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  1. #1
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    Auto lease options

    So I’m in need of a new ride within the next year, preferably an suv for space but open to wagons.

    Now my problem, one I’ve never had to deal with is I have employee-family pricing on all the major manufacturers, Audi, BMW, Jaguar, Honda, Toyota, MB, etc.

    Audi, Toyota, and Honda are the close to home options with the Audi and Honda being the best on residual returns.

    Love the ride of Toyota but never have been a fan of how cramped they feel inside. Honda is safe and reliable but the Pilot/Passport design looks like a hairliped retart. The Q7 is nice but then you sit in a Q8 and things start getting ridiculous.

    So obviously my first thought is to start another car thread and ask the dentists.

  2. #2
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    The smart money is that you shouldn't lease in the first place.

    Beyond that, get what you want and can afford.

    I justt bought an MB GLC 300 4matic for what that is worth.

    I agree it is a constitutional right for Americans to be assholes...its just too bad that so many take the opportunity...
    iscariot

  3. #3
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    Lease at MSRP no bueno.
    Lease at 3% below invoice not bad.
    Lease an end of year 350 day old sled, best deal.

    I’ve been a buy and drive into the ground my whole life but right now a lease looks like a nice option. The only reason I’m asking here is to hear others lease experiences.

  4. #4
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    you seem like a Pontiac Aztek kinda guy.

  5. #5
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    Name:  41D1A006-BC83-4900-8688-866E1B6257E1.jpeg
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    vdub OG

  6. #6
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    I, too, have been in the "buy and run into the ground" camp, and am mid-way through a lease, albeit on a nicer car than I would have previously bought and run into the ground. My thought process was as follows:
    • Leasing (with intention of turning in after the ~3 years) generally is not a prudent financial move -- you're paying for the use of the car during the relatively short time period when it loses the most value
    • But new upscale cars are not the smartest financial move anyway. I thought of it as a premium for driving a nice car, akin to "if you can't afford a good tip, you can't afford the nice restaurant"
    • Upscale cars have tons of electronics, making them less reliable. So if you want an upscale car, it makes more sense for it to be newer/in warranty
    • But a conventional loan payment on a new upscale car is painfully high. A lease payment is a fraction of that. I see minimizing the amount of cash you put into the car as the main financial benefit to leasing
    • E.g., if something were to happen that would lower the resale value (accident, VW diesel scandal, etc), you're out only the cash you've put in
    • To that end, ask for a lease with zero down payment (or "cap reduction"). Also, you can read up on forums like Edmunds on current lease terms being offered (e.g., money factor, residual value), so you know what's reasonable to ask at the dealership -- apparently those are pretty standard, and are completely independent of the selling price you negotiate
    • You get some option value: If you decide to buy it out, the lease becomes equivalent to a loan on the first ~1/2 of the price at a very low interest rate, with a more manageable balloon payment at the end (or a smaller loan at used-car rates)
    • You can then decide to run it to the ground or sell at ~5-7 years before really expensive repairs hit


    For me, the main drawback has been watching the mileage. 12K/yr seems to be just right for my commute and the frequency with which I take out-of-town trips, but a lease would have made no sense when I lived in LA and drove 700 mi RT to Mammoth several times a month

  7. #7
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    Auto lease options

    IMO leasing only begins to make sense financially if you are able to write off the lease payment.

    Even then, I canít make sense of how that beats a used car with about 10k on the odometer, particularly if you want a luxury car and if there are specific options youíre after. Youíre paying for almost half off MSRP and you have something to trade in / sell. Then sell/trade around 90-100k on the odometer before everything starts to break.
    Last edited by Self Jupiter; 08-14-2019 at 09:13 PM.

  8. #8
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    If you go premium and only keep a car 6 years/90K miles then leasing can make some sense

    Maybe go lightly used, like <30K miles and keep through a 100K refresh up to 150-180K miles?

  9. #9
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    Quote Originally Posted by hutash View Post
    The smart money is that you shouldn't lease in the first place.

    Beyond that, get what you want and can afford.

    I justt bought an MB GLC 300 4matic for what that is worth.
    Not true. Depends completely on the type of car and if its run through a biz or not.

    Quote Originally Posted by 54-46 View Post
    If you go premium and only keep a car 6 years/90K miles then leasing can make some sense
    The normal buying cycle for premium buyers is 3 years/36 months. Pretty sure BMW leases way more than they sell. I've been out of the franchise part of the business for awhile though.

