A Discussion of Differing Points of View: Is Jeep Leasing an Intelligent Choice or a Dumb One ??

[luk4mud]

I leased once when I was young and dumb. Never again. I prefer to buy used with around 10-20k miles.

Smart money talking here. Let someone else pay for the initial depreciation, and still get a near new vehicle.

 

[MOguy]

Smart money talking here. Let someone else pay for the initial depreciation, and still get a near new vehicle.

This used to be how I did it but my last few "newer cars" cost be FAR FAR more in repairs then the few grand I saved on the price. I want a newer family/wife car and I expect it to be trouble free.

My most recent gently used few year old low mileage GMC Acadia Denali, my gently used few year old low mileage Ford Fusion and my gently used few year old low mileage 4Runner all ended up costing more money to maintain and repair then the older cars I have or have had in the past. Buy the time I traded them in they all cost more than had I leased new, thousands more. I know will loose money when I trade in my leased vehicles on a new lease of even if I just walk away but it will be less of a loss and far less of a headache.

Over the last decade I have had bad luck with newer gently used vehicles. I don't want new car any longer than the manufactures warranty. Leasing keeps me in these warranty covered cars. A quick calculator drill shows me the $400 lease payment (far less then the purchase payments plus the repair bills of newer cars I have had the pleasure of owing) is the better deal for me.

 

[luk4mud]

This used to be how I did it but my last few "newer cars" cost be FAR FAR more in repairs then the few grand I saved on the price. I want a newer family/wife car and I expect it to be trouble free.

My most recent gently used few year old low mileage GMC Acadia Denali, my gently used few year old low mileage Ford Fusion and my gently used few year old low mileage 4Runner all ended up costing more money to maintain and repair then the older cars I have or have had in the past. Buy the time I traded them in they all cost more than had I leased new, thousands more. I know will loose money when I trade in my leased vehicles on a new lease of even if I just walk away but it will be less of a loss and far less of a headache.

Over the last decade I have had bad luck with newer gently used vehicles. I don't want new car any longer than the manufactures warranty. Leasing keeps me in these warranty covered cars. A quick calculator drill shows me the $400 lease payment (far less then the purchase payments plus the repair bills of newer cars I have had the pleasure of owing) is the better deal for me.

Those are valid conclusions based upon your personal experiences. I have had just the opposite. Lease return vehicles that have been serviced at the dealer, certified used vehicles (with some caveats) are good bets in my experience. My wife and I are at a point where we can pay cash for most things, but buying a depreciating asset and the steep depreciation that goes with it in the 1st couple of years is just not what we want to do.

As for leasing, it makes some sense to me for self employed folks that can write off the payments. I have leased a few (I am self employed), jacked up the mileage allowance which drives down the residual, and then bought the vehicles for a discounted price at the end of the lease.

 

[MOguy]

Those are valid conclusions based upon your personal experiences. I have had just the opposite. Lease return vehicles that have been serviced at the dealer, certified used vehicles (with some caveats) are good bets in my experience. My wife and I are at a point where we can pay cash for most things, but buying a depreciating asset and the steep depreciation that goes with it in the 1st couple of years is just not what we want to do.

As for leasing, it makes some sense to me for self employed folks that can write off the payments. I have leased a few (I am self employed), jacked up the mileage allowance which drives down the residual, and then bought the vehicles for a discounted price at the end of the lease.

how long do you keep these vehicles? You can pay cash for a lease.

 

[AbleGuy]

I am SO GLAD I got everyone's Panties In A Wad over my comment:

Leasing is STILL just an Alternate Method of Financing a vehicle

That's how it's viewed by those in the car business. Just another way get people in a new to them vehicle, "Move the Iron" off the lot and get paid a commission on the sale!

Having said that I also did say that there can be a vehicle Lease that is a GOOD DEAL in some situations using the example of very expensive or slow moving vehicles depending upon terms, mileage restrictions and conditions.

That fact that so many poster's are so passionate about telling us why they are right about leasing versus buying is fine IF it makes you feel good to justify your purchase to the rest of us. In reality I/we could care less about the financial agreement you made to acquire your vehicle. If it makes happy and want to thump your chest about the great deal you believe you got good for you!

My point was to give a vehicle dealer perspective about how vehicle leasing is looked upon by those in the car business. Nothing more. If you "feel" attacked and wronged by that point of view so be it. Your not going to change my mind and I am not going to change your mind and that was NEVER the intent of my post. Leasing, buying or renting it's all just a way to "Move the Iron" off the lot.

Just realize that dealers like leasing vehicles as with few exceptions the terms, mileage restrictions and conditions are written HEAVILY in favor of the dealer not the consumer. Leasing also provides the OEM manufacturer and manufacturer's financing arm of their business a quick way to adjust unsold vehicle inventory to keep plants running producing vehicles. Leasing also provides the dealers with a ready fleet of lower mileage off lease used vehicles being returned and or going to auction that provides a great opportunity to purchase lower mileage used vehicle inventory for sale on their lot. After all the 4 big profit centers for franchise dealers are vehicle financing, warranty vehicle repair, customer vehicle repair and used car sales. Notice that selling new is not the in the top 4!

With volume selling now the name of the game at franchise dealers it's all about the back end money they get from the manufacturer. The more new vehicles they Sell/Lease the more Moohlah they get paid on the back end selling new cars.

Leasing is just another way that helps to make it all happen!

By the way read below:

Copy & Past DIRECTLY from the Consumer Reports article referenced above in LUTHJ's post about Buying or Leasing a New Car and I Quote:

"The low interest rates that have prevailed elsewhere for the past few years have carried over into lease contracts, which also helps moderate their cost. Interest rates are a critical part of the economics of leasing, because at the end of the day a lease is just another way to finance a car."

