Leasing actually worked for me

CBartowski · ‎02-15-2021

Figured I'd share an actual positive leasing story, who knew.

I decided to lease my 2019 Grand Cherokee, for some reason, I think I was mostly looking at monthly payment, back in 2019. Turns out, I asked the lease holder, US Bank, what my pay off would me (end of lease is still a good 18 months away). Here are the numbers

-Sticker price in 2019: ~$40,500.

-Negotiated monthly lease payment: $350 for 39 months with $3k down

-Pay off value for the car: ~$20,000

So for a 40k car I am spending total $13,650 (payments) + $3k (down payment) + $20k = $36,650.

Am I missing something? This seems like it actually worked out. Keep in mind all the interest and such is rolled into the payments.

Crazy to actually see a positive leasing story.

Anonymous · ‎02-16-2021

The only point of contention I have is the down payment.

Let's go with round numbers $3,600 down saves you $100 a month (roughly).

However if you total your car you lose that and have to start with another $3,600 down to get the same deal.

My advice is to take that $3,600 and put it in savings and pay yourself $100 a month for the same net effect on the lease.

This way if month 6 the car is totalled you still have $3,000 in the bank towards offsetting the new lease versus having to cough up another $3,600.

I always purchased but with COVID and driving less I just leased my first car with 10,000 miles per year.

My wife however always leases so I do have some experience.

My advice aligns with what they say on lease hacker too.

Shooting-For-800 · ‎02-16-2021

There are plenty of good lease deals out there.

As long as the numbers work, they work.

Leases get a bad rap because so many people use them toget a car they can't afford or they get a new leases every few years so they never own anything.

Congrats,

Rebuild started in 2014 - $100k unsecured credit in 2017 - $500k unsecured credit in 2024.

DON'T WORK FOR CREDIT CARDS ... MAKE CREDIT CARDS WORK FOR YOU!

mich800 · ‎02-16-2021

A few things. 1. no one purchases at sticker price. and 2. you will need to pay sales tax on the buyout. 3. what will the actual used market value for the vehicle be at lease end.

CBartowski · ‎02-16-2021

@mich800 wrote:
A few things. 1. no one purchases at sticker price. and 2. you will need to pay sales tax on the buyout. 3. what will the actual used market value for the vehicle be at lease end.

So in the quote I got from USBank, the taxes and the BS "lease purchase fee" was all included in the final buyout quote a few weeks ago.

Judging by the research I've done so far, the value will be at or more than what I will pay for it.

Good point on the purhcase price! I'm still going to mare this in the win column, basically just because I didn't get screwed ha!

lhcole77 · ‎02-16-2021

Nicely done @CBartowski

Used/CPO car prices are higher right now due to Covid so the math is working out in my favor as well. Plus, the vehicle has barely been driven in the past 13 months so it still feels so new to me.

mich800 · ‎02-17-2021

@CBartowski wrote:
@mich800 wrote:
A few things. 1. no one purchases at sticker price. and 2. you will need to pay sales tax on the buyout. 3. what will the actual used market value for the vehicle be at lease end.
So in the quote I got from USBank, the taxes and the BS "lease purchase fee" was all included in the final buyout quote a few weeks ago.

Judging by the research I've done so far, the value will be at or more than what I will pay for it.

Good point on the purhcase price! I'm still going to mare this in the win column, basically just because I didn't get screwed ha!

I've only leased a couple times because I put too many miles on. But the times I have the residuals were really close to the market value at the end. So the advantages are, you get the rent a car for a few years and then buy a used car at fair market value but you know who owned it prior and what maintenance it had.

sccredit · ‎02-17-2021

I have leased two cars - a Toyota Tundra and DW's current Infiniti QX50. The Tundra had equity in it at the end but a higher monthly lease price than, say, an F150 or similar. We sold it to our local dealer and walked away with the equity. The QX50 had a dirt cheap monthly lease payment but will absolutely not be worth the residual value at the end. When we leased it Infiniti had just released the all new redesign of the QX50 in the summer of 2018. The residual was ridiculous (over 60% on a 15k a year lease) and the money factor equated to 0.25% interest. We've enjoyed the low payment for a very nice car but will be handing it back later this year and buying her next one.

CBartowski · ‎02-18-2021

@mich800 wrote:
@CBartowski wrote:
@mich800 wrote:
A few things. 1. no one purchases at sticker price. and 2. you will need to pay sales tax on the buyout. 3. what will the actual used market value for the vehicle be at lease end.
So in the quote I got from USBank, the taxes and the BS "lease purchase fee" was all included in the final buyout quote a few weeks ago.

Judging by the research I've done so far, the value will be at or more than what I will pay for it.

Good point on the purhcase price! I'm still going to mare this in the win column, basically just because I didn't get screwed ha!
I've only leased a couple times because I put too many miles on. But the times I have the residuals were really close to the market value at the end. So the advantages are, you get the rent a car for a few years and then buy a used car at fair market value but you know who owned it prior and what maintenance it had.

Yea I've been really surprised. I've found even if I don't plan on keeping it, mileage won't matter if I just buy it at the end then sell it, might be cheaper or "lose less money" than paying the premium on the mileage overage. I think I'll keep this one which helps, I also am well over mileage.

4sallypat · ‎02-24-2021

Past 20 years I have leased cars (BMW, Land Rover, Honda).

Most all of them were not worth keeping due the inflated residuals, huge depreciation hit and repair costs were high.

Luckily was able to walk away from many of the cars I leased.

My current ride is a 2018 Honda Clarity which I leased for $285/month, 12K miles per year, plus tax for 36 months.

I love this car so much that I am going to buy her out at the end of the lease!

Residual is $14,400 for a $35,000 MSRP car.

Even after the $7500 federal credit, $3000 dealer discount, $2000 CA CVRP rebate, $1000 SCE utility check, and HOV sticker - the car is definitely worth keeping!