A little background: I’m a first time car leaser, at the time the special for the car I leased seemed like a good deal. I recently signed a 24 month lease for a 2015 Buick Encore Convenience AWD through the dealership with a 15,000mi/year plan. I will be moving twice in the during the 24 month lease and my original plan was to purchase a used car for a short term use and then trade it out in 3 to 5 years for a new car.
I was currently looking at SUV models for the convenience of moving in the next 2 years
The used cars I was looking at were pricing near $20K ranging from 40-50K miles
At this point I am not sure what my plans should be after my lease is over. I will most likely have 15,000 mi on the car, hopefully still in good shape because I prefer not to drive very often except commuting to work daily 3 miles (one-way) and maybe once or twice a month trip to groceries and errands. At the end of the lease I figured I would have 15,000 miles or a little bit over that with a estimated $17K payment if I decide to keep the car. Or negotiate the price of car after the lease is up and trade it in or sell it to get a smaller/compact car.
I know it’s too late now, but it sounds like you should have stuck to your original plan of buying a used car . . . especially since you don’t drive much
You could have bought a used car for cash, and gotten cheap insurance
But now you’re locked in, shelling out monthly lease payments, paying expensive comprehensive insurance, and you’ll have to be extremely careful with that leased car, because you’re going to get hammered for every little ding, when you turn it in
And you won’t have anything to show for it, financially, that is, because they will take the car
As for “estimated $17K payment if I decide to keep the car.” . . . that is false logic. The numbers always work against you and for the dealer. When you do the match, you’ll quickly see you’re overpaying. If you want to buy, do so at the beginning
Leasing almost never makes financial sense for an individual, and it’s a dangerous trap to fall into. I know a lot of people that got in over their heads when they leased
2 years could mean major changes in your life. Your lease will allow you 30,000 miles with no penalty when the lease ends. If you only drive 15,000 miles the price you pay for the car if you want to buy it will be higher. So, don’t worry about using the car. Ideally you will have in the area of 28,000 miles when the lease ends.
Until then use the lower lease payment to put money aside for a significant down payment on your next car. A $10,000 down payment would allow you to buy a nice car with an affordable monthly loan payment.
It depends on how you like the car and if it meets your needs. I own 4 cars with no car payments. The newest is a 2004, and oldest is a 2000. Miles on my fleet range from 75,000 to 178,000. I live in an area where roads are heavily salted in winter. All my cars still look good, are reliable, and take a 2000 mile trip without worry.
The car you just leased will last 10, 15, even 20 years. That’s a lot of years without any car payments. Just keep it washed and waxed, maintain it properly, and expect to go through several sets of tires and brakes. Buy a good car and keep it a long time. That’s the only to do it if you want to have no car payments.
Sorry, but I know there will be those who disagree with what I have to say, but leasing can be very smart. It is a very sound way to create excellent credit, and allows the lessee several options which include buying the vehicle at lease end or walking away. And leasing is generally a lower monthly payment than purchase. Plus a leased vehicle is pretty well guaranteed to fall within the manufacturers new vehicle warranty during the duration of the lease. The manufacturer provides guaranteed future value, so the risk of being “upside down after two years” can be significantly less than purchasing a vehicle that is several years old with high mileage. Most leases allow for minor dings ( usually those that can be covered by a credit card are not charged). Yes, you are required to maintain the vehicle, but usually the dealership will provide a turn- in inspection prior to the end of your lease that will tell you what your responsibilities may be. If significant damage and/or wear and tear need to be addressed, then they can be. If the vehicle is involved in a major accident, insurance fixes it and you walk away at the end of the lease. If you are buying it, chances are you just lost lots of money due to the accident and the drop in residual value. I know I don’t want to have a vehicle with a CARFAX report that says it was involved in an accident. And please be sympathetic to those who do not have the cash to make a big ticket purchase. And as to AWD, I really don’t think it fair to tell someone what he/she needs. I personally think of AWD as a safety factor. It is a known fact that AWD improves the handling of a vehicle and thus makes the vehicle safer in all conditions , be it rain, dry road, sand, dust, and snow. Why do you think WTC prohibited Audi from using AWD in motor sport? Simple. It was an unfair advantage, and they were running away from the rest of their competitors.