    Another interesting program is the multiple car lease the Benz/Audi/BMW do.
    "I don't pretend to have all the answers, and I think there's something to be said for that" -One For The Road

    Brain dead and made of money.

  10. #10
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    mentioned above but watch out for residual value amount.

    i have a tacoma lease ending soon. i got 3k off on a 2017 TRD w most options and supposed 'low' money factor (whatever that means) but the residual even w 15k miles/year is so high im not going to buy it. well that and a few other reasons

    my other mistake was thinking Toyota would improve the shitty motor and transmission plus add at least a few mpg in 3 years...nope, just gave the 2020 taco a driver power seat and new grill...wtf

  11. #11
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    add - ive heard ub cant negotiate residual value but havent tried...

  12. #12
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    Quote Originally Posted by cycology1 View Post
    mentioned above but watch out for residual value amount.

    i have a tacoma lease ending soon. i got 3k off on a 2017 TRD w most options and supposed 'low' money factor (whatever that means) but the residual even w 15k miles/year is so high im not going to buy it. well that and a few other reasons

    my other mistake was thinking Toyota would improve the shitty motor and transmission plus add at least a few mpg in 3 years...nope, just gave the 2020 taco a driver power seat and new grill...wtf
    Which is why I bailed from my Tacoma for a Tundra, same fuel economy, way more power, actually enjoyable to drive. The Tacoma bordered is miserable the longer I owned it.

  13. #13
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    Quote Originally Posted by cycology1 View Post
    add - ive heard ub cant negotiate residual value but havent tried...
    Residual value is what it is. Money factor is basically synonymous with APR on a finance deal. That can be negotiated.

    I might look into a program where I can switch cars.
    "I don't pretend to have all the answers, and I think there's something to be said for that" -One For The Road

    Brain dead and made of money.

  14. #14
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    Quote Originally Posted by dunfree View Post
    you seem like a Pontiac Aztek kinda guy.
    They probably have some brand new leftovers from 2012. They couldn't give those ugly things away.
    I'm also a drive into the ground guy and have never leased, but there used to be a guy on Slickdeals that knew all the angles and helped a lot of people negotiating.
    However, I don't think he's around anymore.

  15. #15
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    The dentists here are trying to help you. Except for bobby, who wants to make money off you. Pull the wax outta ya ears and LISTEN.

    Speaking purely as a CPA it MAKES NO SENSE to lease. period. Ever. Its rent expense, pure and simple. You don't need a new car. EVER. If the co pays for it fine, but that's the ONLY exception., as free is a pretty good price.

    Me? I'm getting spoiled in my old age, and my preference is to buy, for cash, something about 2-3 yrs old, at least close to the first big matience cycle. Hold and run into the ground. and by ground I mean 300k. if you take care of it it's gonna look fine. Now, personally, I violated that by buying a 2001 solara convertible (I live in the deep south) in 2011 at about 70k miles I beleive. Which I am running into the ground. I'm at 225k now and it's going strong. BY FAR the cheepest car to own I've ever had.

    Now, you may WANT that new Pilot whatever, and you may dismiss this, which is just fine. Because I promise you, something will happen unexpected 2-3 years out. And your just making more inventory for me.
    "Can't you see..."

  16. #16
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    300k miles... LMAO... We are on different planets.

    But yeah... Go buy a 100k+ car and get a carfax hit, come back and talk to me about depreciation on a asset you own as opposed to rent.

    BTW, I don't lease or finance cars to people.

    "I don't pretend to have all the answers, and I think there's something to be said for that" -One For The Road

    Brain dead and made of money.

  17. #17
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    ^ yeah we are on different planets. that's fer damn sure. It's only about the least cost per mile. period.

    OP - take note of how Bobby reacts. Tells ya what you need to know. And bobby, if you want to debate car finance, without all your hystrics, I'm not going anywhere.

    "Big man."
    "Can't you see..."

  18. #18
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    Quote Originally Posted by Marshall Tucker View Post
    buying a 2001 solara convertible (I live in the deep south) in 2011 at about 70k miles
    I put the wax back in my ears after reading that.

  19. #19
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    Quote Originally Posted by Marshall Tucker View Post
    I violated that by buying a 2001 solara convertible (I live in the deep south) in 2011 at about 70k miles I beleive. Which I am running into the ground. I'm at 225k now and it's going strong. BY FAR the cheepest car to own I've ever had.
    Does it have a Harry Potter decal... or an AMG shifter knob?
    Quote Originally Posted by Downbound Train View Post
    And there will come a day when our ancestors look back...........

