Page 1 of 2 12 LastLast
Results 1 to 25 of 41

Thread: Questions re: leasing a car

  1. #1
    Join Date
    Sep 2005
    Location
    Wah-key'-key
    Posts
    10,390

    Default Questions re: leasing a car

    Leasing is something I've not considered in the past but the more I read about it the more it seems right for me now. But, I'm such a neophyte and will appreciate any info, esp. small print info, that might enlighten me!

    So...here goes!
    Do all dealerships offer both purchase and lease for any new car on the lot?
    Can an old car be traded in on a car that will be leased?
    Can one haggle over the price, just like a purchase?
    Can optional equipment be added to the car or is a lease car "as is", meaning whatever is included is it?

    Or...are these questions dealer specific?

    It appears I'd want a closed end, 36 month lease. At this point in my life, a warranty has become important to me. My current car's mechanic and I were talking about how poorly the more current versions of my car are made (I have an older car from the good ol' days of that particular manufacturer!). He mentioned for someone like me, buying a new Kia, Hyundai (and the like) and trading it in for a new one as soon as warranty runs out is the way to go. All I could think of was...Ugh, the thought of buying a new car every few years is depressing and expensive. The monthly payments are killers even on subcompacts! Once I ran the numbers on how much my current car costs me on a monthly basis, factoring in gas, service, repairs, tires and insurance (I don't have a car payment)...well DANG...I can afford a car payment! But I want to keep it as low as possible. Leasing seems to offer that option. And I don't care anymore if I own the car or not. To turn the car in every 3 years for a new one with a new warranty is now appealing to me.

    So...what am I missing?

  2. #2
    Join Date
    May 2004
    Location
    Smokin' in da windward crib
    Posts
    6,721

    Default Re: Questions re: leasing a car

    Tutu, I'm really glad that you started this thread, since I've been thinking recently about leasing as well. And pretty much for the same reasons that you noted.
    I'll probably need a small SUV, as I have to load and unload an 86-pound amplifier several times a week.
    I'm sure Craig will have some answers about leasing, and hopefully others too.
    .
    .

    That's my story, and I'm sticking to it.

  3. #3
    Join Date
    Apr 2004
    Location
    Honolulu, Hawaii
    Posts
    10,240

    Default Re: Questions re: leasing a car

    Quote Originally Posted by tutusue View Post
    So...what am I missing?
    The condition of the car after the lease is over. For instance do you pay for the repair or replacement of things like dented doors, scratches in the paint, nonfunctioning windows or a broken clock?

    What happens if the car is stolen or is involved in an accident such that it is totaled?

  4. #4
    Join Date
    Sep 2005
    Location
    Wah-key'-key
    Posts
    10,390

    Default Re: Questions re: leasing a car

    Quote Originally Posted by helen View Post
    The condition of the car after the lease is over. For instance do you pay for the repair or replacement of things like dented doors, scratches in the paint, nonfunctioning windows or a broken clock?

    What happens if the car is stolen or is involved in an accident such that it is totaled?
    Good questions, Helen. The lessee is responsible for maintaining the car and fixing anything beyond normal wear and tear.

    Re: insurance...I'm guessing the lessor has specific insurance requirements to cover theft and accidents.

  5. #5
    Join Date
    Jul 2007
    Location
    Oahu, HI
    Posts
    976

    Default Re: Questions re: leasing a car

    I leased a car for 5 years back in the late '80s. This is what I learned.

    1. 5 years is too long (so three is probably right.)

    2. The leaser pays for EVERYTHING (including all maintenance, repairs and full insurance coverage, just like when you finance a car purchase.)

    3. Any and all marks on your car inside and out will be fixed by you before you turn in the car.

    4. Leasing is like renting, only worse. No getting out of the contract early.
    (I was activated during Desert Shield/Storm, and asked the company to take the car back and cancel the lease, since the end of the contract was about 18 months away. Sure, they said, if I pay all the rest of the payments and whatever else they chose to charge me for my use of their car.)

