The Old Lease Vs. Buy Debate. What to do???

[WhySoSerious]

If I lease a brand new truck it comes out to about $9,200 per year for 3 years with downpayment, trade in, and montly payment.

If I finance an '11 truck it comes down to about $9,500 per year for 4 years when it is all said and done.

If I lease I have nothing at the end of the 3 years. If I finance an '11 I will have a truck worth about $8,000 give or take at the end of the 4 years.

If I lease I get a brand spanking new top of the line truck. If I buy I get a used truck that is not the top of the line but is still quite good.

I tend to put low miles about 7,000 to 10,000 per year at most.

I'm not looking to do any mods so that isnt an issue.

 

[Trupiano]

Never tried leasing so I couldn't say.

But, do you have the option of buying the vehicle at the end of the leasing period? And if so, what would be the total cost offset vs just buying in the first place? Just in case you leased, then decided you wanted to keep it. It the difference isn't much, I'd say lease it, then if you have a change of heart you can buy it for not much more at the end of the leasing period.

 

[WhySoSerious]

Never tried leasing so I couldn't say.

But, do you have the option of buying the vehicle at the end of the leasing period? And if so, what would be the total cost offset vs just buying in the first place? Just in case you leased, then decided you wanted to keep it. It the difference isn't much, I'd say lease it, then if you have a change of heart you can buy it for not much more at the end of the leasing period.

That's a real good question. Something I didn't consider. I could consider buying the vehicle at the end of the lease!
I guess what it comes down to is that if I were to buy the brand new truck outright.........the monthly payment would be quite high as opposed to leasing it.

 

[WhiteExpress]

The only reason I would consider leasing a vehicle is a DD.

Go lease a Focus or similar, keep the miles off the nice vehicle.
At the end of the lease, lease another new car, no big ticket maintenance items to worry about etc.

I'm not quite there yet, but it's my plan later in life.

 

[WhySoSerious]

The only reason I would consider leasing a vehicle is a DD.

Go lease a Focus or similar, keep the miles off the nice vehicle.
At the end of the lease, lease another new car, no big ticket maintenance items to worry about etc.

I'm not quite there yet, but it's my plan later in life.

That would be ideal but I would never be able to afford two vehicles. Not in my lifetime, lol.

 

[AV8B6015]

Leasing works for my wife. She doesn't go over on miles, and she has zero interest in mods. She wants a new car as often as possible and I talked her into the lease option after she traded out of an 04 Maxima 8 months after she got it. Here is how we got there;
She had a car that was paid off. Traded for another car. Drove that car for a year, traded again (still had good positive equity). Traded for the Maxima after just over a year, and it was bye bye positive equity. So for her, leasing made sense in that a) it makes her keep the car longer, and b) it's cheaper.

Not sure if that helps you, but there you go.

 

[09SMOKINHEMI]

the disadvantages of the lease are the baloon payment at the end of the lease if you wish to purchase, the restriction of miles you can put on there per year, and if you lease and decide not to purchase, you're left with nothing.

the disadvantages of purchasing is that cars are not good investments, in the sense that they don't appreciate in value. you do have more freedom with the purchase with putting mods on and adding as many miles as you want, but it is your responsibility as far as maintenance goes if you're not under warranty. at the end of the life of your loan, you're left with something tangible, your truck, and if kept in good running condition, could possibly give you 200K miles or 6 years without payments, which is what appeals to me.

 

[09SMOKINHEMI]

Leasing works for my wife. She doesn't go over on miles, and she has zero interest in mods. She wants a new car as often as possible and I talked her into the lease option after she traded out of an 04 Maxima 8 months after she got it. Here is how we got there;
She had a car that was paid off. Traded for another car. Drove that car for a year, traded again (still had good positive equity). Traded for the Maxima after just over a year, and it was bye bye positive equity. So for her, leasing made sense in that a) it makes her keep the car longer, and b) it's cheaper.

Not sure if that helps you, but there you go.

that is true, and like was mentioned above, if miles and mods are not an issue, and if you're wanting a new vehicle pretty often, leasing might be the way to go.

but if you're planning on keeping a vehicle, purchasing is the best option.

 

[TheMaddog]

mom is just bought her leased tahoe, which was going to be mine.

 

[0212353]

wait wait wait..........

$9200 a YEAR for your lease payments? $767 a month?!??! What the hell......

I leased my last 2 trucks. My payments are WELL lower than that.

My 08, I leased, drove it for 24 months and "traded" it in. How? I bought it on paper and traded it in. I didn't "turn" it in. I paid 8400 in payments over 2 years, and at that point, I could have walked away. Instead, "bought" it, and traded it in and got $4500 towards my '10. So.......I came out kinda nice there.

Leasing work(d) for me until this '10. Hell, we have leased 3 vans. Love that, get a new one every 2-3 years.......done. But, I love my '10. That ***** isn't going anywhere........so, should have bought it outright.

But.....lets be honest, in 5 months when this lease is up, if they come up with some f'd up crazy deal that I'd be too stupid to pass up........right. LOL - My truck is 30 months old...I'm not at 16K yet. My 08 had 11,700 miles on it when I dropped her off.

Sorry, rambling. Don't lease for that payment, its nuts.

 

[MADDOG]

You've just described the attractive front end of a lease - the low buy in.

You also described one of the disadvantages, no equity in any asset at the end of the lease. They only way you recover that is to buy the vehicle at the end of the lease. At least you know what that contract will be, specifically, the acquisition cost aka residual value.

It will take you longer to realize having an asset if you lease, then buy the truck. By that time, the value of the asset is depreciated even further.

Depreciation is an issue in both cases but the asset may be worth more if you purchase it, then turn it over after you pay it off or at least at the time you are no longer upside down on loan balance vs. book/market value.

