leasing a car - question

[CowboyMcCoy]

Um, I sold cars for 7 years. Part of it paid for my education. I can tell you two things I will never do in my life. 1) Buy a new car 2) Especially never lease a car

You're putting money towards something that's not an investment. The best way to go is a used car that you can keep and have some day without having to pay a payment. I know people love being tied to their cars. But my advice is by a nice used car for the same budget you can afford with your lease.

 

[theogt]

You're putting money towards something that's not an investment.

So don't go to the movies, don't buy a rug for your house, don't get a pet. What else?

Yes, I agree, no one should look at a vehicle as an investment. But I'm not sure every penny you earn should be invested.

 

[CowboyMcCoy]

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.

True. Negotiating is key, especially with new cars. Now if someone can find me a cherry used car, sometimes I'll ante up for the market value of the car. But even in the luxury car market there is so much hold back and dealer incentives that you'd be a fool to take the first deal you get in most cases, unless you know how to read the invoice correctly and negotiate within a grand or so from there. That's all I'd ask my customers for, a grand. Sometimes if they were rude I'd take their head off. Or if I just needed money really badly. But most times I was just up front. Hey, would you let me make 1,000 on top, since that what I get paid out of?

%90 of the time it worked.

 

[CowboyMcCoy]

So don't go to the movies, don't buy a rug for your house, don't get a pet. What else?

Yes, I agree, no one should look at a vehicle as an investment. But I'm not sure every penny you earn should be invested.

Some of us view money differently than others. I've been rich and I've been poor and I never have been into spending excessive money on cars. I like to own what I drive and have my mobile mechanic friend work on my car. It's too much of an expense. Plus, I find some old cars that are pretty cool little jewels if I look hard enough.

 

[CowboyMcCoy]

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?

The balloon note is typically something you pay after you have the option to buy. It's usually not worth the market value at the point it ballons. From there, you can walk away. But then you're just set up to buy another new car. While they take your old one and make money off of it, again.

 

[CowboyMcCoy]

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

You can also ask them to sell it to you for 100 under invoice, even more in some cases, without the dealer incentive... or so that they can meet the dealer incentive volume goals. It just depends on how good of a negotiator you are.

 

[couchscout]

Only thing I can really add to this conversation is do NOT finance through the dealership, thats how you get screwed. Get your loan from your bank, and don't tell the dealership you plan to pay that way until you've agreed on the price of the vehicle. Even if they keep hitting you with "monthly payment" numbers, you keep coming back that you want the actual price lowered. When they come to a number you can agree with, thats when you tell them you are gonna finance it outside the dealership. Is hacks them off pretty bad, but its the best way to get a good deal.

Obviously, if you end up leasing, you can't do it this way, but if you decide to buy, this is how I suggest you go about it. Good luck, buying cars is a tricky business.

 

[YosemiteSam]

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

The only cars worth leasing are luxury cars. Non-luxury cars aren't worth leasing. (ie, Ford, Chevy, Honda, Toyota, etc) The value isn't there.

The only time even a luxury car is worth leasing is when you get a deal on one.

I've never paid more than $550 a month for a luxury car lease and have never paid a down payment or a security deposit.

These are in chronological order

• BMW X5: $550/month
• BMW 525: $518/month
• Mercedes CLK350: $399/month
• Landrover LR3: $510/month
• Mercedes C300 4Matic: $448/month (wife's current car)

The two biggest influences are timing and credit score. Look for someone having a big special on luxury car leases. (timing) and keep trying to get that credit to 800! At 800 they will give you almost anything you want! Mercedes doesn't pay for oil changes like BMW. Well, they are paying for mine.

If you are going to get a non-luxury car. You are better off buying it. (don't buy luxury cars. That is a straight ripoff!)

 

[casmith07]

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.

Not sure what you're trying to say in bold above.

 

[casmith07]

The two cars I've bought, I went on Edmunds and priced them, printed out the "True Market Value" price, and went from there. I haven't overpaid for either car, but I feel they were more likely to give away the Honda moreso than my Infiniti I have now.

 

[Vtwin]

Um, I sold cars for 7 years. Part of it paid for my education. I can tell you two things I will never do in my life. 1) Buy a new car 2) Especially never lease a car

You're putting money towards something that's not an investment. The best way to go is a used car that you can keep and have some day without having to pay a payment. I know people love being tied to their cars. But my advice is by a nice used car for the same budget you can afford with your lease.

Not trying to argue with a pro but my personal experience is that unless you are looking at something in the 5 year old and/or high mileage category it made no sense to buy used. I looked at the used market in 2002 when I was shopping for a pickup. I started out that process "knowing" I would buy used. The more I looked the more I found that anything with reasonable age/mileage was not much less than a new vehicle. I ended up with a new truck. Same process in 2007 when we replaced my wife's vehicle. Same process a month ago when I replaced my ten year old pickup.

Maybe it has something to do with living in the Northeast where the bodys go before the power train. I would still be driving my 02 pickup if not for the subrame and rocker panels rusting out. It was now or never to get anything in trade as one more winter might have done her in and I would be sinking almost as much as a years payments into bodywork etc and still be driving an 10+ year old truck. I paid 700 over the invoice he showed me and with 3k in factory rebates on top of that I don't think there is any way I could have gotten a used rig that would end up costing me less over the next ten years.

I think if you are the type that doesn't need a new vehicle every three years a case can be made for buying new IF you can negotiate.

 

[theogt]

Not sure what you're trying to say in bold above.

Probably should have said "new" but they're at least partially synonymous.

 

[LittleBoyBlue]

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

Watch out for:

1. Annual Mileage allowance
2. Repair/Turn in costs at end of lease
3. Service Deal while you are using the car