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Lease a rip-off or not?

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  1. NightAngel79

    NightAngel79 Bounty Hunter Administrator Moderator

    So I am dying to get a 2013, but the only way I can afford the payments is if I lease.

    I plan to buy car at end of lease, with the understanding I will still be able to get payments in the 250 range at that time.

    2013 Camry SE is car I have eye on, lease deals are usually around 200 to 219 a month. I have a 5,000 trade-in and I'm looking at a fully loaded SE sitting at around 28,000.

    I'd be interested to hear anything info, advice, whatever that anyone could spare.....


  2. Unforgiven

    Unforgiven -.. --- - / -.. .- ... .... Moderator

    Having done two leases for my wife prior to buying the last car, it didn't work for us. Both times we wanted to buy out at the end and both times it was too pricey. We were left then left with no vehicle equity and an expired lease. So for me, I'll stay away from leasing.
    NightAngel79 likes this.
  3. treb1797

    treb1797 Well-Known Member

    We all say this when we lease a car, but after the 2 or 3 years is up it's very very tempting to get the newer model that is out at the time you turn your lease in for darn near the same amount you were paying. Trust me...been there done that 4 times.:p

    If you truly plan to buy it out right at the end then I say go ahead.
    NightAngel79 likes this.
  4. jhawkkw

    jhawkkw Chinchillin' Moderator

    There are some benefits to leasing, but generally the idea is to only lease the car if you don't plan keeping it at the end. Leasing is good if you constantly like to have new cars, you lease vehicles that maintain their value (high residual), and take good care of it. One benefit of continuing leasing is that your vehicle will always be under warranty as long as you pick the right length.
    NightAngel79 likes this.
  5. unnamedny

    unnamedny Well-Known Member

    I did alot of research prior leasing and here are the things I came accross. Look for deals, local lease companies have good deals sometimes on various cars, if you are willing to look at different cars its a good idea to lease. I'm not sure about Toyota but Honda gives you $1500 for scratches and dents at the end of the lease, so if your bumper is scratched and side is dented (moderately) you are not going to have to pay for it. There are companies who are going to charge you for every scratch in and outside of the car.

    If you are looking to buy a car after lease, make sure you negotiate the price of the car first and then the lease. Also if you have cash you can finish lease, buy it off and resell it for more what you paid at the end.

    There is a thing such as one time payment lease, but I wouldn't recommend it. Also you are paying $500 in bank fees when you lease. Its not a bad idea to lease if you want to lift your credit history as well.

    Generally speaking some people lease cars and do 25k miles a year on it. At the end of the term they roll back the miles. This makes it a terrific deal, but its risky. Its a federal crime. If you get into accident, they write your miles and you are stuck. You are not going to be able to get service at the dealership.
  6. Davdi

    Davdi Well-Known Member Contributor

    Same in the UK, it's a crime to alter the miles. But not if you have to replace the Speedo/Odo, and document the change (keep receipts). The changed mileage should show on the next MOT (annual safety check).
  7. NightAngel79

    NightAngel79 Bounty Hunter Administrator Moderator

    How did this turn into a discussion of fraud?! Lol
  8. SamuraiBigEd

    SamuraiBigEd Under paid Sasquatch! Moderator

    It's all your fault!:p:D

    As far as leasing, it really only makes sense for people looking to get the new model every couple of years. You can come out ahead buying at the end but you can also get taken to the cleaners if it is a popular model.

    As far as the lower payments, they also come with major restrictions like mileage limits.

    My stepfather was a very well known and respected attorney, I can't give all the particulars of what he said but in a nutshell he said any benefit to leasing can also be had from buying and then some, he is totally opposed to leasing under any circumstance. The reason the dealerships want to push people into a lease is they make more money than off a purchase.
    NightAngel79 likes this.
  9. unnamedny

    unnamedny Well-Known Member

  10. mplevy

    mplevy Well-Known Member

    In all honesty, I'm not sure it's a sound idea financially to pay for 8 years on the car (3 years on lease, 5 years - or maybe less if you can - to buy it out). Why not look at something more affordable that you can get the payments into your affordability range? Do you NEED all the options that $30,000 vehicle has on it?

    Sure, you WANT a new car, maybe scale down the features to make it affordable. I did that, I dropped from Limited to Premium (2011 Subaru Outback) and it put the vehicle in my price range (saved $3,000 in the process).
  11. SiempreTuna

    SiempreTuna Well-Known Member

    Going back to the mileage fraud: a friend of mine, years ago, opened up a speedo in order to 'fix' the mileage and found a note saying "Oh no, not again".

