Lease? or Buy and sell two years later??

mgdvhmanmgdvhman Member Posts: 4,157
Anybody out there got any horror stories..or good
stories about Buying a Truck...Financing 4
years..(or 3 or 5)..and selling two years
later..paying off loan..and walking away with
cash?...Instead of Leasing for two and..well..just
walking away!

I might run down the Lease road for the first time
with a new Silverado...instead of buying....

I was figuring out the Residual..and if I didn't
tie up my money..financed a lot of it..if not
all...and sold 2 years...could I make money??..On
paper I'd be several thousand ahead...but did it
work for you in the real world??

Any one try this and think for sure they were
gonna be golden??...and end up getting screwed?

Tell me what Truck it was and if it was purchased
with a discount or not..etc...

I wanna hear all sides here!

I hate to lease..but at about 45,000 miles in 2
years....If i kept it for 5 years...who is gonna
want one with that kinda miles?'s not really a
lot...but once a car gets over don't
matter if it's a 99 or a 69...people get nervous!

tell me what you experieneced

Thanks In Advance



  • ladyblueladyblue Member Posts: 326
    This is really a better question for the Smart Shopper or FWI conferences, but I'll give you my opinion.

    Unless you are putting a substantial amount down, selling the truck after only two years my see you being upside down on your loan. You may get luckly and sell it for enough to cover this amount, but usually only if you sell it privately.

    As far as leasing goes, you are committed to remain in the lease for its entire term. So if you sell the truck, you have to make enough to pay the remainder of the lease term plus the residual. Also, some leases have penalties for terminating early.

    Vehicles depreciate over time, so if you are looking to make money on one, it probably won't work. You're losing money the minute you drive it off the lot.
  • mgdvhmanmgdvhman Member Posts: 4,157
    To lease it for 2 years with 45,000 miles and to buy it for 0 down and finance it all at 5 years...comes out to the same payment. After 2 Years I'd owe 18K and would be worth About 22-23K. Seems like I could make money....but I don't know if GM has all the right stuff in place yet to buy one of these. Perhaps Leasing will be the way for me for the first 2 years?


  • ladyblueladyblue Member Posts: 326
    From what I hear, GM is not offering any great lease deals on the Silverado. And remember, those residual amounts are an estimate. If the truck depreciates more than they estimate it will, it may be worth only 17,000 after two years.

    If you're looking to turn a profit, buy the truck. This way, you can sell it as soon as you see your loan balance has dropped below the truck's market value. If you lease the truck, you have to stick to the timetable outlined in the lease terms.

    I still say it's a gamble trying to predict the future value of an item that depreciates over time. I've never thought of vehicles as money-making products. Invest in stocks, bonds, CDs or real estate if you're looking to make money.
  • mgdvhmanmgdvhman Member Posts: 4,157
    I'll have it for 2 years for sure...So I'm not concerned with riding out the Term of the lease. I got the Value bases on the Residual...and backed it up with what 97's with same options are going that should be on the low end.

    I'm not buying to make money...I know cars a Money pit..especially when you buy new. I just figured maybe I could shell out the same amount every month..and at the end of 2 years...walk away with some cake...instead of just..well...Walking away!

    90% sure I'll lease.
    Chevrolet hasn't made as many of the 3/4's as 1/2's...they got a late start and then quit right away. And moving from Arlington to Pontiac isn't going to help it out none.


  • RichRich Member Posts: 128
    A few things about leasing.

    In a lease, the bank is taking the gamble on the value of the vehicle in the future. They always estimate low, very low. You make up the difference in your payments.

    Usually a lease is for a specific number of miles per lease period. There is a hefty penalty for high mileage. If the mileage is declared in the lease and in advance, the penalty is not quite so hefty. On cars, this is usually $.15 for every mile over the allotted 15,000 miles per year.

    This is a personal thing, but I look at a leased vehicle more like a rental car. I don't abuse the vehicle on purpose but just don't care. It bothers me when it is my daily driver and there's no good reason to take good care of the vehicle.

    Maybe what you really want to do is buy a "work" truck. Equip it with the absolute minimum that you need to survive. (Auto trans, A/C, radio delete and rubber floor mats.) If you have to buy one of those $10 beaded cushions to prevent sticking to the vinyl seats even better. Finance the truck the shortest period that you can. Keep your maintenance at recommended levels plus 10%. (Close but no cigar.) A the point where the truck starts to cost in maintenance for non wear items, sell it and get a new one. For your business it is probably the least expensive vehicle plan.

  • mgdvhmanmgdvhman Member Posts: 4,157

    I'd be leasing for 22K miles a year...the extra miles are 8 cents a mile and if you don't use them..they are refunded at the end.

