question i have on leasing, if the price of the truck you want is above your means if you purchase but can lease to own is it a good idea?
Wow, talk about a loaded question! Generally speaking, if something is above your means to buy you should stay away from leasing it as well. BUT, there could be exceptions. One exception would be if you were a younger person trying to establish credit and you needed a car to get you to and from a new job. You want reliability, new technology, safety, and a warranty. You probably couldn't afford to buy a new vehicle, because you don't have the down payment, but you could lease. A new Hyundai Elantra ($16,000) or even a Hyundai Sonata ($22,000) could be leased for $150 (Elantra) and ($209) Sonata with little or nothing down.
Everybody is different. If you want a new car, don't have the down payment and know you can swing the monthly payments, it might be OK for you to lease.
and how does lease to won work on mileage?
You are allotted a certain number of miles during your lease. If you are way under the mileage allowed, it might make sense to buy the vehicle. It depends on the book value of your vehicle and then consider the mileage you've put on it.
and you will know what your residual price after the lease so you can pretty much know what your monthly payment will be after the 36months as a purchase of a used car right? Thanks
Yes, the buyout price is given in the lease contract. Keep in mind you will have to pay any sales tax on that amount. Also, that price in the lease might be negotiable. Doubtful, but could be.
I've only bought one vehicle at lease end because I mostly lease for business purposes. That was my mom's lease of a 2009 Impala, but that was a special case. (Hey, I forgot about that one. Turns out I've leased 13 vehicles, not 12.) This is a great story and I might have to tell the whole thing at some point, but basically during the depths of the Great Recession she went in for an oil change on her older Impala and the salesperson talked her into leasing a new Impala. He really socked it to her on price. So bad that when I found out about it I marched over there and unwound the deal and got her another similar Impala for $125 less per month. Anyway, at the end of the lease the buyout amount was about $4,000 less than the going price for that car. We basically had to buy it, as it was profit waiting to happen.
At the end of any lease I'd look at the buyout amount, tally up the amount I've already spent on the vehicle, then look up the book value of the car. If you have low mileage, that's a plus in favor of buying. Then it's just a math problem. If you like the car and it makes financial sense to buy it, I'd go for it. A bonus is that you know the maintenance history of the car.
I'm going to consider buying my wife's 2016 Charger. With zero down and 35 payments of $257 a month we will have paid in $8,995. Less the last payment on her Altima, $271, made by the dealer as an incentive, we are into that Charger for $8,724. If the going price on this car is $22,000 and at lease end and our buyout is $20,000 or less, we've got some hard thinking to do. It's been a great car. We are on a pace to finish about 2,000 miles below the allotment.