Car Leasing Noobie Seeking Any and All Input

[TrvlBug]

DH and I have decided to lease our cars going forward. In the past, we've always purchased new cars and kept them until they fell apart, then for the last 2 cars, on a 7-10 year cycle, and now have decided to lease going forward for the new technology as well as convenience.

DH is replacing his 2017 Lexus ES350 with a 2025 one. These cars, as well as all Lexus' are hard to come by and with the trim level we want to get the 360* camera, there are none to be found on the west coast in the colors acceptable to DH.

As we are total noobs to car leasing, I'm hoping to get as much input as possible to 'do it well'. I do know, having read it here that you should put the car only in the primary driver's name as well as paying $0 down if possible. Are there any coverages we should buy from the dealer such as, IIRC, they have something for $850 that covers any little dings and dents that you might be dinged for at lease end. If you total the car, will your insurance covers you 100% or do you have to buy gap insurance from the dealer?

Any and all insights are greatly appreciated. Thank you.

 

[Koolau]

I think leasing makes it more difficult to know exactly what the car's cost is. Car dealers exploit this fact so you need to figure out how to determine the actual cost for comparison.

 

[ncbill]

leasehackr [sic] dot com is the place to start for researching how leases work

yes, zero down with gap insurance (now included in many leases) is best

also can hire a broker from there & look for lease deals offered in your area.

 

[DrRoy]

We have never leased and never will. You are always paying for the highest depreciation period of the car's life. Keep buying as you have been.

 

[rembrandt]

Suze Orman Says You Should 'Never' Lease a Car“You should never lease a car,” she said. “Leasing a car is the biggest waste of money out there.”

 

[Jerry1]

I used to lease a car when working. I found it to be a good value but I think the math worked because of the amount of miles I was driving. The structure of the lease was such that there was a base lease and then I bought additional miles for a flat rate that was a bargain. I bought so many of the additional miles that it brought the average down considerably. I was also in an environment where I was required to drive a car that was no more than three years old as a term of retaining my car stipend. So the option to drive it into the ground wasn't on the table.

Leases are actually pretty simple. As you said, no money down and negotiate a monthly payment. Divide that payment by how many miles you intend to drive and determine what your cost per mile will be. Compare that to owning and I'm pretty sure it will be more expensive but it may be a good value for you. With leasing, the vehicle is typically under warranty the entire time and often they even pay for the scheduled maintenance. When it comes time for another vehicle, you just turn over the current vehicle and get another one. If that's the way you want to roll, go for it. Personally, I very much enjoyed getting a new car every couple years but that's when I was working. Now, that's a little rich for my budget.

 

[TrvlBug]

leasehackr [sic] dot com is the place to start for researching how leases work

yes, zero down with gap insurance (now included in many leases) is best

also can hire a broker from there & look for lease deals offered in your area.

Thank you. I'll check out their website.

 

[TrvlBug]

Yes, we realize we are paying a premium by leasing, however, have decided to lease mainly for the convenience of just being able to give the car back in 3 years. We worked our a$$es off to be able to be in this position (not have cost as our #1 priority in making spending decisions)!

 

[Qs Laptop]

I've leased at least a dozen vehicles over the past 30 years, mostly for business purposes. I beg to differ with those that say NEVER LEASE A VEHICLE, as there are circumstances where it makes sense. So Suze Orman can just go and...

Anyway:

1. Don't buy more miles than you need. Most leases will be 12,000 miles per year, but sometimes you can get them at 10,000 miles. If you are not going to drive within 10% of the miles in the lease terms, don't lease. In other words, if you take a 36 month lease and you figure you will only drive 25,000 miles, I'd recommend not leasing. However, if as you say, you "worked our a$$es off to be able to be in this position (not have cost as our #1 priority in making spending decisions)" then go for it.

2. Never, never do a lease longer than 36 months. I say this because most vehicles bumper-to-bumper warranty run out after 36 months. If you do a 39 month or 42 month lease you will be liable for repairs if anything happens to the vehicle past 36 months. Dealers like to do 39 and 42 month leases because it lowers your monthly payment.

3. Always frame the deal in dollars per month. "But I don't really want the 9 speaker premium sound system. That's $775 on the window sticker which translates to $21.52 a month more. I don't want to pay $21.52 more per month but I suppose I could live with it if I got that equipment thrown into the deal at my (lower) price." Conversely, suppose you and the dealer are $14 a month difference in the monthly payment. Don't let the dealer say it's only $14 difference, when in reality it is $504 more, over 36 months.