    I will never lease again.

  6. #6
    Join Date
    Apr 2008
    Location
    Wherever I am, I'm there
    Posts
    3,198

    Default Re: Questions re: leasing a car

    I have leased once in my life, might do it again if the circumstances were right. My daughter leased once and will never do it again. She was transferred out of country with a year left on her lease. Leasing company said "tough"! She had to pay it off completely.

    Leasing is similar to outright purchase - you can lease as many options as you like. The problem is that there are more opportunities to get "fleeced" in a lease program than even a purchase. The lessee has to be VERY knowledgable about the lease game or you can be taken.

    The main reason people lease is that they can get a more expensive car than they would normally be able to afford. Consequently, over the long run, leasing is a more expensive way to "own" an automobile than purchase. Also, you will probably be limited to no more than 12K miles a year. Perhaps not a problem on Oahu but a BIG problem on the mainland.

    So my final answer is....it depends!

    Tutu, send me your email address via pm. I want to send you some information that will help you decide if leasing is right for you.
    Peace, Love, and Local Grindz

    People who form FIRM opinions with so little knowledge only pretend to be open-minded. They select their facts like food from a buffet. David R. Dow

  7. #7
    Join Date
    May 2004
    Location
    Oahu now part of the traffic problem in lower Puna
    Posts
    8,415

    Default Re: Questions re: leasing a car

    Leasing offers a great way to get into a new vehicle with lower monthly payments.

    Things to consider before leasing:

    1) How many miles will you be driving it? Leases imply a limit on annual mileage. Go over the cap at the end of the lease, and the cost per mile will be added to the vehicle when turned in or the lease is paid off (for ownership) thru the balloon payment at the end. For this rule, keep your mileage down during the lease period.

    2) Do you own a business? Leases offer a great way to write off the lease payment entirely (or a greater part of). If you bought the car, you cannot write off the monthly payments, nor the downpayment (likewise it would be hard to justify writing off the balloon payment of a lease either). For purchased vehicles you can do the five-year sliding depreciation scale, the One Time Capitalized deduction, or claim mileage for business write-offs on purchased vehicles. But for practical purposes it's hard to purchase a car for business and take the one time deduction if it's financed. Leasing offers a big monthly write off on lease payments.

    3) Because auto dealers want to insure the leased vehicle is maintained properly (for greater resale value if turned in) they will sometimes offer better maintenance schedules or better extended warranties. If you have the dealer do the scheduled maintenance, there is a maintenance record that is beneficial on resale value of that vehicle. You don't have to dig up those records, it's at the dealership. But dealership maintenance is quite a bit more expensive than outside mechanics...but it's deductable.

    4) Extended Warranties. If you can afford it I recommend it. Sure it's a fleecing at the F&I Manager's desk, however cars do break down and when they do costs can be expensive. If you plan on returning the vehicle at the end of the lease, the most pristine condition will warrant a greater resale value to the point where you could possibly walk away from the lease at the end with no out of pocket expense. Plus it's a deductable expense.

    5) Most balloon payments at the end are based on what the monthly lease payments accumulated to over the term plus the initial down payment, subtracted from what the projected Blue Book value of that vehicle would be at the end of the term. Typically it's based on pristine conditions, hence get the extended warranty.

    There are probably other tax advantages to leasing rather than purchasing. But from a business standpoint it's well worth it.

    Insurance wise because it's for business purposes, your insurance will go up slightly. But that's par for the course for any business use of a personal vehicle. Most car insurance waivers will ask if you will use this vehicle to get to work and back or use it for non-personal use. If you say yes (even if it's your own private vehicle) your car insurance will reflect that usage and will more than likely be higher. But like any business expense, it's deductable.

    If you state you won't be using it for business purposes, you cannot deduct that cost, only mileage. But by deducting for mileage, you are implying to the car insurance company that you are using it for business purposes and can reject any auto claim you submit if in your disclaimer you indicated you will not use it for business purposes.

