lease over buying

[4LowNGo]

Anyone lease over buying? Why and how's it working out for you?

[GaryWT]

I have never leased. I drive too many miles in a year, usually over 20,000 plus unless you hit a real good deal the up front money is high. Looked into one of those $99 a month deals and they wanted $5,000 up front. When I asked what if I only put 2-3,000 up front they said the payment jumps to about $300. Did not make sense to me. I know it works out for a lot of people though.

[BirchyBoy]

I kicked the tires on a Dodge Ram lease while in San Diego. I work at home so mileage isn't really an issue. I looked at a Dodge Ram quad cab, 2wd with the Hemi engine and tow package. The truck listed at 44k and the lease payment was about $450. As I got up to walk away, the salesman asked what was wrong. I told him that a low mileage lease (10k) per year with $3k down should have had a payment under $200. He said "well, it is a 44k truck". I said yes, and the residual should be a lot higher for a low mileage truck and that I could get a new Ford F250 with gas engine that was more capable for less money. I said that capable part because the payload on the truck was about 1,100lbs, not much more than my Grand Cherokee.

Long story short - leasing is all a numbers game and may work for some but not others.

[binfordtools]

I have leased a Ram 1500 for the last few years. My yearly mileage is fairly predictable. However, this year I bought a TT which will inevitably increase my miles driven so leasing after this truck is up may be out of the question. Outside of using the TT, for my daily driving I have always leased and had great luck. There are always debates on value of leasing vs. buying and I would say there is no wrong answer. People seem to get very passionate about this subject. Some will (angrily) debate this stating that a lease is a waste of money. Other’s will say that it’s great to get a new car every 2-3 years. I don’t really think there is a right or wrong answer here. If you want a new vehicle every 2-3 years and don’t mind the payment, leasing is great. If you want to actually have your payment count toward actual ‘ownership’, then leasing is not for you.

[C130]

I haven't leased a truck but have leased several cars, currently leasing a BMW. Leases are very negotiable, just like buying, it's all negotiable. But, with leasing they'll try and screw you in several different ways that you have to be knowledgeable in. One is the "money factor" and they'll sometimes mark it up over what the manufacturer is charging. My BMW dealership tried this and I had already looked up what BMW financial was charging. I simply told them I wasn't paying them a markup and they said okay, no problem. It was a simple markup but a big difference in the payment and if one didn't know about it they would have been ripped off. I also negotiate the price of the vehicle, I don't pay a lease rate based on full MSRP.

Some vehicles and manufactures have pretty good leases and others are terrible. BMW usually has decent lease rates and personally I don't want to own one out of warranty. We are interested in the new Volvo XC90 but their lease rates right now are insane so it's not an option. I never put money down on a lease. I put down zero on our current 750LI and it's never been an issue. Of course the montgly payment goes up but I'm not loaning them money.

[4LowNGo]

My last Ram 1500 was financed and I did like that truck a lot but couldn't justify the payments for a 3 mile trip to work one way, so we traded it and my wife's 13 Wrangler on a 14 Durango R/T. Well I just purchased my first TT and although the Durango can tow it, having a pick-up would make it easier and nicer in many ways. I don't think going over miles would be a concern.

[jamesmc321]

I have done both...

Lease - you put money down, make a payment (normally a little less per month) and turn it in - nothing back

Buy - you put money down, make a payment and trade it in - you get a little back

Just as example:
- purchased 2009 Sierra (1/2 ton) - financed 5 years (paid off in 2014)
- payment was about 425 / month - got great deal
- just turned in said Sierra (81k miles) - got $19,000 trade towards new Sierra (1/2 ton)
- payment is about 350 / month - got better deal :D

both trucks would have been in the 325 range to lease

long and short is, either way, make sure it can tow your camper and go have fun!

[PerryB]

I have done both...

Lease - you put money down, make a payment (normally a little less per month) and turn it in - nothing back

Buy - you put money down, make a payment and trade it in - you get a little back

Just as example:
- purchased 2009 Sierra (1/2 ton) - financed 5 years (paid off in 2014)
- payment was about 425 / month - got great deal
- just turned in said Sierra (81k miles) - got $19,000 trade towards new Sierra (1/2 ton)
- payment is about 350 / month - got better deal :D

both trucks would have been in the 325 range to lease

long and short is, either way, make sure it can tow your camper and go have fun!


Using these numbers. The lease would save $6000 over 5 years but have no trade in value. A net loss of $13,000. I have personally never seen a situation where a lease pencils out. All a lease does is allow you to drive a more expensive car than you can afford with nothing to show for it at the end. Opinion.

[C130]

Using these numbers. The lease would save $6000 over 5 years but have no trade in value. A net loss of $13,000. I have personally never seen a situation where a lease pencils out. All a lease does is allow you to drive a more expensive car than you can afford with nothing to show for it at the end. Opinion.


He doesn't say how much money he put down initially so doubt your numbers are accurate. My opinion on leases depends on how long you typically keep your vehicles and the current lease rates on a particular vehicle. I don't put down any money up front on a lease, not one penny.

I don't think a vehicle typically has a very good return rate at the 2-3 year point which is what a lot of lease terms are. Of course that factor is projected in the lease rate as the residual value and sometimes it doesn't work out in the manufacturers best interest, sometimes it does. I've purchased and I've leased but it all dependeds on the current lease deals and how long we plan to keep the vehicle. It had nothing to do with what I could afford but what was cheaper for me. I'm not saying leasing is a great deal but neither is buying a new vehicle and it depreciating $10,000 as soon as you drive it off the lot. I have only leased a few times but currently leasing my wife's car.

This has been several years ago up there were some manufacturers that almost got out of leasing because they miscalculated their residual values so much. The values at the end of the leases were not near what they had projected and they lost a lot of money. The higher the residual, the lower the payment for the consumer. I compared what my wife's car is costing me for a 3 year lease vs. what 3 year old identical cars are selling for and I would not come out ahead by purchasing and trading at three years.

[PerryB]

You bring up some good points. Maybe I'll have to re-think my position on the matter. The initial (first 3 years) depreciation is overwhelming. I would like to have a new f150 every 3 yrs. Thats my work/runabout truck.

[C130]

I highly recommend anyone interested in leasing to go to one of the forums for that particular brand. That's how I gained a lot of knowledge on what the current rates were at the time. It saved me a lot of money being informed because the dealers will mark up items if you let them.

But, like I said before it just depends on the deals at the time and it may not make any sense at all to lease. Mileage can be one of the big drawbacks of leasing if you go over the limit. But, some manufacturers have even streamlined that process and it's much cheaper now than in the past if you go over your mileage limit. My wife doesn't put very many miles on her car and we were doing a 15000 miles per year lease but at the end of three years we were only averaging about 35000 miles. Our current lease is 12000 miles per year and with BMW you can just go online and purchase additional miles if needed and it's just slightly higher than paying upfront for miles that you may not even use. They used to charge you a ton if you went over. I'd definitely check and see what the charge would be if you do go over though, they are all different. We traded our last BMW in 6 months early for a new lease and BMW sent us a check for the unused miles, something I didn't expect. But, used BMW's around here sell like crazy and the dealer can't keep the 7 series on the lot because after three years they are less than half of the new price. So, my local dealer seems to want to get the leases in early if low on used inventory and of course get you in a new lease. BMW does a lot of leases and typically has pretty good lease rates. I know you are talking about leasing a truck but just giving my experience on leases and they can vary a ton. I have leased a particular vehicle before then tried to lease another one a few years later and it was a terrible lease on the same vehicle. Some manufacturers have terrible leases, others great leases, just depends.