4. Get a true zero down lease. Otherwise known as "sign and drive." No money down, no security deposit. Nothing out of pocket.

5. Ask about incentives and rebates. They can and do reduce your capitalized cost of leasing.

6. Time your shopping so you will be ready to sign lease papers at the very end of the month. Two reasons--the dealer wants to book a deal in the current month, they have incentives and bonus programs so they might bend a bit more on price, but more importantly if you wait until the end you can say, "I don't know. The lease programs might change tomorrow." You might be able to use that hesitation as leverage to get some price concessions. I have a specific strategy I use here. Ask me if you want to hear more.

7. Do not agree to pay a lease termination fee (sometimes called a disposition fee). This is usually imposed by the bank that is financing the lease, not by the dealer. I don't mean the fee you would pay if you terminated the lease early, I mean the fee they sneak into the contract where they get $300 when you turn in the vehicle and don't lease through that bank again.

8. Ask them to put extra miles on the paperwork than the actual miles on the new vehicle you are leasing.
The day you're about to go in to sign the papers tell them to add on a couple hundred miles on the paperwork. So even though you are getting the vehicle with say, 11 miles on it, have them put down 456 miles or somesuch. It's free miles and a small insurance policy against going over the mileage limit.

9. Oftentimes, they will agree to make your first month's payment. Might as well ask. (If you have a current lease they will often offer to pay off the final month or two of your current lease.)

I've got more tips but this should get you started.

 

[ShokWaveRider]

We have leased our daily drivers for over 30 years now. It makes even more sense in retirement. What we do is allocate an annual max payment which for us is $5k per car. I really think it makes sense and we do not care about the cost. Everything is covered and driving is basically carefree. JOHO. I think 30 years gives us some good experience too.

 

[ShokWaveRider]

2. Never, never do a lease longer than 36 months. I say this because most vehicles bumper-to-bumper warranty run out after 36 months. If you do a 39 month or 42 month lease you will be liable for repairs if anything happens to the vehicle past 36 months. Dealers like to do 39 and 42 month leases because it lowers your monthly payment.

I agree with most all your points. As for number 2, I have always negotiated the extra 3 month warranty (for a 39 month lease) into the deal. If one cannot do that then I agree with the point.

 

[Aerides]

I agree that not all decisions are financial, and the reasons the OP cites are good ones. Also, it's fun to get a new car!

As far as available inventory, don't let that stop you. When I was shopping for my current car, all the dealers were saying it would be 3-4 months for the specs I wanted as there was no local inventory - because everything was loaded with 5k or more in extras I didn't want, or colors I for sure didn't want. I was willing to wait and made that clear.

Just be firm on what you want - and don't want - leasing or buying, and do so when you aren't in "need" vs. "want" mode.

 

[aja8888]

Understand the term "money factor".

Right now, VW is offering cheap leases on some SUV's, however, the pricing is on a 7,500 miles per year lease.

 

[TrvlBug]

I've leased at least a dozen vehicles over the past 30 years, mostly for business purposes. I beg to differ with those that say NEVER LEASE A VEHICLE, as there are circumstances where it makes sense. So Suze Orman can just go and...

Anyway:

1. Don't buy more miles than you need. Most leases will be 12,000 miles per year, but sometimes you can get them at 10,000 miles. If you are not going to drive within 10% of the miles in the lease terms, don't lease. In other words, if you take a 36 month lease and you figure you will only drive 25,000 miles, I'd recommend not leasing. However, if as you say, you "worked our a$$es off to be able to be in this position (not have cost as our #1 priority in making spending decisions)" then go for it.

2. Never, never do a lease longer than 36 months. I say this because most vehicles bumper-to-bumper warranty run out after 36 months. If you do a 39 month or 42 month lease you will be liable for repairs if anything happens to the vehicle past 36 months. Dealers like to do 39 and 42 month leases because it lowers your monthly payment.

3. Always frame the deal in dollars per month. "But I don't really want the 9 speaker premium sound system. That's $775 on the window sticker which translates to $21.52 a month more. I don't want to pay $21.52 more per month but I suppose I could live with it if I got that equipment thrown into the deal at my (lower) price." Conversely, suppose you and the dealer are $14 a month difference in the monthly payment. Don't let the dealer say it's only $14 difference, when in reality it is $504 more, over 36 months.

4. Get a true zero down lease. Otherwise known as "sign and drive." No money down, no security deposit. Nothing out of pocket.

