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Lease a car?

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NutmegCT

NutmegCT

Great Pumpkin
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Anyone ever actually leased a car (personally, not for a business)?

I've got some questions ....

Thanks.
Tom
 
I've leased several cars in my lifetime. The big advantage is you don't have to pay for the residual value of the car so your payments are lower. The risk here is that you are responsible for the residual value of the car which can be affected by many things including excess miles, mechanical shape and accidents. If when you turn in the car, the value of it doesn't equal the expected lease value, you will be responsible for the difference which could be a shock to your budget. Some of the risks cannot be controlled by you but can be insured like the most common which is the difference between the value of the car if an accident happens. They have "gap" insurance which covers that difference-- Lease payoff vs. what your insurance pays for a totalled car.
 
I leased a car when we lived in Florida - PM if you have specific questions, but, generally was not a good experience.
 
My sister leased a car (Tahoe) a few years back and was not happy that she had to pay an extra $4,000.00 at the end of the lease for excess mileage. She was fully aware of the over-mileage but kicks herself for not just outright buying. I think if you really take care of a car, no dings or scratches, and watch your mileage, you might break even. Plus, the high upfront charges coupled with the monthly lease costs really don't sinc with the generally low interest rates for purchasing pervasive in the struggling car market today.
 
Gentlemen - that is exactly the stuff I was wondering about. The "unstated cost" at the end of the lease.

Example: <span style="font-style: italic"> "2011 Rogue S AWD with Splash Guards & Mats model 22211 subject to availability to well qualified lessees through Nissan-Infiniti LT. $23,170 MSRP incl. destination charge. Net capitalized cost of $19,670 does not include a $595 non-refundable acquisition fee. Dealer contribution may affect actual price set by dealer. Monthly payments total $7,761. At lease end, purchase for $14,829, plus purchase option fee up to $300 (except KS & WI), plus tax, or pay excess wear and tear plus $0.15 per mile for mileage over 12,000 miles per year. Lessee is responsible for maintenance and repairs. Disposition fee due at termination of lease term. No security deposit required. See participating Dealer for details. Offer ends January 31, 2011."</span>

It's that "disposition fee due at termination of lease term" that got me wondering. And I never realized that if the value of the car at the end of the lease is *more* than was estimated in the lease agreement, I'm obligated to pay the difference. Oy.

So if you sign a lease, you're actually signing a legal document to pay an *unknown* amount at the end of the lease? Plus, it's up to the dealer to decide on "excess" wear and tear?

Please correct me if I'm wrong about that, but ... Yikes!

Tom
Edit: the Nissan stuff is just an example of the wording I was questioning.
 
For business it "may" make sense, but for a personal car? Run Forrest, run!
 
Basil said:
For business it "may" make sense, but for a personal car? Run Forrest, run!
Click to expand...

And if you are writing off the vehicle as a legitimate expense, beware. Will raise a red flag with the IRS if you attempt to take 100% of the lease cost as an expense, even if legit.
 
TR6BILL said:
Basil said:
For business it "may" make sense, but for a personal car? Run Forrest, run!
Click to expand...

And if you are writing off the vehicle as a legitimate expense, beware. Will raise a red flag with the IRS if you attempt to take 100% of the lease cost as an expense, even if legit.
Click to expand...

That's why I don't bother writing off any part of my home as an office - trying to justify how much is "office" and how much is for personal use would be a hassle I'd rather avoid.
 
NutmegCT said:
It's that "disposition fee due at termination of lease term" that got me wondering. And I never realized that if the value of the car at the end of the lease is *more* than was estimated in the lease agreement, I'm obligated to pay the difference. Oy.

So if you sign a lease, you're actually signing a legal document to pay an *unknown* amount at the end of the lease? Plus, it's up to the dealer to decide on "excess" wear and tear?
Click to expand...

I think you're 1/2 right. The residual value is agreed upon before hand and is not negotiated at the other end. To back this up, I do recall when the market was strong and people were selling their lease cars rather than returning them and making themselves money. Then the market crashed and they were worth less and thus people just handed them back. In neither case could the payout be re-negotiated. Interestingly, I wanted to lease a Sorento shortly after they came out and Kia wouldn't let me as they had not calculated a residual value.

That being said, I too had to pay about $4k for mileage. (I was planning to buy the car but then we moved back to Canada and there were just too many hassles coming across the border) Also, it is up to the dealer, and, things like non-original tire brands can be charged for if the dealer wants to.

The biggest thing for me was that I never felt like I was driving my own car. Any scratch, any odd sound, any tiny stain inside weighed on me. In reality I wasn't charged extra for condition (and the car had even been in a couple of accidents) but knowing that I could be drove me crazy. I've since realized that the car I like the best is the car that is paid for and mine - even if it isn't the newest or brightest thing.
 
Tom,

I'd look into buying.Right now seems to be a good time to
buy a new car.It looks like sales are really slow right now.

- Doug
 
Reading all the negatives you guys have experienced with leasing, coupled with what I've read and wondered about, then looking at the low interest rates on offer these days ... I can't see who'd want to get into a non-business lease.

The next six months will be "interesting". I'm thinking first of the sedans recommended by Consumer Reports (their opinions as well as owner opinions, plus reliability forecasts). But I'm always open minded!

Thanks gents.
Tom
 
My father taught us that leasing cars was only for the foolish.

Here in Phoenix my favorite thing is that you can lease your car (something ridiculous like an Escalade) and then you can lease aftermarket Rims and Tires for it (to properly get that "I am an idiot" look).
 
I worked for a dealership...once.
Personally, if you don't like car salesmen, you REALLY won't like lease salesmen.
I watched them foist off leases to folks who had no business doing that.
They couldn't buy a new car, they certainly could not afford the end costs.
Remember the T-Birds that everybody seemed to have in the early 80's?
Lease program.

From what I saw, I would never lease a car or suggest to anyone to do so.
Of course, I wouldn't buy a new car, either.

Having been in the auto repair industry, two years old and usually all the bugs are out of them.
THEN you buy.
 
:lol:

Waaaaay too true!!
 
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