Leasing a vehicle

[BigTex]

Long story short. Wife totaled her BMW X3 this week so we are in the market for a new one. Considering a lease as she only puts around 10k per year on a car. Hers has been out of warranty for a year or 2 and that always was unsettling to me. I did all of the basic wrenching like oil changes, plugs and wires, etc.

I'm considering a lease to keep us in warranty, free maintenance etc. Anyone lease their vehicle instead of buying? I don't really want to own another one out of warranty.

Leasing would be $5k down, $615/month for 36 option to buy for $27k

Buying would be $20k down and $615/month for 60 months with intent of trading at 3-4 years

 

[Sniperwannabee]

No

 

[2ndamendfan]

To me leasing is the worst thing you can do. About the same as renting a house.

You are worried about being out of warranty meaning you are worried about repair costs. Yet you will send more money than needed to the finance company.

Just my $0.02

 

[Sniperwannabee]

From everything I’ve read leasing is a big waste of money... even more so than buying a brand new vehicle


just buy a Honda or Toyota and you won’t need a warranty

 

[Doc68]

Buy a nice used vehicle that still has a warranty. Read up on it and know the going price and blue book value.

Doc

 

[2ndamendfan]

For business/tax reasons leasing works.

But for an individual it is just stupid. I know a ton of people who have tried it and no one has ever done it twice.

 

[THEIS]

Hi,

If you have a business...have the business lease it for way better tax deductions.

Sincerely,
Theis

 

[sirhrmechanic]

 

[powdahound76]

I was gonna suggest a Yota or Honda.

My dad got my mom a new (2 yr used, 18k miles) Avalon limited last year (her request). 24k out the door cash.
She likes it more than the BMW she was driving before.

 

[Sniperwannabee]

I know a ton of people who have tried it and no one has ever done it twice.

boy that’s the truth!!! Everyone I know regretted it and it was a huge scam.. ended up being charged extra for mileage scratches stained seats etc etc I don’t know what it is but I’ve seen more new BMW broke down on the side of the road than any other make lately

 

[kenny1773]

For personal use, I am a buy one and run it 10/15/20 years type person (current car is 15 years old as of a couple days ago)
I can tell my advice would not apply to you

 

[BigTex]

For personal use, I am a buy one and run it 10/15/20 years type person (current car is 15 years old as of a couple days ago)
I can tell my advice would not apply to you

It applies to me, just not the wife. I'll run my Duramax until it quits.

 

[BigTex]

We really like the BMW, nothing else drives like it. It is definitely higher cost of ownership. Id like her to get a Lexus (Toyota) for reliability, but the wife doesn't want an "old lady car". Lol

 

[theLBC]

2 reasons to get a lease that i can think of (actually 3).
1. as suggested, if you own a business
2. if you get a cheap car like a corolla you can lease for $130/mo
(3.) you are horta or the german

 

[Broncovan]

If you've resigned yourself to having that $600/month car payment, FOREVER, then leasing may be the answer for you.
I've known a few people that have leased, in the end, they all got screwed.

 

[gopherslayer]

My boss has leased 3 trucks now. He likes it and actually gets a better deal than buying. He’s pretty meticulous on how he keeps the truck. He is not self employed.

My wife leases for a business expense. She just picked up an Acura RDX A-Spec. She didn’t want a mom car anymore. It’s a pocket rocket at 272hp and a 10spd tranny. Her dad just leased a Silverado Crew Cab and boy did he get a deal. His buyout added to the down payment and all the payments is stil about $5k cheaper than buying and his payment is less too. Weirdest deal I’ve ever seen but he ran with it and I would have too.

 

[jcam]

Nothing drives like a paid for vehicle.

 

[2ndamendfan]

We really like the BMW, nothing else drives like it. It is definitely higher cost of ownership. Id like her to get a Lexus (Toyota) for reliability, but the wife doesn't want an "old lady car". Lol

In full disclosure I am a mechanic (35 years).
German vehicles are money pits after about 5 years. But nothing drives like a German vehicle.
They just have a feel and once you get that in your blood you have a hard time letting go of it. I have quite a few customers who have dumped thousands into their German vehicles only to replace it with another and start the whole process over.

