Have any of you looked at auto lease deals lately? I've always deliberately avoided leasing because it's generally more expensive than buying. You know, more money for the middle man means less money for me. My philosophy has been buy gently used and drive the vehicle for as long as possible.
For example, our last purchase was a 2003 Toyota Highlander purchased in 2005. We don't put many miles on our cars, so we just turned 100,000 on it last month. We could probably have this car for another 10 years pretty easily. I'll die of boredom before the car dies I think.
Anyway, recently one of my coworkers who was shopping for new cars came in and asked my opinion on leases - mostly I think because he knows I don't like them. As it turns out, he already signed the papers to lease a Honda Odyssey for 36 months. But here's the really weird part- the overall cost to lease the vehicle for 3 years and buy out the lease at the end was cheaper than buying the car outright. How does that even work? I kept at him for more information (of course he didn't have the contract with him to take a look at it), but he said he went through the math a number of different times and kept coming up with the same answer... lease it! There was a trade-in involved, but it was included in both the buy and the lease offer. Totaling the 36 lease payments and the buyout amount was slightly less than to finance the purchase, which I think he said was a .9% financing deal. The buyout seemed particularly low for a 3-year old decked out Odyssey- maybe only $20,500. I just looked up a 2011 with 36,000 miles and the good condition price was around $25,000. That doesn't seem to make sense either.
It's possible he overpaid a little bit for the van but probably not because he obtained cost figures from KellyBlueBook.com and again, the two deals (buy and lease) were based on the same values.
This is tough I know, because we can't see the numbers and I'm only providing the limited details I have but have any of you run into this recently? Can you think of anything I'm missing? Have any of you discovered situations where the overall cost of leasing was lower than purchasing the vehicle?
For example, our last purchase was a 2003 Toyota Highlander purchased in 2005. We don't put many miles on our cars, so we just turned 100,000 on it last month. We could probably have this car for another 10 years pretty easily. I'll die of boredom before the car dies I think.
Anyway, recently one of my coworkers who was shopping for new cars came in and asked my opinion on leases - mostly I think because he knows I don't like them. As it turns out, he already signed the papers to lease a Honda Odyssey for 36 months. But here's the really weird part- the overall cost to lease the vehicle for 3 years and buy out the lease at the end was cheaper than buying the car outright. How does that even work? I kept at him for more information (of course he didn't have the contract with him to take a look at it), but he said he went through the math a number of different times and kept coming up with the same answer... lease it! There was a trade-in involved, but it was included in both the buy and the lease offer. Totaling the 36 lease payments and the buyout amount was slightly less than to finance the purchase, which I think he said was a .9% financing deal. The buyout seemed particularly low for a 3-year old decked out Odyssey- maybe only $20,500. I just looked up a 2011 with 36,000 miles and the good condition price was around $25,000. That doesn't seem to make sense either.
It's possible he overpaid a little bit for the van but probably not because he obtained cost figures from KellyBlueBook.com and again, the two deals (buy and lease) were based on the same values.
This is tough I know, because we can't see the numbers and I'm only providing the limited details I have but have any of you run into this recently? Can you think of anything I'm missing? Have any of you discovered situations where the overall cost of leasing was lower than purchasing the vehicle?