    Re leasing: I'd really like a new car, but I would never buy one: the depreciation is just way too painful!

    I recently got a 2.5 year old beemer with 16K on the clock and 6 months to run on the original warranty (plenty of time to find any issues) and saved about a quarter to a third on the price when new. Admittedly, it took some time to find the bargain I was looking for but then a colleague had to wait almost as long when he bought one new.

    I also only buy what I can afford to buy outright - no loans or leases. I just hate to pay out money month after month when I can save up and get interest on my savings rather than pay interest on a loan/lease.
  12. NightAngel79

    NightAngel79 Bounty Hunter Administrator Moderator

    Of course I NEED all that! ;)

    I'm being greedy, I'll be honest. But I wants what I wants :)

    I've bought my last 3 cars outright. There is even a chance I may buy my dream car outright.

    But if not, I WILL have me a new car, with less than 10 miles (or so) on the odometer. Fresh as today's milk :)
  13. mplevy

    mplevy Well-Known Member

    Champagne tastes on a beer budget.

    I've been through this. Years ago I REALLY wanted a particular vehicle. In the end it was just too much money and I really had no NEED for the vehicle, saved myself initial cost and gas money by buying something more sensible.

    Maybe some costs can be cut by losing some option packages that aren't a necessity. Yes, pushbutton start is nice, I kinda wish I had it myself, but to get it on an Outback requires upgrading to the Limited and then adding another $3,000 option package on top of that. Just not worth it for not having to rotate the key to start the engine. Bluetooth connectivity would have been nice, but I have a headset that works perfectly and nobody else in the car can hear the conversation.

    I've heard it before, emotions should take a back seat (no pun intended) in vehicle purchasing. What you WANT is most likely going to be more than what you NEED and what you can afford. I would LOVE to have a Corvette, I certainly can't afford it though...

    On the depreciation front. It totally depends on the vehicle. Granted, I had a decent down payment, but my Subaru is only 18 months old and I'm not upside-down on the value, the OP likely won't be either with a $5,000 down payment. It might have been mentioned in this thread (I read it SOMEWHERE), if you absolutely plan on buying out, negotiate price NOW. Even if you plan on leasing, talk them down some. Also, when you buy out at the end, remember that you will NOT be able to get a new-car interest rate on that loan, it'll be a used-car rate.
    NightAngel79 likes this.
  14. A.Nonymous

    A.Nonymous Well-Known Member

    IMO any time you don't pay cash for a car you've got ripped off.
  15. SiempreTuna

    SiempreTuna Well-Known Member


    Good for you.

    Somebody has to buy 'em new so cheapskates like myself can get 'em used :)
    NightAngel79 likes this.
  16. A.Nonymous

    A.Nonymous Well-Known Member

    That's what I'm saying. You lose like 20% of the value in the first year and like 40-50% in the first 5 years if I remember correctly. You are sick of your car after 5 years and I sneak in and buy it for half of what you paid. Works for me. :)
  17. unnamedny

    unnamedny Well-Known Member

    coming back to lease. Sandy passed by NYC, about 100,000 were total lost. My friend leased and he got a new car a week later at rge same rate. Many who had financed had to go to war with their insurance companies for months.

    I really hate like my rear bumper looks like lumber jack had fun with it with his axe. During my lease I don't care that much, its all covered by $1500 scratch and dent.

    If you get into medium serious accident and car starts giving you issues after repairs, you don't care if you leased.

    I really don't see point of leasing if you live in country side, have your own driveway and parking is not an issue. Oh, and don't forget that you need to drive to pick up your mail or to get can of soda. No point to lease.
  18. A.Nonymous

    A.Nonymous Well-Known Member

    If those in Sandy had gone my route of paying for the car outright then the insurance company would simply pony up on the perfectly legit claim (what you don't have full coverage?) and you'd go buy something else.
  19. unnamedny

    unnamedny Well-Known Member

    FYI I have 2 cars and one is financed another one is leased. Financed car is going to get run to the ground by my parents. The leased one is getting its 4 banger engine to 7-8k rpm all the time. I never warm it up. I don't care if I don't change the oil on time or it's going to be changed a little later. etc.

    insurance try to cheat you everyway they can. You are lucky if you had geico who handled it nicely. My friend's insurance told him they didnt know the odometer reading so they offered a lot less for the car. You still lose tax and other dealership fees that you pay for the car, insurance does not cover it.
    What if you don't have the money to pay out right the way?

