Leasing vs. Owning - Page 3

ricka · 12-11-07, 07:13

After buying all my cars, keeping them for 10+years each and loving no car payments after the term, I decided to lease the latest one.

One part was because car designs run about five year life cycles and get pretty stale.

Two, the cars (while pretty reliable) do get the very expensive maintenance costs.

Three, I decided to ramp up a bit on the latest ride but wanted to stay under warranty. I even added the extra cost for 20,000 miles per year. And the monthly costs were still significantly less than buying. Love the Audi and other German rides are great but the maintenance bills can be quite the buzz kill.

Oh, those can't miss lease deals on TV normally require a decent payment due at signing and the mileage limits are 10k a year. The fine print is where all the reality is...

Ambrosia · 12-11-07, 08:00

Quote:

Originally Posted by ricka

After buying all my cars, keeping them for 10+years each and loving no car payments after the term, I decided to lease the latest one.

One part was because car designs run about five year life cycles and get pretty stale.

Two, the cars (while pretty reliable) do get the very expensive maintenance costs.

Three, I decided to ramp up a bit on the latest ride but wanted to stay under warranty. I even added the extra cost for 20,000 miles per year. And the monthly costs were still significantly less than buying. Love the Audi and other German rides are great but the maintenance bills can be quite the buzz kill.

Oh, those can't miss lease deals on TV normally require a decent payment due at signing and the mileage limits are 10k a year. The fine print is where all the reality is...

Great info guys, so overall do you like the lease better?

Darren F · 12-13-07, 07:13

Leasing is the way to go....Especially on new cars...over 90% of my customers lease their cars....Ive been doing this for a while at both Lexus and Mercedes

jimmie jam · 12-13-07, 10:47

Quote:

Originally Posted by jsatek

Correct, that could not be further from the truth. You, the buyer, are paying only the depreciation. Hence the term RESIDUAL VALUE. The bank is making INSANE interest on you every month, not to mentinon ridiculous Bank Fee's and Lease Termination Fees.

Google a lease calculator to see the formula which breaks down the Interest+Principal. you would be amazed.

i agree. do you think that if they (dealers) made more money "selling" a car that they would push leasing? leasing is not the best spent $ for the most part, (there are exceptions to everything). they tell you that you can drive a more expensive car by "leasing". everyone seems to forget that when you buy a car you buy a car (oh, you can call it leasing if you want). you are only "renting/leasing" a car if you get it from hertz, alamo, ect.. A LEASE IS JUST A NAME FOR A FINANCING TOOL. oh yea, you "buy" the car. the lease is just the "financial" word for your car LOAN.

no need here to flame from car salesmen...this is just MY opinion.

jsatek · 12-13-07, 11:05

I (my family) owned a Cadillac dealership for over two decades. I openly flame saleman, I acutally did it more when they worked for me!

I could tell you stories...

Darren F · 12-13-07, 11:23

if you lease or finance a car it doesnt make a difference to the dealership...They make their money either way...There are time they make more on a lease than a finance and there are also times when they make more on a finance than a lease....All a lease is, is another way to finance a car with a lower monthly payment and less money down to get to that payment...whichever way you choose it should be based on what your wants and needs are...new car every 2-3 years, lease....keep a car longer than that finance it or buy it....

Jayhawker · 12-13-07, 11:49

They both have pros and cons. Leasing is a great way of having a car if you budget a car payment monthly, and like to get a new car every few years. The miles you put on a lease only hurt you if you turn the car in and walk away. Most manufactures will eat the last 6-8 payments of a lease if you trade in for another vehicle that they make. VW was very good at doing that.

Leasing "generates" more profit for the dealership and the mfg. What 99% of the population doesn't realize is that lease payments are based off the selling price of the car. If you remember that last car you got, if the salesperson had any brains they pitched this..."mr. jones, you payment is 400 a month for 60 months with 3500 down ...(blah blah blah) OR i can get you into that same car with 2k down for 319.67 + tax"...Most Americans are payment buyers and if the payment fits in the budget, they usually take it.

If you lease, negotiate the selling price of the car, not the payments. The lower you get the selling the price, the lower your payment is. You should know what you can afford and the #'s will fall into place.

Want more tips????? Read ON.....