 

[kenny1773]

Leasing buys you convenience, its up to you if that is worth the cost

Do you want the hassle of selling the car outright when the warranty runs out? I do not mean trade it at the dealer, I mean sell it for what it is really worth. You might make out better financially if you buy the car at a deal (you have to work for), then sell it to Joe Q Public when the warranty runs out, *IF* you want that work. If not, lease it.

My wife's car is currently 8 years old

Its not that we can't afford new cars, we just don't care. What we have runs, rarely any trouble, and I have not had a car payment since 1993.

 

[2ndamendfan]

My wife's car is currently 8 years old

Its not that we can't afford new cars, we just don't care. What we have runs, rarely any trouble, and I have not had a car payment since 1993.

Right, debt makes you a slave.
What people should do is do a "cost per year analysis "

For example. My uncle bought a new 2020 F350 this year.. his payment is roughly $1200 a month for 6 years. That means for the next 6 years he will be sending the finance company $14,400 a year!!!

That is a shit ton of repairs.

I have quite a few customers I have explained this to. One deposits $700 a month into a separate savings account. He tells me that is what he uses to pay for repairs to keep his 15 year old truck on the road. Yearly repairs average about $1700 the last 5 years. He is ahead about $35,000 right now.

Also a new vehicle has more expensive insurance and registration fees.

 

[BigTex]

In full disclosure I am a mechanic (35 years).
German vehicles are money pits after about 5 years. But nothing drives like a German vehicle.
They just have a feel and once you get that in your blood you have a hard time letting go of it. I have quite a few customers who have dumped thousands into their German vehicles only to replace it with another and start the whole process over.

This is the reason I was even considering a lease. Not planning on keeping past 5 years.

 

[Sean the Nailer]

View attachment 7504606

especially when you consider that the way he wrote the opening statement, his wife wrote off 3 different BMW's, just THIS WEEK.

Driving lessons,,,, I'm just sayin'.

 

[2ndamendfan]

This is the reason I was even considering a lease. Not planning on keeping past 5 years.

Have you looked into an extended warranty? I am generally against them also.
But this is because I can budget and plan for repairs (not just vehicle, but home and appliances also).
The warranty companies are in business. Just like a casino both sides are gambling but the house rarely loses. The warranty companies know average cost of repairs and make sure they have the upper hand.

But I have seen them work out for people from time to time.

 

[Slash0311]

I lease. Im one that prefers higher payments over risks of breakdowns. All of our scheduled maintenance is included as well as full warranties.

My wife a Rav4. She drives high miles for work. We got her a 3 year, 20k mile/yr lease because it made more sense to do that over keeping it for 6 years, barely getting it paid only to trade.

Me, I had a Tacoma. Sticker was & 37,000. 3/10k lease with a maintenance warranty. With the covid cutting inventory, I had time and went in to ask about a 2021 Tundra. They had one on the lot and I had 9 mo left on my lease. They wanted to deal, BADLY! I got a Tundra sticker of $55,000, same lease terms. First month payment was only money out of pocket. They ate all 9 months I had left and gave me $32,000 for my trade. My monthly lease payment is $540. And they threw in the $799 Tundra bed mat. My father-In-Law leases and was shocked they ate the 9 months remaining.

 

[BigTex]

Have you looked into an extended warranty? I am generally against them also.
But this is because I can budget and plan for repairs (not just vehicle, but home and appliances also).
The warranty companies are in business. Just like a casino both sides are gambling but the house rarely loses. The warranty companies know average cost of repairs and make sure they have the upper hand.

But I have seen them work out for people from time to time.

Much like playing blackjack, consistency is key. I never purchase extended warranties on anything.

 

[Romeo458]

Absolutely not. Take that 5 grand pay cash for a good used car and call it a day. Even as you get something that you have to spend a little bit of money on to repair its going to save you money in the long run on payments and interest.

