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Leasing Or Buying ??

WS6Y2K

Charter Member
Full Member
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Jan 27, 2002
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761
Location
DFW, TX
Leasing or Buying ??

It is time to get my wife a new vehicle. It seems that every 2-3 years she wants something new. I hate putting a bunch of money down then 2-3 years later we trade it in and lose that money. She does not drive too much where the mileage would be a problem. She drives about 10-12K miles a year. My question is with the low interest rates is it better to buy than to lease?? I know you can get some good deals with buying and low rates. ?Can you negotiate with a lease?? I know the rate is pretty much set, but what about the price.

Here's my plan and let me know if this can be done. I am going to go in like I want to buy. Then once I get the vehicle to the price I want. Can I tell them to take those $$ and do a lease. Is this possible??

Right now we are just going to start test driving see what she likes.
 
We are in a similar situation. We are leasing both the Av and an '00 Grand Am. She doesn't want to car payments when our son hits college in a few years. I posed the same question: with 0% for 60, it would be great to buy. I had her on a yellow Monte Carlo SS. Pretty good deal and no penalty getting out of her lease 6 months early. But she instead wants to buy her car outright at lease end. That's cool with me. Her car is almost 3 years old and only has 11,500 miles! My Av has more miles in 10 months but the Av is my daily driver AND the family cruiser.

Jamie
 
This one's complex . . . do a Google search on car leasing vs buying , and you'll have more advice than you can use!

IMO . . . buy if you plan on keeping the car for a long time, or if you can pay cash, or get 0% financing ;D. If you want a newer vehicle frequently, and interest rates are high, leasing may make more sense.
 
Also, it's my experience that leasing will tend to get you more car/truck than you can "afford" or make payments on. For example, for me to finance my Av, I would be paying and extra $110 a month. Granted I'd own it in 5 years, I just wasn't ready to swallow that large of a payment. Given all I've done to my beloved Beast though, it's looking I'll be buying her at lease end. Hey, I can't just give someone all those mods for free ;D

Now in 2005 if they still have 0% for 60 months, still have a decent GMS rebate, GM loyalty rebate and $2500 cash back, then yes, I'll be getting a new Av! Who knows, by then maybe they will have finally gone to 72-month loan terms as the rising costs of cars/trucks may soon make that a reality!

Jamie
 
Just got back from the dealer. We are looking at a 03 GMC envoy. They told us that gm is now doing 0% for 60 months on all 03 envoy's. So I am back to the same question. With 0% for 60 months do you lease or do you buy?? I know in about 3-4 years we will want to get something new again. So I would think leasing would be best but with the low rates I am not sure. I just don't like the fact that if you lease for 4 years and decide to buy after the lease you still have $12-15K that you will have to refinance for another couple of years. It just smarter to get another new vehilce and keep you payments the same. ???
 
I think you have to be able to answer this question first: WILL you buy the Envoy at leases end? If yes, then financing now will save as you WON'T get 0% on a 3-year old car/truck. BUT, if you are leaning more toward replacement in 3 or 4 years, then a lease certainly would be more economical.

Jamie
 
Leasing vs. buying basically comes down to 2 things....do I want to keep this vehicle in the long run...or do I want get into something new after 3 years....

Leasing offers lower monthly payments...makes it more affordable...and takes the worry out of any warranty issues....because most of the time your warranty will last the length of the lease.....down side to this is the fact that you have limited milage allowance per year...which is not a problem for you....and upon lease end they will charge for anything that is not considered to them as wear and tear.....

Best bet is to go not letting the dealership know your intentions...whether leasing or buying...because it doesn't matter....you can haggle the price down on the vehicle you intend to lease or purchase....

Taking advantage of the special offers won't come into play until after all this other stuff is already configured... :B:
 
Thanks everyone. Looks like it is going to be leasing. I know we will not keep the vehicle longer than 4 years. And we really don't have to worry about the mileage. With everything changing on new vehicles every couple of years you can't help but wanting something new with more bells and whistles.
 
We've faced similar decisions each time we've gotten a new vehicle. In one case, we went with a lease instead of the purchase for the following reasons:

1. We were about to purchase a home. The monthly lease cost of the vehicle was less than the purchase. This gave us a better debt-to-income ratio. In some states, leases payments don't count toward debt-to-income ratio at all.
2. This was a secondary vehicle. It's purpose was for putting around town. We didn't have to worry about being dinged for the extra mileage at the end of the lease.
3. We only needed the vehicle for a few years until we settled into the new house budget. After that, we were moving up to a larger vehicle (this ended up being the Av!). The bottom line, with a lease we knew what kind of 'deprecation' we were up against.
4. This wasn't part of the lease vs. buy decision, but ended up being a benefit. The lease protected us in an insurance accident claim when the other person's insurance company insisted on using aftermarket parts to fix the damage on our vehicle. Our insurance company contacted the leasing company. The lease company's lawyers used clauses in the lease agreement to have the insurance company use the better, more expensive factory parts instead.

