iamhomin

My cousin stepped into a 60 month lease term on a 2002 3.2 TL 4 years ago.

I never knew or was interested in his lease until yesterday when he showed me the monthly statement of $440 a month.

He said he put a downpayment of $2,500 and has around 14 months left in his lease, so I did a quick calculation.

$2500 (downpayment) + (60 * 440 ) = $28,900.

He could've easily made the purchase at the same rate and could've kept the car.... but anyways, the question:


From what I understand, when you want to purchase the same car at the end of the lease you have to pay the difference in the residual value, correct?

Also, what is the best thing he could do in this leasing term?





Thanks in advanced.

D_Nyholm

He may be able to terminate his lease early. Certain companies will do that for you. Then, they take into consideration the Residual value of the car and the amount of the buyout. If the residual is high enough, the difference between that and the buyout could take care of any fees that he may incur with it.

He needs to call the leasing company and see what their buyout system is. Mileage will also be taken into consideration on the lease. If he is over mileage, he may be pretty screwed. Actually, I think the leasing company screwed him already!!

Pure Adrenaline

iTrader: (2)

You should never lease beyond a 36-month term. After that, you just get screwed.

The best thing to do right now is try to get out of the lease early, I guess. Or dump it on www.swapalease.com.

scottt

My lease on my 2003 TL-S w/Nav was for 42 months, nothing down (except 1st, security, acq, taxes) for $389.90 a month. Never EVER lease a car longer than its warranty.

He can get out early, but is probably WAY upside down. He may just want to take his lumps and wait it out and turn the car back in, in the end.

NSXNEXT

iTrader: (2)

What's the scam here? He just didn't do his homework. Buyer Beware.

utvol9903

Save your money and dont lease a car period. It ist the worst option you have when buying a car, because you are being fleeced.

D_Nyholm

Hmm, i wouldn't state that. For many people, leasing can be much better. Especially if you can write off the payments.

Leasing isn't the best for some people, for others, it is the only way.

iamhomin

I guess he doesn't have many options.

ResidualFreedom

I got into this conversation with a friend of mine, who was a dealer for GM for 5 or 6 year and for the past 5 year has been running a used car dealership. The total cost of a four year lease PLUS buying the car out after the lease is..... get ready..... DOUBLE THE COST OF THE CAR PLUS $600!!!!!! That was his way of getting a rough estimate, however that was from years of experience so I'm sure it was accurate. I couldn't believe it... why would someone lease a car and buy it out?

Hurleysurf24

so let him buy the car at the residual of 5000 dollars turn around and sell it and get somecash back

98tlracer

So it seems like if you ever do a lease, don't ever buy it out after its over right?

Hurleysurf24

are you kidding me

you can make some money if the market is in your favour on several cars .. ie.. if the depreciation is less then what was anticipated .. hence buying it at residual and being able to make some cash on the side by reselling it

Lawaia

He can try to get out of the lease early but not without paying off the remaining term. He signed a contract which binds him to a stream of payments. Even if he decides to turn in the car to start a new lease, the company will roll the existing lease payments into the new deal.
Either way, pay it now or pay it later.

utvol9903

This example sums up why leasing is a bad idea, and why you lose money. Basically you are just renting a car for a couple years with nothing to show for it at the end of the lease.



Card debt, buying and leasing?

A young man wants to know why he should not lease a car? It seems like a better deal than buying. Leasing stinks. Here’s why. Take a 2001 Honda Civic? Sells for $18,000. If that car in four years loses 60% of value it would be worth $11,000. You've lost $7,000 in value. If you lease this Civic and bring it back to the dealer in four years and you have not paid them $7,000, then they have lost money. You have to pay them the depreciation value or they lose money. They aren’t in the business of losing money. They make the depreciation up and a profit, mostly in interest on the loan. You can’t even get close to a cash transaction. If you could lease a car for less than it goes down in value then it would make sense. You’re letting someone else take the hit. That’s when renting makes sense. “Someone has got to lose money, and it ain’t them.” Food for thought: Smart Money Magazine says the number one most profitable thing on the car lot is the financing contract. Number two is the repair shop. Number three is the extended warranty. Number four is the sale of vehicles. What kind of business are they in?! Buy a slightly used vehicle and you can get it for 25% off sticker. You’ll always in this way.

