OMG Suze Orman says LEASE!

[Creditaddict]

1. That's the point of a lease that they are betting on the value down the road and you are renting for the term of the lease and you can turn it in at the end and walk away regardless if it's not worth what's left or not.
2. I'm mad at our 39 month Kia lease, I would never lease beyond 27 months in future... Love the 24 month Infiniti leases!!

[Shogun]

I've thought about leasing, but I've never done it.  I have 3 vehicles right now.  My Cadillac and Chrysler 300, both of which are paid off.  And then there's the Chevrolet Sonic I bought for my son this past summer

I guess both has its perks.  You can lease a more expensive vehicle than buy.  Plus when it's done, you can walk away.

But my Cadillac has been paid off for quite some time now.  Still runs great, looks great.  Every day I drive it, it's like putting money in my pocket.  "No Payments".

The Chrysler 300 is paid off, and has just 22K miles on it.  So I'm thinking it has some time to go before it's done and buried.

It's just up to the individual.  But I have been looking at the Mercedes leases...  I do like their cars.

[Plasticard]

Sometimes I wish I could lease too, get a new car every two to three years. However, driving 25k miles a year automatically kicks me out of leasing, since would be crazy to pay the over milage fee after the 15k per year max on a leased vehicle. Another upside, if you ever want to mod the car, you can do so much more easily with a purchased vehicle than a leased one. 

[coterotie]

You're the guy who should take advantage of leases by buying the off lease low miler that has been well maintained.  You let someone else take the new car depreciation and you pile the miles on for a year and flip it.  Done right you probably drive the car for nearly free.

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@Plasticard wrote:

Sometimes I wish I could lease too, get a new car every two to three years. However, driving 25k miles a year automatically kicks me out of leasing, since would be crazy to pay the over milage fee after the 15k per year max on a leased vehicle. Another upside, if you ever want to mod the car, you can do so much more easily with a purchased vehicle than a leased one. 

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[black_citi]

Leasing isn't for everyone of course. It's basically determined by your personal needs. If you love owning a new car every 3 years and you have the finances to support it, go for it. I'm a car freak lol. I love cars but i'm not sure I would do another lease.

There are those that hate leases, those that love them and those that are in between. I'm the "in between" type. I leased a car in 06 and for the first 6 months I liked it. After that, however, I hated the car with everything I had lol. The lease was for 4 years but the car got repoed in 09. To be honest, I didn't care lol.

That repo is 5 years old now and the car I have now is financed. Although I would love to have a nicer more expensive car by leasing, I think I would stick to cars less than 20k by financing. Its easier for me.

[ScoreBooster]

In December, I leased a 2013 Lincoln MKZ for 24 months. I put $1K down. Due to high manufacturer-rebates, the monthly payment was significantly less than financing.

I leased because I didn't want to be "bound" to an additional car-payment for too long. In addition to that, I can get a new car every two years without spending a dime on repairs, new tires or any kind of maintenance.

My second car is financed. That's my five year old "workhorse" and will be replaced by a new ride in about a year when the extended warranty expires and new tires would be due. The replacement will be financed, too.

This gets me a new car every two years while taking advantage of the positive aspects financing has to offer on the other which will be kept much longer.

There simply is no "it's always better to lease/finance"-scenario. You simply have to know how you are going to use a particular vehicle and how long you want to keep it.

If somebody tells you "It's ALWAYS better to...", you should be very careful. That individual probably doesn't know what he/she's talking about.

[ScoreBooster]

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@RushXTC wrote:

Now I will NEVER lease a car for sure! I was going to end up paying $15,000 more than the car is worth TODAY, Imagine 4 years from now? When the car is only worth $20,000 ($41,000 car right now) and you STILL have to pay those $20,000 even though it's a 4 year old car... lol... not cool!

I say purchase is the best way to go...

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After a lease contract ends, you don't "HAVE TO" pay anything since you can return the car - and most people who lease do just that.

If you want to own the car free and clear at some point in time, leasing is most likely not the way to go in the first place.

Again, there is no "best way" because the right way can only be determined by the individual (and his/her circumstances) who has to make the decision.  Plain and simple.

[ScoreBooster]

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@Anonymous wrote:

Why are people who can't afford down payments buying/leasing new cars every few years, anyway? Seems like they'll always be upside down or renting a vehicle.

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Leasing has nothing to do with not being able to afford to buy. You will be surprised by how many BMWs, Mercedes' and other expensive cars are leased. Leasing a new BMW is actually the norm..

Another lease-advantage: My credit-report. Although I only put $1K down, my credit-reports show an account with a $14K-balance and only 23 payments left. That's all I'm committed to. In a few months, that balance will be below $10K.