Leasing worked for us, bought a van in 03, sales tax, interest, repairs above and including tires brakes, fluids made the 26k car $236 a month for 12 years. Now we turned down oa lease of a camry for 2 years @$140 a month, and got a Kia @ $200 a month. So I am saving $36 a year, warranty covers everything, no time out for trans fluid, tires, brakes and with 100k bumper to bumper no surprise repairs. Now granted if you are lucky and keep it longer than 12 years you might be better off. The biggest thing to consider is mileage, wife averages 8k a year, well under the 12k allowed, but if you are a high mileage customer buying is a no brainer!
No I am saying every 3 years @ $200 a month we turn it for a new lease on a new car. 12 years = 28 k. vs 12 year old van too much going wrong to fix, 26 k original price, brakes, tires, interest sales tax repairs etc. cheaper for us to lease dependant on mileage, for us not an issue.No time out for tires,brakes, breaks, and cheaper.
I have leased cars before. I do not know what is the downside if you are not driving a lot. Okay so here is some basic math (with rounding and no taxes to simplify it)
car costs 20k.
36 month of lease $200 a month =
$7200 in three years.
At the end of the lease I have the opportunity to buy it for (guess what) 20000-7200 = $12800
If I would buy a car from day one I would also buy the same full coverage insurance for my car, that is required by the lease company for their car while i am using it. So that is equal. Often with leases basic maintenance included as well.
I do not see problem with leasing.
I signed the lease about 24 hours ago, but they are not open today. Would it be too late to back out of the deal, at this point, I’d prefer not to ruin my credit and would pay the fees to get out of this contract.
Don’t pay too much attention to the posts telling you how unwise it is to lease. Only you can determine if leasing is right for you. You’ve got yourself set up in a new car and look forward to 2 years of trouble-free driving. You say you’ll be moving twice in that time, you’ll have enough to worry about without thinking about car repairs or reliability. Buying a used car usually won’t give you that peace of mind.
See where you are in 2 years. You may love the car and want to keep it, you may hate it and want to look for something else.
Many consumer contracts that involve credit have a 3 day period for the consumer to reconsider the deal. This is a protection from high pressure sales tactics. It might apply to leases for autos. Call your local better business bureau or AAA for some advice.
The majority of posters on this site are anti-lease. You now have a new car with no real worries for the next 2 years. A used car with 50,000 miles is really much more likely to need repairs, new tires, new brakes in the next 2 years. Leasing isn’t for everyone, but for a low miles per year driver who wants to drive a new trouble-free car with a warranty leasing can work. It is your decision.
I keep my vehicles forever or until my needs change. I am so, so glad that I bought every one of them. Getting a new lease vehicle every two or three years I would have been and would be forever making car payments, and those small dings that I ignore or just do a “touchup” would have all needed to have been professionally repaired. My last pickup, I had a great truck fully paid for for about 15 years… and then gave it to my daughter. My current car has been paid for for five years… and I plan to keep it forever. If I’d leased, I’d still be making car payments. I probably would not have been able to retire.
Leasing over the years would have cost me far, far, far more than I’ve paid. And I wouldn’t have been able to put 35K/yr on them (some I actually did) without huge penalties.
Leasing is far more expensive in the long run. Most people that do so lease in order to drive a better vehicle than they can actually afford. 4WD? If you want to use that for an excuse to lease, that’s fine… but I’ve been driving in New England and North Dakota since 1967 without a problem. 4WD isn’t necessary for the overwhelming bulk of the people that have it. And I would argue that it isn’t safer… it just provides a false sense of security. I see far more 4WD vehicles in the ditches every winter than 2WDs… by a wide margin.
If you want to lease, for whatever reason, I support your decision. If you want a finer car than you can buy, if you don’t want to be bothered with cars and just want to let the dealer take care of everything, that’s fine. But if you’ve convinced yourself that it’s cheaper, it isn’t. Structure the numbers so it sounds cheaper if you’d like. The leasing agent will even help you do that. But buying is less expensive for most people in the long run, even if you have to buy used cars.
Oh, and one more thing, leasing is NOT a better way to develop a good credit rating than buying. It’s a much more expensive way. Car loans kept up DO create excellent credit.