People lease because the front end is attractive. Here's some other things to consider when leasing:

1. Annual mileage - low miles avoid the mileage penalty!
2. Damage beyond normal wear and tear - it's out of your pocket.
3. Lease value and residual value is based on full sticker so the acquisition cost at the end is probably more than what you'd pay for an equivalent used vehicle.

As a business, lease costs can be deducted if the vehicle is used for the business. If this isn't the case for you, no tax break is available.

If you're uncertain about your financial future, leasing might not be right for you, either. Once you enter into a lease, it's binding for the entire length of the agreement. Terminating the agreement is nearly always difficult and expensive. If you decide you want to get out of a lease in order to lease another vehicle, you might be able to have the first lease "bought out" as part of the deal. If you simply want out, you will probably be assessed a hefty termination fee designed to keep people from trying to break their leases.

There's a few more pros and cons in the lease vs. buy debate. Here's a great link that gives you some tips on negotiating a lease and why or why not a lease may work for you.

HowStuffWorks "Leasing a Car Overview"

 

[RyeRey521]

wait wait wait..........

$9200 a YEAR for your lease payments? $767 a month?!??! What the hell......

I leased my last 2 trucks. My payments are WELL lower than that.

My 08, I leased, drove it for 24 months and "traded" it in. How? I bought it on paper and traded it in. I didn't "turn" it in. I paid 8400 in payments over 2 years, and at that point, I could have walked away. Instead, "bought" it, and traded it in and got $4500 towards my '10. So.......I came out kinda nice there.

Leasing work(d) for me until this '10. Hell, we have leased 3 vans. Love that, get a new one every 2-3 years.......done. But, I love my '10. That ***** isn't going anywhere........so, should have bought it outright.

But.....lets be honest, in 5 months when this lease is up, if they come up with some f'd up crazy deal that I'd be too stupid to pass up........right. LOL - My truck is 30 months old...I'm not at 16K yet. My 08 had 11,700 miles on it when I dropped her off.

Sorry, rambling. Don't lease for that payment, its nuts.

The op did state that that figure was with the trade-in and down payment factored in, but that does still seem high.... I just picked up my truck not too long ago and couple months before that my fiancé and I leased a fusion for her as a DD.... Love the idea for her and the use the car will get, but a truck in general, I can not see leasing. Take care of the ting and like others have stated, it will serve you beyond the life of your loan and then at that point I times are good you can get the fancy bells and whistles on something new and still have a "beater" to go get your mulch, lumber, what have you for weeken chores... I don't mind the commitment, expecially with these trucks...


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[Ocelot]

Those annual prices seem awfully high, not sure how the trade was figured. For example, I bought a used 2011 in April with 14,000 miles on it for $22,500 I got $9400 trade. With tax, title, etc, I have a $334 payment for 4 years. I did get 2.1% financing though.

 

[hermit]

$767 ....wow.... thats more than my house payment.

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[WhySoSerious]

wait wait wait..........

$9200 a YEAR for your lease payments? $767 a month?!??! What the hell......

I leased my last 2 trucks. My payments are WELL lower than that.

My 08, I leased, drove it for 24 months and "traded" it in. How? I bought it on paper and traded it in. I didn't "turn" it in. I paid 8400 in payments over 2 years, and at that point, I could have walked away. Instead, "bought" it, and traded it in and got $4500 towards my '10. So.......I came out kinda nice there.

Leasing work(d) for me until this '10. Hell, we have leased 3 vans. Love that, get a new one every 2-3 years.......done. But, I love my '10. That ***** isn't going anywhere........so, should have bought it outright.

But.....lets be honest, in 5 months when this lease is up, if they come up with some f'd up crazy deal that I'd be too stupid to pass up........right. LOL - My truck is 30 months old...I'm not at 16K yet. My 08 had 11,700 miles on it when I dropped her off.

Sorry, rambling. Don't lease for that payment, its nuts.

I figured out 9200 a year because the monthly payment would be 600 per month, a 2,000 down payment, and finally my trade in which is worth 5,000 bucks. Does that sound like too much? I kind of think it does too but that is what the online lease calculator told me.

 

[shibby927]

Holy crap my truck payments are $560 a month and they are only that high because I bought it with about a $1500 if that down payment which was the leftover on my trade in. $700+ a month is crazy.

 

[SmokedRam]

That kind of payment sounds like you'd be leasing from Rent A Center or something....

Maybe I should start a truck leasing company, I'll call it, "Rent A Ram"!

 

[jsteinm1]

I decided to lease my truck. Main reason I did that is because I have a good job but a thin credit file, so I was looking at 2% APR on a lease or 6.5% APR on a new purchase. I leased mine and will buy it at the end of the lease where I can have more credit and refinance for a hopefully low rate.

If you lease, make sure you push that dealer hard. They can lower the monthly payments, a lot. They're first offer was $550/mo after taxes for 36mo w/ 5k down and I got them down to $340/mo for 42mo with 3k down.

 

[Musclemckeester]

I found reading through this thread very helpful. I have often wondered the pros/cons for leasing, but the have nothing to show for it at the end of the lease would bother me.

Say you lease a vehicle for 3 years, and at the end of the lease you decide to buy the vehicle. Wouldn't it cost you more in the end though? Otherwise you could have been paying that 3 years toward the cost of the vehicle.

 

[arod412]

The biggest reason why i buy instead of leasing is because the truck is essentially mine when i drive it off the lot...so i can sell it the next day if i wanted to...or in 3-4 years i would have equity (down payment money) so i can use that as money towards a newer truck...but the idea is that it's mine, and i can do what i want.

I do understand why people lease, but it's just not for me.