Why do people lease?

[Rich Sandor]

The salesperson makes money on the difference between invoice and sale price.

Unless the manufacturer is giving out spiffs (bonus pay) for selling a lease or finance, it doesn't make any difference to the salesman.

The big advantage to leasing for a salesperson, is you get the chance to sell another vehicle to the person after 3 years. You can imagine a salesman who's been on the business for 10+ years, every month they have X amount of lease returns, many of which they can turn into another sale..

[Meowjin]

I personally believe who ever leased a plus 50grand car in the past 2 years has won, because i know several 2 year luxury cars are worth 50-75% less. You win if you paid less than 50%

[q0192837465]

I still don't like how rigid leases are. When you lease is up, you have to make a decision on whether to lease a new car orget rid of it or wuever. Basically forcing you to make a decision even if the deals r super crappy. Financing will allow you to take ur time and plan slowly on how you wanna proceed. If money is tight, keep the car for a year or 2 longer.

I agree that leasing is living beyond ur mean. And seriously, those rates mean jack. With all those fees taken into account, the REAL interest rate is much higher than wut they claim to be.

[quasi]

Leasing works best for me. I put lots of mileage on domestic trucks which depreciate fairly quickly. Instead of buying it I do 2 or 3 year leases. This way the vehicle is pretty much maintenance free besides oil changes, brake and tires. I get rid of them before the mileage is stupid high and I'm never driving a vehicle more then 3 years old. My company also writes it off.

[Rich Sandor]

Originally Posted by q0192837465

I still don't like how rigid leases are. When you lease is up, you have to make a decision on whether to lease a new car orget rid of it or wuever. Basically forcing you to make a decision even if the deals r super crappy. Financing will allow you to take ur time and plan slowly on how you wanna proceed. If money is tight, keep the car for a year or 2 longer.

I agree that leasing is living beyond ur mean. And seriously, those rates mean jack. With all those fees taken into account, the REAL interest rate is much higher than wut they claim to be.

You actually have MORE choices when you lease than if you finance. You also know when your lease is going to be up, so you have time to look around and see what's out there before your lease is up. You can also extend your lease with most companies by a few months if you absoulutely need to, you just pay the extra depreciation. If money is tight, you can get into a cheaper car when the lease is up.. but if you're financing, you are forced to keep paying the same (higher) monthly payment unless you sell it, at which point you will take a huge loss on depreciation. You actually have LESS choices if you finance.

Also, the rate is what the rate is, nobody can charge you a "fake" rate. What does happen is that the marketing department has $XXXX that they can play with, and either they can give you $XXXX off the price, or give $XXXX to the credit branch to reduce the interest rate, or some combo of that. That is always changing, but usually the monthly payment is pretty much the same.

And honestly, most people wouldn't know a good deal if it slapped them across the face and said: "I'm a GOOD DEAL, BITCH!"

I've seen people pay $6000 over invoice and they were the happiest customers in the world, and then I've seen customers buy a car for well UNDER invoice and still think they were getting ripped off.

A "good deal" is all about perception.

[Harvey Specter]

One of my friends leased a Charger SRT-8 just before Chrysler dropped the leasing late and his payments came out to almost $900/month (with tax). It sounded like a good deal for a $50,000+ car but the problem now is the car, like all Chrysler products, have dropped so much in value that he could have went out and financed the same car with a lower monthly payment.

[BlackZRoadster]

Originally Posted by TRDood

maybe they don't want to keep the car for long

for me, even if i had the money, i would not pay 50k straight cash for a BMW all at once.
i'd rather lease it because 1. i will have more choices in a few years when my lease is over, 2. i can spend that other 40k elsewhere investing, 3. if i ever sell the car within 5 years, i am going to get a big dep hit

leasing a bmw for say 3/4 years, is not only gonna be 10k, typically on a lease i'd say ur paying for half the car on a 4 year lease including the downpayment

[What_the?]

here's a question... if the car gets into a bad accident i.e. greater than $2000 worth... if it's fixed, would the company care at the time of lease return as long as everything's fixed?

Because if they don't, I see this as a plus for leasing, since if this car were financed, that big accident would surely drop the price of the car if you were to try to sell it... but if you could just return it, the accident would not affect you at all...

so the thing is, would that accident or multiple accidents matter on a lease return?

[Harvey Specter]

Originally Posted by What_the?

here's a question... if the car gets into a bad accident i.e. greater than $2000 worth... if it's fixed, would the company care at the time of lease return as long as everything's fixed?

Because if they don't, I see this as a plus for leasing, since if this car were financed, that big accident would surely drop the price of the car if you were to try to sell it... but if you could just return it, the accident would not affect you at all...

so the thing is, would that accident or multiple accidents matter on a lease return?

Nope, they don't care as long as the car has been fixed.

[.Renn.Sport]

Originally Posted by Jah Al Zawahiri

One of my friends leased a Charger SRT-8 just before Chrysler dropped the leasing late and his payments came out to almost $900/month (with tax). It sounded like a good deal for a $50,000+ car but the problem now is the car, like all Chrysler products, have dropped so much in value that he could have went out and financed the same car with a lower monthly payment.

thats why its only smart to lease cars with high residual

[Rich Sandor]

Originally Posted by .Renn.Sport

thats why its only smart to lease cars with high residual

Yes and no. You want the residual to be as high as possible, but that's not the only consideration. If the lease rate is well over 10%, then that might cancel out the nice high residual. You have to look at the whole picture.

[heleu]

Originally Posted by Jah Al Zawahiri

Nope, they don't care as long as the car has been fixed.

Really? The residual must plumet though. Doesn't that affect the resale value? The dealership would have to declare it.

[What_the?]

if this is true indeed, then that's a huge plus for leasing

i've known people who've owned their cars for like less than 6 months only to have it go through an accident which would totally drop the car's residual value

that part works well then

[Harvey Specter]

I'm sure it hurts the resale value but that's one reason why most people stay away from lease returns because you have no idea how the cars been driven. And I've been leasing for years now and the last 3 cars I've returned had some sort of claim on it and I've never had a issue with the leasing company. My brother had a leased out 2003 325i a few years back which had almost $10,000 worth of claims on it when he returned it and BMW never asked one question when the car was returned. As long as the damage has been repaired the leasing company will not say anything.

The whole claims or the car been a lemon is the reason why I listed "- Don't have to worry about getting stuck with a lemon or trying to sell a car that's been in an accident or has a big ass ICBC claim" as one of the pros about leasing.