Lease vs buying

[papi]

Thoughts on leasing vs buying your next truck.

[ctbruce]

Only experience is with buying. The things about leasing that have always scared me away are:
1. Limited yearly miles
2. $0.25/mile penalty over the yearly milage limit
3. Nothing to trade in on a new vehicle down the road
4. Makes no sense to me to buy my car back after the lease period is over

In some cases it probably makes sense but for us it never has. Others who have leased may have a different opinion so take mine for what it's worth, the cost of the paper this is written on! Good luck.

Chip Bruce, RPh
Kansas City, MO
2016 Fuzion Impact 312
2015 Chevrolet Silverado LTZ
WELL....THAT WAS FUN!

[bsmith0404]

It depends. sometimes a lease has a great interest rate. Leasing isn't a bad deal. They simply calculate what the vehicle will be worth in 3 years, your payments are calculated to pay the depreciation. At the end of 3 years, if the book value is greater, buy the vehicle for the calculated value and enjoy the positive equity. If it's value is less, turn it in and get something new without any loss to you. Insurance does not cost any different for purchased vs leased. The area you have to watch for is extra miles and damage beyond normal wear and tear. You will get charged for that, but if you purchased the truck, you'd get hit for that on trade in as well. So realistically, it comes down to what is the deal, can you get a better interest rate by leasing? How long do you keep your vehicles? If you keep them for many years, buy. If you swap out every 3-4 years, lease.

I used to be a car salesman and have never really seen anyone really lose because of a lease, but I've also never seen anyone keep their vehicle at the end of a lease. They always get a new vehicle and a new lease. They will never own their car, they will always have a car payment, but they are always driving a new car.

[Mike484]

Leasing is good for business. Many times I have wanted to buy a peice of equipment/vehichle because the cost of buying was much less than the cost of leasing. But, our financial side wouldnt let me do it because at the end of the year they could only write off depreciation if owned, they could write off all of the lease amount though so to them it was more cost effective to lease.

But,on a personal lease, I don't see the benefits at all. I had a neighbor think it was best to lease so he went out and leased a truck. Within the first year, he ended up purchasing an older car to drive and left the truck parked most of the time because he was using too many miles and hit that $0.25 a mile mark so it would end up costing him more to drive the truck than to purchase an older vehicle and drive that instead. What a waste.

I guess it all depends on how you can use it as a tax break and how many miles you will be driving it.

[sourdough]

As with most things, leasing benefits come to those that use the lease to their benefit.

I always said I wouldn't lease a vehicle in part due to the reasons listed above and I always figured that the dealer was going to look for an "out" when it came time to divest myself of the vehicle so I would be on the short end of the stick. My son leased vehicles and said I should try it so I did (not from him). Could not have been happier.

Leased a Hummer for 4 years. Our concerns were mileage (you HAVE to know how you drive) and what would happen when it came time to turn it in (what kind of knock offs we would receive for who knows what). Got a lease with the max miles allowed which fit us just right. Drove it for 45 months with no issues and decided to return it 3 months early. I was several thousand miles under my prorated miles allotment. When I returned it they took it, forgave my last 3 payments and said it looked like new (KEY consideration). I had intended to just roll over into another vehicle lease but a new model Toyota had come out and it didn't have favorable lease terms so just bought it cash. No more leases.

You have to understand the lease process; mileage allowance; how they determine the residual etc. Some vehicles will have a higher residual than others giving you a better lease price. Bottom line is that a lease can be a great tool if you fit in the category of person that can benefit from it and understand what you are getting into.

[Desert185]

Living in a rural environment with market needs 40-60 minutes away, the mileage limitations would kill us. We tend to keep vehicles a long time, anyway.

We bought the wife's Volvo XC70 as a pre-owned lease turn back. The car looked new. Not a mark on it. Still have it. Best vehicle I have ever owned. JD Power and Consumer Reports got this one wrong. No payments.

