To some this might not seem like a huge thing, but to me, the total opposite. While my lease ends in May of 2020, I intend to buy it, for a couple months at least. Don’t get me wrong, I absolutely love my car, minus all the gauges being totally red (took me a week to realize there was a fuel and temp gauge). I’m excited because we may see a return of the hatchback, which is a huge deal to me. I’m optimistic that we will have the option of hatch and sedan, but every time I see a hatch I feel absolute envy. Just my two cents.
I'm no financial expert or anything, but that doesn't sound like a good plan to me. Tacking on that interest to your car just to sell it pretty soon after. Just my .02
In just the first 10 months of the lease, I’ve put over 26000 miles on it. My cap is 30000 for all 3 years. I often have to travel for work. With over 2 years left, the only logical thing to do would be to buy it for at least a couple months.
To digress on minutiae four a second, red lights are the one color that does not distract from night time vision — and why many tractors (as in tractor trailers), have at least some red lights in the cab for night driving.
I love my red dash lighting, and like the OP, love my ‘17 WRX — though also have hatch envy. When the next WRX comes with a hatch, that will be the only thing that would cause me to sell my current WRX.
Since trading in my WRX, I forgot about those red gauges. Then a couple months ago I saw my friend's Forester at night and I was reminded of it. I don't think they'll make a return since they already switched to white but I'm eagerly awaiting the redesign so I can get back in.
Not at all. WRX lease is a better deal than buying but hardly anyone leases anyway
Take a base WRX for instance. The interest rate on purchase is 2.9%, but the lease rate is 1.92%. Also consider that the lease comes with free gap insurance and a $1000 damage allowance, and the buyout at lease end is crazy low, I would lease it.
Leasing's not a scam, it's a simple financial arrangement. Sometimes it works out better than buying, sometimes it's a wash. It depends on a lot of factors--mileage, residual value, interest rates, etc.
Dealers wouldn't lease if they didn't make money, but then they wouldn't sell you a car if they didn't make money either.
I have only leased one vehicle in my life because I drive usually more than 20K miles a year. If you use a car for work, leasing is a great way to take advantage of tax benefits.
Most American trucks I would probably lease to buy, if you like extended cabs. rebate on a Double Cab Sierra 1500 are usually $8000 to lease and about $2000 to buy. In that scenario even with usage tax, tax to buy , and finance charges for an A tier shopper you probably come out $1500 ahead on the lease. And the great part, if for some reason you don't like it.. or need to walk away.. you can without losing money.
I think leasing is good for "flexibility" but there seems to be a correlation between those who avoid leasing and instead purchase a vehicle and keep it for a while than those who want the "newest" thing every two or three years. I think it financially is better to... well... finance... I'll use myself as an example.
Let's say my car was around $27k -
If I financed it for 60 months, like I did, with the interest I wound up paying around $30k -
If I chose to lease it for however long I would have paid maybe $6k total -
Now I can sell my car for anywhere between $16k-$18k if I get the right buyer -
I've had my car 4 years with over 45k+ miles on it -
I agree that I would have saved money in the short term but not in the long term, since I enjoy keeping cars for a while and really "using" the vehicles without restriction (lease = miles limited), it makes more sense to finance than lease -
I'm not putting anyone down who chooses to lease. I'm sure there is nothing wrong with it. I've yet to meet someone with a six-figure salary and a college-education though who chooses to lease over financing, especially if you plan to buy the vehicle out after the lease. That's just from my own experiences and my own limited opinion.
I make close to 6 figures and have a college education and I leased my 2018 WRX. My payments are 310/month. Residual Value is 54% of my sticker price, and buyout came out to be 16500. I think with 3 years and even over the 36,000 miles, with the ridiculous resale value of WRX, I can easily get more than that for the car. It all depends on residual value of the vehicle. Even if you put 40k mileage on the car, a 2018 in 3 years can likely still go for around 20k. That's me being realistic and not over inflating my price that many do on their 8 year old cars.
The only problem with the buyout option, is if you buyout and finance for >4-5 years, then you're in negative equity. But if you can afford to do a balloon payment, or can use the value of the car to trade in for a new car at another dealership, then you actually may be better off.
I think leasing is good for "flexibility" but there seems to be a correlation between those who avoid leasing and instead purchase a vehicle and keep it for a while than those who want the "newest" thing every two or three years. I think it financially is better to... well... finance... I'll use myself as an example.