    Bottom line is you can wear a casio on your hand, some choose to wear Rolex, Omega, TAG. If you have enough money, why not.

    I hope you realize there are people who don't even know how to put in a washing liquid into the car. This kind of people are getting taken for a ride by the mechanics all the time. Lease is convenient to them.
  20. Speed Daemon

    Speed Daemon Disabled

    I was offered 0.9% financing for 36 months on my Y2K Mustang. Since my investment account was making well over 10% it was a no-brainer. By keeping my capital invested and earning money, I made far more profit (even after taxes) from the investment fund than I paid in interest.

    I've also leased a car that I really couldn't afford, and ended up paying dearly for my excesses.

    The bottom line is that you can use financing and leasing to get you in a car that's otherwise beyond your means. But if you're not careful, that can end in repossession and lawsuits. If you want to be financially smart, you can take advantage of very low interest rate offers to save you money in the end. And if you have to ask about how to do it, paying cash might be for you. :)
  21. unnamedny

    unnamedny Well-Known Member

    exactly correct. Thats why rich businessman who can afford to buy home for cash stil get the mortgages and loans. They use the cash to make even more money from the investments.

    Lease sounds nice when it comes to luxury cars, prices are so relatively low because of high residual value of the vehicles.

    It's not the bedt idea to buy car for cash, unless you really know how its done. Trick is to scan for dealerships who are in finamcial troubles.
    more on it here if anyone is interested http://www.fatwallet.com/forums/finance/1001920/

    Leasing a car for $200 bucks a month is not the worst financial decision that you can make. Big plus is rise of your credit history.

    Idea of lease is to pay as little as possible upfront. There are one time payment lease option, but its not wise at all. If car gets stolen or total loss by let's say something like Sandy, all your money are gone.

    also, what if you are not satisfied with the car you got? there are options to upgrdae your lease, in worst case scenario you are stuck with it for 3 yrs or whatever is your lease term.
  22. A.Nonymous

    A.Nonymous Well-Known Member

    The problem is still that you're buying a car beyond your means. Why? Leasing is, from a purely mathematical perspective, the most expensive way to get a car. Financing is the second most expensive way to get a car. The cheapest is to buy a quality used car somewhere and pay cash for it.
  23. unnamedny

    unnamedny Well-Known Member

    it is more expensive to lease a car, but it has nothing to do with getting a car beyond your means. If your rent+bills +lease+insurance is less than 1/3 of your monthly salary and you don't have any extra money spend. You can easily afford it.
  24. A.Nonymous

    A.Nonymous Well-Known Member

    Being able to afford it doesn't mean you should though. But set aside whether you should or not and let's discuss whether you really can afford it. The fact is you can't. The average lease payment (per Edmunds) is $412 a month. Let's say you lease a car from now 'til doomsday. Now, you will always have newer (1-3 yr old) cars while I'm driving cars that are 4+ years old. But I'm taking that $412 a month and investing it instead. So you're giving a car company $412 a month while I'm putting $412 a month into the stock market. The market averages 10% long term so in just a 30 yr period I have $901,773.45. You have nothing. There are some growth stock funds out there that average 12%. If I get just 2% more on my investment I end up with $1,348,670.13. So you have a string of newer cars and I have nearly $1.5 mil. What if I'm half wrong? I've still got half a million dollars. If you're like 99% of Americans, you can't afford the new/leased car.

    Now, maybe you are filthy rich and you are already a millionaire. In that case you're better off paying cash for the car just to avoid the finance and leasing charges. You still take a huge butt kicking on depreciation, but if you're a millionaire you can afford it.
  25. unnamedny

    unnamedny Well-Known Member

    and all you are going to have to do is take your 1mil to your wooden casket. You are compairing walking to leasing car. Its like compairing living in the box and savings every penny to enjoying life at your possible means.

    You are not reading a thing I posted. There was a deal on Honda Accord SE. Total payment add up to $5500 for 3 years. You'd have to own a $21,000 car for over 11
    years just to get the overall price per month to
    match this deal. How is it bad? no tire changes, no brake jobs. Now how much is it goinh to cost after 11 years with 130k miles on it. Probably not more than 5k. Add the number of money you had to spend on all maintenances, parts, repairs etc.

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