    Bottom line is a lease indicates a clear definitive use of the vehicle if using it for business purposes which allows for lawful deductions as a business expense...purchasing thru financing enters a grey area and can flag an audit.
    Last edited by craigwatanabe; May 25th, 2010 at 10:42 AM.
    Life is what you make of it...so please read the instructions carefully.

  8. #8
    Join Date
    Sep 2005
    Location
    Wah-key'-key
    Posts
    10,390

    Default Re: Questions re: leasing a car

    Quote Originally Posted by craigwatanabe View Post
    Leasing offers a great way to get into a new vehicle with lower monthly payments.

    Things to consider before leasing:

    1) How many miles will you be driving it? Leases imply a limit on annual mileage. Go over the cap at the end of the lease, and the cost per mile will be added to the vehicle when turned in or the lease is paid off (for ownership) thru the balloon payment at the end. For this rule, keep your mileage down during the lease period.
    I have yet to hit 5,000 miles in a year!
    2) Do you own a business? Leases offer a great way to write off the lease payment entirely (or a greater part of).[...]
    Yes, I own a business and am aware of the tax advantages of a lease. In this economy, however, I'm not in need of extra tax advantages! And it's projected I won't need them for a few more years which should take me into full retirement! I'm waiting to hear back from my accountant.
    3) Because auto dealers want to insure the leased vehicle is maintained properly (for greater resale value if turned in) they will sometimes offer better maintenance schedules or better extended warranties. If you have the dealer do the scheduled maintenance, there is a maintenance record that is beneficial on resale value of that vehicle. You don't have to dig up those records, it's at the dealership. But dealership maintenance is quite a bit more expensive than outside mechanics...but it's deductable.
    My goal is to keep costs down while driving a newer, safe car under warranty. I can honestly say this is a decision based on age(ing!)!!! I'm fanatical about maintaining my cars and have saved every receipt...even the one for the new cup holder! I do this for every car and turn that package of receipts over to the new owner. You bring up a good question...can warranty work be done by an outside mechanic?
    4) Extended Warranties. If you can afford it I recommend it. Sure it's a fleecing at the F&I Manager's desk, however cars do break down and when they do costs can be expensive. If you plan on returning the vehicle at the end of the lease, the most pristine condition will warrant a greater resale value to the point where you could possibly walk away from the lease at the end with no out of pocket expense. Plus it's a deductable expense.
    Won't the car's initial warranty cover 'big' breakdowns/repairs? I assume the warranty doesn't cover normal servicing but I would expect bigger repairs to be covered. Not so?
    5) Most balloon payments at the end are based on what the monthly lease payments accumulated to over the term plus the initial down payment, subtracted from what the projected Blue Book value of that vehicle would be at the end of the term. Typically it's based on pristine conditions, hence get the extended warranty.[...]
    Do all leases have a balloon payment or just open-end leases? What about a closed-end lease and I roll over lease #1 into lease #2 at the end of lease #1?

    Still curious about:
    Do all dealerships offer both purchase and lease for any new car on the lot?
    Can an old car be traded in on a car that will be leased?
    Can one haggle over the price, just like a purchase?

    Thanks for taking the time to explain this, Craig. I really appreciate it. I wish your new job was at a Honda dealership on Oahu. I'd make an appt. to be your first customer!

  9. #9

    Default Re: Questions re: leasing a car

    Quote Originally Posted by matapule View Post
    The main reason people lease is that they can get a more expensive car than they would normally be able to afford.
    Quote Originally Posted by craigwatanabe View Post
    Leasing offers a great way to get into a new vehicle with lower monthly payments.
    Isn't this the kind of mentality that got the country into the financial mess we're in? Consumers just want want and want. Can't afford it? Borrow. Already in debt? Borrow more. Extend yourself. Max out your credit. Damn the consequences. Maybe someone will bail you out if it all goes south.