Here’s a general Cost of Ownership story for lease bs. Own comparison:
Owning a New Car Will Cost You $9000 a Year, Says AAA Study
The annual cost study shows that new cars and all the expenses that come with them keep rising.

Owning a New Car Will Cost You $9000 a Year, Says AAA Study

The annual cost study shows that new cars and all the expenses that come with them keep rising.

www.caranddriver.com

• AAA has conducted a cost study on new-car ownership every year since 1950 and has just issued results for 2019—and a worksheet so you can figure your own costs.
• New cars on average cost $9282 per year over a five-year/75,000-mile period, a 5 percent increase over 2018, says the nonprofit insurance agency.
• Finance charges and longer loan terms contributed most to the increase.

You're not imagining it: New cars are getting more expensive. You're not just paying more once, when you take delivery, but every time you spend money to fuel, fix, finance, insure, register, and watch the car depreciate each year. According to an annual AAA study that the nonprofit insurance group has conducted since 1950, Americans spend on average $773.50 per month on new-car expenses. That's $9282 per year. Where's my raise again?

(Story continues, use link to access it further)

 

[MOguy]

Here’s a general Cost of Ownership story for lease bs. Own comparison:
Owning a New Car Will Cost You $9000 a Year, Says AAA Study
The annual cost study shows that new cars and all the expenses that come with them keep rising.

Owning a New Car Will Cost You $9000 a Year, Says AAA Study

The annual cost study shows that new cars and all the expenses that come with them keep rising.

www.caranddriver.com

• AAA has conducted a cost study on new-car ownership every year since 1950 and has just issued results for 2019—and a worksheet so you can figure your own costs.
• New cars on average cost $9282 per year over a five-year/75,000-mile period, a 5 percent increase over 2018, says the nonprofit insurance agency.
• Finance charges and longer loan terms contributed most to the increase.

You're not imagining it: New cars are getting more expensive. You're not just paying more once, when you take delivery, but every time you spend money to fuel, fix, finance, insure, register, and watch the car depreciate each year. According to an annual AAA study that the nonprofit insurance group has conducted since 1950, Americans spend on average $773.50 per month on new-car expenses. That's $9282 per year. Where's my raise again?

(Story continues, use link to access it further)

They are figuring costs that all cars have, new and old, except the fix, new cars have warranty.

I am not saying new cars don't cost more than a paid off car but you still have many of these expenses regardless.

Owning a vehicle (new or old) costs money. The interesting part is when adjusted for inflation owning a car seems to be getting cheaper.

 

[AbleGuy]

The interesting part is when adjusted for inflation owning a car seems to be getting cheaper.

That is interesting.

So, how’s that shake out with new car prices today as adjusted to inflation? Are prices really as high as we perceive them to be today or are they actually more comparable to prices 30 years ago? Anyone know?

 

[luthj]

In 1967 the average car cost $3,215, in 2016 Dollars that's $22,807. In 2016 the average cost was : $25,449. Now since 2016 the average price has gone up a bit to almost $30k. That is partially being driven by consumer preferences.

 

[MOguy]

I haven't bought a new car since my Jeep in 2001, it was just over 20k. Now they are 40k plus.

 

[jadmt]

I haven't bought a new car since my Jeep in 2001, it was just over 20k. Now they are 40k plus.

you can find plenty of jeeps under $30K.

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[Christian P.]

Here is an alternative that is fairly simple but people don't talk about much. It's negate the problem of financing vs leasing.

Whether it's a used or new car, just calculate your cost per mile. Factor all your expenses (payment if applicable, insurance, repairs, fuel, etc).

You may be surprised with the results. We had a 4Runner for 7 years and a BMW 3-series for about the same time. For all these years I thought I was doing great with the 4runner since it had a lot less depreciation than the BMW. However we actually managed to put 80000 miles on the BMW with almost no repairs. Bought it at 87000 miles and sold it at 167000. Since the BMW was getting about twice the mpg than the 4runner, the cost per miles ended up being less on the BMW than the 4Runner.

It's just another data point, but it's interesting to measure.

 

[Bayou Boy]

In my eyes, if you have to do very much calculating and figuring at all when buying a car, you are overspending. Sure, make sure you are making a good deal on that particular car but other than that, just buy something you can afford.

This reminds me of the guys that religiously use Fuelly. Are you going to sell the truck if it doesn't return exactly the mileage you want? No? Then who cares what the mileage is. You will know if it burns too much fuel. But it'll be because its 40% too much, not 10%.

 

[AbleGuy]

I haven't bought a new car since my Jeep in 2001, it was just over 20k. Now they are 40k plus.

Thx for response.
I’m pretty sure I could buy a 2001 Jeep today cheaper than $40k though ?


It all boils down to this:

just buy something you can afford.

I’m moving this one to the “Best Advice/Quotes” thread, thx

 

[vintageracer]

This is America Baby.

What I want and what I can afford don't need to match.

That's when all this creative financing comes into play!

That's how I turn my vehicle "Want" into a "Need" that I can "Afford".

So what if it takes FOREVER to pay for it!!!

 

[AbleGuy]

“That's how I turn my vehicle "Want" into a "Need" that I can "Afford".”

Kinda like the phrase, “eat, drink, and be merry for tomorrow we die,” which has been commonly used but still misunderstood for centuries...and yet many of us still choose to follow it.

Mixing parables:
Who’s happier in the long run, the ant or the grasshopper?