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Questions on Leasing a Vehicle
Posted on 3/6/14 at 12:36 pm
Posted on 3/6/14 at 12:36 pm
I'm new to the whole car buying process in general but after looking around, I'm leaning toward a lease. I'm in the process of moving across the country and I need to find a vehicle by the beginning of April. In that same timeframe, I also need to find an apartment, furniture, etc. I have a lot of expenses right now and buying something outright would really eat away at my budget and I'd wind up sacrificing on pretty much everything else. If I lease, I won't have to put down such a big down payment, the note is more reasonable, and in 3 years I'll be looking to get something new anyway.
What are some of the pros & cons of leasing over purchasing? What are the hidden fees and dealer tactics that I should watch out for? Is the TT&L based on the sale price or the sum of the down payment and monthly payments?
Here's what I'm looking at...
So if I'm reading it right it's $4,649 (down payment & 1st month) due at signing. The down payment and the total of the monthly payments for 39 mos. is $14,111. Do I pay the TT&L on that $14,111 or on the negotiated purchase price? I also see a couple of other nickel & dime fees (destination charge, etc.) but I've been told that those are negotiable. I get 10,000 miles/year for a little over 3 years; being that I live in a small town and won't be traveling much I don't think that it will be a problem.
TIA
What are some of the pros & cons of leasing over purchasing? What are the hidden fees and dealer tactics that I should watch out for? Is the TT&L based on the sale price or the sum of the down payment and monthly payments?
Here's what I'm looking at...
quote:
Retailer Participation Required. For well qualified lessees. Offer ends 3/31/14. Excl. taxes, title & lic. Retailer participation req. $4400 CONSUMER DOWN PYMNT + $249 1st month payment + tax, tags, fees. . 2013 G37 Sedan AWD subj. to avail. to well-qualified customers who lease through Nissan-Infiniti LT. Subj. to credit approval. MSRP $38310 incl. dest. chrg. Net capitalized cost of $36111.11 incl. a $700 non-refundable acq. fee. Retailer contribution may affect actual price set by retailer. Monthly pymnts. total $9711.18. At lease end, purchase for $23752.20 plus $300 purchase option fee (except KS & WI) plus tax, or pay excess wear & use plus $0.25/mile for mileage over 10,000 miles/year. Lessee is responsible for maint. and repairs. Disposition fee due at term. of lease. No security deposit req.
So if I'm reading it right it's $4,649 (down payment & 1st month) due at signing. The down payment and the total of the monthly payments for 39 mos. is $14,111. Do I pay the TT&L on that $14,111 or on the negotiated purchase price? I also see a couple of other nickel & dime fees (destination charge, etc.) but I've been told that those are negotiable. I get 10,000 miles/year for a little over 3 years; being that I live in a small town and won't be traveling much I don't think that it will be a problem.
TIA
14
Posted on 3/6/14 at 12:40 pm to Corkfather
I think I will lease my next vehicle.
I only drive about 1200 miles a year in my current vehicle now that have a company ride....
I only drive about 1200 miles a year in my current vehicle now that have a company ride....
Posted on 3/6/14 at 12:41 pm to Corkfather
quote:
$0.25/mile for mileage over 10,000 miles/year
This is a deal killer for me. Especially if you're driving it across the country in your move.
Posted on 3/6/14 at 12:43 pm to Supermoto Tiger
quote:
$0.25/mile for mileage over 10,000 miles/year
This is a deal killer for me. Especially if you're driving it across the country in your move.
It's $0.25 only if you go over the 30,00 you're allotted. I wouldn't be driving it across the country either, I'd be buying it up here.
This post was edited on 3/6/14 at 12:44 pm
Posted on 3/6/14 at 12:43 pm to Supermoto Tiger
There are several tax benefits from leasing a car if you use it for work. Not to mention, you don't pay for depreciation. That's the main benefit of leasing. The cons are mileage costs if you exceed your allotment.
Posted on 3/6/14 at 12:45 pm to Paul Allen
quote:
There are several tax benefits from leasing a car if you use it for work
such as? any different from benefits from buying?
