School me on Leasing a Car please

tn123

tn123

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May 8, 2013
Hey guys I have questions about leasing and the costs associated with it..

So I own a car and it keeps having issues so I want to sell it and probably lease a car now. 

But what are the costs associated with leasing? Like I pay upfront some cash and then monthly payments but what else?

Do I pay if the car has problems or is that covered by the dealership? Like if my window breaks or my brakes need to be changed, is that covered or do I have to pay for it to be fixed.
 
You're not going to have to pay anything for fixing for most part since car will be new. Some brands offer free maintenance including oil changes like BMW and Audi.

The biggest hurdles are the low miles allowed. I haven't seen leases that allow more than 15k miles per year. If you don't drive much and want to have the latest and greatest then leasing is a viable option. Also when you return the lease, they will comb through the car with a magnifying glass to look for dings and wears.
 
I'm not looking to get anything crazy, I just want a new car that works because my car is having a lot of issues. 

I don't drive much and I'm looking at the 12k miles per year thing and I think I can handle 1k a month of driving. I'm at the like 850 range now.
 
wj4 said:
Also when you return the lease, they will comb through the car with a magnifying glass to look for dings and wears.
Click to expand...

I thought the same thing before I turned in my first lease but it was not the case. I'm on my 3rd lease and my previous 2 cars were pretty worn, had some dings, few little dents, and one had a cracked tail light and they never said a thing. I think that's mainly because I stayed with the same dealership/car make. I haven't turned a car in and leased somewhere else yet, curious to see how it goes when that day comes.
 
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I'm not copping anything because I don't want to, and no I am not getting a luxury car. I want something for 300 or less that is reliable.. I like to live within or below my means got bigger goals than having a nice car 

I am just wondering what other costs are besides the monthly payments
 
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TN123 said:
I'm not copping anything because I don't want to, and no I am not getting a luxury car. I want something for 300 or less that is reliable.. I like to live within or below my means got bigger goals than having a nice car 

I am just wondering what other costs are besides the monthly payments
Click to expand...

Insurance will definitely go up, especially if you have a old car and you're planning on getting a 2015 model. Not sure about your age or location and current car, but plan for a $100 increase at least. You'll need to add comprehensive coverage if you don't currently have it since you don't own the car as well.

Be 100% positive on your yearly mileage. You will be taxed if you go over your limit.

Negotiate based on the car's value, not the monthly payment, as that is what will be used to calculate your monthly payment anyways. You're essentially paying for the depreciation on the car when you lease, so if you negotiate a car down to $40k from $45k, that means less money out of your pocket for the monthly payment.

Keep in mind that some dealers use bait and switch tactics and may be liable to pull a fast one on you, e.g. they sold the car on the morning you were supposed to finalize the buy, the car you ordered was supposed to have a screen display and has a regular radio unit, etc. The legality factor varies based on state to state, but if you finalize an order and its not up to par, DO NOT SIGN ANYTHING ELSE UNTIL IT IS RESOLVED by either them adding the features, giving you money back, or getting you a new car.

Good luck. Cop da M3.
 
TN123 said:
I'm not copping anything because I don't want to, and no I am not getting a luxury car. I want something for 300 or less that is reliable.. I like to live within or below my means got bigger goals than having a nice car 

I am just wondering what other costs are besides the monthly payments
Click to expand...
Then you already failed with trying to lease a whip.
 
TN123 said:
great input bro. How do you come to the conclusion that I have failed exactly.
Click to expand...
Because you'll be stuck in a cycle of monthly payments.

Buying vs leasing is a never ending argument. You can argue the same for buying since you'll have to foot the bill when the time comes. Others will say they lease cars for business and use that as write off.
 
wj4 said:
Because you'll be stuck in a cycle of monthly payments.

Buying vs leasing is a never ending argument. You can argue the same for buying since you'll have to foot the bill when the time comes. Others will say they lease cars for business and use that as write off.
Click to expand...
Actually I am going to be writing off my car for business first of all..

Secondly I can make 25-30k work better for me than spending it all at once on a car. If that makes any sense
 
TN123 said:
Hey guys I have questions about leasing and the costs associated with it..

So I own a car and it keeps having issues so I want to sell it and probably lease a car now. 

But what are the costs associated with leasing? Like I pay upfront some cash and then monthly payments but what else?