When you are in the market for - let's say - a mortgage, having a $15K-balance and a $600-payment for 23 months certainly looks better than a $50K-balance with a $900-payment for 59 months. That's what I'd be looking at if I would have financed the same car with the same down-payment.

[Anonymous]

How Does Leasing Affect my Credit Score

First, you must understand the components that constitute your FICO score. There are five elements that are used to determine that all-important number: 35% of your score is weighted towards your payment history,30% is weighted towards the amounts owed on your credit cards, 15% is devoted to length of credit history, 10% is generated by new credit and 10% comes from types of credit used.

There are also four categories of debt financing. Revolving, Installment, Mortgage, and Government.  Financing of a vehicle falls under the component category of Installment Debt. So, the question to ask yourself is how do I use a vehicle to raise my credit score? Experts like Forbes, MyFICO, Experian, TransUnion and Capital One Bank says the No. 1 indicator of good credit is a long history of on-time payments. In fact, MyFICO estimates 30 percent of your score is your payment history. You want your established accounts to be open for a good period of time with no derogatory information on your report. Paying off your car loan early shortens the amount of payment history entered on your credit report, which does not increase your credit score. So, how does leasing increase your credit score? By leasing your vehicle for 2 or 3 years and making punctual payments, not only will you have a lower payment as indicated in the last month article, but you will increase your credit score. Here’s how: If we use a 2016 Toyota Camry SE with a MSRP of $24,675 and a sale price of $20,877 with a 60% residual and 3% interest your  payment will be $233 per month for 3 years. Now, if you were to lease two different vehicle for two terms you would have an indication on your credit report under the Installment category of $20,788 times two. So, in your vehicle installment history you would have a total of $41,576 in six years. Leasing your vehicle would improve your credit score dramatically. Improving your credit scores, will allow  you to purchase future big ticket items for far less, based on the lower finance charge for purchases. Leasing becomes a financial tool in helping you take a depreciating liability and turn it into an appreciating asset.

Final thought: Retail financing your vehicle for 60, 72, or 84 months and paying it off, does NOT constitute your credit score will increase. Actually, Experian says, it will decrease. The most cost effective process to spike your installment credit score, is to Lease your new vehicle for 2 or 3 year terms.

[Creditaddict]

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@Anonymous wrote:

How Does Leasing Affect my Credit Score

First, you must understand the components that constitute your FICO score. There are five elements that are used to determine that all-important number: 35% of your score is weighted towards your payment history,30% is weighted towards the amounts owed on your credit cards, 15% is devoted to length of credit history, 10% is generated by new credit and 10% comes from types of credit used.

There are also four categories of debt financing. Revolving, Installment, Mortgage, and Government.  Financing of a vehicle falls under the component category of Installment Debt. So, the question to ask yourself is how do I use a vehicle to raise my credit score? Experts like Forbes, MyFICO, Experian, TransUnion and Capital One Bank says the No. 1 indicator of good credit is a long history of on-time payments. In fact, MyFICO estimates 30 percent of your score is your payment history. You want your established accounts to be open for a good period of time with no derogatory information on your report. Paying off your car loan early shortens the amount of payment history entered on your credit report, which does not increase your credit score. So, how does leasing increase your credit score? By leasing your vehicle for 2 or 3 years and making punctual payments, not only will you have a lower payment as indicated in the last month article, but you will increase your credit score. Here’s how: If we use a 2016 Toyota Camry SE with a MSRP of $24,675 and a sale price of $20,877 with a 60% residual and 3% interest your  payment will be $233 per month for 3 years. Now, if you were to lease two different vehicle for two terms you would have an indication on your credit report under the Installment category of $20,788 times two. So, in your vehicle installment history you would have a total of $41,576 in six years. Leasing your vehicle would improve your credit score dramatically. Improving your credit scores, will allow  you to purchase future big ticket items for far less, based on the lower finance charge for purchases. Leasing becomes a financial tool in helping you take a depreciating liability and turn it into an appreciating asset.

Final thought: Retail financing your vehicle for 60, 72, or 84 months and paying it off, does NOT constitute your credit score will increase. Actually, Experian says, it will decrease. The most cost effective process to spike your installment credit score, is to Lease your new vehicle for 2 or 3 year terms.

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It's incorrect what you are stating will report as installment debt when you are leasing vs traditional finance.

When you lease only the TOTAL of your lease payments over the term are what is reported as your total installment debt... So in this case, your $21k sales price with only 40% being covered during your 3-year lease payment would report or under $9k total!