... hee hee
Posted on 01/07/2013 1:18:27 PM PST by Hot Tabasco
I have questions on how a dealership calculates a lease payment on a new car
I did it once, never again.
The car depreciates faster than your payments pay down the lease. I ended up paying another 8k at the end.
Save yourself some grief/$$$ and buy a 2-3 year old model.
Basically you are renting a car until they make you buy most of what you could have bought it for new.
Had this just last week. I have never leased so I thought it would be interesting for a fun weekend car. She wanted a Fiat. I was getting crazy numbers for that car, basically $365 a month for a two year lease. He finally slipped and stated “we take the sticker and divide by the time involved and depreciation.” Sticker.
Avoid if you can unless you know you want to purchase the vehicle after the end of the lease.
I contacted my local Honda dealer via email over the weekend and asked for a quote on an Accord EX-L coupe, with a MSRP of $28,785.00 according to the Honda pricing website.
This was a 3 year lease, 12k per year with nothing down. The sales manager responded with a quote of $389.59 per month.
So here's the kicker, I went to several internet sites that offered lease calculations and based on the MSRP, months of lease, sales tax included, the highest payment I came up with was approx. $221.00 per month.
So what is the dealership factoring in that would create a $160.00 per month discrepancy in the monthly lease payment?
I appreciate any good advice and will take all expected others with a grain of salt...........Thank you
How stupid they think you are.
1. that you stay under the specified mileage of the lease (excess mileage can be very costly, and make what seems a good deal end up as a very expensive deal)
2. That you take good care of the car..especially outward appearance, dents, chips, paint discoloration. You will be charged through the nose for these items at the end of the lease.
Of course, if you are planing to buy the car at the specified price at the end of the lease, then you don't have to worry about either of these.
Try other dealers.
... hee hee
You’re not limited to your local dealer. You’re also not limited to full sticker when determining lease payment. Work your deal, get your price then discuss payment. Price to lease, with a number of options, versus price to purchase, with a number of options, including down payment or no.
Then, shop it, hard. They’re taking you for a low information person who will just pay what they’re asking.
Run it through the lease calculator on the Honda website and see what you come up with, not this I’m pretty sure.
Avoid leasing unless you can write it off. Also, watch the mileage limitations. Most leases have 10,000 miles per year in teh lease. You’ll pay 20-30 cents per mile for everything over.
I’ve leased before and it is a poor financial move. Buy the car or get something 2-3 years old.
I'm in the metro Detroit area and my neighbor recently turned in her Mercury Millan at the end of her lease and was given a Lincoln MKS, 2 year lease, 10k per year, for $300 per month and no down payment...........
I'm also looking at a 2013 Buick Regal Turbo being offered for $249 per month, 10k per year and -0- down........This lease amount, by the way, is consistant with an online payment calculator whereas the Honda lease was not.......
If one MUST buy a new car for whatever reason, they are better off in the long term to get the thing, maintain/take good care of it, pay it off as quickly as possible, and drive it until the wheels literally fall off.
The people that buy new and trade in for another every 2 or 3 years are total idiots, IMO. They are just paying interest during the time of highest depreciation, and chances are it will be ‘under water’ when they go back for the trade in. No worries though. They are totally HAPPY to just tack that negative equity onto the new loan, making someone REALLY upside down before the ink even dries on the contract and the are keys handed over.
The whole business of buying cars is just INSANE!
Dave Ramsey says its a great idea...So I say go for it...sigh...
My friend and I have sent each other car lease ads that reflect the growing trends for dealerships such as : Posche Turbo for lease $119.00/mos x 5 years. Based on $180k down, 860 Fico score, $5 mill. net worth statement, 0 miles per month, $5k/per engine startup fee and you must leave car at dealership for duration of lease.
I've only purchased 5 new vehicles in the past 38 years, with only two in the past 28 so I've gotten my worth of cars. Like I said, based on my age, and the limited driving I do now that I'm retired, leasing a vehicle is the best option for me.
you’ve got the FEVER.
been there, done that, best of luck to you my friend
Roughly:
List price of car - estimated value at end of lease / number of months of lease term = monthly lease payments.
It was only good if you owned your business.
No longer a good idea.
Free country.
“I did it once, never again.
The car depreciates faster than your payments pay down the lease. I ended up paying another 8k at the end.”
What? That’s not right. The good thing about a lease is you don’t have to worry about depreciation. Unless you had an open end lease that are no longer in existence. Closed end leases have a “guaranteed future value” the residual that the lease co. is responsible for.
...
So here's the kicker, I went to several internet sites that offered lease calculations and based on the MSRP, months of lease, sales tax included, the highest payment I came up with was approx. $221.00 per month.
I don't see how you can get a $221 per month lease on that car. Even if you get 0% interest on it, they are essentially saying that there is only a difference of $7,956 between the new car and the car after three years. A 2010 Accord EX-L with 36,000 miles on Kelley Blue Book was listed at $15,572 for an excellent trade in ($17,462 for private sale). AOL listed its MSRP at $26,080.
Now that makes sense. I never factored in the drastic depreciation cost of the vehicle after 3 years and that's why the calculator I used came up with such a discrepancy between it and the dealer.
See my post #25......you're absolutely correct.
I saw it and almost went for it but turned it down since they're lousy in snow and winter is now here..........
There are pros and cons to leasing. If you want low monthly payments, no out of pocket $, and you don’t drive more than 15k miles/yr. There are usually no repair costs because most leased cars are offered with warranties. If you buy new the depreciation is severe if you sell the car within 4/5 years. Any our of warranty problems can be costly. There are just too many variables to consider so you might want to speak with your accountant.
Heh. When I was a young-skull-full-of-mush just out of college with my first decent-paying job, I had to have a new car every two years or so.
Then, in '84, I was front-ended in my brandy-new Bronco [oh, how I loved that truck]. It was totaled -- I survived and a switch clicked in my brain that made me realize they're all just a hunk of metal.
I still love vehicles, but haven't bought a new one since. Have had great cars and trucks -- can't complain about a one of them. And, boy, have I saved a ton of money.
Heh.... Don’t go TOO hard on your young self...
At least cars weren’t so crazy expensive back then, in relation to wages/pricing.
I think you forgot the sarcasm tag. Dave actually calls them “Fleeces”
Did I really need the sarcasm tag?
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