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May 10, 2009 at 3:48 am #590830
guitarboy53MemberSo I am thinking about buying a new vehicle and I would really like to keep my payments low. One option the Honda dealer mentioned is a Lease. Leasing has always been a bit scary to me and I was wondering what you have experienced when leasing a new car. Is there anything I should look out for? Specific questions to ask? I don’t drive a lot so the mileage should not be an issue. I guess I would like your thoughts on leasing. Thanks!
May 10, 2009 at 4:07 am #666397
cathywMemberIt sounds good at first, but… We leased a car when we were “young.” When the three year lease term was up, the interest rate to finance a purchase of the remaining balance was 22%. And if the value of the car is less than the balance owed at the expiration of the lease (for example if there is any damage to the vehicle), then you owe the difference when you turn the car in. Finally, just try to get a look at the actual lease and its details before you agree to lease the car. Practically impossible. By then then you are stuck with whatever terms they offer. We never leased again. I’d recommend reading any of Remar Sutton’s books about purchasing vehicles. He has great explanations about financing, including leasing. There’s probably lots of info on the net as well.
May 10, 2009 at 1:59 pm #666398
JoBParticipantguitarboy53
unless they will give you a blank copy of the lease to take home and read before signing so you know what to look for as you sign the actual lease, i wouldn’t… i ran a dealership at one time and can tell you there are lots of ways to increase the bottom line when a lease is turned in.
a lot of credit unions have a “fleet” buying service… or you can buy the car through costco and finance through your own bank… keeping the price down does a lot to keep payments down.. and i think you can do better even in these financial conditions by using a buying service…
May 10, 2009 at 2:03 pm #666399
cathywMemberHere’s another story about car financing. The last time we bought a car we arranged for our car loan (with another company) before we even went onto the car lot. It’s a good way to make sure you don’t get talked into buying more car than you want. The dealer wasn’t happy because they make a lot of their money by financing the purchase as well as by selling the car. So they told us we HAD to fill out a credit application anyway. They told us they could get us better terms than what we had. When we protested, they told us it was required by the Federal Government’s new Patriot Act! I kid you not. Not true of course, but it was a great line. This is a major car dealership in the greater Seattle area.
May 10, 2009 at 3:00 pm #666400
SueParticipantI have not personally leased, but I know people who have back east and I know they had a lot of extra expenses if they went over the allotted number of miles per year, or if there was damage to the car – and it’s not always possible to avoid the dings and scratches, especially when they’re not your fault.
We bought a new car about 6 months ago and I have to say that the loan process at BECU was rather painless, and they have rates as low as 4.9% right now, I believe. University Mazda couldn’t beat that rate, which I’m sure disappointed them. BECU was even cool in that when they preapproved me for far more than I was intending to spend, they told me to keep the approval letter under wraps and not show it to UMazda until I agreed on the price, otherwise they might try to upsell me if they thought I could get approval to finance whatever they gave me.
May 10, 2009 at 3:10 pm #666401
DunnoParticipantWhy not get a used car and save the $$$?
Leasing has never been a good idea unless you own
a business and can write it down against your income, even then? I’ve always bought used cars and have been able to save a ton $$. You can even find a barely used new car and save. The stories above confirm the way I feel about leasing. If you’re looking for a good used car and want it backed by a good mechanic, try Ty’s Used Auto’s and Repair on Delridge, just a couple
blocks south of Barton. Good luck!
May 11, 2009 at 10:32 pm #666402
AlkiRagdollParticipantI have leased twice — both times were very high end cars that I was not sure I really wanted to own, and the lease cost was half of what the monthly purchase price would have been… making it something I could afford. I always drive less than 10k per year, so the miles were never a problem — but lower mileage does cost you more as does exceeding the annual mileage. My advice — if you buy a new car every 3 years, then leasing makes sense. I buy every 3 so for higher cost vehicles it fits my needs.
The first turned out to be an awful car — too many problems, so when the lease was up, they came and got it and I didnt have to bother with it. I figure that I would have had difficulty selling it given its maintenance record.
The second car I really liked, but the residual was not sufficient when the lease was up so i ended up buying a new version of the same car for what it cost to purchase the leased car. When the cost of gas skyrocketed, I also considered leasing another car (a hybrid) but was told by the dealership that the lease didnt financially make any sense… so you might do some comparison shoping and weigh the costs and car value.
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