    I understand how leases's the reason why I'm thiking about it...I'm not sure the new Silverado's are ready to buy!
    You hear all this stuff here..and wonder. Well I live in the Metro Detroit area and know all kinds of people who work with and for GM. I hear all kinds of other stuff like Weak Frames on 3/4 tons..leaking seals..etc.

    I've waited long enough..and am not going to wait any more.(so that's not an option)..and a Chevrolet is the ONLY truck i will if's ands or Ford and Dodge are NEVER an option for me. (no offense to anyone)

    I understand the Rental car feeling..I've thought that too...

    As farr as the Work Truck route...Thanks for the Idea..but that would NEVER fly....I need good seats for this Old back I have mis-treated over the years. I will be getting delivery of my 3/4 LT in 3 weeks. No offense to people who order that kind of truck..but that route is not for me. I'm not the Yuppy type...but like comfort and options. The wife and I make Very good money and the whole issue is not what the payment is...that doesn't's more of an issue.."can I make the same payment and walk away with some Cake at the end??"......Leasing comes into my mind (which I've never done) due to the fact that I can just turn it in at the end and let some other Joe worry about it..if it has mega problems. In the past few years I've also moved and drive a lot more miles now which makes me concerned about all the miles I rack on that Truck and what re-sale I'll have with mega miles?

    I know new cars lose money...I'm not concerned about a profit.

    Just trying to make my money work smarter here for me. The truck will be here basically I'm just up in the air as to what way to go..maybe I'm just getting too paranoid??....I bought an 88 when they were new...over the years people said all kinds of things about those..I never had a single problem...maybe if I didn't go looking for info on problems..I'd feel better about buying?..Kinda like what you don't know don't hurt theory..

    Thanks for the tip on least expensive plan...but that's not was i was trying to get at.

    Thanks for the Input....any more??
    Do you lease Rich?


  • mgdvhmanmgdvhman Member Posts: 4,157
    Does anybody out there Buy new every two years??
    ..and then sell it themselves...
    That's what I'm looking for...


  • RichinKsRichinKs Member Posts: 412
    One other thing to think about. In some states such as Ks you only pay sales tax on the difference price. So if you don't trade in a vehicle you pay more tax. On a late model that could be over a thousand dollars. Soooo you have to sell the vehicle on your own for over a thousand more than what the dealer will give you and put up with the hassle of joy riding buyers just to break even. Thats why I stopped trying to sell my own 15 or so years ago. Also I purchase mine for the flexability. Its hard sometimes to tell what we will be up to in 2 years. I don't like locked into anything. Just pay cash and the truck payments you can invest for more future income to buy another truck when the wim hits you. If you cann't afford to pay cash put down as much as you can and have the payments as short as you can so the next one your total tradein value actually goes towards your next truck instead of the finance co. ...... Rich
  • mgdvhmanmgdvhman Member Posts: 4,157
    Now that's a new angle...

    Although I can afford a lot...I don't want to put anything down...just do whatever it takes to finance for the same price that a lease would cost me a month.(no down also)
    That way I'd walk away with some extra cake after the 2 years...about 5K or more the way I figure it.,,Dealer Trade is never an option around here..

    People say put as much down and finance for as short as possible...which is very true...but whay put any money into a huge loss (truck)..when my Money is getting about 16% per quarter interest right now??.
    Too many ways to look at this..
    As each day draws closer...steering towards purchase more than lease....we shall see

    When GM offers "lease deals" can't pass them up....but they got Nothing for Silverados...We will see what Promos come out Aug.2nd!

    Thanks for the Input.

  • mgdvhmanmgdvhman Member Posts: 4,157
    The hurry up and pay it off theory will not work any more as it has in the past for me...with 25K miles a year now...I can't keep this Pig for 9 years as I've done in the past....(i know people do it)..If I bought it 1-2 yrs old and kept it that long...would work out..But new for 30K and sell for Peanuts 9 years later....Gotta get a new one every few years....(amazing what we feel we HAVE to have now


  • mgdvhmanmgdvhman Member Posts: 4,157
    I hear ya...I've done the Run into ground..and it got old...time to do every two year method...sure it costs more..but I'm in a better financial boat these why not have fun!

    The best way is Buy 1-2 years old...then run into almost the ground...I did that once..Bought for about 11K....sold a decade later for 5K.....not bad deal....however I was sick of looking at that dash!...

    Nothing wrong with paying it off as quick as possible either....

    I see some places have 6 and 7 years loans now...Some people say that's the only way they can afford X car....well....swamme says you shouldn't be buying that car until you can afford it!

