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Is this a good lease deal? What parts of this deal can I negotiate?
I've thought the lease deals on the Camry SE seem pretty good. They're advertising $0 down and $267 a month on a $25k MSRP car.
You say this is the first time you need a car....does it make sense to lock yourself into a 3 year commitment on one? Is there a chance you won't need this car 12k miles a year? Leasing is generally the most expensive and least flexible option for buying a vehicle. Would a lightly used vehicle not work just as well for you? You should be able to buy something still under warranty for around the same payment.
The reason to lease is because I have never been a car owner before and am concerned over the upkeep over the long-haul. But a good warranty should take care of that, no?
Upkeep is pretty minimal on cars these days. Picking up a Hyundai or Kia certainly covers you for quite awhile. 5 years on everything and 10 years on powertrain would be a good thing for someone that doesn't drive many miles. Assuming you would be satisfied with one of those vehicles it probably wouldn't be a bad thing. You pretty much have to buy new though because the powertrain warranty doesn't transfer to a 2nd owner. I'm sure they sell them with extended warranties though but just to go on the record I don't recommend extended warranties either. But if you do buy an ext warranty, only go with one backed by the car manufacturer.
Personally if I was in your shoes...I would pick up an Accord. No the warranty isn't as glorious as the Hyundia/Kia but the odds are very good you'll never need it. The real upside though is resale value. If in a few years you decide you don't need a car or maybe need something bigger....low mileage Accords bring stupid money. Even in ten years it will still be worth considerably more than the Hyundai/Kia. I just feel that's a better investment and where I'd spend my coin. Good luck either way.
What is this statement based on? I know firsthand of two different people who wrecked leased cars, and the insurance wrote a payoff check to the leasing company, and another check to the lessee, for the difference between the payoff amount and current replacement value (which I believe would be equivalent to Edmund's estimate to buy the same used vehicle at a car dealership).
In both cases, the people were pretty far into their leases. The further away you are from the payoff amount, the less likely you will see anything. But that is no different from financing a car, yet I don't see people saying "NEVER PUT MONEY DOWN WHEN YOU FINANCE A CAR!"
the logic is that insurance makes the leasing co. whole. If there is any equity left, that could go to the owner.
but, usually on a ST lease, the depreciation is such that there won't be any equity, so the buyer gets no $ (they just walk away). And that is true if you put 0 down, or 1k, or even 2K. So, the money you put down effectively instantly vaporizes as depreciation, and in a total situation, it is the first thing to go.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
What's the difference between this and buying a car with a downpayment? Maybe nothing...but generally speaking the buy-out or payoff on a loan won't be as expensive as a lease $ for $. So this is just one part of why most (myself included) don't recommend putting money on a lease.
One of the other reasons I don't recommend it is because the entire purpose of a lease is to minimize cash costs. By throwing down a big chunk of cash up front, you've just basically eliminated one of the main advantages to leasing. Yes your payment will increase if you put nothing down but it's cheap money assuming you're getting a favorable rate (less than 1% is common lately on subsidized deals).
I guess from my perspective, I see leasing more as an easy way of getting a car for several years on a trial basis - if I like it a lot, I will buy it out. If not, I just hand the keys back to the dealer without having to hassle with the trade in. Moreover, in my past experience of leasing many cars, I have usually had enough equity built in the car (according to appraisals provided by CarMax, among others) where I would be able to trade it in at no loss with about 1 year left on the contract.
With my most recent lease, I crunched the numbers many times, considering an all cash purchase vs a lease. What I found is that for the first 3 years, leasing would cost virtually the same as cash purchase (assuming that the lease's depreciation curve is accurate). The reason is my state collects sales tax only on the payments, whereas the entire amount would be due on a cash purchase.
So if I discover I really like the car and buy it out at the end of the lease, that's when I'd be kicking myself for not having paid cash in the first place.
There are probably deals out there that get the lease vs buy very close, particularly with some of these subsidized deals with inflated residuals and super low money factors. But for me if it's that close I'd still rather own it so I'm not locked into that mileage allowance, potential damage expense, or the tail-end fees that are quickly becoming the norm. You want to buy it out? Fee. You want to turn it in? Fee.
What I've found is a nice way to "try out" a vehicle is to assume someone's lease. I've done this a few times and made out very well because someone put money down on a lease, drove it very few miles, and then had to get out for some reason. I took over the lease in the 14-18 month range with super low miles and in all cases bought out the lease at the end or traded/sold with positive equity. Those three trucks were among the cheapest vehicles I've ever owned. Most of the lease assumptions you see on the lease swap sites are horrible deals....but occasionally a killer deal will show up and you can pounce.
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.
'11 GMC Sierra 1500; '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '08 Maser QP; '11 Mini Cooper S
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.
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.
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.
'11 GMC Sierra 1500; '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '08 Maser QP; '11 Mini Cooper S
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.
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.
'11 GMC Sierra 1500; '08 Charger R/T Daytona; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '08 Maser QP; '11 Mini Cooper S
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.
Thanks for any help!
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
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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!
A Ford Focus with a sticker of $42K?
I'm guessing not a Focus, and some other Ford?
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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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2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4
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A reporter would like to speak to a car shopper under the age of 34 who is unsure whether you should lease or buy. If this is you, please send your daytime contact info to pr@edmunds.com by Friday, May 2, 2014 at 10 a.m. PT/1 p.m. ET.