03CoupeV6

Far be it from me to correct someone's math, but how do you figure that $7,000 is 60% of $18,000... it's less than 50%.

60% of $18,000 is $10,800

EH03TL

I guess I am lucky. My lease is 440 also but it is for 2 years, includes insurance, tags and maintenance, nothing down and is 30,000 miles per year. My lease is not through normal retail channels, though. I have people here tell me how my lease is such a bad deal, too. I can't believe it. But I do hear alot, buying a car that you leased for a few years is bad because you have paid for it twice. Well how can that be? If you lease the car and pay on it until the lease is up, you have paid for the portion of the car you used and the owner has taken a hit on the value but since the owner is a 3rd party looking for profit, you pay a little more yet have a brand new car. If you buy the car out, you're buying a fairly good priced used car (except if the residual is ridiculously high for some reason). Its not fair to compare the 2 even if its the same person and car. Lets say the lease is 3 years and you buy it out at the end, you had to pay for some kind of car for the last 3 years, right. Are you going to drive a Ford Festiva or Geo Metro for 3 years then buy a TL from a pal of yours when his lease is up? Are you going to walk for 3 years and buy an off lease car from somewhere? Of course not. Leasing gets people into cars for less per month which is attractive then when the car is a little older, the purchase payments are cheaper too. A lease is 3 years, lets say, then the buy is a 5 year loan. Than's 8 years. If you buy a car new and finance it 8 years, is that going to be that much cheaper in the long run? Probably not. It depends on how much money someone has and their credit. A person who has money of course will just buy a car with cash. My in-laws buy every car outright. A Camry, Pilot and Vette, all cash. Do they need to worry about it? No. Now me, well I can't do it so I lease. If I did not have my special deal on my TL, I could not afford it and would still drive a Corolla like I did in 98-01. The person who started this thread, your cousin probably did fine when he leased. Hindsight is always 20/20 and it may not seem like a good lease now but at the time with whatever circumstances he was in, it was appropriate and he got the car he wanted. You can't take money with you to the grave so why not spend a little now. Have fun.

EH03TL

I forgot to add, if you lease a car then buy it, you're buying a used car with a known history. That's better than any carfax or trustworthy seller. Its a great hidden value. I would never lease a car for 3 years then buy the next persons lease turn in, would you? Oh and I am in the auto industry but I have nothing to do with sales or finance of any kind.

phipark

sounds like he was/is just an idiot. I pay less for my 2002 and I OWN it, well the bank does.

Shift_it

You can purchase it what ever the "BALOON PAYMENT" is. For that you might as well no, b/c I am sure he prob paid way more that to interest of that lease he had. basically he got corked screwed!!

Also miles is really important to. If he was to just give it back on the terminate of the lease make sure he is not over the miles, they usually charge like 10 cents or more per mile over the end of lease contract.

All I say is fuk a lease!! That car is mine!!

F23A4

As such I'm buying out my Maxima's lease in May.

As I'm done with buying brand new cars, $13k (res.) on a garage kept well maintained 2002 Maxima SE with a known history is a used car deal that's hard to pass up.

Whizzbomb

I wasn't planning to buy when my lease is up, but I love the car, esp with the mods that I'm going to buy it when my time is up.

I'm gonna be in this car for a decade

Joe

parvo99

Leasing isn't exactly a bargain, but let's be realistic, double the cost of the car plus $600?

The point of a lease is that you can get lower monthly payments vs purchasing the car. Plus, to double the cost of the car, the buyout price would have to be more than the original price of the car.

F23A4

True dat!! I'm definitely in it for the long haul. (But that's not to say I wont pick up something like a used G35C in a couple of years. )