    I'm not saying leasing is a universally bad idea. There are lots of situations where it's a smart thing to do -- but I think a good general rule of thumb is if you can't afford to buy the car, you shouldn't lease it either. I think the better course of action is to choose a car in your price range instead.

  10. #10
    Join Date
    Sep 2005
    Location
    Wah-key'-key
    Posts
    10,390

    Default Re: Questions re: leasing a car

    My accountant just gave me a HUGE green light to go ahead and lease. She strongly feels it's the right thing for me to do at this time in my life. So, now to edumacate <g> myself about the various leases and their pitfalls. <sigh>

  11. #11

    Default Re: Questions re: leasing a car

    Quote Originally Posted by tutusue View Post
    I have yet to hit 5,000 miles in a year!

    Yes, I own a business and am aware of the tax advantages of a lease. In this economy, however, I'm not in need of extra tax advantages! And it's projected I won't need them for a few more years which should take me into full retirement! I'm waiting to hear back from my accountant.

    My goal is to keep costs down while driving a newer, safe car under warranty. I can honestly say this is a decision based on age(ing!)!!! I'm fanatical about maintaining my cars and have saved every receipt...even the one for the new cup holder!
    Cup holder? Hmmm.

    Do keep in mind that in addition to keeping the outside of the car free of any scratches and dents, the lessee also has the responsibility to have the interior be clean and immaculate upon the car's return. Penalties are assessed for any food or drink stains found on the carpeting and upholstery. So one needs to be very careful if he/she is in the habit of drinking and/or snacking in their vehicle.

    Needless to say, this factor is the reason why an otherwise ideal candidates for auto leasing is sometimes better off buying their own car. You never know what can happen if you have to transport young children or pets.
    This post may contain an opinion that may conflict with your opinion. Do not take it personal. Polite discussion of difference of opinion is welcome.

  12. #12
    Join Date
    Sep 2005
    Location
    Wah-key'-key
    Posts
    10,390

    Default Re: Questions re: leasing a car

    Thx, FM, but all cars have cup holders. I just happen to LOVE one of the cup holders in my car. It's very cool! I'll miss it! And, yes, I've been known to drink a soda in my car...one with a top on it...but I have yet to spill a drop in any of my cars. Plus, I'm not very good at eating and driving...eating is too much of a distraction for me! Much like cell phones! Kids? Nope! Pets? Huh uh! Rarely a passenger, even! Regardless...$h!+ happens, and it can happen in any car at any time to anyone. But, for the most part, I'm the only one who spends any time in my car.

  13. #13

    Default Re: Questions re: leasing a car

    Quote Originally Posted by tutusue View Post
    Thx, FM, but all cars have cup holders. I just happen to LOVE one of the cup holders in my car.
    That's supposed to be a safe place to keep a person's family jewels.

  14. #14

    Default Re: Questions re: leasing a car

    Sorry, tutu, my post wasn't directed at you. It wasn't directed at matapule or craig either, for that matter. It was mostly directed at the people matapule and craig were talking about. People who see leasing as yet another way to live beyond their means.

    Quote Originally Posted by tutusue View Post
    Thx, FM, but all cars have cup holders.
    Well, not ALL cars. I have two that don't, and I know a few people who have cars that don't have cup holders.

  15. #15
    Join Date
    Sep 2005
    Location
    Wah-key'-key
    Posts
    10,390

    Default Re: Questions re: leasing a car

    Quote Originally Posted by zff View Post
    Sorry, tutu, my post wasn't directed at you. It wasn't directed at matapule or craig either, for that matter. It was mostly directed at the people matapule and craig were talking about. People who see leasing as yet another way to live beyond their means.
    Thanx, zff, but I knew it wasn't directed at me. That was obvious.
    Well, not ALL cars. I have two that don't, and I know a few people who have cars that don't have cup holders.
    Really? My previous 2 cars didn't have cupholders but one was a 1978 and the other a 1988! My current car is a 1995. I kinda figured anything from the 1990s on had some sort of a cup holder!

