Leasing a car

[Sirrahsim]

Pros?
Cons?
Things to look out for?

The 2008 Focus for $169 a month for 39 months seems to good to be true so it probably is but I can't figure out what the pitfall is. I would like some input from anyone who has ever leased or looked into leasing please

[Lady's Human]

Mileage and maintenance requirements, liability insurance rates are higher (Ford normally requires a $1 million liability rider), and when the lease is up you don't own the car.

[Sirrahsim]

I guess I should say that we are comparing it with picking up an older used car that may come with problems. We are looking for something we can afford and with a cap at $200/month that doesn't leave much wiggle room. We could probably afford a cheap used car up to about $5k but I don't know if that would be better or worse than leasing.

[Medusa]

It's been my experience that the pro is that you can get into a lease inexpensively, usually just the first and last month's payment. However, at the expiration of the lease, you still owe money on the car, at which time you can either purchase it or turn it in and lease another one, which doesn't make financial sense. If you lose your job or for whatever reason you can't afford the car any more, you still are responsible for the payments. You may be able to get someone to assume the lease but, if they default, the leasing company still comes after you. Cars are not an investment; they lose their value by 20% the second you drive them off the lot. I'd rather know that, if I come upon hard times, I can sell it. Hope this helps.

[Sirrahsim]

Fortunately job loss isn't a concern since my husband is in a high demand career in the military but I do see where you are coming from. What do you mean you still owe more at the end of the lease? Like if we decided to walk away at the end of the lease and buy a used car or something we would still owe something to Ford?

[pitc9]

I've never leased a car and I don't think I ever would.
If I'm making payments on a car, I like knowing that one day it will be paid off and it will be ALL MINE!

But I know people that lease cars and always will. They figure that they'll always have a car payment so they might as well get a new car every few years.

[Medusa]

What do you mean you still owe more at the end of the lease? Like if we decided to walk away at the end of the lease and buy a used car or something we would still owe something to Ford?

No, I meant that, unlike when you get to the end of the payments w/a car that you purchased, the lease won't be paid off. There will still be a balance. You do not owe that balance but if you want to continue w/that same car, you either have to lease it again, buy it outright (which makes no sense because you already paid on it for X amount of years) or lease another one. No, once the lease is fulfilled, you're done. For ex: my (then) husband leased an Acura legend for me. We made payments of $532 a month for 5 years. At the end of the lease, there was still a balance of something like $8,000, which is ridiculous. So I had the option of buying it and make more payments , turning it in or leasing another car. We walked away from it all and bought a car. Sorry if I confused you.

One thing I forgot to mention is that sometimes employers will lease a car for their employees and the employer makes the payments. As long as it's in the company's name and you have no financial responsibility or liability, then that's entirely different. But, again, should job loss occur, you're without a vehicle and no past history in your credit report. But, as you say, job loss isn't a concern.

[Laura's Babies]

I know nothing about leasing a car. My neighbor leases and has leased since I have lived here so for 7 years she has made "payments" but still don't own a car, that seems awfully silly to me. I looked into it once and thought they have to be crazy... I think you have to put a rather large sum of money up in the beginning and and the end? Your milage is limmitted or you pay. Research it on the internet.

Consumer reports, a good place to start
http://www.consumerreports.org/cro/c...ar-leasing.htm

This sigh should help with costs
http://leasing.carbuyingdiscounts.co...fdffd612062284

Leasing FAQ's
http://www.ertlecars.com/leasing_faq.php

[Cookiebaker]

I personally will never lease a car. At my last job, we used to lease office equipment to companies, and we got ALOT of profit through leases. In my opinion, its a win/win situation for the leasing company, and a total loss for the leaser. The leasing company gets the $ from the item sold, AND gets it back to resell at the end of term (many times in brand new/slightly used condition). If there is any damage or any repairs, the leaser paid for that as well. If at the end of the term, the person decided to keep the equipment, then they had to pay fair market value to keep it, basically paying for it twice.

You would be paying for a brand new car, and at the end of the terms, you don't own an almost-brand-new car to either keep driving or to sell. You have lost the investment.

[RobiLee]

All I'm going to say is

BUY BUY BUY

I think leasing is a no win situatiion. You don't own it in the end. All those payments for nothing is the way I look at it.

I understand why people do it though. They can get a nice shiny new car and think they are getting a really good deal.

I have always bought my cars and like knowing that it is mine. I try to take really good maintenance care of it so that when it is paid off in a few years I can have it for a few more years with no payments. I love when I have no car payments!

[Cincy'sMom]

I used to be anti-lease for all the reasons people have stated...you make payments and have nothing to show for it at the end, etc.

I am now leasing my second car, and as long as I can afford to make monthly payments, would have it no other way.

- I get a new car every 2-3 years. My aunt doesn't like to car shop...she gest longer leases.

- It is always under warranty. I replace engines in two used cars. Yuck!

- I don't drive a lot of miles, so there is no issue on that for me. My truck I had a 3 year, 36,000 miles lease. I turned it in with 24,000 miles. My Nitro, today is 1 year that I've had it, and I got a 10,000/yr lease. I have ~9900 miles on it. I have it for another 15 months and then I get something new, or I can buy it then. ( I'm think next will be Ram 1500 Quad Cab. Maybe a 2500? I want a big truck!!! )

[caseysmom]

It depends, in your situation I would say to buy. If you own a business and you can write it off it may be worth it. My sister leases and gets a new car every four years and that works in her situation, its not for me though.

[sirrahved]

Missy, we got a GREAT car (2002, 30,000 miles!) For around 8k. We only pay $175 a month. You might want to talk to your bank and see what they can do.

[Catlady711]

Well every decent financial thing I've ever read says you are money ahead buying a USED low milage car rather than buying new or leasing.

That said...

My current vehicle I leased in the fall of 2001. This was shortly after 9-11 and the discounts were terrific, plus I have a relative that can get great manufacturer discounts as well. I couldn't afford to outright buy the vehicle new and I had to get rid of my old one before I'd end up paying someone to tow it away.

Leases have some pretty steep requirements on milage, who can service the vehicle and exactly when you have to have it serviced. In my case I planned on buying it when the lease was up from the get go so the 'rules' didn't really apply for me. I had the thing rust proofed, paint protected, and fabric protected from day 1 (dealer thought I was nuts doing that with a leased car) and also had the radio DOWN graded because they didn't have a CD/Tape combo it was either or and most of my music is on tapes (again dealer thought I was nuts). When the end of the lease came I bought it as a used vehicle and had to go with a 5 year payment option. At the time I didn't think I could afford a shorter term. Turns out I was able to pay it off 2 years early.

Point being I needed a vehicle and this was the only way I could afford the monthly payments on a new one that fit my needs. I figure if you can't make the monthly payments it doesn't matter what the total cost is if they take it away from you for non payment.

Long term leasing or buying new WILL cost more money in interest, fees, taxes, depreciation etc.

However in my case that's not a totally bad trade off for a vehicle that is reliable and doesn't have to go in the shop costing me $$ every couple weeks which is what was happening with the old one. Granted the old one had 140,000+ miles on it and was 10 years old (bought new, paid off 3 months early).

If you buy a used car that was a lease turn in you would come out money ahead in the long run.

If you lease you have no vehicle at the end of the contract to drive and you're back at square one with no vehicle for a trade in even unless you buy it used at the end of the lease. (I never could figure out how people afford to keep getting a brand new lease car every 2 years)

Just my thoughts and experience.