Hey Batman...you're a good salesman...glad I don't do business with you. We would bump heads all the time. And, you have made some valid points.

But, there are a lot of people that call themselves financial planners, but they're essentially car salesmen also (not meant as a negative). They make money by selling. Frankly, there is not many REAL financial planners, out there. That is why I said CERTIFIED. And, I probably would add credentialed, as well. I good write a full dissertation in regard to this, but I'll stop here.

Examples are easy to generate, much like polls, but let me give you one....

A young lady leases a new SUV every 2-3 years, for the past 12 years. Pays the minimum down on the lease and makes the required payments. She also does the required maintenance, keeps the vehicle in nice shape and has mileage below the turn-in requirement. Also, has no problems with the vehicle. Turns the car in and starts the leasing process over again, etc. etc.

Sounds reasonable...but, what is her asset at the end of all these leases...ZERO. Now we will change it slightly.. she buys the vehicle applying essentially the same amount of money down, makes the monthly payments for 3 years and changes nothing in regard to maintenance, etc. At the end of 3 years she keeps the vehicle and makes payments to herself for the next 2 years (or not). Remember, this is a good, well maintained vehicle. She now has a larger down payment for her next vehicle. By vehicle number 3 or 4 she could be payment free...oh, forgot to say, if you do this, you're free of dealer trade in, which is good. Realistically a dealer cannot give you what a vehicle is worth since they need to make money on it....so, you sell as a private individual.

Now, I'll tell you this is a true scenario of my wife and a niece. Many years ago, their respective "financial planners" had advised them to lease. I convinced them otherwise..they now buy vehicles every 3 years for cash (this is not a brag, but I have not financed a vehicle in 20 years, because of this discipline).

As you mentioned, most people look at the payment issue (what's the lowest) and as a result they are upside down on the vehicle, but that is another financial issue.

Leasing "works" for some people, but to give the impression that it is better than having a solid "financial sheet", is wrong. But, if you are happy with it....good for you.

Oh, a last thought....some financial lenders look at leasing as good and bad. Good your making the payments or bad, you have no asset for the payments.

We should have people in the lending industry on this forum....what is your opinion on that???

Again...my 2 cents.

 

The $690 quote I got was to finance with nothing down over 5 years, before tax & tags, based on a sticker price of roughly $35,000. Mercedes does not require tax to be paid upfront, however, they do not include that in their quote since it can vary greatly from state to state. So it's a common understanding that unless it is also paid for upfront with their required dues, then the monthly lease payment will be slightly higher.

I realize that the C230 I provided for the example is not an "average" car. However, it was an offer that I was very familiar with. Two of my friends just got new C230's recently; one paid cash for the lease upfront and the other financed a purchase.

I've done the numbers and for that C230, leased for 2 years, including tax and all the other fees, etc., you're two-year total cost walk-away and move on expenditure is about $15,500.

 

My 1LT has nearly $3,000 in options and it's stock. Stock means you don't have after-market tint, spinners, neons, and fuzzy dice, not the fact that it doesnt have any options

 

Right on!

 

And a game it is, kind of like a shell game. Why do you think car dealers have such a bad reputation?? Interesting that the only people who are advocates of leasing are people who work for dealers!!!!

 

Hey, before I started doing this I thought car salesman were worthless. You just gotta see it from a different perspective. Next time you buy a six-pack of Coke from the grocery store, try to haggle them down. There's about 750%markup in that.

 

I want to start this by saying that Batman you are right and wrong. You are right in your leasing of the trailblazer for you. You are also right that most people will buy a vehicle new or used with 0 dollars at signing. I have seenthis more times than I care to remember. (I hang out at the local chevy dealership alot) Snoopy is very right in his statement also. I haven't had negative equity in a vehicle in years. I always buy. I put down over half of the red tag price of my HHR. I do have excellent credit, but I try not to borrow, if possible. My payment was never discussed during the purchase, because I didn't ask my Credit Union. I have 1.9% interest on a 3 year loan. I pay 2 payments a month and I will own my car in a little over 2 years, give or take. I could scrape up and pay more down, but at 1.9% why would I?

My mother and father both have been burned by leases and they both were way under the miles for their leases. Everyones version of normal wear and tear seems to be different most noticably when the person is not interested in leasing or buying another car at that time from that dealer or manufacturer.

I do not rent to own or lease anything, not a car, not a TV,nothing. The only lease I have had since I "woke up", was the space for my business. I bought the building 4 years later. Yes, I had to finance that, but who has a couple hundred large laying around? I have had many dealers laugh at my offers over the years only to have them call me back at the end of the month or quarter and ask if I was still interested in the vehicle at my price. batman I understand why you leased the trailblazer, it works for you. It would never make it for me though. Thanks for the insight and I hope you will still lurk here for us diehards. thanks bro.

I am not bashing anyone here, but at the end of 3 years I will have a paid for HHR, not a piece of paper that shows how much I paid to drive a vehicle that I no longer have. just my

 

I am part of the minority which would prefer to lease a car. I bought my first brand new car this last september as an early University graduation present. That is my HHR. I'm in Canada so I'll provide some Canadian numbers becuase I don't feel like doing any conversions. I paid some 28000 for mine and financed through GMAC. Because I was a student and didn't have much for a down payment and other things I financed over 60 months with a 4.5% interest rate, I think. I believe my total cost at the end is going to be somewhere around 32000 to 33000 dollars. What will this vehicle be worth? In five years, if I kept it and sold it, I would say 7000 if I'm lucky. A 3 year less would run about 13000 to 15000 at the most. So for two 36 months leases I would have paid slightly less than the financed cost of my vehicle not to mention I would have about 200 dollars a month more to spend or invest every month. By investing 200 dollars a month into mutual funds or whatever else I could have probably earned more than the 7000 that the vehicle would be worth at the end of my financial obligation.

I wish I would have looked at things more carefully when I bought my car and I wish I would have talked to someone like Perry. My parents always bought cars and hated the idea of leases becuase you never own anything. Well, I've realized that this is not the case, leasing is a very viable option and I will be leasing from here on in.

As an aside the audi I am looking at getting now has a 608/month 36 month lease cost with 10000 down. The finance cost for 36 months with 10000 down is well over 1000/month. The total cost after 36 months of financing is about 58000 while the cost of the lease for 36 months plus the residual buy out option would total about 52000. This was from my audi finance person. Seems like leasing and buying it out is a good option, assuming you don't have to finance the residual buy out amount.

That's my contribution.

Mike

 

This thread should be renamed to lease or buy an HHR.