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General Questions about Leasing Vehicles

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  • qbrozenqbrozen Posts: 17,150
    I've made this same argument before. You lose in either scenario, so I'm not sure why folks use that argument for not putting money down on a lease.

    However, I do agree that a good lease deal typically comes with very very low interest rate, so that alone is a good reason not to put down money up front.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • aviboy97aviboy97 Posts: 3,159
    sebring95-

    I don't agree with your view on putting money down on a lease. All a down payment does it alter your monthly exposure. Over the course of the lease, it ends up being a wash. You are really never out any money at all.
  • sebring95sebring95 Posts: 3,231
    Well to be fair, with the recent APR on a vehicle I wouldn't recommend putting anything down on a finance deal either. GAP coverage is really cheap as well, particularly if you go through your insurance carrier and not what a dealer sells. Stick the down payment in your investment account and easily make money.

    Still, on a typical lease vs buy if you total out the car in the first year or so, the lease is very expensive to get out of and you'll likey not see that equity until the last year or so.
  • sebring95sebring95 Posts: 3,231
    So you're willing to hand them thousands of dollars that vaporizes if the car is totaled or stolen? For what you say is a wash over the length of the lease? If it's a wash, why in the world would you do it? I'll keep the money in my pocket (or better...in an investment account making far more than the money factor on the lease).
  • qbrozenqbrozen Posts: 17,150
    But, see, again, that argument doesn't really hold water if comparing lease to finance. The same thing typically happens if a financed car is totaled or stolen in the first couple of years.

    If you say that you shouldn't put money down on a car no matter if its a lease or finance, well then OK, but i don't see how we can apply that thinking to just leases.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • kmurkmur Posts: 36
    About GAP coverage... I think most auto manufacturers' captive finance companies waive GAP, so any gap coverage would be a needless extra.

    In fact, I think most of the leasing horror stories that still get repeated over and over like urban legend go back to the time when it was mostly private banks which financed car leases.

    The last thing auto manufacturers want are legions of irate lease customers. They are looking for repeat business.
  • sebring95sebring95 Posts: 3,231
    I don't think this was ever really a discussion between leasing and financing. I know the financing piece came up...mainly because someone stated that "people don't typically recommend NOT putting money down on a financed car" or something to that effect. Well I recommend that regularly for partially the same reason as the lease: cheap cost of capital and less risk of loss with gap coverage.

    Either way the original discussion was about down payments on leases and the best response I've seen supporting a down payment says it washes over time. Which it might. I'm not sure why I would pony up a wad of cash now only to recover practically the same amount back over 36 months. Sounds like all the risk is on me.
  • qbrozenqbrozen Posts: 17,150
    OK. You did specify "lease" in your reply. But if your contention is that you should never put a big downpayment on any new car, then I can't argue that reasoning.

    '13 Stang GT; '86 Benz 300E; '98 Volvo S70; '12 Leaf; '14 Town&Country

  • ken117ken117 Posts: 189
    Best is to lease with an OEM which supplies GAP coverage in the lease. Acura, for example. Put no money down and let the GAP coverage take care of any shortfalls in the insurance payoff if the car is totaled

    If a lease does not include GAP, some insurance companies offer it at a very reasonable cost. Never, ever buy GAP from the friendly dealer F&I guy. They will charge you hundreds. Of course, if you fall for their word tracks they will be very appreciative.
  • I don't think having money down is that much important not like having good credit. If you have good enough credit, you don't even need to put any money down. I'm glad I have the time to read everything it is on having money down, credit scores, etc....
  • I am looking to buy a used 2010 Subaru Forester, ideally just off a 42 month lease. Has anyone the residual lease numbers from 2010? I'd like to not just assume the % is the same as the 2014's.

    Thanks for any help!
  • sebring95sebring95 Posts: 3,231
    I'm curious what you plan to do with this info? The residual won't have an impact on the current market value or what a dealer may have paid for it.
  • Wouldn't you want to check here on used car appraisals and see what the car is worth? You'll need mileage, condition, etc.
  • kyfdxkyfdx Posts: 27,671
    edited September 2013
    I agree... those numbers aren't really relevant, but if you want to know anyway, start looking here, in Subaru Forester Lease Questions...

    http://townhall-talk.edmunds.com/direct/view/.ef9ddaf/401#MSG401

    Turbos your thing?

    http://townhall-talk.edmunds.com/direct/view/.ef9ddaf/422#MSG422

    regards,
    kyfdx

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • jipsterjipster Posts: 5,345
    What costs can one expect if buying car at end of lease? You've got residual value, then on lease says any taxes or fees. The tax part is okay, what can one expect in terms of fees? Fees from dealership the car was turned into at, or fees to lessor? Negotiable?
  • I would like to trade in my car in and lease a new car. New job, less money, better benefits. I do still owe money on the car but have about 13-14k equity in the car. Would like to use a little of the money towards a new car lease and pocket rest of the money so I can supplement my income. I know that you get less for trading in vs. selling privately, but to add the tax to the trade-in amount to see if it is worth it just to sell privately.

    Question is, for the amount of money I will receive for my trade-in, the tax on the amount will far surpass the amount of taxes on the lease. What happens with the excess taxes? Applied to the lease? Or will I loose it? Thanx!
  • audia8qaudia8q Posts: 3,138
    The extra costs vary depending on the lease....some, but not all charge a purchase fee which can range from $50-500 and should be on your lease contract. the dealer may change a dealer fee/converyance plus sales tax and motor vehicle charges. It can't hurt to try haggling but they hold all the cards, so don't be surprised if they don't budge. Good luck.
  • anthonypanthonyp Posts: 1,857
    I am going to buy a ford focus2013 which has a sticker price of 42,000....reduced to 35,626....I asked about a two year lease, with one payment....I was told 12,000......I wonder if you could tell me what I should do? ThankYou Tony
  • kyfdxkyfdx Posts: 27,671
    Tony...

    A Ford Focus with a sticker of $42K?

    I'm guessing not a Focus, and some other Ford?

    MODERATOR
    Prices Paid, Lease Questions, SUVs

  • MichaellMichaell ColoradoPosts: 3,184
    Focus EV starts at $35K, but there aren't that many options available so not sure how you could get to $42K.

    And .. there is a manufacturer special lease on the Focus EV ... $298/mo with $0 down and 10,500 miles per year.

    Of course, that does factor in more than $10K of incentives...

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