leasing a car - question

[JBS]

i am seriously considering leasing a new car..i have one question and it is in regards to financing...I have pretty good creidt..roughly in the 750 range...what rate should i be looking to get? i dont know much about car sales but i feel like the interest rate is the part where most consumers get screwed...

thanks in advance

 

[JBS]

i lied..after doing research, i have another question...is the residual figure something that can be "negotiated"/"discussed"? how do i know im not getting ripped off on that figure?

 

[trickblue]

If you have good credit, lease what you can afford... that is all...

 

[casmith07]

If you have good credit, lease what you can afford... that is all...

Pretty much this. Figure out what your monthly lease payment number is and shop from there.

 

[Aikmaniac]

If you have good credit, lease what you can afford... that is all...

Not trying to be argumentative or anything, but if this is the case...why not buy new?

Is the reasoning that you can get a "nicer" car when leasing? In other words, if I wanted to drive a Cadillac, I'd rather pay $500-$600 a month rather than the probable $800-900 when buying.

 

[theogt]

i lied..after doing research, i have another question...is the residual figure something that can be "negotiated"/"discussed"? how do i know im not getting ripped off on that figure?

Residual can't be negotiated. You're only negotiating price and money factor. For many brands, invoice and money factor can found on the internet. Your negotiation should start AT invoice and go up from there. And you should demand the lowest money factor they offer. For the most part, a dealership will have a floor for their money factor that they can't go below.

 

[Wimbo]

look into the merits of buying a used model & go that route. A lease = down payment + monthly payments... at the end of 3 years (or whatever your lease term is) you have nothing to show for it.
There really is not a good reason to ever buy or lease a new car, IMO. The initial depritiation of buying new is too great, and leasing is only a long term rental situation. Just my $0.02.

 

[JBS]

Not trying to be argumentative or anything, but if this is the case...why not buy new?

Is the reasoning that you can get a "nicer" car when leasing? In other words, if I wanted to drive a Cadillac, I'd rather pay $500-$600 a month rather than the probable $800-900 when buying.

This doesn't hurt..just as important though, I keep cars for 2-4 years at a time and get sick of em..figure I should try leasing

 

[SkinsandTerps]

Not trying to be argumentative or anything, but if this is the case...why not buy new?

Is the reasoning that you can get a "nicer" car when leasing? In other words, if I wanted to drive a Cadillac, I'd rather pay $500-$600 a month rather than the probable $800-900 when buying.

The old rule of thumb was that because the average American gets a new car about every 3 years. I don't know if that is true anymore.

So as long as a leasee is not going over the agreed miles per year. They come out with what they need and often times a nicer car for the same or less money. And can just turn the car in and get a brand new ride and start all over. You have the option at the end of leases to buy if you want and many people do that too. Thing is you have nothing to trade in at the end of a lease. But you get screwed on trade-ins anyway.

 

[JBS]

Residual can't be negotiated. You're only negotiating price and money factor. For many brands, invoice and money factor can found on the internet. Your negotiation should start AT invoice and go up from there. And you should demand the lowest money factor they offer. For the most part, a dealership will have a floor for their money factor that they can't go below.

A dealer would be willing to sell a car below invoice?

 

[theogt]

Not trying to be argumentative or anything, but if this is the case...why not buy new?

Is the reasoning that you can get a "nicer" car when leasing? In other words, if I wanted to drive a Cadillac, I'd rather pay $500-$600 a month rather than the probable $800-900 when buying.

If you want a new car every few years and you don't drive far, leasing is the way to go. If you put 20,000 miles a year on a car, or don't value having a nice car, you shouldn't lease.

Lease pricing and finance pricing can vary such that one or the other is better, depending on what you negotiate. But on average, both should be relatively similar in terms of price paid and equity owned for the first three years. After that, the value of purchasing goes through the roof, but then again you're driving an old car, so it's a question of whether you want to pay to have a nicer car or not.

 

[theogt]

A dealer would be willing to sell a car below invoice?

Technically, yes. Often there are dealer incentives. But, for example, on most BMWs, you should shoot for about $500-$1,000 over invoice.

 

[trickblue]

Not trying to be argumentative or anything, but if this is the case...why not buy new?

Is the reasoning that you can get a "nicer" car when leasing? In other words, if I wanted to drive a Cadillac, I'd rather pay $500-$600 a month rather than the probable $800-900 when buying.

One word... depreciation...

When leasing you have no responsibility other than your monthly payment...

I happen to own a Land Rover and all the maintenance that requires... it adds up...

Luxury cars aren't necessarily the best cars, but they are nice... that is what you are paying for... the amenities without the maintenance costs...

 

[WoodysGirl]

If I'm financing a car, then I buy new. If I'm able to, I buy new vs used because at least I know where the car has been from its inception.

If I'm paying straight cash, then I don't mind buying used.

Lease has never been an option for me. I just feel it's throwing money away.

 

[SkinsandTerps]

They don't typically lease them below invoice though or even close to invoice.

Most times closer to sticker because they assume you are going to take good care of this rental car, and then they can sell it for more on the back end with ideal mileage.

 

[theogt]

They don't typically lease them below invoice though or even close to invoice.

Most times closer to sticker because they assume you are going to take good care of this rental car, and then they can sell it for more on the back end with ideal mileage.

This couldn't be further from the truth.

But don't get me wrong. There are lots of people that get screwed on leases. You just have to be smart enough to research pricing and willing to negotiate.

 

[SkinsandTerps]

If I'm financing a car, then I buy new. If I'm able to, I buy new vs used because at least I know where the car has been from its inception.

If I'm paying straight cash, then I don't mind buying used.

Lease has never been an option for me. I just feel it's throwing money away.

That is how a lot of people look at it. But many of us rented apartments at some point. Those apts. were ours...but still not. Same idea really.

You are paying to use an item for a set amount of time with boundaries. For example, I love going to amusement parks, but the cost is often outrageous. That is the cost of enjoying the park and what it has to offer for the time I use it.

 

[SkinsandTerps]

haha. Sorry Theo, meant to write "try to" after typically.

 

[WoodysGirl]

That is how a lot of people look at it. But many of us rented apartments at some point. Those apts. were ours...but still not. Same idea really.

You are paying to use an item for a set amount of time with boundaries. For example, I love going to amusement parks, but the cost is often outrageous. That is the cost of enjoying the park and what it has to offer for the time I use it.

I rented because that was my only option...I became a homeowner because I thought it was a good investment.

I just dont like a lot of revolving debt. I've got two big bills and a few small ones. I prefer that continuing car notes and the like not be one of them.

 

[SkinsandTerps]

I rented because that was my only option...I became a homeowner because I thought it was a good investment.

I just dont like a lot of revolving debt. I've got two big bills and a few small ones. I prefer that continuing car notes and the like not be one of them.

Understandable, especially since rarely are cars good investments. Don't get me wrong, I own 4 cars. None leased. I have leased in the past and it worked for me at the time. You may have been able to get a house over renting at that time too, I know a few people that thought they couldn't afford it and were able to save money by purchasing a home.

I hate bills in general, so I get that part too. I have one bill that I keep forgetting to pay off simply because I have it on auto draft and always ignore it (Bought a computer as a gift). Interest rates and such kill your pockets. I tell people all the time only charge what you can afford to pay off within months.