Lease is good for business purposes, but not for our situation. I'll probably never buy another new vehicle unless its an ATV/UTV. Works for us.

[itat]

As long as you can live with the mileage limitations, it may be worth considering a lease. I've always felt that it depends on 2 things:

1) whether or not you can write-off the lease payments, and
2) how frequently you trade for a new vehicle

Our tax system may be different than others but I was able to deduct lease payments when I was driving a lot of km for work, and it made more financial sense than buying at that time.

If you want a new vehicle every 2-4 years, it makes more sense to lease - less money down and pay interest on a lower amount. If you keep your vehicle for 7 or more years, it makes more sense to buy. There's a grey area in the middle. If you have cash to be able to pay for it, it's probably better to buy but you'd want to talk to a financial advisor to see if investing that cash makes more sense.

[CaptnJohn]

Once leased a vehicle for business use only ~ a great deduction.

My wife would come out OK on a lease but prefers to own her vehicle and only 1 payment. The ONE is because you are required to finance through Ford for rebates. So, when the 2nd payment comes pay it off. I average over 2000 miles monthly on the F350 and a lease would never be a good idea. Besides, they would complain at turn in about the holes for mounting the 5er hitch.

[jmak]

Leasing is great:

1. If you are driving withing the allotted mileage per year without an issue.
2. The type of person that wants new every few years.
3. The type of person that is always paying an auto payment.
4. Own a business and the business pays the monthly payment.
5. Want more of a vehicle than you can afford outright.

Leasing keep the terms at no more than 3 years. Just like if buying it is best to keep the term to 4 years or less.

[linux3]

I have never leased. My neighbor did and that's why I don't. The dealer nickeled and dimed him to death. Too many miles, scratches and he had to buy new tires.
I'm much too cheap and hate the loss of control.
Pay cash. Cheapest way and easy to walk away from any "deal".

[bsmith0404]

I sold cars and can tell you many people who are in car sales lease. Main reasons, some lease terms have better interest rates, you only pay tax on the portion of the lease not the price of the vehicle, you can turn it in and get a new car at the end. As for the mileage restrictions, don't worry about it. Here's why, at .25 per mile, that's $250 per 1,000 miles or $2,500 for every 10,000 miles. If you were to purchase and trade your car in at the end of 3 years, how much of a deduction will you take for an extra 10,000 miles? Probably somewhere in the neighborhood of $1,000-1,500. Most leases I've seen the residual value is at least $1,000-1,500 or more than what the actual value of the vehicle is at that time. So pay your mileage penalty and walk away. The benefit of the lease to the dealership, return customers every 3 years. As mentioned before, if you typically change cars every 3 years anyway and want to keep your payments lower, a lease is a good option. If you plan to keep your vehicles longer, you can still lease and then buy at the end of the lease, or you can just buy. One thing that many people don't realize, it takes better credit to lease. Most leasing companies will not accept a lease for someone with a lower credit score. We had many people who wanted to lease to get lower payments, but they didn't qualify and had to buy.

[larry337]

I spent 20 years in the car business. During that time I worked at every position including sales manager and finance manager. The answer to your question is there is no definite answer lol. All the points raised so far are all valid. It just depends on your situation, the deal, and the particular car. Some cars just lease better than others. For example Honda always has a great lease deal on an Accord or Civic. Often times a 3 year lease payment is equal to or lower than a 5 year buy payment. But other vehicles don't lease well at all. Particularly HD trucks. Finance companies don't want them because they often times are used for real work like construction or snow plowing. But sometimes you'll see a great lease deal on half tons. Your question is way to open ended for an answer. But as a general rule, if you like a new car every 3 years, the milage fits, and the deal looks good, you can't get hurt doing a lease. Ask questions, compare the two offers, and do what's best for you and your situation.