Do I pay if the car has problems or is that covered by the dealership? Like if my window breaks or my brakes need to be changed, is that covered or do I have to pay for it to be fixed.
Click to expand...

When leasing a car, most dealerships will take care of certain things because at the end of the day, its still their car.

When you do lease a car though, you must have a nice down payment and must be fully insured.

My wife and I lease a BMW X3 and we have to pay for the following,
- any damages we make to the car
-Tires
-Windshield wipers
-Miles
Im sure theres more but because she works there and is a great employee, we get taken care of.
 
wj4 said:
TN123 said:
great input bro. How do you come to the conclusion that I have failed exactly.
Click to expand...
Because you'll be stuck in a cycle of monthly payments.

Buying vs leasing is a never ending argument. You can argue the same for buying since you'll have to foot the bill when the time comes. Others will say they lease cars for business and use that as write off.
Click to expand...

if you can write off the car lease as a business expense then its definitely worth leasing.

i write commercial equpment leases for a living so my expertise with consumer auto leases is somewhat limited, but a lot of the same characteristics will apply. Assuming every part of the lease is negotiable, you want to try and negotiate as much of a cap cost reduction as you possibly can without coming out of pocket. This may be in the form of negotiating the actual invoice price or seeing if you qualify for any sort of rebate or other dealer incentives. You also want to see if the end of term residual is negotiable. I dont know what the industry standard is when it comes to car leases (if its a FMV residual or if the residual amount is pre-set at the time of purchase) but if you can negotiate what the residual is, you definitely want them to make it as high as possible. Typically the lease payment is calculated by taking the difference between the cap cost (cost of vehicle plus all other taxes and fees that may be built in) and the residual and multiplying that by the lease rate factor (money factor). By reducing the cap cost or increasing the residual, you can reduce the amount of the lease payment. You might also be able to negotiate the lease factor (which is just a tricky way for us leasing people to hide what the implied interest rate is).

good luck.
 
If you have some cash lying around that you can afford to sit for a while, consider Multiple Security Deposit as well. It'll lower your monthly payment.


Also, a $300 a month lease is about entry-level luxury vehicle category. If you just genuinely want a car to get you from point A to point B, check out the Prius C, dealerships here have plenty in stock from last model year that were a few grand below msrp with another $1k incentive discount. With enough negotiating skills, it wouldn't be too difficult to get that for around $150-$170 a month lease especially if you could do 10k miles a year.
 
djaward said:
When leasing a car, most dealerships will take care of certain things because at the end of the day, its still their car.

When you do lease a car though, you must have a nice down payment and must be fully insured.

My wife and I lease a BMW X3 and we have to pay for the following,
- any damages we make to the car
-Tires
-Windshield wipers
-Miles
Im sure theres more but because she works there and is a great employee, we get taken care of.
Click to expand...

Thats a given with that but windshield wipers in a lease?

Also its not even good to put a big down payment on any lease. Never... If you get in an accident your big down payment is gone. Only time its good if you have bad credit and are trying to get approved...might as well finance then


Paying for 1st month payment,Tax, doc and title is more like it and negotiating the price of the car...
 
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Step 1: Find buy here pay here we finance anyone $1 down used car dealership

Step 2: Find the cleanest Fiero on the lot

Step 3: Get on that 120 month financing plan

Step 4: Apply bodykit to said Fiero

Step 5: Stunt in your Fierarri :smokin
 
dankenstien88 said:
Step 1: Find buy here pay here we finance anyone $1 down used car dealership

Step 2: Find the cleanest Fiero on the lot

Step 3: Get on that 120 month financing plan

Step 4: Apply bodykit to said Fiero

Step 5: Stunt in your Fierarri :smokin
Click to expand...
:lol: I second be this

Very fun car to drive
 
Leasing is an option for people who don't have money to purchase the car, but really need one. Typical lease last 2 to 3 years and you're usually restricted to a certain amount of miles, so it would be wise to lease a vehicle if it didn't make you more money.



 
 
TN123 said:
I'm not copping anything because I don't want to, and no I am not getting a luxury car. I want something for 300 or less that is reliable.. I like to live within or below my means got bigger goals than having a nice car 

I am just wondering what other costs are besides the monthly payments
Click to expand...

I like your mindset, young man.
 
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