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General Questions about Leasing Vehicles



  • mpl82mpl82 Posts: 9
    thanks John - I appreciate your response but it didn't address the core of what I'm asking which is: if i'm giving the car back to the leasing company in a few years...why should I care about anything BUT monthly long as i perceive it to be a low monthly payment...what else matters.

    Purchasing a car I can see as being different because the total financing has to be in my favor...but, again with leasing, I'm having trouble seeing beyond mohthly payments.
  • delta737hdelta737h Posts: 603
    edited October 2012
    How do you know if you're getting the lowest monthly payment possible? How do you know if the payment reflects a fabulous deal or just a very mediocre deal? Calling five different dealers and selecting the dealer with the lowest payment and, then, hammering that dealer until they drop the payment by $5 or so does not, in any way, guarantee that you've gotten a good deal let alone an outstanding deal. I've seen cases where people thought they got a great lease deal only to discover that the sell price was very closed to MSRP when it could have been gotten for many thousands of dollars less. Those that are payment buyers are at risk for getting very bad deals. Dealers LOVE payment shoppers. It's like bringing a canary to the cat. The only way to guage whether or not you're getting a good deal is to look at the selling price which, in turn, drives the lease payment. It is the metric by which deals are judged.

    The point is that what you perceive to be a low monthly payment may not even remotely mirror a good deal. Perceptions can be very misleading. Consequently, a lot of money is left on the dealer's table.

  • sebring95sebring95 Posts: 3,225
    Couple other points...even if you're happy with the payment. An inflated residual could haunt you if for some unknown reason you need to exit the lease early (or total the vehicle without GAP). Also, early payoff fees, end-of-lease fees, termination fees, mileage fees, options to trade/sell/return at the taie...all things that should still be considered even if the payment is right where you want it.
  • Absolutely agree! Higher residuals trigger higher lease balances which, in turn, inflate early termination charges IF one must terminate early.

    There are several factors that must be considered in addition to those described not the least of which is the money factor. Inflated money factors mean higher payments. Those with excellent credit should always insist on the buy rate when negotiating a lease.
  • mpl82mpl82 Posts: 9
    Hi John - appreciate the feedback. I do think that's the strongest argument in favor of looking at all of the numbers when leasing - it's the only way to truly KNOW if you're getting a good monthly payment.
  • mpl82mpl82 Posts: 9
    edited November 2012
    Are taxes, tags and title included in the monthly cost calculation?

    What fees can I expect to pay upon purchasing a new lease and what are ballpark estimates?
  • delta737hdelta737h Posts: 603
    edited November 2012
    You asked...

    Are taxes, tags and title included in the monthly cost calculation?

    They can be but don't have to be... it's up to you. All or some of these costs can be capitalized or paid up front at lease inception.

    What fees can I expect to pay upon purchasing a new lease and what are ballpark estimates?

    Can't provide ball park estimates. Taxes vary widely from state to state and bank acquisition fees and dealer doc fees vary as well. For instance, Honda charges a $595 acquistion fee whereas Mercedes-Benz charges $795. Texas and Illinois levy sales tax on the purchase price (i.e., Agreed Upon Value) while several states like Florida, Indiana, and Arizona levy sales tax on the monthly payment... a huge difference. The maximum dealer doc fee that dealers can charge in Ohio is $250 while in NY it's $75 unless, of course, these state mandated maxims have changed.

    Hope this helps.

  • mpl82mpl82 Posts: 9
    Thanks John - which way do you recommend: paying up front or adding to the cap cost? Why?

  • delta737hdelta737h Posts: 603
    edited November 2012
    Depends upon the cost of money (i.e., interest rate % = money factor x 2400... this is a very good approximation which will serve as a basis for comparison). If money is relatively cheap, then I suggest you capitalize everything and pay as little up front as possible. You can even capitalize the first month's payment. One thing you don't want to do is put money down (i.e., cap cost reduction) because a car is a depreciating asset. Furthermore, if you total the vehicle, you may lose part or all of your cap reduction.