  16. #16
    Join Date
    Apr 2008
    Location
    Wherever I am, I'm there
    Posts
    3,198

    Default Re: Questions re: leasing a car

    Quote Originally Posted by tutusue View Post
    Do all dealerships offer both purchase and lease for any new car on the lot?
    Can an old car be traded in on a car that will be leased?
    Can one haggle over the price, just like a purchase?
    Yes,

    Yes,

    Yes.
    Peace, Love, and Local Grindz

    People who form FIRM opinions with so little knowledge only pretend to be open-minded. They select their facts like food from a buffet. David R. Dow

  17. #17
    Join Date
    May 2004
    Location
    Oahu now part of the traffic problem in lower Puna
    Posts
    8,415

    Default Re: Questions re: leasing a car

    Quote Originally Posted by zff View Post
    Isn't this the kind of mentality that got the country into the financial mess we're in? Consumers just want want and want. Can't afford it? Borrow. Already in debt? Borrow more. Extend yourself. Max out your credit. Damn the consequences. Maybe someone will bail you out if it all goes south.

    I'm not saying leasing is a universally bad idea. There are lots of situations where it's a smart thing to do -- but I think a good general rule of thumb is if you can't afford to buy the car, you shouldn't lease it either. I think the better course of action is to choose a car in your price range instead.
    Leasing a car doesn't mean getting into a car over your price range. It offers a way to capture your vehicle expenses thru taxable deductions. You can't do that in a vehicle purchase thru financing. Naturally if you're gonna lease a vehicle for business (really the only reason to lease) you want to keep it within your budget allocation.

    The problem with most vehicle purchases or leases is that it's typically more difficult to purchase a vehicle outright. Who has that kind of money to dispense at one time, especially businesses who need cash flow to stay solvent during times when accounts receivables can extend to past 90-days.

    I disagree that general rule of affordability. If you can't afford the cash outlay or monthly distribution of a purchase, then leasing IS a viable alternative because if you stay within the limits of the lease (mileage) you can walk away from the lease at the end (typically 3-years) instead of maintaining financing for 2-3 additional years where depreciatable value exceeds the net worth of the vehicle and ending up with an asset that has no cash value worth expending.

    Plus with leasing you can deduct those monthly expenses and recapture some of those costs.

    Bottom line of course is always affordability. If you can manage a 90-day net on receivables then leasing is affordable because you are showing prudent fiscal management of your cash assets. And you should only lease or purchase what you can comfortable afford. Getting in over your head won't help you or the dealership who wants to keep your business for your next purchase. Those sales associates who are in it for the quick buck will find their careers ending as quickly as the dealerships that facilitate that kind of arrogant attitude.

    Qualifying a customer means looking at what that customer can afford without developing a mindset of buyers remorse and that means finding the right vehicle at the right price. This is the function of a reputable sales associate and the dealership they work for.
    Life is what you make of it...so please read the instructions carefully.

  18. #18

    Default Re: Questions re: leasing a car

    Quote Originally Posted by tutusue View Post
    Thx, FM, but all cars have cup holders. I just happen to LOVE one of the cup holders in my car. It's very cool! I'll miss it! And, yes, I've been known to drink a soda in my car...one with a top on it...but I have yet to spill a drop in any of my cars. Plus, I'm not very good at eating and driving...eating is too much of a distraction for me!
    Glad to hear you don't ear and drive at the same time. That would be quite a distraction, as you say. But of course, I was thinking more along the lines of eating in the car while parked.

    Quote Originally Posted by tutusue View Post
    Much like cell phones! Kids? Nope! Pets? Huh uh! Rarely a passenger, even! Regardless...$h!+ happens, and it can happen in any car at any time to anyone. But, for the most part, I'm the only one who spends any time in my car.
    Well, if you don't have pets or any young children to haul around, then I guess it's not a problem as far as keeping your car's interior spic and span. Lucky you.
    This post may contain an opinion that may conflict with your opinion. Do not take it personal. Polite discussion of difference of opinion is welcome.