We negotiated the price just like we were purchasing the vehicle, then went with the lease option. The dealer didn't seem to care either way.

Hope this helps. Good luck to you!
 
Here is a good site that I have researched in the past.
E-CarTips

I normally put too many miles on to lease, and have a mental problem with leasing... :rolleyes:
I just can't understand paying for something your not building equity in. In 4 years what has been accomplished? :cautious:
My Father is of the other opinion though, he has leased probably 15 cars.
 
i am buying my AV. i do not like some of the terms that a lease has. besides i would not be modding a vehicle i had to give up later. although that lower lease payment is not too bad if you ask me. :B:
 
A few more questions??

1. How do you determine the residual value?
2. Usage tax ? Is this the same local tax for new vehicles
3. New car fin. rate ? I see some from 4.99% e-loan up to 7.% What is the normal for lease??
 
Hernz Av said:
A few more questions??

1. How do you determine the residual value?
2. Usage tax ? Is this the same local tax for new vehicles
3. New car fin. rate ? I see some from 4.99% e-loan up to 7.% What is the normal for lease??
I've used Edmunds, which has a good howto and links for auto lease figures, and Leaseguide.com has some good general leasing information as well.
 
pdxkevin said:
I couldn't lease.

They tend to frown on the modding that I like and the off-roading I like.
True....it would not only be a waste of time and money to mod a vehicle...that your only going to turn in at the end of the term lease agreement...that is you could always remove the aftermarket parts and sell them...but in the end your going to miss out...

The flip side is that your going to buy out at the end of the lease in which.....they could care less what you have done...and how many miles you have..... :B:
 
NJAV, that's kind of my idea. I really coulnd't swallow the payment for 60 months. So instead, I'm saving the $125 a month now and will likely do a buy out at lease-end. This has allowed me to get more truck than I was really willing to pay for up front. Granted, I'll end up with about 7 years of payments :rolleyes:

Jamie
 
jamie said:
NJAV, that's kind of my idea. I really coulnd't swallow the payment for 60 months. So instead, I'm saving the $125 a month now and will likely do a buy out at lease-end. This has allowed me to get more truck than I was really willing to pay for up front. Granted, I'll end up with about 7 years of payments ?:rolleyes:

Jamie
Jamie...think about it the only real downside to buying out is the little extra you will pay as opposed to buying it from the get up....but you still for all intensive purposes bought a brand new truck...you being the only owner and the only one to maintence and maintain....your in good hands.... :B:
 
Gather round my children and the Chief will make a confession. Once upon a time in a galaxy far far away the Chief was a new car salesman. I sold, gulp...Fords down in Houston, Texas.

Now with that said I got edumacated on sales and leasing and basically what I learned, I would never, EVER, EVER lease a vehicle. If you do lease a vehicle you do it very short term, 18 to 24 months, and you better not rack up the miles. In some tax situations it is also advantagous. In that case it works - but 36, 48 month leases or longer? The only one winning is the dealership and the finance company. Think about it - you do payments for 48 months and build zero equity in a depreciating asset. Do payments for 48 months and you've got some of your capital investment back.

I'm not a big fan of leasing and with 0.0% out to 60 months PLUS cash back - damn it's raining money out there!
 
Everything he says is true, and he is the reason that I buy non-fords - we still remember him here in Houston. ;D
 
I am not a financial wizard, but I don't believe you can build equity in something that depreciates in value. One thing my financial advisor told me is not to many people will loan you money for nothing. If you can find an 02 Ava with 0% interest for 60 months no mater how you slice it, it is a better deal then a lease. Even an 03 with 0% for 36 months (if you can swing the payments) is a good.
 
Exactly! When my wife and I bought her Thunderbird, we went 2.9% for 48 months, when we bought the Pontiac Montana we bit the bullet and did 0.9% for 36 months and I'm doing 0.0% on the Av for 36. The payments are brutual but I'm not upside down.
 
gandolphxx said:
Everything he says is true, and he is the reason that I buy non-fords - we still remember him here in Houston. ;D

That was YOU I sold that Bronco to?

Oh no! That explains A LOT! :2: ;)
 
This is the catch 22 of the leasing world.....low monthly payments to get into something you may or may not afford to buy outright......this is why leasing is attractive to your average consumer.... :B:
 
i guess it all depends on where u go and what deal u get too.. one dealership wanted to lease the av to me for $50 more a month then my payment is.. and in 4 years and 9 months it's mine not theirs.. go figure..
 
If it didn't make the company a whole ton of mulla than they wouldn't do it. It is never about what is best for the consumer. Let's face it, if they don't make money they fold.
 
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