    Can't imagine 7 years of car payments...for the same car!!....oh well....another case of individual preference....If you live your life based on the Min.Payment be it
    (No offense to anyone who does this....everybody has there own opinion)

  • RichRich Member Posts: 128
    If you're leasing AND you can claim the vehicle is used in business, all of us are helping to pay for your new truck. When I leased, about 79% of all costs were deductible. So a combined tax rate of 39% and 80% deductible was about 30% of the actual cost was returned to me. Thanks to Uncle and Moonbeam. From that I had to subtract any reimbursements from the company. I always came out ahead. Buying the vehicle you can do the same thing but only for about 5 years and I've been keeping vehicles for 7-8 years lately.
  • james24james24 Member Posts: 17
    I do nothing but the leasing thing. I watch friends and family do the I want to own my car thing, finance it for 5yrs because they dont want to put lots of money down, than like most people, realize that they dont like the vehicle anymore, need more room, or worst one of all, the vehicle just plain sucks. Try to sell or trade your way out of a vehicle with 2 or 3 years left on the note. GOOD LUCK!!! I lease for typically 3yrs, and usually trade well before my lease expires. And with all of my leases, I have never paid any fees or penalities with trading in, and have only taken a hit on 1 car for 1500.00 dollars. However, I had the car only 10 months before I gave up trying to get GM to take care of its numerous problems. I dont feel the need to own a depreciating item, or to own it past the factory warrenty. and even though I lease, I take excellent care of my cars and trucks for the resale and just pride of what I drive.
  • mgdvhmanmgdvhman Member Posts: 4,157
    It's almost here and I am steering towards buying.

    If i kept it for a long time..I'd go with 1-3 yrs...but I am looking to match a zip down lease...which works out to be a 5 yr loan with nothing down.
    My money is making too much to pull it out. It sounds silly to finance instead of Pay cash...but I'd rather pay 6.5% a year than lose about 16% each quarter...

    Back on track

    I've done research for what 2 yr old Silverados with same stuff and miles are SELLING for..not listed for....and based on a 2 yr balance....there is no way in hell I can lose.
    Yeah the truck has depreciated a ton....but keep in mind i will have paid the exact same amount per month as a lease would have cost me. I should walk away with about 2500-5000 smacks. Keep in mind this is a Hot Truck,new model year,and I'm getting GM discount..which helps resale.

    Now if GM had "lease deals" on Silverado's,and I drove 12K a year instead of 22K...I could get an Escalade for about $50-$100 CHEAPER a month than the Silverado!!!......What is wrong with this Picture??
    I'll be sitting at a light..and some Yuppy in an Escalde will think he is better than me...even I pay MORE for the Silverado!

    Oh well....I don't want an Escalde or Tahoe

    I'll keep you posted as to what I do.

  • mgdvhmanmgdvhman Member Posts: 4,157
    People keep mentioning about it for a company.

    I never said it was a company vehicle.

  • page3page3 Member Posts: 54
    Leasing is great if you are going to trade it every two years.I have been getting my wife a new Suburban for 8 yrs. now every two years and never come out of pocket at trade in time. But you have to keep the milage down.Also stay clear of dealers.They would rather sell you the car.Lease company's do much better,and when it comes time for early trade in it is no hassle.Usually the suburban is worth more than the payoff if you worked out a good deal at the start. Don't pay sticker price.Also as stated earlier,put that extra 2-300 dollers in the bank that you are not paying every month. Another thing I like is that when it comes time to take it in to the dealer for work they give her a new loaner car or truck. Last time she drove a 3/4 ton Silverado for 3 days!My wife loves that service.
  • mgdvhmanmgdvhman Member Posts: 4,157
    Usually Leases are a great deal...Except Silverado's. 22K a year for miles will be $600 a month roughly. Extra Mileage adds about 80-100 of there is no 2-300 extra to put in the bank in this case!

    Deals are usually on somewhere between stripped and loaded cars.

    I've only got a week more to go...and still don't know what to do yet. When i started this topic..I thought my mind was clear?

    If no deals or rebates fall into place in the next week....probably going to buy it and sell 2 years later..(and no I will not lose my [non-permissible content removed]) pay off will be about 7K under Projected Blue Book.

    I'll keep you posted what happens

    - Tim

    PS - MY dealer would rather Lease...
  • tp4unctp4unc Member Posts: 437
    Man, you are EVERYWHERE! Just a tip.....BUY a Tundra. You'll love it. Trust me.
  • mgdvhmanmgdvhman Member Posts: 4,157
    Why would I want a smaller truck instead of a Silverado?

