Lease Deal
2nd Gear Member
Joined: Jun 2011
Posts: 181
From: NJ
Leasing is not much different from buying a car. The important thing is the selling price. You don't have enough information for us to comment on whether you had a good deal. What's the MSRP? How much did you pay for the car before trade?
The simplest way to understand leasing is that you pay for the depreciation of the car during your lease term and the "interest" of the depreciation. So if selling price is 20K, the residual value is 5K, what the car is worth, say after 36 months, then you are paying 15K and the interest on 15K.
The simplest way to understand leasing is that you pay for the depreciation of the car during your lease term and the "interest" of the depreciation. So if selling price is 20K, the residual value is 5K, what the car is worth, say after 36 months, then you are paying 15K and the interest on 15K.
Last edited by flash gordon; Aug 9, 2011 at 01:54 PM.
2nd Gear Member
Joined: Sep 2009
Posts: 451
From: Arizona
yeah also the sale price after the lease is over is a big factor. Sometimes the dealers divert your attention by getting you the payments you want and having a HUGE residual value if you want to pay it off.
Leasing isnt bad, but you better take care of that car....door dings, curbed rims, scratches, chips...get ready to pay for it when you turn the car back in after your lease is up...
Leasing isnt bad, but you better take care of that car....door dings, curbed rims, scratches, chips...get ready to pay for it when you turn the car back in after your lease is up...
4th Gear Member
Joined: May 2010
Posts: 1,277
From: Temple, TX
Also, the mileage is where you can get screwed and fast... Plus you didn't specify the final agreed value/balloon payment at month 39.
Since they are having to order the car you haven't actually closed on the deal. I would seriously, I repeat, seriously consider cancelling the lease. Here is why...
For $340/month, plus the $3500 from your trade, plus a low interest rate... You would probably come out ahead at the 39 month mark if you decide to trade or sell it then. With the lease, even with no overuse charges, depreciation/damage fees, turnin/collection fees, etc. you walk into the dealership at month 39, turn in the car and keys and walk out. You have no equity and must decide what to do to get home (being sarcastic obviously, but you would literally be without a car) unless you buy or lease something else.
However, you purchase and get the wild hair to mod the car with a CAI and tune, you don't have to worry about whether you are going to be fined heavily at the end of the lease. Also, if you get new car fever after 3-4 years, then you will likely not upside down and can sell the car private party or trade in and recoup some of the cost of your car in equity.
No matter what, I hope you enjoy your new ride (when you get it).
Don
Since they are having to order the car you haven't actually closed on the deal. I would seriously, I repeat, seriously consider cancelling the lease. Here is why...
For $340/month, plus the $3500 from your trade, plus a low interest rate... You would probably come out ahead at the 39 month mark if you decide to trade or sell it then. With the lease, even with no overuse charges, depreciation/damage fees, turnin/collection fees, etc. you walk into the dealership at month 39, turn in the car and keys and walk out. You have no equity and must decide what to do to get home (being sarcastic obviously, but you would literally be without a car) unless you buy or lease something else.
However, you purchase and get the wild hair to mod the car with a CAI and tune, you don't have to worry about whether you are going to be fined heavily at the end of the lease. Also, if you get new car fever after 3-4 years, then you will likely not upside down and can sell the car private party or trade in and recoup some of the cost of your car in equity.
No matter what, I hope you enjoy your new ride (when you get it).
Don
Thread Starter
Joined: Aug 2011
Posts: 17
Thank you all for the insights.
BigDin, while I won't have any equity in the car after the lease, my total amount paid in will be quite a bit lower. So while it is quite possible to have positive equity after 39 MO, it is unlikely it will be greater than the difference in payments. Obviously this is the age old argument for lease vs. buy on any car.
Also, I won't do big enough mods that I can't do on a leased car.
I hope to enjoy it in about 5 weeks. Feels like forever!
Any idea if they get then put sooner than 6 weeks (this is me hoping)?
BigDin, while I won't have any equity in the car after the lease, my total amount paid in will be quite a bit lower. So while it is quite possible to have positive equity after 39 MO, it is unlikely it will be greater than the difference in payments. Obviously this is the age old argument for lease vs. buy on any car.
Also, I won't do big enough mods that I can't do on a leased car.
I hope to enjoy it in about 5 weeks. Feels like forever!
Any idea if they get then put sooner than 6 weeks (this is me hoping)?
1st Gear Member
Joined: Jul 2011
Posts: 89
From: CA
4th Gear Member
Joined: May 2010
Posts: 1,277
From: Temple, TX
Thank you all for the insights.
BigDin, while I won't have any equity in the car after the lease, my total amount paid in will be quite a bit lower. So while it is quite possible to have positive equity after 39 MO, it is unlikely it will be greater than the difference in payments. Obviously this is the age old argument for lease vs. buy on any car.
Also, I won't do big enough mods that I can't do on a leased car.