Basically leasing a car lets you get a more expensive car for less of a monthly note, drawback is you never own it and have to pay mileage overages
Posted on 3/6/14 at 12:46 pm to Paul Allen
quote:
tax benefits from leasing a car if you use it for work.
Would this be possible for someone who isn't filing a 1099? I'm a non-exempt, W-2 employee.
quote:
Not to mention, you don't pay for depreciation.
This is also attractive. You're paying less to lease for 3 years than you would paying a note for 3 years and at the end of that period you can just bring it back and get a new one. You don't have to deal with the bullshite of selling it, etc.
I'm not concerned about not "owning" the vehicle. I'd rather it that way.
This post was edited on 3/6/14 at 12:48 pm
Posted on 3/6/14 at 12:58 pm to Corkfather
The questions I'm really trying to answer are:
1: What amount is TT&L based on?
2. What would I need to claim it for business use?
1: What amount is TT&L based on?
2. What would I need to claim it for business use?
Posted on 3/6/14 at 1:04 pm to Corkfather
I haven't owned a vehicle since 1992. Leasing fits my needs perfectly. A few tips:
Be wary of exceeding your mileage allowance.
Stick to the manufacturer sponsored leasing specials and don't try to customize the vehicle with additional accessories.
You will pay sales tax on the monthly note and on any capitalized cost reduction that you pay up front.
Most manufacturer leases have a sign-and-drive version with a higher monthly payment and no money up front.
Take a look at Honda. They have one of the most aggressive leasing programs that extend to almost all of their models.
Be sure that the lease includes Total Loss Protection. If the car is totalled or stolen you will not be liable for any early termination fees.
HTH
Be wary of exceeding your mileage allowance.
Stick to the manufacturer sponsored leasing specials and don't try to customize the vehicle with additional accessories.
You will pay sales tax on the monthly note and on any capitalized cost reduction that you pay up front.
Most manufacturer leases have a sign-and-drive version with a higher monthly payment and no money up front.
Take a look at Honda. They have one of the most aggressive leasing programs that extend to almost all of their models.
Be sure that the lease includes Total Loss Protection. If the car is totalled or stolen you will not be liable for any early termination fees.
HTH
Posted on 3/6/14 at 1:06 pm to Corkfather
Dave Ramsey's answer when asked to point out flaw's in leasing:
quote:
A car fleece is basically renting a car. You pay $400 a month and at the end of the new car lease, you turn it back in. If you want to buy it, you are buying it for what they estimate at the beginning of the fleece to be the market value. At the end of the lease, it’s called the residual value. If you pay $400 a month for 60 months, you pay $24,000 before turning it in. The car will not have gone down in value more than that, because the car companies would lose money if it did. When they get the car back, you will have paid them more than the car has depreciated during that time.
During that time, you’re maintaining the car as if you owned it. You’ll get charged for excessive wear and tear, or if you put too many miles on it. If you rent it for $24,000 and it went down $15,000 in value, then it cost me $9,000 to rent this car for this period of time. That is their profit during that time.
Another thing is that the interest rates on a vehicle lease are not disclosed because the Federal Trade Commission has determined that this is not a debt, so there is no federal disclosure involved. Therefore, you have no truth in lending disclosure sheet. The interest rates you get charged are unbelievably high. That’s where you’ll realize you got screwed over.
People get sold automobile leases because they are told that it’s what sophisticated people do. But as it turns out, the car companies make more money on leasing you the car than if you bought the car with cash, according to the National Auto Dealers Association. Broke people think ‘how much down and how much a month’. Rich people think ‘how much’. If you can’t pay cash for a car, then ride a bicycle. But don’t lease a car.
Posted on 3/6/14 at 1:07 pm to Corkfather
Find out if you have the first option to buy after lease is up. Your situation may change in 3 years. The mileage fees can be brutal
Posted on 3/6/14 at 1:07 pm to Corkfather
quote:
What amount is TT&L based on?
Pretty sure the tax is figured off of what the lease will cost. You will have to pay the difference if you decide to buy once your lease is up.