5. Ask about incentives and rebates. They can and do reduce your capitalized cost of leasing.

6. Time your shopping so you will be ready to sign lease papers at the very end of the month. Two reasons--the dealer wants to book a deal in the current month, they have incentives and bonus programs so they might bend a bit more on price, but more importantly if you wait until the end you can say, "I don't know. The lease programs might change tomorrow." You might be able to use that hesitation as leverage to get some price concessions. I have a specific strategy I use here. Ask me if you want to hear more.

7. Do not agree to pay a lease termination fee (sometimes called a disposition fee). This is usually imposed by the bank that is financing the lease, not by the dealer. I don't mean the fee you would pay if you terminated the lease early, I mean the fee they sneak into the contract where they get $300 when you turn in the vehicle and don't lease through that bank again.

8. Ask them to put extra miles on the paperwork than the actual miles on the new vehicle you are leasing.
The day you're about to go in to sign the papers tell them to add on a couple hundred miles on the paperwork. So even though you are getting the vehicle with say, 11 miles on it, have them put down 456 miles or somesuch. It's free miles and a small insurance policy against going over the mileage limit.

9. Oftentimes, they will agree to make your first month's payment. Might as well ask. (If you have a current lease they will often offer to pay off the final month or two of your current lease.)

I've got more tips but this should get you started.

Thank you! I really appreciate these tips, and if you have more, please share, either here or as PM!!!

 

[Qs Laptop]

Thank you! I really appreciate these tips, and if you have more, please share, either here or as PM!!!

These are general auto shopping tips, but also apply to leasing.

1. Download the manufacturers .pdf brochure to your PC or phone. PC is better because it's easier to navigate .pdf files. Near the back of these brochures is a chart, several pages long, showing the various equipment offerings at different trim levels. You will see items that come standard with certain trim levels, items that are optional at certain trim levels, and items that simply are not available on some trim levels. Learn these trim levels, learn the optional packages and their pricing.

2. Find your vehicle by visiting some dealers in your area and look at their inventory. Find a couple of vehicles that fit your criteria and locate the window sticker. Download that window sticker to your PC. It will have the VIN# and the equipment listed. Get a least one vehicle from at least two dealers. Three dealers would be better because you are going to pit these dealers against each other to get your best pricing.

Having a couple of vehicles selected and having their window stickers in hand is a very powerful negotiating tool, as you will see. Being able to sling about the names and numbers of various packages shows the dealer you've done your homework and are serious.

3. The dealer might have an advertised price for a lease. You will not be paying this price. This is their opening salvo in the negotiating process. Also, remember, you are not paying anything out of pocket, so you have to convert their advertised price into a monthly payment. The dealer has his advertised price, let's say it's 36 month lease, $3,999 down, $499/month. Since you never, ever make a down payment, immediately back that $3,999 out of there and add it to the monthly amount. $3,999/36 months = $111.08 a month. So their advertised deal is really $610.08 per month, nothing down.

Negotiating 101--you always want the other guy to name a number first. You might say something like, "I don't want to pay anything out of pocket. Nothing at all. What is the best price you can give me with nothing down?" Then shut your pie hole until they make an offer. Don't say a word.

They'll come back with something like $610 a month, maybe $599 a month, which you will decline. Then they will ask you what number you had in mind. General guideline--take off at least 20% of their number and present it to them. You want it to be really low. Plant your flag.

For this deal I would probably have my opening offer be something like $480 a month, nothing down. They might laugh, they might say, "That's so low I'm not even going to bring it to my manager."

Fine. Tell them you've got another vehicle at this other dealer you want to look at. This is the vehicle on the other window sticker you have in your pocket. Then get up and go over there. Seriously. You've got to establish you would walk away from their deal and go look for a better deal. And why not? This other dealer has the exact same vehicle. You know this because the window stickers are identical (or nearly identical.) Go see how much wheeling and dealing this other dealer will do for you. I can't stress this enough.

 

[mystang52]

Sorry for this thread creep question: What happens if the person leasing the car passes away? Is the spouse on the hook for remainder of the lease?

 

[folivier]

At this point in my life, I'll be 71 in March, the Buick Enclave we bought in Sept. 2023 will probably be the last car we buy. I plan to keep it until it starts costing us money after the warranty is up. Then I'll be very interested in leasing. I'm getting tired of doing repairs and a new car every 3 years sounds like it would be great. Plus it keeps me up to date with safety features. And self driving will be great as my driving reactions diminish. "take me to Costco" or take me to my doctor appointment.

