Leasing

Curious of everyone's thoughts on leasing vs. buying a truck???? pros/cons etc.

Leasing is easy but very comparable to purchase. My thinking is to research your realistic needs for the truck including past uses and intentions for the future. Look at resale value, reliability, fuel type and mileage expected. Test drive several for fit to your size and comfort. Then purchase (buy) a used truck with modest miles in that make and model. You will often save thousands. Jim

Worst thing we ever did. Leased an SUV years ago, and went to buy it a few years later. The thing was almost as expensive as a new one, had to be re-inspected for the title, and wound up costing us a lot more that just buying a new vehicle. I'll never do it again.......

The company doing the leasing is in it to make a profit. That profit is the additional cost to the leasee over what it would have cost the leassee to buy it in the first place. Hello?

uh? Leasing is a bookkeeping trick to reduce yer TAXES. Ittza also a salesman trick to intice you to puttchur signitiure on the dotted line. (remember, he gittza commission on sales) Theres a "perfume" in NEW CARS that seems to really effect women. (its actually the GLUE used to install the interior) I botta NEW 1995 Dodge DIESEL pick'em-up and putt over 100K miles on it before someone ran into me. (frown) I found a USED 1994 Dodge DIESEL that I could afford and someone ran into me (again!!!) in the meantime I'll drive my RED midlife crisis. (1976 MGB sportscar) ......Dell, yer self-appointed sparkie-meister

Leasing will allow a faster tax write off and works for people in a higher tax bracket. Most leases have a limited miles. My CPA says owning and taking a standard mileage works best for me.


Best advice, ask your CPA.

Right now leasing is ridiculously cheap compared to buying. Why? Because the leasing companies are assuming very high retention values for these vehicles. Which also means that when you turn your leased vehicle, you can expect truck prices to be even higher than they are now. When you lease, you're locking yourself into getting a replacement vehicle in a few years. Yes, you can buy back your leased vehicle, but in that case you would have been ahead to have bought it outright to begin with.

If you intend to get a new vehicle every few years, you don't drive a lot of miles and you're not too rough on your trucks, it probably makes sense to lease. I don't fit in any of those categories, and I suspect most folks here do not.

Here in Michigan, there's no sales tax on leased vehicles. So on a $50K vehicle, you pay an acquisition fee ($300, I think) rather than $3000 in sales tax.

If you do lease, figure out how many miles you expect to drive the vehicle above what you're allowed. Then buy those miles up front; they're MUCH cheaper to buy up front than at the end of the lease. (Figure conservatively, because you lose the miles you don't use.)

leased two different trucks 11yrs apart both were bad deals. one with chrysler always hidden charges ect.

Those lease prices you see in the car ads are only for CERTAIN vehicles. A dealer might have one or two on the lot for that price, and by the time you get there they are always "gone."

Then they sit you down and quote you out a lease for twice as much. By the time all is said and done the payment is comparable to buying. That's my experience.

Plus I drive 20-25K a year. They'll lease you one for that kind of mileage, but the payment is MORE than buying outright.

If you think Dave Ramseys advice is of any value (and he explains why) leasing is NOT the way to go in MOST (not all, perhaps business use) situations, it depends on your use and needs and budget. For me I pay ONE payment of cash versus lease which is best economically and over the long term but that don't mean its right for you. The leasing company makes a profit DUH so buy it and lease it from yourself to make that profit instead of them BUT hey that's like just buying it yourself outright LOL

John T A buy for cash versus lease kind of guy

In general society and an individual is better off when people own stuff.

Owners tend to be or become more responsible, more careful, etc.

Renters tend to develop a 'not mine I don't really care' attitude, even if they are generally good folk. It just creeps into a person's thinking.

Financially a lease is a stacked deck against the consumer most of the time. It can make sense in business, but not often as a consumer/ average joe buying (well, not buying!) stuff.