Let's say my car was around $27k -
If I financed it for 60 months, like I did, with the interest I wound up paying around $30k -
If I chose to lease it for however long I would have paid maybe $6k total -
Now I can sell my car for anywhere between $16k-$18k if I get the right buyer -
I've had my car 4 years with over 45k+ miles on it -
I agree that I would have saved money in the short term but not in the long term, since I enjoy keeping cars for a while and really "using" the vehicles without restriction (lease = miles limited), it makes more sense to finance than lease -
I'm not putting anyone down who chooses to lease. I'm sure there is nothing wrong with it. I've yet to meet someone with a six-figure salary and a college-education though who chooses to lease over financing, especially if you plan to buy the vehicle out after the lease. That's just from my own experiences and my own limited opinion.
The buyer and seller agree to a value of the vehicle at the start/end of the contract term. Based on the expected depreciation rate and the interest, that determines the monthly payment.
As the buyer, you pay $XXX/month to use the vehicle, and at the end of the contract, you have the option of paying the balloon payment (which was agreed upon signing the contract) or walking away. If the value of the car tanks while you own it (e.g., VW Diesel-Gate), you turn the vehicle in to them and they take the loss. If the vehicle doesn't depreciate as expected, you can buyout the vehicle and either keep / sell it at a "profit". If it's about even, you decide whether you want to roll the dice again and continue driving a vehicle under warranty.
I initially leased my STI. At the end of the lease, it was worth ~$6K more than my balloon payment. Had I not developed an emotional attachment, I could've paid off the remaining balance on the loan and put $6K in my pocket.
It's funny that most people don't know how leasing works.. a lot of people are so afraid the big bad dealer have it out for them.
Just do your homework, research before making a decision and you'll come out ahead, lease or buy. A clueless, emotional buyer is a dealer's best friend.
I have the lease/buy debate with my fiancée all the time. She's an economist by training. I can't convince her leasing is a reasonable idea. Sad.
Some of my colleagues in a medical practice used to have the practice (LLC) lease the vehicles, then they would pay quite a bit (~$1000 a month) pretax dollars, and at the end of the lease buy the vehicle for a pittance. Several of them drove higher-end Mercedes. (I think they also took deductions for gas mileage, which according to my accountant is double-dipping and not allowed.) She said leasing for work wasn't a great deal for me and deducting mileage would be a better deal.
I guess I am wrong. I legit didn't know. Now I feel foolish.
Honestly I like to blindly sometimes follow the advice of more successful people I've met in my life, at least when I was younger, since it has helped me. For example back when I was 18 I was told to put my money into the market through Vanguard and invest in the S&P 500 instead of buying lottery tickets. I was told to put a little bit away in your 401k and make sure your company can match it. I was also told that leasing a vehicle, especially if you are leaning towards buying it out at the end, is not financially the best idea.
Alas I was wrong about leasing. I guess it makes more sense, especially with the stronger incentives and more flexible financial options for it.
I apologize if my post came across ignorant or foolish.
Thank you for clearing it up everyone.
(btw: Hope everyone has an amazing Friday and a great weekend!)
Several reasons leasing can be bad:
1) You pay depreciation up front, which may not be such a big deal on a car like the WRX, since it retains a high resale value, anyway.
2) If you like to drive, there will be mileage penalties.
3) If you live in a city or poor climate, you will pay for any "deemed-excessive" unavoidable damages; TBD by the lessor. This will sometimes force the lessee to buyout, just to avoid the penalty.
I'm no finance expert, but I research. If you decide to lease, do the math and then low-ball negotiate the "sale" price and try to get more mileage. Leasing really is a crap-shoot.
Chris the WRX comes with a $1000 damage allowance, very few end up paying out of pocket for damage. Also consider this, If you purchase a wrx and have 1 or 2 fender benders that show up on the carfax, no matter how minor they were, your car is devalued by roughly 20%. If you leased it, Subaru eats that depreciation. Doesn't happen to everyone, but it certainly happens! Also the over mileage charge for wrx is only .15 per mile, so even if you go 2000 miles over your lease, you would owe 300 bucks. Considering there is pretty much guaranteed equity in the residual (ie the car is worth 20k and the buyout is 16500 typically) the overmileage seldom comes into play as any dealer with a brain will buy the car for the residual to resell even if you dont, so there would be no mileage to pay.
Different banks handle it differently but usually the minimum required is just the first months payment and dmv. Some banks do sign and drive but not Chase typically.
I'm no dealer sales , but there shouldn't be any cash required at lease signing.
It all is just leverage to get your monthly payments down.
If your car is 40k, residual value at 50% and you put 3k down, then your car payments should be somewhere around 472 per month. That's only IF the $3000 is put towards sticker price of car.
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