I read an article saying that leasing is increasing and will continue to increase over the next few years.

 

Any BGPers lease?

I have.

I haven't, but I plan on leasing my next one.

I have.

 

I haven't, but I plan on leasing my next one.

 

What caused you to make that decision? 98, how long is your lease?

I have leased one car and will NEVER do it again.

I have leased one car and will NEVER do it again.

 

Its certainly not for everyone. What caused you to come to this decision?

I have and won't again. Payments are low but you have nothing when the lease is up. Also you have a mileage limit. I also will not buy new. I can get a low miles used for $10,000 less than a new car.

I have and won't again. Payments are low but you have nothing when the lease is up. Also you have a mileage limit. I also will not buy new. I can get a low miles used for $10,000 less than a new car.

 

You actually did have the choice to buy the vehicle at the end of your lease so you could have had "something." In addition, you also had the cash that you didn't spend on traditional financing payments at the end.

 

Consider this: A guy "bought" a heavy duty truck or big SUV 3 years ago on a 66 month loan (66 so that he could get an affordable monthly payment). Like many drivers, he wants to now trade that vehicle in early. Unfortunately, with $4 gas, the truck is now worth a whole lot less than he had hoped and a whole lot less than he still owes. What exactly does he "have?"

BTW, as a disclaimer, I don't sell cars so I have no agenda here. I think that leasing is the right way to go for some/many but not for all.

My wife leased her first new car, ('98 Civic). The best thing that happened was she had an accident, she was so far over her mileage limit it wasn't even funny.

Its certainly not for everyone. What caused you to come to this decision?

It's a horrilble deal. Extremely high interrest rates and at the end of your 3, 4, or 5 year lease you have nothing. Yes you can buy the car but you are out all the money you just spent. Figure up how much he will end up spending on a vehicle you lease if you end up buying it at the end of the lease.

 

You actually did have the choice to buy the vehicle at the end of your lease so you could have had "something." In addition, you also had the cash that you didn't spend on traditional financing payments at the end.

 

Consider this: A guy "bought" a heavy duty truck or big SUV 3 years ago on a 66 month loan (66 so that he could get an affordable monthly payment). Like many drivers, he wants to now trade that vehicle in early. Unfortunately, with $4 gas, the truck is now worth a whole lot less than he had hoped and a whole lot less than he still owes. What exactly does he "have?"

The first problem is he bought a vehicle he couldn't afford. If you have to finance it for 66 months so you can afford to make the payment then you could never afford the truck to start with. Second, do you buy a truck/vehicle thinking about what price gas will be 3 years into the loan? Third, what would he have if the truck was leased? He would trade out of it early and lose everything he had paid on it.

 

BTW, as a disclaimer, I don't sell cars so I have no agenda here. I think that leasing is the right way to go for some/many but not for all.

As a disclaimer leasing is not the right way to go for anyone. Leasing is a way for people to be able to make monthly payments on a vehicle they can't afford.

 

Do yourself a favor and find a 2-3 year old vehicle to buy. You will have the cash you didn't lose by leasing or buy new at the end.

Clyde, I want let me add that I am not trying to tell you what to do. I will tell you that the train of thought that "leasing is a good idea for some" just isn't true. They call it a lease only because at the end of the contract it's thier car. When you lease a Honda it is financed through Honda financing. It is a loan at an insane interest rate. They can call it what they want but that is what it is.

Clyde, I want let me add that I am not trying to tell you what to do. I will tell you that the train of thought that "leasing is a good idea for some" just isn't true. They call it a lease only because at the end of the contract it's thier car. When you lease a Honda it is financed through Honda financing. It is a loan at an insane interest rate. They can call it what they want but that is what it is.

 

I won't succumb to making blanket statements because everyone's situation is different. Every deal is different.

 

Part of the burden falls to the buyer. You say the interest rates are higher. What are you basing that on and did you not try to negotiate it? In addition, the interest rate is only ONE factor in determining the monthly payment. If the interest rate it too high, the vehicle is no longer competitive and it doesn't sell.

 

I'm not against buying a 2-3 year old used car as that's what I did for my current vehicle. However, not everyone wants a used car. They have concerns about its long-term maintenance. They want a strong warranty. They like the new car smell. Whatever the reason, buying like I did is not for everyone.

 

If you are a long-term holder of a vehicle then leasing is a terrible way to go. However, most of us trade out after about 32 to 36 months. So with that being the average mindset added in with people like to buy a new car instead of a used car, leasing makes much more sense. Why? The average loan today is about 61 months (fast approaching 66 months). If my payments are spread out over 60 months but I want to trade it in after 32 to 36 months, in most vehicles, I owe more than my trade is worth. So that takes away the "you have nothing argument" since most people never see the end of their loan anyway. These people not only get to finance a new purchase, they also get to add onto their loan the amount they were in the hole on the car they are trading in. Does that seem like a good deal? If that's your MO in buying vehicles , leasing is a good alternative.

 

Your argument is good ONLY for those who don't mind used cars AND they are going to hold on to the vehicle for 5 to 7 years. The average buyer does not fit that profile.

I can get a low miles used for $10,000 less than a new car.

 

Here are the first two cars I randomly picked:

 

2008 Camry LE vs 2006 same car 24k miles - $24300 new vs 18250 used

2008 Cobalt LS 4Dr vs 2006 same car 24k miles - $14885 new vs $11130.

 

Reduce the new car price by the likely rebates and its even smaller.

 

For a $10k difference on on non-luxury car, you're not getting late model and low miles.

When you lease a Honda it is financed through Honda financing. It is a loan at an insane interest rate. They .

 

I just looked up the money factor on a 36 month lease through Toyota Motors Credit Corp on a Camry. Its about 6.85%. Is that insane?