Although I have heard of some states charging tax on the full price when you lease, then again if you purchase. Not sure exactly how/where La falls.
Posted on 3/6/14 at 1:10 pm to Layabout
quote:
Be wary of exceeding your mileage allowance.
It says 30,000 for the duration and 10,000/year. Is your mileage checked annually?
quote:
You will pay sales tax on the monthly note and on any capitalized cost reduction that you pay up front.
I keep seeing this. What exactly is capitalized cost reduction, in layman's terms?
quote:
Be sure that the lease includes Total Loss Protection. If the car is totalled or stolen you will not be liable for any early termination fees.
So if something happens to the car, insurance will cover the damages but not the remaining balance on the lease? That's good to know.
This post was edited on 3/6/14 at 1:12 pm
Posted on 3/6/14 at 1:11 pm to LSUfan4444
I also think too many people turn to leases for the wrong reasons. Doing it to buy more car than you can truly afford is the wrong reason, IMO.
I am not in agreement with Dave Ramsey and think you have to pay cash, but with used car loans easily found under 2.0% and specials under 1% pretty frequently, I think buying something used with a remaining warranty (which also saves depreciation) is the best way to go right now.
I have bought two new cars in my time, and both times it has worked out for me. If you want to buy new, you better plan on keeping that car for 7+ years.
I am not in agreement with Dave Ramsey and think you have to pay cash, but with used car loans easily found under 2.0% and specials under 1% pretty frequently, I think buying something used with a remaining warranty (which also saves depreciation) is the best way to go right now.
I have bought two new cars in my time, and both times it has worked out for me. If you want to buy new, you better plan on keeping that car for 7+ years.
Posted on 3/6/14 at 1:12 pm to Corkfather
you gonna ignore wise words aren't you....
Posted on 3/6/14 at 1:14 pm to Corkfather
you wouldn't believe what you could get for 15-20k at a dealer auction. what you looking for? Sell your car and put all towards cash down on something a few years old.
Posted on 3/6/14 at 1:14 pm to deNYEd
quote:
You pay $400 a month and at the end of the new car lease, you turn it back in. If you want to buy it, you are buying it for what they estimate at the beginning of the fleece to be the market value. At the end of the lease, it’s called the residual value.
I don't plan on buying it.
quote:
If you pay $400 a month for 60 months, you pay $24,000 before turning it in. The car will not have gone down in value more than that, because the car companies would lose money if it did.
The math says differently.
quote:
The interest rates you get charged are unbelievably high. That’s where you’ll realize you got screwed over.
I'm not going to sign a lease without calculating the interest rate.
Posted on 3/6/14 at 1:15 pm to Corkfather
quote:
It says 30,000 for the duration and 10,000/year. Is your mileage checked annually?
No.
I leased my last car and after 2 years I was way under my mileage. Offered a new job which caused me to blow my mileage out the water. When lease was up, I could buy outright, trade in for another and wipe out mileage or pay the fees. I choose to buy outright. Pay a little more when all said adn done. But allowed me to get the car I wanted. Still driving it.
Posted on 3/6/14 at 1:15 pm to Corkfather
quote:
Another thing is that the interest rates on a vehicle lease are not disclosed because the Federal Trade Commission has determined that this is not a debt, so there is no federal disclosure involved. Therefore, you have no truth in lending disclosure sheet. The interest rates you get charged are unbelievably high. That’s where you’ll realize you got screwed over.
Posted on 3/6/14 at 1:16 pm to deNYEd
quote:
you wouldn't believe what you could get for 15-20k at a dealer auction. what you looking for? Sell your car and put all towards cash down on something a few years old.
I don't have the money to buy outright or put down a $10,000 down payment. I can lease a car for what I'd put down in something new.
I have to get an apartment (or possibly buy a house), furnish it, and move up here. I'm not gonna get a shitty apartment so I can buy car. I don't have the time or the money to buy. I'm not going to have any money from my F-150 because I'm not selling it.
This post was edited on 3/6/14 at 1:18 pm
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