  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,919
    If you are in the process of car shopping, using online forums and tools and plan to visit a dealer soon, a reporter would like to hear from you. Please email by Tuesday, November 13, 2012 and provide a few lines about your experience so far.
  • I know everyone says not to do cap cost reduction on a lease if you can help it due to the risk of losing your down payment if you total the car. But what about a single payment lease? Is there any risk associated with that for the same reasons?
  • Single-payment leases work differently..

    For purposes of calculating the lease balance, a single-payment lease is considered to be a payment in escrow, from which the monthly payments are then taken, each month..

    In event of an involuntary termination, then you'd receive the balance of the payments in return.

    Moderator - Prices Paid, Lease Questions, SUVs

  • Thanks for the answer.
  • hamm3rhamm3r Posts: 55
    I am looking at leasing my first car & want to make as little a down payment as I am allowed. I have a car to trade in that I will probably get around $9,000 for, but I'd like to pocket the cash instead of putting it toward the lease. Having never leased before I do not know if this is common, rare, or unheard of. My best guess is that it is rare but that it depends on the dealer, but I'm hoping that those of you with more experience will tell me that it happens all the time & I should go for it. Thanks for any advice.
  • qbrozenqbrozen Posts: 16,887
    edited December 2012
    perfectly normal. they will just cut you a check.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '08 Town&Country

  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,919
    A reporter would like to speak to someone who is going to be in the market for a new car in the next few months because their lease is expiring. If you fit this description, please email your daytime contact info to by Friday, January 25, 2013 at noon PT/3 p.m. ET.
  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,919
    A reporter is looking for new car lessees. If you leased a new car in the past few months, and would like to share your story, please email your daytime contact information to
  • My husband and I are senior's (72/66). We leased our (2) Chevy Equinox's in 2011 through Ally and they will be turned in in May/June (respectively) 2014. We have very low mileage on them (14000 and 10000) and they are in perfect condition so extra fees are not a concern.

    We have been looking at other vehicles that we think we might be interested in when we surrender our current vehicles. We are going to have just (1) vehicle next time as we don't drive them enough to justify the cost of insurance, gas, and lease payment.

    Since we are retired, would it be cost effective for us to lease another vehicle since we put on so few miles or should we buy a vehicle? We do not want a payment (leased or bought) over $550/mo. How can we get the most bang for our buck? Thanks
  • What other vehicles are you interested in?

    You sound like perfect candidates for leasing again, since you drive so few miles, and your driving circumstances aren't likely to change (e.g., you aren't going to get transferred to a new job). That's the downside for some younger lessees - they lease a vehicle, and then they move house or job, or have a baby, and the vehicle or the lease mileage limit is a problem.

    If by "get the most bang for our buck" you mean you want the nicest vehicle you can get that fits in your budget, then again, my opinion is that you're a great candidate for leasing. Leasing generally allows you to have a lower payment on a nicer vehicle, since you are only paying for part of the vehicle's depreciation.

    Let us know what vehicles interest you, and members can offer more advice.

    Need help navigating? - or send a private message by clicking on my name.

  • Thanks for your reply so quickly :)

    We have been thinking about "upgrading" to a Buick Enclave or Nissan Pathfinder or something in that range. We want another SUV because we need the extra space. When we looked at the Enclave my husband had sticker shock..haha

    We had a 2006 Pathfinder LE (loaded!) that we traded for one of the Equinox's and although the Equinox is a nice certainly isn't the Pathfinder :)

    We've looked at the Ford Escape and taken it for a spin. It's in the same size and price range as our Equinox and has a couple more bells and whistles but we weren't overly thrilled with it. I think we're leaning more to a more nicer vehicle. I was tempted to look at the Edge while we there but they haven't had much of a rating.

    We have always owned our own vehicles and we have excellent credit (we've worked all our lives for it!).

    I'm trying to do research on vehicles that we might be interested in before we turn ours in next year. What I'm most concerned with is what the Residual will be.

    We're NOT interested in Honda, Toyota, Mitsubishi, Kia or the like.

    Any advice would be helpful. Thanks
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