Never, never, and never lease a car. It's the greatest scheme dealers ever came up with

 

[2ndamendfan]

Absolutely not. Take that 5 grand pay cash for a good used car and call it a day. Even as you get something that you have to spend a little bit of money on to repair its going to save you money in the long run on payments and interest.

Never, never, and never lease a car. It's the greatest scheme dealers ever came up with

I actually think finance companies came up with it. That and maybe the IRS. As has been stated, for a business leasing works.

 

[Buzzinga]

I was one of those people who was taught to buy a car and keep it for 15-20 years. I did that with a Toyota 4Runner. I drove a 1999 from 2001 until it had 366,xxx and the head gasket blew. I think that was about 17 years. I recently bought a 3-year-old Lexus at about 50% of msrp, it had 60,000 miles on it, so still full of life. I will keep this car for a while, I'm sure.

However, when I totaled up the maintenance over 17 years, it was as much as I paid for the car. Oil changes, tires, starters, and a million other little things that popped up over the years really brought up the total cost of ownership. I always considered that car extremely reliable and never a problem, yet there were well over $10,000 in shop bills, and there were more that I knew weren't there.

If you want to lease, these are my suggestions.

1. NO MONEY DOWN. If you wreck the car coming out of the parking lot, your GAP insurance will pay off your lease, but you are out any money you put down.

2. Your lease should be approximately 1% of the MSRP of the vehicle. This way your average out-of-pocket cost over the life of the lease will be consistent with the depreciation of the vehicle.

3. Negotiate your maintenance and miles to suit your needs.

Remember, a dealership wants to lease you that vehicle. It's in their own best interest. It means you will be back in 3 years in need of another vehicle which gives them a chance to move another unit on you. If you buy a car, you may or may not be back...in 15 years.

I would also have a list of all the BMW dealerships within 50-100 miles of you, that way if one dealership says no, you can just go to the next one. Within three dealerships, you should find one that will take your offer.

 

[dzander]

Buy a Toyota or a Subaru , change oil and filters yourself, Drive it for 10-12 years, sell it for a good bit of money when your done with it. Look at the resale values of these cars compared to anything else.
Put tires and brakes on it when needed.
German cars are expensive to maintain, had a Audi Q5 , loved how it handled, but was a money pit, had 222,000 when it traded it.
At 88,000 had to put new rings in it, factory recall. Timing change issues, electrical issues, check engine lite, it was always something.
Subaru all wheel drive works as well as the Audi all wheel.
Outback has 105,000 on it, oil and filter every 6000 miles. Plugs at 60,000.
Still has original brakes front and rear. But i do mostly highway miles. Runs and handles like new.
If you have to have a German car you will have to pay way more than a Japanese car for maintaiance , just the way it is.
Wife runs a Hybrid Rav4 , same story. Neither car has ever been back to dealer.

 

[chevy_man]

I worked for a dealer. They love leases because they make a pile of money.



Quit buying german crap.


I bought a $4k truck and have spent less than $4k over 10 years and 100k miles on maintenance. I'm the person dealerships hate.

 

[Romeo458]

I actually think finance companies came up with it. That and maybe the IRS. As has been stated, for a business leasing works.

Im not sure who did but its a legalized con, I would never lease a vehicle for a business either. At the end of shelling out close to $20000 in payments I'd like to have something to show for it. The business that I had I needed a Van the whole my tools and equipment around even then finding an older used Van that was in good condition cost me nothing in the end with All of the maintenance and repairs combined.

The car I have now I actually purchased all alone and doing the math if I would of made the payments as they had schedule that $17000 car would have ended up costing be about 25k. I won't buy a new car on alone again. I do buy a newer car it has to be at least 5 years old because then a lot of its value has dropped off but it typically has plenty of life left.

 

[Romeo458]

I worked for a dealer. They love leases because they make a pile of money.



Quit buying german crap.


I bought a $4k truck and have spent less than $4k over 10 years and 100k miles on maintenance. I'm the person dealerships hate.