  19. #19
    Join Date
    Sep 2005
    Location
    Wah-key'-key
    Posts
    10,390

    Default Re: Questions re: leasing a car

    Quote Originally Posted by Frankie's Market View Post
    Glad to hear you don't ear and drive at the same time. That would be quite a distraction, as you say. But of course, I was thinking more along the lines of eating in the car while parked.
    Ya know what's weird? I don't think I've ever considered eating in my car while it's parked! I always take food to my destination. It's a comfort thing!
    Well, if you don't have pets or any young children to haul around, then I guess it's not a problem as far as keeping your car's interior spic and span. Lucky you.
    Been thru the kids and the pets and came out the other side, relatively unscathed! Only once did one of my kids get sick in the car...and it was my boyfriend's, not mine!

  20. #20

    Default Re: Questions re: leasing a car

    Craig, I know what you're saying, but do the majority of people who lease a car do so for business? Do they even do it as a financially sound decision? My limited personal experience is that that's not the case.

    The only few people I've known for a fact who leased their car did so because none of the new cars they could afford came from Germany (even though the cars they could afford from Japan would've met their needs just fine). These are people whose financial situations I can only barely describe as stable. That, and going by horror stories I've heard from other people, I've always felt leases had something of air of desperation about them.

    Maybe the vast majority of financially responsible lessees go by unnoticed, and I have my bad impression because the horror stories are louder. I will defer to your experience, Craig, and if you tell me most leases are sound financial decisions, I'll believe you. I'd be curious to hear what percentage of leases are not though.




    Quote Originally Posted by tutusue View Post
    Quote Originally Posted by zff View Post
    Well, not ALL cars. I have two that don't, and I know a few people who have cars that don't have cup holders.
    Really? My previous 2 cars didn't have cupholders but one was a 1978 and the other a 1988! My current car is a 1995. I kinda figured anything from the 1990s on had some sort of a cup holder!
    My 1983 Ferrari doesn't have cup holders, and while it's an old car, even the new 2011 models don't have 'em. My '91 Acura NSX doesn't have cup holders, and it's a model Acura produced up until 2005 without ever adding them. It seems lots -- if not most -- high end sports cars don't have cup holders.
    Last edited by zff; May 26th, 2010 at 09:40 PM.

  21. #21
    Join Date
    Sep 2005
    Location
    Wah-key'-key
    Posts
    10,390

    Default Re: Questions re: leasing a car

    Quote Originally Posted by zff View Post
    [...]It seems lots -- if not most -- high end sports cars don't have cup holders.
    There's probably a very good reason for that!

  22. #22

    Default Re: Questions re: leasing a car

    Quote Originally Posted by zff View Post
    ....The only few people I've known for a fact who leased their car did so because none of the new cars they could afford came from Germany (even though the cars they could afford from Japan would've met their needs just fine). These are people whose financial situations I can only barely describe as stable. That, and going by horror stories I've heard from other people, I've always felt leases had something of air of desperation about them.....
    I think there's yet another category of people who lease, those that would like to own a European car but are leery of how they start needing repairs as soon as the warranty ends. Having the chance to own two, my experience has been as soon as that warranty ends, little things start to pop up, no deal breakers but things that gnaw at your wallet. I haven't had the same problem with two Japanese cars I've owned.

  23. #23
    Join Date
    Apr 2004
    Location
    Central Oahu
    Posts
    774

    Default Re: Questions re: leasing a car

    Quote Originally Posted by tutusue View Post
    Leasing is something I've not considered in the past but the more I read about it the more it seems right for me now.
    At this point in my life, a warranty has become important to me. My current car's mechanic and I were talking about how poorly the more current versions of my car are made (I have an older car from the good ol' days of that particular manufacturer!). He mentioned for someone like me, buying a new Kia, Hyundai (and the like) and trading it in for a new one as soon as warranty runs out is the way to go. All I could think of was...Ugh, the thought of buying a new car every few years is depressing and expensive.
    So...what am I missing?
    Lemme back up a little. Now that you have leasing as one solution to the problem, and can do it at any time you want, can you take a few minutes to revisit the original question?

