Has anybody here ever leased a car?

My fiancee and I were recently in a similar situation (sans the towering inferno) and we didn't have great credit, making things more difficult.

Not sure what your situation is on your other vehicle, but what we were able to do was borrow against my car (a 2005 Mustang) to buy her car outright. We got approved for a $14,000 loan. We paid off the $4,500 owed on my car and bought hers for $6,500 (and we got an amazing warranty on both vehicles for a total of $1,000 extra). So now, we have one car payment which is actually lower than what I was paying on mine alone and we own her car in full. I pay a couple extra bucks a month on my insurance for gap coverage (insuring the difference between the actual value of my car and what I owe).

We got a great Honda Civic, warranties on both cars and lowered our monthly payments. I did the math and in the end, it will cost me about $700 more than if I had continued my car payments and paid it off in June and we had financed her car separately.

 

Agreed. I remember when I leased, and this was back in the late 1990s - like 1998 - and it was more affordable than owning. The manufacturers, much like now, were struggling and desperate to keep churning out cars and making whatever they could, so leasing was dirt cheap.

Then, after the two or three years (I can't recall the term) to lease the same car was double the cost and owning was cheaper, more affordable and made more sense.

Do the math. That's the only piece of advice I have.

Or, buy used.

 

It's a bad deal.
If you're desperate, buy a clunker until you've got the money to buy the car you want.
With the way some cars are made today, you can drive them into the ground and not drive yourself into the poorhouse.
I had my Acura for 13 years. A lot of those years, I was telecommuting so wear/tear was low, but when I traded it in it was at 145,000 and could have gone another 60, easy, feeling and looking good. I had no car payment for 7 years.

 

Thanks guys. The reactions on both sides are interesting. Lots to think about.

 

Leasing can be a good deal but do the math. Most do not realize that you can negotiate the lease. People get blinded by the cheaper monthly rate compared to financing.

One thing you should not do is put money down to reduce cap cost unless you plan to buy and end of lease. Ideally you want to get into lease for zero money down sans first months payment.

To negotiate the figures you want to know are - sticker price, discounted price they are calculating the lease on, interest rate - typically interest rate is quoted as a factor such as .00375. mutliply this number by 24 to calculate actual interest rate used.

Check to see if there are rebates on car. these should be applied to discounted price.otherwise the dealer will keep them.

Ideally tell dealer you want to buy car - negotiate best deal then tell then you want to lease based on same numbers.

Going over mileage is not that big a deal. typically the cost is .15 to .20 per mile . if you do an extra 1000 miles at . 20 per that's only $200 bucks.

One final thing - be sure your lease has gap insurance. that covers you if car is totaled and insurance payment is less than what you owe on lease.

Do the math and you can get a good deal.

 

Thanks. I did know about gap insurance. No way I would go into a lease without it. That is excellent advice all the way around.

 

Make sure you get it through your insurance company and NOT the dealership though. Dealers will usually charge like $500 for it (which you'll then pay interest on) even though you should be able to get added to your insurance policy for only a few bucks a month.

 

I was in that situation ... wrapped my car around a guardrail and NEEDED transportation ASAP.

This is what I did:

Buy a clunker cheap. Drive it until the wheels fall off. Pay the car payment, but put aside money every month as your "car payment" into savings. It doesn't have to be a fortune -- $100 a month gets you $1,200 a year. When the wheels fall off -- hopefully after several years -- you can pay cash for a car and NEVER have a car payment. I've done this for years and it was the most freeing thing I've ever experienced.

I'm currently driving a Honda with 178K on it that I bought with 60K miles on it for less than $5K eight years ago -- and it runs great. Doing that allowed us to save up and buy my wife a car with cash last year. We plan to buy a car every five years, set aside $100-200 a month for it, and we expect to have $6-7K in the bank. I always try to buy Hondas (or Toyotas -- something that is known to be reliable long-term) with about 60,000 miles on them. If you're willing to buy a Big Three car -- I had some bad experiences with both Ford and Chrysler-built products -- you can get fewer miles cheaper.

 

Another thing to watch with leasing is wear and tear on the car. Unless you're really, really meticulous, they can be a pain in the butt about every ding and scratch.

I've leased, bought new, and every other damn thing. Cars are good enough now that I found find a good one 3-4 years old and plan on keeping it 10 years. Really not that big a deal anymore.

 

To answer the thread title directly, I wouldn't be caught dead leasing a vehicle. But that's me ... things I would look for before even thinking about it:

1) Looking used. Hondas and Toyotas tend to be durable and pay for themselves in a hurry.

2) With the used market as saturated as ever, deals can be had depending on how picky you might be. Also, given the economy, someone somewhere is looking to get out from a bad deal he/she may have made recently. The smart ones who don't get too greedy won't try to maximize profit if they fully understand how badly their credit could get destroyed with a default in this category.

3) If you're going to lease, make sure your drive to and from work, your best friend(s) and favorite relatives is really short. If it isn't, you'll be stuck with either a big fee for putting too many miles per your leasing agreement or having to buy the vehicle, which stinks if you were really looking forward to getting out of it.

Good luck. And, obviously, don't get burned on the deal. One burn is already one too many.

 

The mileage penalty concern is overblown unless you completely underestimate your usage. Say you have a 3 year lease that allows 36,000 miles and you do 39,000 . It will cost you an extra $450.

 

Mileage issue is not overblown, Boom. Seems like people who lease do this all the time.

And many folks balancing air-tight budgets don't have $450 just lying around to pay off numerous fees.