Leasing a car

Troll_sl said:

So I'm looking at leasing a car. For my particular situation it's just my best option (little cash, basically non-existant credit history). I don't have "bad" credit. I'm never late on payments and don't live beyond my means. I've just never bought anything big.

I also understand the general downsides of a lease: renting vs. owning. Mileage limits. Wear and tear fees. I'm also planning on walking away after the lease is up, not putting down the rest to buy.

So anyone have any experience with leasing? Anything I should look out for?

How easy is it to negotiate to lower the down payment?

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Why not help fix your Credit by purchasing a car you can get a loan for with your so-called nonexistent credit?

Troll_sl said:

Because that would cost me a shit-ton more a month than I want to pay?

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You can't get a cheaper used car? Do you have to get new?

And you won't get a decent lease rate with zero or bad credit. It's even more important to have good credit when leasing.

They're gonna try to hammer you with fees, no matter how legitimate, when your lease term expires.

We have leased two cars. We were in a similar situation as you, little money, spotty credit, etc. The leasing plans they gave us looked great, low payments and everything. My g/f at the time only lived about 15 minutes from work, so she would never realistically go over the miles. A year after getting the car she got a new job with a much longer commute. She immediately was blowing over her allotted miles. When we were finishing up the lease she was 4,000 miles over and I can't remember the exact cost. Something like 500 free miles and then $0.25/mile after that. We didn't want to pay the fees so we bought it. They tacked on crazy charges like a $3000 finance charge and shit. She ended up owing $13k on a 2010 Civic which isn't too bad, but I felt we got gouged.

I leased my current car and with my new job I am blowing through the miles already (24000 in 10 months). I will be raped.

Things to look out for, all the added protection. Think about what you're going to do at the end of the lease realistically. If you plan on buying the car outright, none of that shit is important. If you're just going to lease it and walk away, I would go for the packages that protect paint, interior, and probably tires. They had one where they spray a coat of something over your paint to keep it from chipping, I would look into that too. The thing with the lease is they will nickel and dime you on everything wrong with the car when you bring it in and they will charge A SHITLOAD for minor defects. Not uncommon for some scratches here and there to be $1000, then another $1000 on interior damage, $1000 for new tires. Just be prepared. They might be able to deal with you and walk you into a new lease at that point.

If your credit and money situation is low I wouldn't do it. It seems great, but it is a pain in the ass.

Yeah, with a lease just consider that to get that low monthly rate you're going to have to put a few grand down to start, and they're going to gouge you for a few grand when you return it.

Do the math and figure out if you are really saving any money by the time you get hit with $3000-$5000 worth of fees & required downpayments. An extra 5 grand is the equivalent of an extra $200 a month on a 24-month lease.

I've leased all my previous cars (5) before my most recent car which I financed.

The positives of leasing:
1) New car every 2-4 years
2) Lower monthly payments vs financing
3) Fixed monthly payment with no surprises since car is always under warranty. Nice if you are OCD budget conscious and hate unforeseen costs.
4) If car is seriously damaged, no worries about filing claims for "diminished value" and then trying to sell your car with a shitty Carfax report. Just hand the keys back at the end of the lease without penalties because of the GAAP insurance.

Negatives of leasing:
1) You never "own" a car, hence never have any equity in the vehicle unless you made a huge down payment on your lease.
2) You can't mod your car, unless you "unmod" it before giving it back
3) A lot more obfuscation during the costing process. With a finance all you have is the rate. With leasing there is money factor, residual value, term, etc,
4) Unless you really love the car, it generally isn't beneficial to buy it out at lease end.
5) You are restricted to a fixed amount of mileage

First off, some of the claims here that you get raped when turning the car in is patently false. I've returned 3 cars without an exchange for a new model from the same vendor, and have never been charged anything more than the lease disposition fee ($250-350) depending on manufacturer (in my case Honda and BMW). As long as you don't turn the car in with massive stains on your seats and crater size dings, everything else is pretty much considered normal wear and tear.

Go for a lease if you know you won't be driving high mileage, like a new car every 3-4 years (or see yourself getting a better car), appreciate the fixed monthly cost, and want lower payments vs a finance. However, whatever you do, do NOT put a single penny down on a lease. Any down payment on a lease is a total waste.

Hmm - as a light driver you're definitely getting me intrigued about the idea of leasing - been looking at buying a new car for a change for myself (always been a used guy) - and with my health I don't put many miles on 1k a month would double my high months usually and looking at the rates it's pretty badass the rate difference with the only downside of "never owning" but then again, you also get to trade up afterwards.

Now when you guys talk about "Fixed monthly payments with no surprises" - do you mean that any service issues that crop up are handled by the dealership by default? So like say... the emergency brake gets stuck permanently on (like is happening with my current 2001 I bought used) they'll consider it something that is covered by the lease and handle it without any costs besides the annoyance of being out the car for a few hours?

Even if you go for a longer lease though? Scanning over Scion's (they're a big appeal to me right now - and last I checked Consumers seems to think they're OK) site they've got leases for up to 5 years (or was it 6? too lazy to go back) - I'd think that would go past the default warranty, no? Or what's normal warranty length?

Edit: NM don't need to answer - it's 60 months/60k miles the same as they max the lease at except miles (and I'd be under than anyhow since I barely drive that much - 10 miles a day is likely my average).... man I'm getting really tempted... just the idea of never paying for a damn repair from something going haywire again... hell down payment is less than this damn emergency brake issue is being estimated at....