    The reason I'm asking is because this seems to be trading the hassle of buying a new car from a dealer for a different set of hassles of leasing a car from a dealer. Hopefully the latter is less hassle than the former, but I'm skeptical/cynical.

    Setting aside the leasing concept for a moment, what do you want from this situation? Do you want reliable transportation that always runs, even if you have to spend a little more money to get it? Do you want to avoid big lumpy budget-destroying repair expenses? Or do you want to have the novelty of new-car smell as soon as the incumbent's ashtrays fill up?

    One option might be to purchase all the extended warranties from the dealer or from third-party insurers. When the car's air-conditioning core rots out or its starter motor fails then you've already insured the repair costs. You'd pay a bundle for this much insurance, but at least you're buying peace of mind at a lower price than a lease payment.

    For reliability, you could insure your current car for towing and rental-car replacement. That's an expense (which you're already willing to pay as a lease) and a hassle (just like buying or leasing) but at least the problem might happen less frequently than a three-year leasing/buying concept. If your car doesn't start one day (or leaves you by the side of the road) then you take a taxi and call the mechanic/insurance company. Again not cheap but it satisfies your priorities and it's probably cheaper than leasing.

    For big unpredictable repair bills, you could start setting aside a monthly repair fund in a money-market account. It'd be the monthly amount you're currently spending on repairs or the amount that you'd be spending on a lease payment. When the big repair happens then you curse as usual, but at least you already have the money on hand. And if the big repair doesn't happen, or if it takes a long time to happen, then you've saved a pile of money toward the purchase of a replacement vehicle.

    For new-car smell, you could consider what you want as the car's original warranty expires and either go buy a replacement new car or start shopping for extended warranties. The advantage of this option is that you have the choice to keep a favored car longer if you want.

    BTW, at fewer than 5000 miles per year it might be worth the added expense to have your trusted mechanic step up the frequency of oil changes, transmission inspections, and engine diagnostics. The hardest miles on a car are the first few miles out of the driveway, and we island residents put more wear & tear on our cars than Mainlanders routinely driving 200 miles/week at 70 MPH.
    Youth may be wasted on the young, but retirement is wasted on the old.
    Live like you're dying, invest like you're immortal.
    We grow old if we stop playing, but it's never too late to have a happy childhood.
    Forget about who you were-- discover who you are.

  24. #24
    Join Date
    Sep 2005
    Location
    Wah-key'-key
    Posts
    10,390

    Default Re: Questions re: leasing a car

    Quote Originally Posted by Nords View Post
    Lemme back up a little. Now that you have leasing as one solution to the problem, and can do it at any time you want, can you take a few minutes to revisit the original question?
    Absolutely!
    The reason I'm asking is because this seems to be trading the hassle of buying a new car from a dealer for a different set of hassles of leasing a car from a dealer. Hopefully the latter is less hassle than the former, but I'm skeptical/cynical.