  20. #20
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    One of my hats is managing the fleet for our company. An equity lease makes sense thru a fleet company for many reasons with a business. The main one is reducing downtime with maintenance/repair issues by turning them frequently.

    I have never leased a personal non-company vehicle. I think we all know buying a used car is the best option, but when they offer you 0% financing it can be hard to turn down, especially if the vehicle you're looking at has a high resale value in the used marketplace. Paying cash for a car usually makes no sense whatsoever.

  21. #21
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    Depends on the car for used vs new. Go look at new Tundras vs a Tundra with 20-40k miles (if you can even find one with the options you want). Just went through this last fall and what I found within 500 miles of me is it cost me $2-3k more to get a new truck without 25k miles already on it. I had cash ready but between interest rates and factory rebates, it made sense to finance by a couple g's. I keep thinking I should pay it off as I haven't had a car loan in a long time but 0% interest makes me think twice.

    It doesn't seem like there's a black and white rule on lease vs buy and used vs new depending on the cars you are looking at.

  22. #22
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    Quote Originally Posted by Conundrum View Post
    Depends on the car for used vs new. Go look at new Tundras vs a Tundra with 20-40k miles (if you can even find one with the options you want). Just went through this last fall and what I found within 500 miles of me is it cost me $2-3k more to get a new truck without 25k miles already on it. I had cash ready but between interest rates and factory rebates, it made sense to finance by a couple g's. I keep thinking I should pay it off as I haven't had a car loan in a long time but 0% interest makes me think twice.

    It doesn't seem like there's a black and white rule on lease vs buy and used vs new depending on the cars you are looking at.
    Yup. If you're shopping Toyota or Subaru (especially depending on where you live), buying lightly used makes little sense. I never did get over my sticker shock of seeing used Tacos/Tundras/Outbacks go for damn near new money. Even when they had a couple years and several tens of thousands of miles on them. That's when new totally makes sense. It's also why I gave up looking at used Subarus when I lived near Bozeman.

    A BMW, Merc, or any other luxury marquee with ridiculous off the lot depreciation on the other hand, I'm all about CPO to get that 100K bumper to bumper AND like 1/2 price off the car. Haha.

  23. #23
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    There is a reason low milage Tundras/Outbacks are hard to find and MB, BMW, Audis are easy. The whole poi t of leaving is to drive more car then you can afford, and the Bobby's of the industry know that.

    Sure, there are rare exceptions to "leaving make no sense" paradigm, like when you company pays for it, but that is the exception not the rule. The car world Bobby lives in survives on leases, even though he claims not to. CPAs may not
    t have the best taste in cars, but they generally know the numbers behind them pretty well.

    I stand by my original statement that leaving rarely makes sense, but then people rarely drive a car that makes the best sense for them anyway.

    I agree it is a constitutional right for Americans to be assholes...its just too bad that so many take the opportunity...
    iscariot

  24. #24
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    Quote Originally Posted by Bobby Stainless View Post

    I might look into a program where I can switch cars.
    Interesting idea, I’m guessing that’s a dealership with a crazy owner that would be happy to keep that gravy train rolling. I’m over at Sonic and they don’t offer that choice since all leases go through their respective dealers.

    Quote Originally Posted by Marshall Tucker View Post
    The dentists here are trying to help you. Except for bobby, who wants to make money off you. Pull the wax outta ya ears and LISTEN.

    Speaking purely as a CPA it MAKES NO SENSE to lease. period. Ever. Its rent expense, pure and simple. You don't need a new car. EVER. If the co pays for it fine, but that's the ONLY exception., as free is a pretty good price.

    .

    3% below invoice on Audi’s and 5% off Honda’s. So that tempting discount is why I’m even considering this option. I do have access to any used vehicle at dealer cost so I could be responsible and just go that route and get a loan through the local C.U. But shit I have access to Audi’s below dealer cost so I don’t know what to do.

    The A3 sportback and Insight are the most fun to drive, amazing on fuel but lack space. The A8 is sick but more than I want to spend. The A7 and Pilot are both respectable vehicles but I don’t run with the middle age housewife crowd so I won’t be driving one. I really had high expectations for the Passport hoping that Honda would make a bigger CRV capability for off-road but instead they just made a slackjawed version of the Pilot.

    Right now the best deal would be an Insight Touring, between the gas savings and employee discount the cost of ownership would help cash flow.

  25. #25
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    Quote Originally Posted by mud View Post
    3% below invoice on Audi’s and 5% off Honda’s. .
    Here's a test. Which is less. $40k or $20k. ready, go
    "Can't you see..."

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