Vaclav_sl said:

Even if you go for a longer lease though? Scanning over Scion's (they're a big appeal to me right now - and last I checked Consumers seems to think they're OK) site they've got leases for up to 5 years (or was it 6? too lazy to go back) - I'd think that would go past the default warranty, no? Or what's normal warranty length?

Edit: NM don't need to answer - it's 60 months/60k miles the same as they max the lease at except miles (and I'd be under than anyhow since I barely drive that much - 10 miles a day is likely my average).... man I'm getting really tempted... just the idea of never paying for a damn repair from something going haywire again... hell down payment is less than this damn emergency brake issue is being estimated at....

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Go for it. The concept of financing your car and "building equity" is BS. Cars only depreciate unless it's an antique. You only end up with equity a few years into your finance payments unless you make a big down payment, and even then it's really a situation of opportunity cost. If I hadn't recently ended up in a situation where I'll be putting a lot of mileage on my car I would be leasing my current vehicle too.

Frenzied Wombat_sl said:

First off, some of the claims here that you get raped when turning the car in is patently false. I've returned 3 cars without an exchange for a new model from the same vendor, and have never been charged anything more than the lease disposition fee ($250-350) depending on manufacturer (in my case Honda and BMW). As long as you don't turn the car in with massive stains on your seats and crater size dings, everything else is pretty much considered normal wear and tear.

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Dude, most people are fucking pigs and treat their cars accordingly. I'm not surprised that a lot of people get dinged for damaged vehicles at the end of leases. Just looking at 2-3 year old cars with my girlfriend, I was fucking shocked at the condition of pretty much every single one we looked at. Apparently "good" condition for 3 year old cars means it only has rust showing in 3 places, that there is a single panel somewhere on the car without a major dent, blemish, or gouge, and that only one of the two front seats looks like a baby was delivered on it.

Eomer_sl said:

Dude, most people are fucking pigs and treat their cars accordingly. I'm not surprised that a lot of people get dinged for damaged vehicles at the end of leases. Just looking at 2-3 year old cars with my girlfriend, I was fucking shocked at the condition of pretty much every single one we looked at. Apparently "good" condition for 3 year old cars means it only has rust showing in 3 places, that there is a single panel somewhere on the car without a major dent, blemish, or gouge, and that only one of the two front seats looks like a baby was delivered on it.

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Agreed, if you're some chick that views her car as a combo mobile phone booth/Avon counter leasing isn't a good idea. I treat my cars very well so sometimes take for granted that a lot of people treat them like shit. Still, the definition of "wear and tear" varies by location. When I lived in Montreal it was impossible to make it two weeks with a new car before your bumpers got scratched from bad parallel parkers, yet when I turned in my Honda they didn't charge me a penny even though they would have to repaint the bumpers to sell it. If I had returned the same car in Dallas there is no doubt they would have charged for it.

Keep in mind that each manufacturer has a CLEARLY defined set of guidelines (and charges) for lease turn-in "damage" you can peruse before leasing. It's not even somewhat subjective so there's no risk of getting "fucked" by your dealer. For instance, on my last bmw they supplied a ruler to measure "dings", with dings that exceeded the size of the ruler costing you X dollars. Same thing for tire treads and upholstery stains.

But yes, if the hypothetical buyer (or his wife) treats cars like shit or plan on driving their St-Bernard around in the back seat, don't lease.

EDIT: Forgot to mention, IF you trade your leased car in at the end for a new model from the same manufacturer, they will pretty much take it in almost any condition as long as they are cosmetic fixes (paint, dings, upholstery). I returned a BMW that had a HUGE scrape on the front bumper which should have cost me $400, but they didn't say a word, most likely because they knew they could roll that into my new car price somewhere. I was told even if there were major fixes involved, they could roll that charge into my new lease so I wouldn't have to fork over a large amount all at once.

I should say my wife treated her car great, the main problem was the mileage. The guy started ticking off things we'd have to pay for and was a real asshole about it. We decided never to give them business again after we bought it so we bought my 2013 accord at another Honda dealer in another city. Probably varies dealer to dealer

Titan_atlas_sl said:

You do realize leasing reports to your credit same as a purchase?
OP- leasing is just fine and most of the bad things don't exist anymore.The american car companies used to screw people on lease penalties. That's where they got a bad rep.
Just make sure you set the mileage at a resonable level and you may have to put close to the full lease startup due to lack of credit. A lease carries much lower interest than a traditional loan, in the range of 1%. Even if you choose to buy at the end it's nice because the company sets a value so if it holds more value that excess can be rolled into your new lease. The finance guys might try to roll protections and maintenance into the contract same as a purchase, so be aware of what yoy are signing and ask for it to be taken out.Good luck.

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Admitting ignorance on this Good to know -

I leased my first car. I found that the issue with my lease is, 2 years into a 4 year lease, I had to give up the car. Basically, if you're in that situation you have to buy the car outright, or pay off the remaining lease and return the car. Both of which were astronomical amounts. Thankfully, I found a way out by trading it in to a dealership that would pay it off gladly, for a car that cost much less. 0 tax+a car that cost significantly less than the lease pay off? Yeah, I ended up with a paid off car (shitty as it may of been) and out like half the cash.