The new trick (car lease content)...

[fitness1]

I've been noticing a LOT of ads popping up for 18 month leases at 10k a year.

Sure, the monthly payment appears lower-ish, but when you divide out the up front money and add it to the monthly payment - well, you get the point.

Just saw one for a Toyota SUV - 399 a month, 3999 up front, 18 months 10k -
that's 620 a month (over 11,000 dollars total) and you only get to drive it for 15,000 miles.

I'm thankful for being able to buy out my 2020 Accord in a year for 14k. It will have about 20k miles on it and it was only 175 a month (no down money) I did a one time pay lease.

[rmp]

yea,, I never thought those guys were doing any one a favor..

Good deal "for them"... for us lowly consumers? yea... not so much

[Dotneck]

I never understood why anyone would pay up front for a lease. Isn't that the point of a lease? To not have to pay up front? (I have to admit I've only leased once in my life. Thank goodness it was during the pandemic and I was able to get out of it without getting a haircut).

[Mr. Jelly]

The only way I could find to make out on car expenses has been to get them paid off and keep on driving them until they die.

[fitness1]

Originally Posted by Dotneck

I never understood why anyone would pay up front for a lease. Isn't that the point of a lease? To not have to pay up front? (I have to admit I've only leased once in my life. Thank goodness it was during the pandemic and I was able to get out of it without getting a haircut).

I did it on the last three Hondas and it worked GREAT!

It saves between 12-15% over the extended payments, you don't have to mess with making the payment every month, and with Hondas holding their resale value the way they do, I buy out the lease a couple months before the end, sell the car myself (I'm obsessive about taking care of them and only drive about 7k a year) I normally net between 1500 and 2000 and apply that to the next lease.

The Accord I'm driving now was 7780 for 36 months (10k) and when you subtract the 1600 or so I netted and applied, it comes out to about 175 a month - at the time they were leasing for 250-ish which would have been 9000 over 36 months.

That's why I pay up front

All that said, given the current climate, I'm going to buy this one out and drive it for a couple of years until the market settles back down. I'll be paying 14k for a 2020 Accord with about 20k miles on it in pristine condition (and knowing how drove it!)

[rokdog49]

If leasing wasn’t highly profitable, the dealers wouldn’t do it.
IMHO, leasing is for people who like to change cars often and don’t care if they lose money. That’s a personal preference, good for those folks.
Somebody is going to have to show me how leasing makes sense from a financial standpoint.
What Fitness1 does is both smart, rare and specific to the car, the times and the fact that he drives so little.
Here’s a thought. Buy a new Honda Accord, pay it off in two years and drive it for the rest of your life, payment free.
At 7000 miles / year and based on my experiences with Hondas you will get 30 years out of it.

[Tahitijack]

My niece wanted a Mini Cooper but she could not afford to buy it so she leased it I pointed out the obvious downsides of lease VS purchase and added maybe she could buy a less expensive vehicle. Nope, she had to have the Mini Cooper.

[Slothead56]

We got caught up the the leasing game about 20 years ago. It was a total disaster. Too many miles per year so the “affordable” end of lease option was to buy the car outright (at a premium) to avoid the mileage charge. This went on for several purchases over a period of 7 or 8 years.

Finally sucked it up and paid up. Now I only buy used vehicles and drive them into the ground. My Volvo has 115,000, my wife’s Mercedes had 155,000+ and her Mini has 55,000.

The habit was handed down…my youngest son has our old 2008 Volvo SUV. 180,000+ miles and going strong.

[Mandobart]

I've never leased a vehicle. My very conservative financial approach is buy them for cash and drive them for 20 years or more. When I figure out my cost per year it's very low - ranging from about $400 to $2000. Of course as the price of new vehicles continues to rise I'll have to keep them longer to maintain this low cost per year. If my '21 RAV4 hybrid lasts 20 years it will cost about $2000 per year. I have no problem driving a (reliable) old car - it's what I've done most of my life.

I find it very effective financially to live below my means and save the funds I'm not spending.

I'm fortunate to have found my way into a career that pays me well to do something that most people aren't interested in. This has allowed me to live debt-free most of my adult life. The money I would have been putting into recurring monthly rent/house payments, car payments, finance charges, etc. has instead paid for my kid's college, retirement savings, travel and of course stringed instruments.

[fitness1]

I guess the point of my post was missed somewhat - not intended to be a debate about leasing or not, but the fact that the companies are using new tactics (leases half the length of what was normal a few years ago) to try to lure folks into it. It's all kind of comical when they don't really have any inventory anyway

The "system" I've developed for leasing my Hondas works great for me. MANY years ago I decided I was always going to drive a newer car with a warranty, even though Hondas seldom break down.

I don't drink, smoke, go out to eat or many other things that suck money out of your budget, so I "treat" myself to one thing.

Given our new economy, my practices will likely be modified some - I live so simply it would scare the heck out of most, and plan to continue that going forward.

[KevWind]

I was always under the impression that leasing really only made sense for people who drive under 10,000 mi. a year, and who can write it off as a business expense ..

[rokdog49]

First off, I understand the OP. I will admit there are human beings who get drawn into this kind of thing. I repeat, leasing is mostly about changing vehicles frequently, no matter the financial loss. In addition, the dealer is pushing a finite number that appears “doable” if you don’t do the math. Leasing a car for $620/ month and having nothing at the end of the lease…duhhh!

Before he could no longer drive, my dad did a three year lease on a Toyota Corolla. It was a “no money down” special and cost him around $250/ month with everything.
For him, that was the best way to go because he really couldn’t make a down payment large enough to make the monthly payments affordable on an outright purchase.
He drove the car less than 10k miles total before he turned it in.
Maintenance was three oil changes and that was it.

[fitness1]

Originally Posted by rokdog49

Before he could no longer drive, my dad did a three year lease on a Toyota Corolla. It was a “no money down” special and cost him around $250/ month with everything.
For him, that was the best way to go because he really couldn’t make a down payment large enough to make the monthly payments affordable on an outright purchase.
He drove the car less than 10k miles total before he turned it in.
Maintenance was three oil changes and that was it.

I tried to talk my Dad into a Civic lease for his "last" car - they were driving probably 3-4k a year at the time. I figured we could do what I've been doing and get them some cash back at the end. He couldn't be enticed though....instead he went out and paid cash for a 2013 Ford Fiesta at about 15k. When Mom passed I sold it for about 7k (a year ago) with 35k on it.

We got lucky because of the ballooning used car market at the time. KBB and Edmunds were showing about 4500 on it.

[Horsehockey]

Bought one new car in my life when I started having kids, I thought I needed a van. Worst & most expensive car I’ve ever owned. For decades since I’ve purchased used and done my own maintenance as a Shadetree mechanic. Sure some stuff I farm out to my independent, both my cars are paid off and have been from day one. This isn’t for everyone, but it is for me.

[ghostnote]

I don’t lease my vehicles, because I prefer to own them at some point. But I have a very good friend - the drummer in all my bands for 35 years - who was a car salesman for 25 years. He sold Toyota, Nissan, Chrysler; lots of brands. He hasn’t owned a car this century. He only leases, for both himself and his wife’s vehicles, which are not the same make. He claims if you get the right arrangement, it’s a better deal than buying. I can’t argue with him because he’s the expert, but I still buy my cars. I don’t like having a restriction on how much I can drive, but some folks don’t care about it.