 

[Lewis Clark]

Suze Orman Says You Should 'Never' Lease a Car“You should never lease a car,” she said. “Leasing a car is the biggest waste of money out there.”

She also thinks people need $5 million - $10 million to retire early. In my opinion she is not the most credible source for information.

 

[Qs Laptop]

Sorry for this thread creep question: What happens if the person leasing the car passes away? Is the spouse on the hook for remainder of the lease?

I'm not certain, but I would say that's a good guess.

 

[Koolau]

At this point in my life, I'll be 71 in March, the Buick Enclave we bought in Sept. 2023 will probably be the last car we buy. I plan to keep it until it starts costing us money after the warranty is up. Then I'll be very interested in leasing. I'm getting tired of doing repairs and a new car every 3 years sounds like it would be great. Plus it keeps me up to date with safety features. And self driving will be great as my driving reactions diminish. "take me to Costco" or take me to my doctor appointment.

I've mentioned my friend who bought his "last new truck" at age 70. Before he passed at 87, he bought two more "last new trucks."

Apparently, like you, he wanted the latest new features and lack of repairs. It was worth it to him to pay the money for the "new" vehicle. He didn't believe he would buy again, so he rejected the idea of leasing (to always have new). Apparently, you are aware of your desire for the latest and realize that leasing can provide that. Good for you!

 

[Jerry1]

Sorry for this thread creep question: What happens if the person leasing the car passes away? Is the spouse on the hook for remainder of the lease?

I'm not certain, but I would say that's a good guess.

I don't think it's a good guess given what I experienced. When my father in law died, the lease in his name was not paid. We called them and asked us where they wanted us to take the car. We took it there and based on advice from our attorney, we didn't pay any further on the lease. They did come back and say that they sold the car and didn't make their money back and wanted payment but my sister in law told them to go to the cemetery and see if they could collect anything from dad and that was the end of it. I suspect that based on the advice from the attorney and the lack of any further pursuit for payment, that there's nothing that made mom liable for the debt. Or, maybe it would have been more trouble than it was worth to pursue. Either way, we essentially just walked away from the lease.

 

[Flyfish1]

I'm in the same boat, my wife's Audi is getting to over 100K miles and I thought we ought to look at another vehicle. Leasing for us seems like a good idea, when I asked her she said a firm "NO", and I will leave out the rest. So, my next inquiry was "could I lease a really cool fast car?" My arm is still sore ...

My late Grandfather in his elderly years, used to buy a new Buick every year. He could because he worked hard and lived frugally all his life.

 

[Koolau]

I don't think it's a good guess given what I experienced. When my father in law died, the lease in his name was not paid. We called them and asked us where they wanted us to take the car. We took it there and based on advice from our attorney, we didn't pay any further on the lease. They did come back and say that they sold the car and didn't make their money back and wanted payment but my sister in law told them to go to the cemetery and see if they could collect anything from dad and that was the end of it. I suspect that based on the advice from the attorney and the lack of any further pursuit for payment, that there's nothing that made mom liable for the debt. Or, maybe it would have been more trouble than it was worth to pursue. Either way, we essentially just walked away from the lease.

I assume such things are contractual and unless someone else signed the lease agreement, you wouldn't even have to return the vehicle. The leaser would need to come get it (Nice of you to return it for them). By the way, I'm no expert, but people came after me for my mom's debts and I told them to pound sand - and they did. YMMV

 

[Closet_Gamer]

Three thoughts:

1 - since the car will be under warranty, perhaps look at makes/models you otherwise might not if you were going to keep it a long time.

2 - look at new cars being introduced where they want to get them on the street and offer big bargains. Again, it’s under warranty so if there are teething problems it doesn’t cost you anything

3 - PM me when your lease is up … I love buying gently used 3 year old cars coming off of leases for 50% less than new! And option that baby up! Options depreciate faster than cars. You NEED a heads up display. You really do. And I would like one on my next car. Sure, it will only cost you an extra $9/mo … but I will get it nearly free! Woohoo!

All kidding aside, enjoy your new car!

 

[TrvlBug]

Sorry for this thread creep question: What happens if the person leasing the car passes away? Is the spouse on the hook for remainder of the lease?

From what I've read, this would be the case if both names were on the lease, therefore, the recommendation to put the lease in the primary driver's name only. I will be checking the contract to see what it says about this.