I hope to enjoy it in about 5 weeks. Feels like forever!
Any idea if they get then put sooner than 6 weeks (this is me hoping)?
BigDin, while I won't have any equity in the car after the lease, my total amount paid in will be quite a bit lower. So while it is quite possible to have positive equity after 39 MO, it is unlikely it will be greater than the difference in payments. Obviously this is the age old argument for lease vs. buy on any car.
Also, I won't do big enough mods that I can't do on a leased car.
I hope to enjoy it in about 5 weeks. Feels like forever!
Any idea if they get then put sooner than 6 weeks (this is me hoping)?
That said, what mileage allowance did you opt for in your contract? Are you in a career field where you may be required to move in the next 39 months that would increase your commute?
My wife and I thought leasing was the smart thing for her 2006 Trailblazer (gone now btw)... She worked at our kid's school district. We lived 2 miles from the school. I worked on the Naval Air Station 5 miles away. We figured we would never go over the 12,000/year mileage we chose. Then I got promoted and we moved to where we are now. I am now driving 80 miles round trip daily 5x per week (20,000+ miles/yr). If the Trailblazer were my DD, we would've been so screwed when we turned it in. Luckily it still sat in the drive way mostly, but it could have been much different.
If this is your first lease, then read ALL the fine print, including any disposal fees that would be applicable. Call your insurance company and get a quote on coverage for a leased vehicle. In some states, leased vehicles must carry more coverage, and that can add to the overall cost of ownership.
Good luck.
Don
Thread Starter
Joined: Aug 2011
Posts: 17
I did the car payment calculator on CarMax.com and used the same info as you for your lease... $340 monthly payment, $3500 downpayment, with a 1.9% APR for 72 months. There wouldn't be any difference in payments since I used the $340/month value too...
That said, what mileage allowance did you opt for in your contract? Are you in a career field where you may be required to move in the next 39 months that would increase your commute?
My wife and I thought leasing was the smart thing for her 2006 Trailblazer (gone now btw)... She worked at our kid's school district. We lived 2 miles from the school. I worked on the Naval Air Station 5 miles away. We figured we would never go over the 12,000/year mileage we chose. Then I got promoted and we moved to where we are now. I am now driving 80 miles round trip daily 5x per week (20,000+ miles/yr). If the Trailblazer were my DD, we would've been so screwed when we turned it in. Luckily it still sat in the drive way mostly, but it could have been much different.
If this is your first lease, then read ALL the fine print, including any disposal fees that would be applicable. Call your insurance company and get a quote on coverage for a leased vehicle. In some states, leased vehicles must carry more coverage, and that can add to the overall cost of ownership.
Good luck.
Don
That said, what mileage allowance did you opt for in your contract? Are you in a career field where you may be required to move in the next 39 months that would increase your commute?
My wife and I thought leasing was the smart thing for her 2006 Trailblazer (gone now btw)... She worked at our kid's school district. We lived 2 miles from the school. I worked on the Naval Air Station 5 miles away. We figured we would never go over the 12,000/year mileage we chose. Then I got promoted and we moved to where we are now. I am now driving 80 miles round trip daily 5x per week (20,000+ miles/yr). If the Trailblazer were my DD, we would've been so screwed when we turned it in. Luckily it still sat in the drive way mostly, but it could have been much different.
If this is your first lease, then read ALL the fine print, including any disposal fees that would be applicable. Call your insurance company and get a quote on coverage for a leased vehicle. In some states, leased vehicles must carry more coverage, and that can add to the overall cost of ownership.
Good luck.
Don
Again great questions and insight. That would definitely be the best approach if I held on to it for 7+ years. However, I like new cars too much to do that. I will make sure to check on all those components. I checked insurance and it is about what I expected. I don't plan on having a large increase in mileage. I chose 12,000.
2nd Gear Member
Joined: Sep 2009
Posts: 451
From: Arizona
yeah sounds like lease is your best bet. Doesnt sound like you want to do all that much to the car and you know you are going to eventually switch it out.
See I know that the coyote 5.0 is my car. Unless something life alterting comes up, I know I will own that car for a long while. I cant wait to get one.
Good luck with the lease. Just make sure to take good care of it and you should be ok. Just treat the car with care, do all the normal maintenance and you should be ok.
If you happen to go over your miles or something does change, you can always trade the car in somewhere else.....I've done that with 2 previous leases that I've had. Just be careful if you ever go that route and do not take it back to ford (or they will prob treat it as a early return)
See I know that the coyote 5.0 is my car. Unless something life alterting comes up, I know I will own that car for a long while. I cant wait to get one.
Good luck with the lease. Just make sure to take good care of it and you should be ok. Just treat the car with care, do all the normal maintenance and you should be ok.
If you happen to go over your miles or something does change, you can always trade the car in somewhere else.....I've done that with 2 previous leases that I've had. Just be careful if you ever go that route and do not take it back to ford (or they will prob treat it as a early return)
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