I just spent $400 but a new brake lines underneath my 260000 mile Dodge Dakota pickup because I didn't want to crawl under there and do it. But even with buying the truck, tires, tune up, and all that I still have less than a $1000 invested in the truck, and hauling scrap metal back as damn near paid for the tires at least... And instead of the dealership I use a local small mechanic shop. They hate me to

 

[2ndamendfan]

I was one of those people who was taught to buy a car and keep it for 15-20 years. I did that with a Toyota 4Runner. I drove a 1999 from 2001 until it had 366,xxx and the head gasket blew. I think that was about 17 years. I recently bought a 3-year-old Lexus at about 50% of msrp, it had 60,000 miles on it, so still full of life. I will keep this car for a while, I'm sure.

However, when I totaled up the maintenance over 17 years, it was as much as I paid for the car. Oil changes, tires, starters, and a million other little things that popped up over the years really brought up the total cost of ownership. I always considered that car extremely reliable and never a problem, yet there were well over $10,000 in shop bills, and there were more that I knew weren't there.

If you want to lease, these are my suggestions.

1. NO MONEY DOWN. If you wreck the car coming out of the parking lot, your GAP insurance will pay off your lease, but you are out any money you put down.

2. Your lease should be approximately 1% of the MSRP of the vehicle. This way your average out-of-pocket cost over the life of the lease will be consistent with the depreciation of the vehicle.

3. Negotiate your maintenance and miles to suit your needs.

Remember, a dealership wants to lease you that vehicle. It's in their own best interest. It means you will be back in 3 years in need of another vehicle which gives them a chance to move another unit on you. If you buy a car, you may or may not be back...in 15 years.

I would also have a list of all the BMW dealerships within 50-100 miles of you, that way if one dealership says no, you can just go to the next one. Within three dealerships, you should find one that will take your offer.

Tires and brakes are maintenance items and are not in the same category as repairs.

If you own a home, one day it will need a water heater and a roof, that is just cost of ownership. Same with tires, oil changes and brakes. You want to avoid those costs, then get a bus pass.

So in 17 years you spent $10,000. That isn't even $600 a YEAR. Holy hell what are you bitching about. $600 is barely one month's payment on a new vehicle. Barely 2 months payment on a used vehicle.

Had you leased for those 17 years you would have spent well over $82,000 PLUS maintenance costs (never seen a lease that covered tires and brakes). Hell the whole point of covered "scheduled" maintenance is so they can catch you on "unscheduled " maintenance.

So you are literally ahead $72,000 (actually being quite conservative on that) and you don't even realize it.

 

[Doc68]

Could you lease a vehicle through a trust?

Doc

 

[2ndamendfan]

Im not sure who did but its a legalized con, I would never lease a vehicle for a business either. At the end of shelling out close to $20000 in payments I'd like to have something to show for it. The business that I had I needed a Van the whole my tools and equipment around even then finding an older used Van that was in good condition cost me nothing in the end with All of the maintenance and repairs combined.

The car I have now I actually purchased all alone and doing the math if I would of made the payments as they had schedule that $17000 car would have ended up costing be about 25k. I won't buy a new car on alone again. I do buy a newer car it has to be at least 5 years old because then a lot of its value has dropped off but it typically has plenty of life left.

Business lease because of IRS rules. No shit the IRS hates you to actually purchase any kind of equipment. That is why many companies will do a lease with a $1 buy out in the end.

It is just playing by the rules. The government which is the IRS wants to keep the whole economic wheel turning by replacing equipment on a regular basis.

 

[2ndamendfan]

Could you please a vehicle through a trust?

Doc

I would imagine you could. You can buy one through a trust.

 

[Codiekfx400]

Prefer to buy a car personally. No loans for me either. I am buying Chevy though.

 

[BigTex]

Thanks for all of the input guys! I get it, the Jap cars are more reliable, but the equivalent Lexus drives like a turd, at least it did in 2016. Lease is out of the question. We'll go test drive next week.

We had excellent luck with this BMW, no repairs in 4 years. Only maintenance. It was just always in the back of my mind that it was out of warranty and shit could hit the fan.

