My daughter leased her 2011 Honda Civic for 18 mos. Then bought it after the lease was up. She was well over her mileage limit, but buying the car at the end of the lease was very affordable for her. Caveat: At the time she worked for the dealership and I don't know if that helped or not.

I typically own until they won't run anymore, but don't know if I want to continue that or not.

 

If your new MO is trading in every few years leasing would be a good option.

Do not do it, ask at work who has done it. If it was a good deal more would do it.

 

That's a big oversimplified there, my man.

 

More people should lease. They would be better off financially.

I appreciate all the info thus far. Anyone have anything to add? Are there pitfalls other than mileage to worry about?

 

 

They can be hard to get of early.

 

Do not lease for more than 36 months.

 

Don't negotiate off of payments. Negotiate off of price and THEN have them tell you what the lease payment would be.

 

Get gap insurance if the lease doesn't already come with it. Some leasing companies include it while some do not. Worth it if you have to buy it.

I appreciate all the info thus far. Anyone have anything to add? Are there pitfalls other than mileage to worry about?

 

Trade-ins can be a pain in the rear. And you can get huge differences from the same dealership as it just depends on the person doing the inspection and the mood they're in. I leased years ago from Kerry Toyota. My uncle did the same. He turned in his 4Runner and they hit him hard. He had a ding in the rear bumper about the size of a quarter. They made him purchase a new bumper. They also made him buy new tires as they said the tread wasn't satisfactory for resale for them. He ended up paying over a grand when he turned it in. With my turn in coming a couple months later at the same dealership, I was worried. My Tacoma had dings in both front and rear bumpers, along with some dings on the tailgate. They told me it was just normal wear and tear, and I didn't pay a dime.

I could never handle a mileage restriction. How many you drive/year should be a big consideration.

 

Hahaha, with all the traveling you have done just the last 2 years alone you'd owe the car company the price of a new car!!

I have done both, leased 3 cars int he past and now I only buy new.

I originally leased a car when I moved back here from SC after Hurricane Hugo. Lost our car in the hurricane and when we made it back here we were pretty strapped for money etc.

 

We leased a car and had a great experience. when the lease was up we turned the car in (was in great shape and owed nothing at the turn in) We then leased 2 cars, one for me and the wife also leased one. Then the nightmare began.

 

My wife had a shorter lease than mine. At the end of her lease she turned it in, in great condition, no wrecks, no damage etc. but was given a bill of over $1,000 for normal "wear and tear" we weren't very happy, we thought it was just the dealership she leased from, fortunately I leased mine from a different dealership, the same one I had the first lease with. When my car was due to be turned in, again no accidents, no damage, well below the miles etc. Turned it in and the dealership had changed the leasing company they used and the same thing happened. Got hit with a bill of close to $2,000 for wear and tear etc. We were not happy campers. It seemed they have become more of a scam than anything else and get you in the end when you turn the vehicles in.

 

Both cars were in great condition yet still got slammed with over $3,000 due at turn in. Leases were a great avenue to pursue when they first started it but it seemed car companies have found a way to get you in the end. We've since bought our cars every time we needed a new car.

 

I will never lease again. Now these leases were over 10 years ago so hopefully things have changed but talking to people that have leased recently they still run into the exact same thing. Leasing isn't as great as it's made out to be. The 1 benefit in leasing is you don't need money down if you don't have it, but they more than get you when you turn in your leased vehicle.

Never have leased. Like stocks, I'm a buy and hold type of guy, usually getting around 200,000 before I replace.

Know a sales manager at a HUGE local dealership and he wishes EVERYONE would lease. Says it's a real $$ maker for them.

Not liking what I'm hearing about when it's time to turn a car in. This is the sort of think that would chase me away.

What about leasing to own, ripoff?

Not liking what I'm hearing about when it's time to turn a car in. This is the sort of think that would chase me away.

What about leasing to own, ripoff?

 

Depends on the car and the buyout.

 

The buyout is stated on your lease agreement. It's usually either the stated Lease End Value or 110% of the stated LEV.

 

LEV is the figure used today that helps determine your lease payment. It's essentially a guess as to what the car will be worth in X number of years.

 

If they guess low and the car is worth more at the end of your lease than your buyout then buy it if you like it. If they guessed high then either walk away or negotiate.

 

Some car companies (Ford for example) got burned in the 90s for having a jacked up LEV in order to get the lease payment down to a certain figure. At the end of the 24 months the cars were worth a lot less than what Ford had estimated and Ford lost a lot of money when those cars were turned back in.

 

I wouldn't let the "turn back" scare you IF you are thinking you will trade your car in 2 to 3 years. You'll still come out ahead even if you get jacked around. Plus many companies are now using a "pull ahead" program that gets people to come in BEFORE the end of their lease and lease another. The turn-in process sucks but in the end it's just one more part of the financial equation.

 

As to the poster who said dealerships love leasing look back to my post about negotiating on price and not payment. If you negotiate off of price you'll get what you consider a fair deal.

^I'm working at a client who happens to be a dealership right now, and I can say with 100% certainty, they LOVE when people come in wanting to lease. It's like they say, there's a sucker born every minute.

Never have leased. Like stocks, I'm a buy and hold type of guy, usually getting around 200,000 before I replace.

 

I have never leased either. However the falacy in treating a car as an investment is that it loses money. So if you bought stocks that trended in value as cars, then you would go broke. Say you buy a 20,000 dollar car, financed it for 5 years, so paying roughly 25,000, with interest, kept it for 5 more years free and clear, what's it worth at 10 years old and 200,000 miles. Not much. So lease the same sort of vehiclefor 10 years ( that may be three leases, how much have you paid? Probably about the same. I came up with 24,000 for Leasing over 10 years. Sounds like a wash to me, except you do own the 10 year old 200,000 mile vehicle at the end. The one thing I have not hit on is taxes. Do you pay propery tax on leased vehicles like you do bought ones? If so, leasing is looking less attractive.

Clyde is correct - it always depends.

 

Its really a financial option that may or may not fit your situation.

 

It may work if:

 

1. You do not have a down payment AND you can not handle a high monthly payment.

2. The mileage limit is livable OR you plan to buy the car at the end of the lease - at that point the mileage does not matter.

3. You plan to keep it for the term of the lease,

4. You do not want worry about the value at the end of the lease since its the banks risk.

 

Of course if you have lots of down payment or do not mind a larger monthly payment buying works fine as well.

 

 

Unless you do plan to 'drive it till the wheels fall off' at least looking at a lease makes sense.

 

Getting a good lease is trickier than a straight buy. They can make a $400 per month lease look good next to a buy option when the rate should be more in the $300 range. You still have to negotiate the capitalized cost. And its easy for them to state an opening monthly cost that is $50 to $100 higher than a properly negotiated lease should be. And if they do that on a 36 month leave you just left $1,800 or $3,600 on the table. That is why dealer's love leases. But if you are armed with the numbers leasing is reasonable option.

^I'm working at a client who happens to be a dealership right now, and I can say with 100% certainty, they LOVE when people come in wanting to lease. It's like they say, there's a sucker born every minute.

 

They love it because of two reasons: 1. Most customers don't know how to buy when they lease (price vs payment) and 2. they know the customer is going to be in the market again in 2 to 3 years.

 

Customers just need to be smart. A few years ago the Federal govt starting requiring that dealers provide complete detail of the transaction to the customer. I think it is called "Reg Z." On there it shows exactly how much you are buying the car for, how much of your money is going towards the down payment (vs covering upfront fees), how much the acquisition fee is, how the LEV was calculated, etc. If you simply look at that you'll know exactly how much you paid for the car. Too many people simply don't.