Leg- term for over inflated payments that are quoted to the customer for the finance dept.
example; 25k car, 5.9% for 60 mos= 482.16. the manager will pencil 497.93 for 60 mos at 5.9%, thats a difference of 946.20 of profit for the f&i guy. "mr jones, for another 22 a month, i can throw in an extended warranty and credit life/disability......well, what if i can do for 13 more a month".....you already paid for it and are now giving more profit.

buy rate- the bank is offering the dealer 6.5 for "a paper", and they are contracting you at 7.5-8%. 13.5 for bad credit and the dealers are getting 17%. make sure you know if the mfg is offering any incentives before you go shopping.

in most cases, if you have good credit, take the rebate over 0% if it's 2500 or more. You won't make up the difference in rate compared with the rebate, assuming a 25k car.

know what your trades worth and don't get insulted when a dealer offers you 1k or more back of book of trade in value. i was very good at hitting trades and making the owners feel like getting rid of the car was the best thing for them. go on kbb.com and get an idea of what it's worth so the dealer doesn't "scoop" your trade.

last day of the month is the best day to buy. dealers are very aggressive to meet goals. i had to put $3500 over book to make a deal, but it brought the dealership a 60k credit in allocations for hitting 200 cars "rdr'd". for those of you fortunate enough to be in a climate like Phoenix, another great day to buy is when it's raining. not many folks go buy a car in the rain. they know it will be sunny tomorrow and dealerships hate to blank on any day.

never buy at the first lot. ex---here in Phoenix, we have 8 Honda dealerships. when i bought my Civic, I went to 3 dealerships before i was happy with my #'s, also having 5 years experience was a huge plus. it's amazing that people will go to best buy, circuit city and few other electronic retailers to save a 50-100 bucks, but won't shop for a car to save possibly a grand.

jimmie jam · 12-13-07, 12:17

jayhawker,

thank you for your honest comments. i have been at this game for 34 years and only wish more consumers were more educated. unfortunately, the auto business along with a few other "must have" consumer products/industries (financial) have been able to keep up an unfair advantage. the internet is the best thing that has happened to the "typical" consumer along with people like you who are willing to share the information.

education is the key to freedom. i'll buy you a drink at the B-J next month.

Darren F · 12-13-07, 01:10

Were any of you guys in the High Line car business? Because from reading what is going on in here sure makes me glad that I am in the High Line business because its not like that

jsatek · 12-13-07, 01:55

I dont know if you would consider Cadillac "high line". But as the owner, I qualify as "high line".

We had Delorean back in the 80's and an insane high line used car lot at the Cadillac store, 60 vehicles starting at about 30k and going over 100k.

My dad is now involved in a BMW store. Some shenanigans, but not as "sleazy" as say a Chevrolet or Toyota store. Different customer. I thought the Cadillac store was pretty legit, the used cars were run properly, as the main profit center should be. We had excellent employee retention. A GSM, GM, and Service Manager for over 10 years each.

jimmie jam · 12-13-07, 02:09

Quote:

Originally Posted by Darren F

Were any of you guys in the High Line car business? Because from reading what is going on in here sure makes me glad that I am in the High Line business because its not like that

darren, the "high line" business is, in reality, a small portion of the new car volume albeit much greater today than 10-20 years ago. there are exceptions to every store and demographic. the majority of "high line" consumers are somewhat different than the "typical" consumer and are treated in a different manor. every store is different. the "average" joe typically gets "worked" if you know what i mean.

Jayhawker · 12-15-07, 08:15

Most "high line" autos you see going down the road are leased. If I were to go back into the business, I would only sell a "high line" product. It's so easy to tell a customer ..."you want to negotiate the payment on this car? maybe you should go look at that the other car you talked about"...and yes, I have said that to a customer who was beating my salesguy up over $15 a month. Another nice thing with "high lines" you deal for the most part with customers who have good to great credit and they can afford what they are looking at. There was nothing worse getting a "paying deal" and having the sales person all pumped up till we pulled credit and having to tell him all the profit was gone if he wanted a unit out for the day.

I remember when Phoenix only had one Mercedes dealership (that's all we needed) and only one Audi store. Now there are 4 Mercedes and 3 Audi. It's so competitive now and more and more consumers are getting internet quotes it has lead to this....

..."mr jones, i will sell the car for 28k".....mr jones goes to get the car, and sees the price is $800 more than the quoted price..."wth is this" mr jones asks, "well, the car the desert package (which is total bs) and I am selling the car for 28k as promised, but i have to add the $800 to cover the cost of the desert package"replies the sales guy.... I think 90% of the dealerships are doing this now. That's the only way they are able to hold any profit since they are quoting invoice or less on line.

If you are getting quotes on line, get the "OUT THE DOOR PRICE not the selling price, so you can have a fair comparison when shopping.