Yall would laugh if I showed you how little damage it took to total it. The airbags didn't even go off. Literally a fender bender. But that's what happens when headlights are 4 grand.

 

[Buzzinga]

@2ndamendmentfan

Owning is cheaper, no doubt.

And if you are fine with driving the same car for 20 years, more power to you. If you like working on your car in your garage, buying is definitely better. If you hate these things and see ownership as a ball-and-chain, leasing has its advantages.

I think we can agree not all decisions in life have to be based solely on finances and getting the cheapest option? Imagine how crappy our lives would be if we always had to choose the cheapest option

 

[Buzzinga]

Thanks for all of the input guys! I get it, the Jap cars are more reliable, but the equivalent Lexus drives like a turd, at least it did in 2016. Lease is out of the question. We'll go test drive next week.

What lexus?

 

[Amanda4461]

Lots of good advice on here. But. If, like me, you like to drive a new BMW, especially an X5M or an M3 or M5. I decided on a 2-year low-mileage lease. After calling a few of the big-city dealers for a quote, you might be surprised to find a better deal with lower down payment and monthly payments. I have leased twice, when I had a rental property LLC. Once with BMW, and once with Acura. Both times, I had a decent experience. The BMW was a car that I could not have realistically afforded to buy new. I grinned every time I fired it up. No issues. Missed it when I turned it in, but walked across the lot and leased the Acura. By then, I could have paid cash for the Acura, but I discovered that I sort of liked a different new car every two years, without worrying about going out of warranty, replacing tires or having my everyday driver stuck in the shop after it had age and mileage against it. The Acura was fine also, until a job change messed up my commute. I went over on mileage by 20,000 miles, and the cash penalty was stiff. Decided leasing hurt my feelings, so I bought a new Corvette. Tires replaced every 20,000 miles at $300+ each. Insurance after the third speeding ticket for 100mph over the speed limit through the roof. Parking away from everybody, only to leave the restaurant to find a few homeboys sitting on your clean red Vette, not moving till the 1911 clears leather, and every time you leave the Vette in the grocery parking lot, finding some asshole that just had to park 2 inches from your door and screw up your fiberglass and paint, ain’t all fun and games. Leasing has its good points, more better if you can do the tax write off, or you are talking about a 6-figure vehicle. Since I have retired, and drive much less, I am interested in leasing again. I figure a lease on a new Electric car or SUV will keep my hair from falling out, at least until they have proven themselves. First adopters often get their asses burned.

 

[BigTex]

What lexus?

NX300 F Sport

 

[Buzzinga]

I hope she likes it!

 

[dustingaunder]

I leased a Chevy Bolt for 3yr/30k miles. 2k down, $240/mo. My work paid the $2k as part of an incentive program. Car was $44k sticker and had a residual of $33k. That car was worth about $16k at turn in. I made out like a bandit leasing that car and not putting those 30k miles on my duramax. Cost me about $12k for 3 years, and I got to charge it every day for free at work. I saved about $300/mo in just diesel alone which is $11k.

Leasing can make sense if you play it right. Leasing a German luxury car is the only way I’d drive one. Out of warranty repairs are stupid.

 

[1moaoff]

Just my opinion. Owning is generally better than renting.
All my business and personal vehicles are cash bought new or less than a year old. Even a R8.
If you can't negotiate a better deal with cash or massive down-payment there's an oddity. Delaers don't like me because I know what I want and I will walk away quickly. One local dealer though has a salesman I call. He gives me numbers I like over the phone. He likes it because I walk in and sign papers and leave so he isn't out time.

I guess all I can say is I like being debt free. I'm 45 and I can retire comfortably now.

Debt is really living beyond your means.

Leasing can be effective for a business but I prefer to buy them the way I structure my business.

Eta: pay cash and consider the monthly bill you aren't paying your warranty

 

[BigTex]

Just my opinion. Owning is generally better than renting.
All my business and personal vehicles are cash bought new or less than a year old. Even a R8.
If you can't negotiate a better deal with cash or massive down-payment there's an oddity. Delaers don't like me because I know what I want and I will walk away quickly. One local dealer though has a salesman I call. He gives me numbers I like over the phone. He likes it because I walk in and sign papers and leave so he isn't out time.