    Setting aside the leasing concept for a moment, what do you want from this situation? Do you want reliable transportation that always runs, even if you have to spend a little more money to get it? Do you want to avoid big lumpy budget-destroying repair expenses? Or do you want to have the novelty of new-car smell as soon as the incumbent's ashtrays fill up?
    No ashtray use allowed except for spare change!!! I want some sort of predictable, financial peace of mind when it comes to a car. And, hopefully, some mechanical peace of mind that comes with a new car. New car smell means nothing to me 'cuz my sniffer doesn't work anymore!!!
    One option might be to purchase all the extended warranties from the dealer or from third-party insurers. When the car's air-conditioning core rots out or its starter motor fails then you've already insured the repair costs. You'd pay a bundle for this much insurance, but at least you're buying peace of mind at a lower price than a lease payment.
    My car is a 1995 German car and German cars are well known for being costly to maintain. I can't imagine what a warranty of any kind would cost at this point...or if I could even get one. And, my car is only worth in the mid $2000. range. It's not worth investing large amounts into it anymore...altho', to someone wanting to step up to a luxury car at a small cost and willing to take on future repair bills, my car is perfect. At this stage of my life (age and pending retirement) I don't want to spend my money on maintaining cars anymore...altho' I'd go back to a Porsche in a heartbeat if it made any sense!
    For reliability, you could insure your current car for towing and rental-car replacement. That's an expense (which you're already willing to pay as a lease) and a hassle (just like buying or leasing) but at least the problem might happen less frequently than a three-year leasing/buying concept. If your car doesn't start one day (or leaves you by the side of the road) then you take a taxi and call the mechanic/insurance company. Again not cheap but it satisfies your priorities and it's probably cheaper than leasing.
    I carry AAA Plus. I also have rental car replacement. And, I really want to cut the odds of my car leaving me by the side of the road...along the Waianae Coast...at night! Fortunately my current car has not done that but it did die in the intersection of Ala Moana and Atkinson and I was able to coast into the AMC parking lot! That can happen to any car, I know!
    For big unpredictable repair bills, you could start setting aside a monthly repair fund in a money-market account. It'd be the monthly amount you're currently spending on repairs or the amount that you'd be spending on a lease payment. When the big repair happens then you curse as usual, but at least you already have the money on hand. And if the big repair doesn't happen, or if it takes a long time to happen, then you've saved a pile of money toward the purchase of a replacement vehicle.
    Bottom line is...a have the money for costly repairs. I have the money to buy a new car for cash. But, in this economy I want to keep that money liquid. At this point in my life, I don't want to spend it on maintaining a 15 year old car. Twenty or 30 years ago I would have been ok with that. But, not anymore. Maybe I'm finally getting more practical in my ol' age!
    For new-car smell, you could consider what you want as the car's original warranty expires and either go buy a replacement new car or start shopping for extended warranties. The advantage of this option is that you have the choice to keep a favored car longer if you want.
    I'd have that option with a lease car, too. I found it interesting in talking to friends who lease...all are female...and all love it! They love the predictability for budgeting, the tax benefits and they really love turning in their cars at the end of the lease and getting the key to a new car. We didn't discuss new car smell!!!
    BTW, at fewer than 5000 miles per year it might be worth the added expense to have your trusted mechanic step up the frequency of oil changes, transmission inspections, and engine diagnostics. The hardest miles on a car are the first few miles out of the driveway, and we island residents put more wear & tear on our cars than Mainlanders routinely driving 200 miles/week at 70 MPH.
    I've always serviced my cars in shorter intervals than recommended...3000 miles vs 5000 miles. My current car is in great shape both inside and out and I've been surprised at the interest already shown in it should I sell!

    Another goal, Nords, is to reduce my overall car expenses. Once I crunched the numbers on my existing car and passed them by my accountant for approval, it became apparent that I'll be able to achieve this goal even with a lease payment. But not a lease payment on a luxury car...or a Porsche!!!

    Thanks so much for taking the time to question my motives and offer options. I truly appreciate it. It allowed me to see how much thought I'd already put into this subject without really realizing it!

  25. #25
    Join Date
    Sep 2005
    Location
    Wah-key'-key
    Posts
    10,390

    Default Re: Questions re: leasing a car

    For you knowledgeable HTers...are the following acceptable lease costs and, if so, are any of them negotiable...

    • "rent charge" (what the leasing company charges for the use of the money...on a purchase it would equate to interest...or so I'm told!)

    • "acquisition fee" (the charge a finance company charges for acquiring the vehicle, setting up the lease and disposing of the vehicle at lease termination)

    • "documentation fee" (what should this include?)

    • "vehicle theft registration"


    Something interesting I learned from my Googleathon...lemon laws don't apply to leased cars in most states. Hmmm...

Page 1 of 2 12 LastLast

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •