Rob63

Has anyone entered into a 5yr (or 4) lease with thier TL and if so, what kind of terms. Any feedback would be greatly appreciated.

rescueswimmer

Dont do it. First off your going to lose your ass if you do a 5 year lease just in residual value of the car at the end. Not to mention you are responsible for all maintance that last year.

TLGator

I agree with r.s. Conventional wisdom says don't lease for longer than the warranty, and in this case there's no good argument to go against conventional wisdom. Why not a 6-year financed purchase? The numbers can't be all that different. If they are, and you can't afford those payments, you may be trying to buy more car than you should. Good luck with your decision.

markjrenna

I did a four year lease. Couldn't pass up the terms. I'll be plenty happy for four years... and then... another new TL

Leasing is not for everyone though, and most people cannot even qualify due to their credit history. Look into leasing very, very carefully so you understand every ramification involved in a lease.

I've been leasing for a few years now and love it.

PM me if you want to know my deal. As the "End of the Model Year" quickly approaches, you may be able to get a lease at a very nice price.

Mark

Tripp11

One would think that "very nice price" on an "end of model year" vehicle would be countered by the fact the residual is lower at the end of a model year than at the beginning of one.....

Just my $.02.

Tripp11

The "sweet spot" on a lease when I made my deal was 42 months...thus that's my term. Most people think that you're an idiot to lease more than 36 months due to the maitenance one has to put into the vehicle after three years (i.e. brakes, tires, etc...). These items are wear & tear and not covered under any warranty. I know that based on my driving style and miles, I'll change out my pads on the front at least 2 times and might need front rotors replaced too before those 36 months are up. Additionally, I'll change all 4 tires due to wear as well before those 36 months are up. Thus, I stretch it to 42 months and get some use out of my dollar on those tires.

Once again, it's all based on driving style and miles......but I agree with those folks on not leasing it longer than the standard warranty period which I believe is 4 years on this car.

scottt

NEVER EVER lease a car longer than its warranty. PERIOD!

1SICKLEX

Leasing for anything over 12-24 months is????????? Unless you like losing money but like driving new cars. Most leases are for 12k-15k tops a year in mileage, which most people BLOW bye and have to incoropate the mileage penalty into the next lease of pay more $$$$$ for exceeding mileage.

To each his own. I will say a 60month lease is NUTS.

markjrenna

You are correct, the TL's residual went from 52% to 51%. In my case, $6.50 per month. Not a big deal. But that is money in their pocket and not mine.

What you need to be careful of as well is the Money Factor. When I started to look into the car the Money Factor was .00195. When I finally made the deal it went up to .0022. The reason the MF went up is due to economic conditions. Prime Rate increase, FFR increase, demand for the vehicle. Take your guess...

In my opinion, timing is everything.

Mark

Rob63

The 4yr lease seems to be the most logical for me...I drive fairly low miles and thus the wear and tear issue really would not be that big of deal. I know so many people on this forum are strictly against leasing, but I enjoy the comfort of having a car under warranty, not having to deal with selling a used car when your ready for something else, and the ability to constantly have new models that leasing enables. Thanks for all the input, anymore idea would be great.

Thanks

Rob

Tripp11

Well, I think no more than a 4 year lease makes sense to me.....all my previous cars have been leased with terms ranging from 36-42 months.

You might want to try out a little bit of reading at www.leaseguide.com. I found it to be quite informative when I started leasing cars.

I would say that a capital cost reduction/down payment is a stupid thing to do though on a lease. My leases have always been $0 down, except first payment.

iamhomin

Too long, too much. Stick with financing if it's longer than 3 years.

rescueswimmer

Since this car has a 4 year warranty 4 years is not that bad. Here is what you have to look at. When you lease a car its like renting an apartment when your time is up you have nothing to show for it. Now leasing for 2-3 years, yea your getting a new car but your not getting an asset either. If your leasing cause you cant afford to buy then maybe you should jump down a class. If your leasing cause you just dont care about equity and want something new to drive every couple of years then lease. If not buy.

Rob63

I just do not believe the equity argument makes much sense b/c unlike a house, a car is a DEPRECIATING asset.

VOdoc

Rob,

I have leased 5 cars but bought my TL. I now drive about 18,000 miles/year so leasing has become prohibitive, plus on the TL the lease numbers were not compelling. Your argument about renting a depreciating asset makes sense IF:

--the lease term is short enough to avoid any major wear & tear or maintenance
--you are covered under factory warranty for the full term of the lease
--the lease is subvented by the manufacturer such that the money factor is CHEAP
--the residual is high enough to keep the payment ultra-low OR you are thinking about buying the car at lease end (then a low residual could be an advantage)
--you do not put any $ in up front (N.B., if the car is totaled, so is your cap cost reduction!!)
--the monthly payment is significantly lower than a financed purchase would be
--gap insurance is included at no charge
--you are certain your needs will not change during the term of the lease (e.g., new baby, longer commute, etc.)
--you intend to get a new car every 2-4 years no matter what

Best of luck with your decision! I was underwhelmed with the lease deals available on the TL. Thus, I purchased for a monthly payment only a few $ higher (60 months, 2.9%).

Regards,

VOdoc

rescueswimmer

Rob I understand what your saying about it depreciating. but if you look these are just b.s. numbers

4 year lease nothing at signing

Term 48 Months Lending Source Lease Quote A
Mileage Allowance 60,000 total miles Current Retail $35,395
Residual Value $15,136 Purchase Price $33,000
Money Factor 0.002 Cap Cost Reduction $0
Mileage Penalty $0.18 per mile Monthly Payment $463
Gap Insurance Included Security Deposit $0
Acquisition Fee Included ($695) Disposition Fee $395
Purchase Option $15,486 Total Due at Signing $463 + tax & license

So after 4 years you have nothing. zilch nada but you spent $22,224

Now If you buy the same car with the same numbers so after 48 months you would have spent 29,520 with the cars residual worth around 15,000 So If I decide to sell my TL for a new model I have spent 7,296 more than the leesee but I also have a 15,000 car the diffrence being 7704.00. I would owe 7,380 still on the car. So at 48 months your about even with amount spent and owed. but 12 months later you own a car free and clear. So this example shows why you should buy vs. lease. You cant argue with the numbers.....

Republican TL

I'll tell you why I like leasing....you never know if the car you get will be a lemon. I have had problems with every car I have ever owned. Bought or leased. If the car I lease has been good to me...I may just buy it, which almost evens out the buy vs. lease arguement. However, with the lease, if your car has become a jalopy....then you can just hand it back in, instead of still owning it and having to go through the trouble of selling it to another person, or worse, getting shafted on a trade in. I like the safety of the lease, but I can definitely see the point on purchasing. If I knew the car was going to be stellar for the next 4-6 years...its a no brainer, but I am not a psychic.

Lore

I agree completely with rescueswimmer, and the way I calculated it in my head (the quick and dirty way) is that after about 6 years (2 three-year leases) you would have spent more than the cost of the first car if you had purchased it AND have nothing to show for it. Like he said, it's like renting an apartment or house. People rent because it affords them a lot of flexibility and the payments tend to be slightly lower. But in the long run, you have nothing that you can call your own.

On the other hand, if I keep the TL for 6 years, I'll have spent my $37,076 + about $2k in interest but I will have a car that I can sell or use as I please.

JT3

The bottom line is that you have to CAREFULLY work the numbers. Unlike traditional financing, most states are much more lenient on what must be shown on the lease contract. It is typically VERY easy to "hide" extra fees, higher interest rates, etc., which can really screw you in the long run.

The basic rule of thumb is: The longer the lease, the more it favors the financing company, and the more it screws the consumer. Of course, this isn't necessarily true if you're planning on "renting" the car for the lease term, and turning it in for a new lease at that time. However, if you're planning on buying out the residual, then typically you stand to lose less with a two to three year lease. I've never seen (not to say that one doesn't exist... just that I haven't seen one) a four year (or longer) lease that doesn't have you paying THOUSANDS more for the car than you would for a conventional loan.

The only exception would be if you paid cash for the residual, but again, if you compare a four year lease with a six-year simple-interest conventional loan, which is paid off after the fourth year (which is basically what you've done with that cash-residual), you'll see that the conventional loan beats the lease every time (again, exceptions are always possible, but unlikely).

I guess, to summarize. The only time leases are "no-brainer" better than a conventional loan is when you're not planning on keeping the car. If you DO plan to keep it, then keep the lease term short, or better yet, go for a long-term simple-interest loan, and pay the car off early (make an extra payment or two each year). In the long run, the numbers will almost always favor this strategy.

Rob63

This is a lot to divulge. I'm still a little weary about buying though b/c I don't want to deal with the headache of maitenance after the 4yr warranty expires nor do I want to have to deal with the disposing of a used car. As I said I don't plan on keeping this car whether I buy or lease for more than 4 years so it might be worth paying a little more just not to have to deal with the all the issues. That is why leasing is attracitve to me...even though I know I could probably come out financial ahead in the long run by buying.

The problem is, I said, I don't hang on to cars for great lengths and I don't want to deal with all the crap.

I kinda find it hard that many of you are driving these cars 7-8 years either....which makes me think that you guys are just more willing to deal with all the junk than I am.

I'm still a little undecided but still leaning towards leasing....maybe I'm just crazy, but I thank you all anyways for your input.

markjrenna

Some good facts from everyone that posted. But since opinions abound here.... Here are mine...

Bottom line is leasing or buying is an individual choice.

I have to laugh at the comment "If your leasing cause you cant afford to buy then maybe you should jump down a class." So very wrong - One way to get in a higher cost/quality vehicle is to lease. I suppose my dad with his business should have bought the Benz instead of getting a new one every 2 to 3 years via lease with no worries (warranty & wear and tear). Bring it to the dealer and leave with a new one.

The whole equity and asset story makes my laugh as well. As soon as you drive the car off the dealers property it has depreciated. What kind of asset only depreciates and never appreciates? No asset. A car is a money losing purchase.

Everyone that has posted has made excellent points on the leasing/buying pros and cons. The facts stand for themselves. To each his (or her) own.

Mark

chlbkl

If the car is a lemon and you have a lease, you're still obligated to pay every month till something gets sorted out between the manufacturer and your financial services company. If the car's a lemon it doesn't mean that you can just give it back with no more obligations. If the car's being repaired, you're also not guaranteed to get an Acura loaner either just because you have a lease. In addition, not making a payment while the car's being repaired may hurt your credit as well that goes to the lease and the purchase.



Oh another thing, if you move while you have a lease, watch out for the sales tax and property (excise tax).
CT, VA, MO, MA, TX are pretty bad about PPT. I'm sure I've missed some states. NY has very high sales tax rate, when you move from another state to NY, you'll have to pay sales tax based on your remaining lease payments. Let's say you leased the car for a month in MA then you move to NY. You'll need to pay sales tax again to NY. NJ has high insurance premiums. Your lease insurance premium may be higher than a loan, depends on what your financial institution requires you to carry. However, most companies have GAP placed on leases in case car gets stolen or totalled. You can get a lower insurance coverage on a loan. But then you'll need to cover the difference if insurance company is only paying what the car's worth and not the complete payoff amount.

chlbkl

Here's food for thought. Instead of the 5 year lease, have you thought about or can you get a 2 year lease? Although I purchase my cars, I do like the idea of 2 year lease. Reason is because it's a shorter lease term, less sales tax and less committment but maybe a little bit higher monthly payment but it might be worth it. After two years if you like it, you can always put a down payment and refi it into a loan. If not just lease another car, something new and exciting might be out as well.

Oswald Vater

I took out a 51-month lease on my TL - the 2nd one I've done this way. It not only lowers my payments a little bit more but any potential issues I might have in that last 3 month period, barring the unexpected, can be addressed in the 48th month. Besides, my dealer took the car back in the 47th month and made the last few payments for me to get me into a new one. I lease mostly because of the business tax break but must admit that I couldn't afford to drive a TL if I had to purchase it outright. Leasing lowers my payments roughly $200 per month less than a purchase.
Another benefit is that, Lord forbid you have an accident, the lease company has to deal with disposal at lease end, a major hit on depreciation if you bought it. Finally, I don't have to convince my wife I need a new car. She already knows I'm getting a new one when the lease is up! FWIW.

Tripp11

This is the best advice in this thread......what's good for one isn't always good for another person.

Perhaps to the person leasing it's more important to have a new car every 2-3 years and not have any major repair costs. Or perhaps to the person buying it's more important to have some long-term equity in the vehicle and actually "see" what you're spending all your money on.

Seriously, just take the time to read what leaseguide.com has on this topic....they do a really good job of breaking down the pro's and con's of each and provide great insight into the old "Hatfield and McCoy" war of leasing vs. buying.

Trust me, there will never be a concensus on any car forum regarding this topic....one person will spout off reasons for their decision and another will spout off reasons for the other.

It all comes down to what's best for your individual situation and what's important to you.

Good luck!

Republican TL

Go back and re-read my post. Where did I say that I would not continue to pay the car? For a lease...I assume the reader would acknowledge a term. Same as a loan. That is what we are talking about on this thread. However with a lease, you have the option of turning it over to the manufacturer at the end of the term, unlike a loan, if your car is crap.

R.I.F. Reading is Fundamental. :sqntfawk:

Republican TL

Another reason for leasing!!

TLGator

If buying or leasing can change your tax burden, that's a special situation. But for most individual taxpayers none of the financial arguments about cars make any sense except one: the most cost-efficient way to drive a car is to buy a reliable model and keep it for years and years and years.

After all, that's what most of us do with, for example, a dishwasher or refrigerator. We pick one with the features we want, the color that fits, and then we use it until it wears out.

But cars are not dishwashers. Cars are part of our culture. They mean a lot more to people than just a way to get from A to B.

For some of us, leasing makes sense because we like changing cars every few years. This is not a financially wise thing to do. Neither is going out to eat, paying $30 for a meal you can make at home for $10. Going out to eat is not about doing the financially wise thing, it's about doing something fun and social and letting someone else cook and clean.

I don't pretend that leasing a car every 3 years is financially sound. But I enjoy driving late model cars and I don't mind paying the premium. And that is what the buy vs. lease decision really comes down to for the average individual: are you willing to pay a premium to get into a new car sooner?

This is no different that a hypothetical argument pitting the TL against, for example, the Accord. Both are reliable and reasonably comfortable for the average person to drive. Most of us could survive driving a Accord and save thousands. But we spend the extra dough because we want to. Leasing is the same.

Good luck with your decision.

Tripp11

Nice post TLGator.....I tried to give you rep points but I have to "spread it around" first.

rescueswimmer

I agree with most of the points that everyone has made. Leasing vs. buying is a prefrence. If you own a business and get a tax break that is alot diffrent than the general consumer. I have to disagree with you on the car/Asset theory. Granted buying a new car is a bad investment since you lose so much money so fast. but its still an asset any way you slice it. This is not ment to be insulting
ASSETS-physical items (tangible) or rights (intangable) that have value and that are owned buy a company or individual.

Even though it depreicates it is still an asset. It has value unlike a lease. but in some cases leases are the way to go but usually not for the consumer.

ndabunka

You leasing guys are fawny! Your renting your car and your talking about hwo others who rent for longer periods are CRAZY? Let's get real for a moment... Anyone who LEASES a car is loosing money from day #1. If they weren't, the leasing companies would not be offering the leases in the first place. Buckle down and buy the car instead of renting it. As long as you care for your car, you will do better in a purchase. If you can't afford to purchase the car, you should not be driving it in the first place.

Tripp11

Hmmm, I better stop leasing my cars then since I'm losing money...

So, just because the leasing companies lease vehicles to us naive folks, then they are making money off of us, right?

Well, if that's the case, then I'm sure "loan" companies don't loan vehicles to anyone since they don't make any money off of that, huh?

They make money whether you lease or you buy - hence the money factor or the interest rate.

It ultimately comes down to an individual's preference and what he or she feels is important to them.

markjrenna

Your definition of "Asset" is correct and, I know that.

My point is to simply make people aware that a car probably has the steepest depreciation rate going of any item one can own.

Unfortunately the average consumer cannot take an "Income Tax Depreciation" on their vehicle. In some cases, individuals can use IRS form 2106 to reduce their tax burden by indicating business purpose. This deduction applies to either leasing or buying.

I am in a situation where leasing makes the most sense in my individual case.

Again, I hope the posts here are informative to the perspective buyer that is torn between leasing and buying. By providing our real word experiences, both pro and con, I believe we are doing that.

Mark

GTFISH

Think of leasing as an insurance policy that guarantees you a minimum value for your vehicle at the end of the lease. You pay a premium for that guarantee and for the option of walking away from the car.
If the car is worth more then you can sell or trade it for the higher value. If it is worth less just turn it back in.

With a purchase, you are taking the full risk of the future value of the car and the cost associated with selling it at a given point in time.

What is the "insurance" worth to you?

Remember the Ford Explorer/Firestone issue? Leasees were probably very happy they had leased versus purchased. Same can't be said for the lender....

TLGator

Thanks, and please do add points when you can. I'm only 1,376 away from having enough for the toaster oven.