together nicely.
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Old 03-16-2018, 09:03 AM   #58
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Avoiding sales tax on the full price of a leased vehicle isn't always possible. Some states charge sales tax on the entire price, making leasing in those states a very costly way to finance a ride.
This is mostly true, with clarification. "The entire price" is the sum total of the lease payments over the life of the lease, not the sticker price of the vehicle. So, if you are paying $300 a month for 36 months the total of your lease payments would be $10,800. This is the amount your state sales tax is based upon. So if your state sales tax is 6%, you would pay $648 in sales tax.

Most states also the lease company to calculate that number into 36 monthly payments and add it onto the lease payment ($18 a month) but a handful of states make you pay it up front. This is where the "true zero down lease" is your friend.
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Old 03-16-2018, 09:04 AM   #59
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I agree, if your state charges tax on the whole amount, it is pointless leasing. In fact, if so, you should move from your Tax gauging state to some place else, as they will be getting you in other places also.... (Joke).
The difference is the sales tax is assessed in one lump sum up front, or it is spread out into the lease monthly payments. Either way, you pay the state sales tax.
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Old 03-16-2018, 09:09 AM   #60
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1) Leasing companies do not have to disclose the APR on a lease, as is required by truth in lending laws if you buy a vehicle (the FTC does not consider a lease a debt). Because of that, you almost always have a higher interest rate on a lease vs. a purchase. Leasing companies reference something called a lease or money factor, but most people don't know or understand what this is.
And they really don't need to know what it is. So the lease company charges you 6.29% on the money in your lease and the bank charges you 5.9% on the vehicle you purchase with financing.


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2) When you lease a car, you are essentially renting it for a specific term. The basis amount you are financing is based on the estimated residual value of the car at the end of your lease term. The amount they use to calculate your lease payment is always more than what history has shown is their exposure at the end of the lease. Otherwise, they would be losing money on the lease and they never lose money. So - you are financing more than the fair market value of the vehicle over the lease term.
For years, decades even, Ford would lease F150 pickups with high residual values that would be result in lower monthly lease payments for the customer but a higher buyout number at lease end. This is how Ford built up their claim that the F150 is the best selling pickup for 29 years in a row (or whatever they're up to now.) I know, I leased seven F150's over the year. Honda does much the same thing with Accords.
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