Car-Leasing basics; what do I need to know?

I think I’m in the same boat. Looking to lease a new car for my wife or buy. She would put less than 6k miles on it a year.

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DO avoid leasing a vehicle.

DON'T lease a vehicle

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expound more pls.

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If you have a company car why waste $ leasing another?

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There's a respect level for the owner of our company. I don't take this thing to the beach or the mountains with three kids. THis is a car with no roof rack or third row.


please go further on how leasing is bad. thanks.

So you think i should pay near 800-1200 a week for an suv vs. way less than that for a month?





Would someone else please chime in since this guy simply refuses to go over the pitfalls of leasing vs purchase?

i found these sub-$300 leases interesting

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So at the end of the lease you have nothing!, Zero! Nada! Yes you enjoyed driving a new vehicle but you have nothing less your upfront fees and monthly lease payment.

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Yeah I’m not a lease guy. I prefer to buy them that way if my income changes I can sell them. I have a years of living expenses if I sell my daily drivers to fall back on.

I couldn’t live with the thought that at the end of the term the dealer is going to chicken shite nit pick about dings and dents deductions.

Also, I knew a guy who leased a nice BMW and then died. Widow was stuck with the lease for a car she did not need. Finally negotiated a resolution, but you don’t just drop off the keys if the lessee dies.

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So at the end of the lease you have nothing!, Zero! Nada! Yes you enjoyed driving a new vehicle but you have nothing less your upfront fees and monthly lease payment.

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Have you done the math on this?

Yes, this is technically true, but that lease payment is much, much lower than traditional financing (of the same vehicle). So while you are left with “nothing”, you paid much less over the term to “enjoy driving a new vehicle”.

When you finance a new vehicle, you’re paying the bank a fee to drive that new vehicle. As you continue to drive it, it depreciates in value. So at the end of your term, you’re left with “something” of much lower value.

The question, and the one that determines the value of lease vs buy, is what’s the difference in cost/spend between these two scenarios?

Lease: Fees + Monthly Payment
Buy: Fees + Monthly Payment - Value at End of Term

As mentioned, this always assumes equal vehicles and terms. If you start considering used vehicles, or holding onto them longer, then it’s not necessarily the same scenario and leasing is not really applicable.

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There's a respect level for the owner of our company. I don't take this thing to the beach or the mountains with three kids. THis is a car with no roof rack or third row.

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I don’t think leasing in your situation is necessarily a bad thing, but how often do you take vacations to the beach/mountains and need the roof rack or third row? If twice per year, renting for two week long trims will be much cheaper than leasing. If it’s more than twice then you are either taking too many vacations or can afford to buy the car outright.

Why not upgrade your wife/husband’s car to fit your needs.

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Leasing seems to make sense for people that don't drive a lot, take really good care of their vehicles and want a new one every few years.

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And most importantly actually have money to burn, because thats pretty much the only people who should be leasing, not people who are in "tight" financial conditions. Continously leasing for a long time is a good way to pay the absolutel most to drive vehicles, because effectively you are paying down the most depreciation on a vehicle every time you lease which is in the first 2-3 years of a new vehicle.

On top of that, the money factors on most leases I've found are astronomically high, this is the "interest rate" effectively. We were looking at a CX-90 (PHEV) from Mazda because the only way you can get the $7,500 tax credit on it is through leasing it, not buying it. Sounds like you'd get a great deal if you can get $7,500 off a ~$50k lease vehicle, but we ran the numbers it just didnt make any sense. The money factor ended up being some absurd amount due to vehicle purchase price at end of lease if we were in fact getting $7,500 thrown our way for this. Money factors can often be VERY high compared to interest rates you'll get on new and even used vehicles when buying...but you just always have to run the numbers.

Also, never put money down on a lease, it makes no sense. Calculate your monthly payment based on 0 down to make all things apples to apples. You might see 1 lease deal for $399/mo but requires $5k down. Another might be $499/mo but requires $1k down. The latter is going to be "Cheaper" if over 36 months despite being $100/mo advertised because the down payment they want is enough less.

In the end, from a financial point of view, leasing is dumb, again because its almost always going to be the most expensive way to own a vehicle since youre paying for the depreciation of the vehicle over the first few years of it's ownership. It only makes sense it would be the most expensive given that scenario.

In the OPs scenario if you just need a larger vehicle "on occasion" like others have said I would just either rent a vehicle or buy a used vehicle thats depreciated a good bit already. You dont need a brand new $50k SUV to go on 3-4-5 trips a year. Buy a $20k-$25k used SUV and use that or just rent something when you need it. That would be the much smarter financial move.

As for the person who mentioned leasehackr, I can say I've visited that site probably 2 dozen times over the years and almost always it's impossible to find something in your area or a dealer willing to do the terms on someone something found. Occasionally you can come across a great deal on a lease but it is VERY few and far between and that site is very dead most of the time I've found. EVs/PHEVs are popular right now due to the $7,500 cash lease companies are willing to pass on to the customer but again have to run the numbers because the "deal" Mazda was offering us for a CX-90 PHEV was still a bit absurd in my opinion with a money factor that was astronomical.

A car is an expense, not an asset. Unless you plan to drive the car into the ground, then lease. Smaller note, get a nicer car and at the end of three years you’re not upside down in a car because of the depreciation.

I’ve had a car not since I was 15. At 50 I don’t foresee that changing. So why not find the least expense and lease.

And do the math, putting more down does decrease the monthly payment but the the total of payments over three years about equals the same amount. (More down and less monthly note equals the same total as nothing down and a higher note).