I guess all I can say is I like being debt free. I'm 45 and I can retire comfortably now.

Debt is really living beyond your means.

Leasing can be effective for a business but I prefer to buy them the way I structure my business.

Eta: pay cash and consider the monthly bill you aren't paying your warranty

I get where you're coming from, but if I can get a 0-2% interest rate on a loan. I can make more money with my money. I have paid cash for cars in the past and haven't gotten much better of a deal as far as total cost, usually a couple grand. Its a weird market around here, most dealers tell you the price is what its marked and they are more than happy for you to leave.

 

[Maggot]

Long story short. Wife totaled her BMW X3 this week so we are in the market for a new one. Considering a lease as she only puts around 10k per year on a car. Hers has been out of warranty for a year or 2 and that always was unsettling to me. I did all of the basic wrenching like oil changes, plugs and wires, etc.

I'm considering a lease to keep us in warranty, free maintenance etc. Anyone lease their vehicle instead of buying? I don't really want to own another one out of warranty.

Leasing would be $5k down, $615/month for 36 option to buy for $27k

Buying would be $20k down and $615/month for 60 months with intent of trading at 3-4 years

Try...


Off Lease Only Find the Best Used Cars for Sale | Used Car ...

www.offleaseonly.com › used-cars

Finding used Cars couldn't be easier! Off Lease Only offers the best used Cars for thousands less than the competition.

 

[1moaoff]

I understand with crazy low interest rates... im not against it if you can easily without penalty access money to payoff without penalty.

But again 2% to 3% for life of borrowers and that's now with rates low. People never get out of debt. New near New debt every time.

But many people commit to more debt because of low rates and cant access cash so then other things also get financed. Think credit cards and revolving debt.

 

[k-space]

If you're going to lease, look for these things: negotiated price, residual value and money factor. You may already know some or all of this.


1. Negotiated price. If you lease, it's called capitalized cost and it's not related to residual value, but is the major determinant of your payments. Understand that number because some dealers will try to stick in MSRP or close to it to unsuspecting customers. Do your research on competitive pricing.

2. Residual value, or what the vehicle will be worth at the end of of the lease. Vehicles with higher residuals means lower payments. A 3 year lease on a $50,000 vehicle with a 60% residual value of MSRP will have lower payments than a $50,000 one with a 50% residual. You can research this by brand and model for predicted residual value. There's a company that sets those values, so they are not negotiable.

3. Money factor. Another way of saying interest rate. To convert one to the other, 2400 is the number. If they give you a money factor (you have to ask for it) of .0022, multiply that by 2400 and your interest APR is 5.28. Don't confuse .0022 with a 2.2% APR. Divide by 2400 when converting to a money factor from an APR. You can shop the rate given by the dealership with your own choices for money lenders. Know that credit score plays a big part in the rate given. Your bank or credit union may beat their rate, so ask the dealership if you can use your lender or match its rate. They won't like it because they have a buy rate from the lenders they use and will give you the sell rate, but in the end they'll be more interested in moving a unit than making a few hundred extra off the finance delta.

The best deals will be made at the end of the month, especially for year-end deals as salespeople and dealerships will be trying to hit their respective quotas and incentives. And don't hesitate to work at least 3 dealerships, even if they are out of town, by going through the internet. You may not get a great deal vs the others, but you'll make sure you're not getting hosed.

 

[FS1]

Always shop on the last day of the month. This is the day that they have the most incentive to deal. Monthly sales totals are filled with incentives for them. One car can at times can mean tens of thousands in incentives from the factory. It also helps them get more desirable vehicles in the future. You may need to do this over several months before you hit the sweet spot for them.

My rule is never lease any car and never finance a car over 45k. If you can afford a 80-90k car you should be able to pay cash. Also never discuss cash payment until the deal is done. They hate cash buyers.