    Don't pollute this section too!
  • mgdvhmanmgdvhman Member Posts: 4,157
    Well...when I started this topic..I had a mind set of Lease. On Wednesday I ended up buying. I plan on selling two years later. pay off will be about 7000 lower than projected Blue Book. I should make out OK. Worst case ....I pay off the loan with what I sell it for...but ut would have to be one hell of bad times for that to happen.

    Problem is....for 22K a year leases...LS residual was's an LT..69-70??...Nope..63%??..huhh? he said that has to be a mistake. Checked with GMAC...nope...they figure LT's don't need any that's what it's going to be! That right there makes it $100 more right away.

    So it all be mine now....Guess I gotta take care of it now...un like a lease?

    Also either way I will be out of the warranty 1.5 years from now. I don't like the idea of having to pay for repairs on a truck I don't own.

    So while lease may be for some....For this wasn't for me.

    perhaps next time they will have real deals?

    Good Luck

    - Tim
  • page3page3 Member Posts: 54
    Sorry, but last time I bought a vehicle I didn't own the thing till the last doller was paid.The bank still holds the paper,lease or finance.

    Life's a beach, ain't it.
  • mgdvhmanmgdvhman Member Posts: 4,157
    Well Duh!
  • tntvptntvp Member Posts: 3
    If you have the room for a home improvement or equity loan and you buy, the interest can be deducted right?/! jest a thought, I think
  • mgdvhmanmgdvhman Member Posts: 4,157
    AS long as they don't find out it was for a car..and not your home.
  • RichRich Member Posts: 128
    That's almost correct.
    If you purchased a home for 100 grand.
    Any amount that you borrow against the house, up to the original 100 grand, the interest is deductible. The interest on the funds between the current first mortgage unpaid balance and 100 grand is deductible. If you have paid you mortgage down to 70 grand, you can borrow 30 grand and that interest is deductible. There is one exception to this rule and that is if the borrowed funds are used to improve your home, that interest is also deductible.

    The IRS rule is that if you are using the appreciated value as a source of funds to be used for other purposes, that interest is not deductible. Just check with your tax preparer to be sure.

    While were on this dry subject..... If you can legally (And I do mean legally, as in IRS legally!) justify the use of your vehicle in your business or job, by all means lease! That way the lease payments are deductible, as are operating, maintenance, repair and cleaning costs are deductible. If business use of the vehicle is 80% (Don't go above that figure.) then 80% of your costs are also deductible. In effect, uncle probably pays for 25% of the vehicle costs. You can do it with a purchased vehicle but it is more difficult.

  • mgdvhmanmgdvhman Member Posts: 4,157
    I thought about the home equity way...and the business way. I own a small business and already have 2 company vehicles....I didn't want to push it either way. So i just bought the pig and will pay the interest.

    Oh well

    Good Points Rich

    - Tim
  • rickstoutrickstout Member Posts: 2
    I would like to know how the performance on this truck has been so far. I am considering buying one and would like some feed back. Thanks Rick
  • caddprocaddpro Member Posts: 20
    ONLY do an equity loan if you know you will own the home long enough to pay off the equity loan. I got an equity loan and got relocated 6 months later and guess what? after equity pay-off, realtor commissions etc... I HAD NO MONEY. I had to finance my car to have a home down payment.
  • brucec35brucec35 Member Posts: 246
    Theoretically, leasing should equal purchasing in total costs, but the myriad of details can make it hard to figure which is best. money factor, residual, cap cost are what matter.

    Leases can "trap" you in a vehicle you don't like if you're not careful. They're rarely a "great" deal, but can be simple and easy if that's what you want. ( no hassles selling or trading your old vehicle)
  • gwmooregwmoore Member Posts: 230
    To revive an old topic, if there is anyone out there. Wondering what experience people have leasing 3/4-tons and 1-tons, doing a lot of towing. Is there any good way of handling a canopy, extra wheels & tires (studs in my case), and other special items that are pretty much attached to the vehicle?

    The other question, how does the tax write-off work on vehicles with greater than 6,000 GVR?
  • bmaigebmaige Member Posts: 140
    I would like to know where I can invest some money at that 16% per quarter rate.
  • mgdvhmanmgdvhman Member Posts: 4,157
    and Mutual funds can kick butt.

    Ford stock for my Bro in law was up 60% in one year.

    Go yak with an investment adviser...

    it's out there.

    - Tim
  • wtdwtd Member Posts: 96
    The key whether its leasing or buying is to get the vehicle at the best price. Alot of people are under the impression that when you lease you have to pay sticker price, its not true. Deal on the vehicle like you were buying it and then tell them you want to lease.
  • meredithmeredith Member Posts: 575
    After 30 or more days of inactivity....

    this topic is being "frozen". It will be archived or deleted in the next 10 days or so.

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