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[fourfourto]

You can't add any mods or aftermarket equipment if you lease.
I have a long list of mods and aftermarket equipment over the last 10 years 145K trouble less miles ,no loan payments , Keep up with wear and tear items, change All fluids ,belts etc regularly ( not to much $$ if you do it yourself)Lube up all pivots , hinges etc every oil change (mobile 1 every 5 k)

Still Looks (wax/detail 4X a year ) and drives like new and will till 300k even if I have to rebuild engine/ trans or whatever down the road.
I also do moderate off roading.

Drove cross country 2 times towing trailer I wouldn't hesitate to take it that far at any time in future.

When buying new get a timeless truck that would be worth the time and effort

If some @sshole plows into me and it's totaled then all effort would have been wasted:eek::rolleyes:

[Desert185]

That's my situation, too. Can't help myself. I call it recycling.

[bsmith0404]

You can't add any mods or aftermarket equipment if you lease.
I have a long list of mods and aftermarket equipment over the last 10 years 145K trouble less miles ,no loan payments , Keep up with wear and tear items, change All fluids ,belts etc regularly ( not to much $$ if you do it yourself)Lube up all pivots , hinges etc every oil change (mobile 1 every 5 k)

Still Looks (wax/detail 4X a year ) and drives like new and will till 300k even if I have to rebuild engine/ trans or whatever down the road.
I also do moderate off roading.

Drove cross country 2 times towing trailer I wouldn't hesitate to take it that far at any time in future.

When buying new get a timeless truck that would be worth the time and effort

If some @sshole plows into me and it's totaled then all effort would have been wasted:eek::rolleyes:

You can make mods when you lease, you just need to remove everything and put it back to original when you turn it back in. It is easier/smarter to buy if you like to make major mods.

[bsmith0404]

I spent 20 years in the car business. During that time I worked at every position including sales manager and finance manager. The answer to your question is there is no definite answer lol. All the points raised so far are all valid. It just depends on your situation, the deal, and the particular car. Some cars just lease better than others. For example Honda always has a great lease deal on an Accord or Civic. Often times a 3 year lease payment is equal to or lower than a 5 year buy payment. But other vehicles don't lease well at all. Particularly HD trucks. Finance companies don't want them because they often times are used for real work like construction or snow plowing. But sometimes you'll see a great lease deal on half tons. Your question is way to open ended for an answer. But as a general rule, if you like a new car every 3 years, the milage fits, and the deal looks good, you can't get hurt doing a lease. Ask questions, compare the two offers, and do what's best for you and your situation.

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Honda definitely has some of the best lease options in the industry. They also carry great residual value so that helps because you're only paying for the depreciation and the tax/interest on that portion. Makes for a very low lease payment. Vehicles with poor residual value are not a smart lease...then again, they're not a smart buy either.

[papi]

Thanks for all the info. I took my chances with a lease. Now I am a proud owner of a 2017 Dodge Ram 3500 DRW with an Aisin trans and auto leveling system. " "bouncey: In 3 year I will let you all know if I made a mistake or a good decision.

[busterbrown]

Nice Truck! If and when I upgrade, I'm looking at a mega cab Ram too. The second row space is required with 3 growing boys. Did you compare the 2nd row space among the competitors? Anyways, congrats!

[larry337]

Looks great! Congratulations!

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[ctbruce]

Very nice, papi! I have the hard one piece tonneau cover on my truck too and love it. Be sure to keep us posted on how the lease works out!

Chip Bruce, RPh
Kansas City, MO
2016 Fuzion Impact 312
2015 Chevrolet Silverado LTZ
WELL....THAT WAS FUN!

[papi]

Nice Truck! If and when I upgrade, I'm looking at a mega cab Ram too. The second row space is required with 3 growing boys. Did you compare the 2nd row space among the competitors? Anyways, congrats!


I looked at all of them and no one have the space the mega cab has. My 2500 was also a mega my kids loved it. The second row seats recline back. Very comfortable for long trip for 2 kids and 2 small dogs.

[papi]

Thanks everyone. I need to get the standar rails adapter for the OEM FW hitch prep. Can't wait to hitch up and go.