On the other hand, big business can turn around more dollars faster if their customers rent/lease, so they emphasize all sorts of lease deals. People that still own stuff can turn their ownership into a bigger lease program, trade hard asset for payments.. This gives the business a bigger part of the consumer pie.

So in general, personal ownership of anything is a better thing for the person, and for the neighborhood.

Leasing or renting is a better deal for the business trying to generate income.

Not every lease in every situation is a bad deal, but in general, we would all be better off if we owned our stuff.

But we are dumb greedy humans, and we keep reaching for the next bigger better thing and try to get it any way we can. Business gives us the illusion of having a better life by leasing a fancier car vs owning a more solid machine.

Govt likes to see cash turn over often, they can tax it at each step of turn over, so they encourage any form of accelerated transactions. Govt likes you to lease stuff, it puts more taxes in their pocket.

And so we continue to lose the middle class...... But hey, I gots me a cool ride for 2 years!

Paul

I'm not a big fan of leasing, in fact, I've personally never done it. Also, when I was in sales, it was frustrating. You'd have a deal all put together to sell a new car and then the buyer would ask, "By the way, I still have 8 months to go on the lease on the car I'm trading in. How do I get out of that?"

The answer is, "You don't. Once you sign a lease, there's no getting out of it". So the deal would be shot down.

That being said, our daughter leases a new car every three years, and for her as a young single gal it makes sense. She gets Hyundai's for a couple hundred a month. She always has an almost new car with no big cash outlay up front, she's a title officer in the real estate business so image is important, she never has to worry about maintenance, breakdowns etc., 'cause the car is always under warranty, etc.

I guess you just have to weigh the plusses and minuses for your own situation.

I've only seen leasing work when the goal is to keep a new vehicle in your driveway. My old boss would do 2 year leases (rare) on his Lincolns, he was getting hammered on the depreciation hit by only owning the cars 2 years. We looked at from a business angle where we normally own the trucks for 4 to 6 years and put a lot of miles on them (120K to 170K) and it looked like a good way to eat up lots of money without anything to show for it. With only 3 or 4 year leases and the miles we put on would blow through any mileage agreement they would allow.


If you are looking at a lease because you can't afford to buy new - you can't afford a new lease either.

Lease if you need a newish vehicle for image sake, you're high income so the write-off of all the lease payment by your business gives a tax advantage over the normal 7 year depreciation on owned vehicles, and you drive less than 12,000 miles a year. Just figure on turning the car in and leasing another when the time comes, and paying that monthly lease payment forever. If you think you might want to buy it after the lease, you'll probably be better off buying it at the outset. And be sure you stay within the allotted mileage- they really hose you for extra miles.

As for Dave Ramsey, his advice is not so good if you're looking to make money outside your salary or wages. It takes money to make money- I'm sure a lot better off having judiciously used credit than if I had done a "debt free scream" and then just saved up for things rather than using credit.

The dave Ramsey stuff cracks me up. "Pay me money, so I can show you how to save money".

Things could have changed, but some twenty-five years ago my accountant told me that if I leased ANYTHING, she would be coming after me with a 2x4 to hit me aside the head.

A friend of mine had leased an automobile in 1986. He was a banker who held a PhD in Ag Economics, but I know he had a few sideline business ventures, too. He fulfilled the 3 year lease and then bought the car after the lease expired, thus driving it for another half dozen years. Knowing how analytical he was, and somewhat remembering what he had told me about how he reached his decision to do that, in the long run he found out he was better off from a financial point of view, versus buying the car outright, or financing it. He had leased this car through GMAC, since it was a GM product. I believe he was able to deduct the lease payments, since this car was tied to his use in business, then he purchased the car outright at the end of the lease, as a car for personal use. I know of a realtor who did the same thing in leasing a vehicle for his business, and then purchasing the car outright for his wife at the end of the lease.

I have a brother-in-law and his wife who, at least as far as I know, do not have a business they can write off these types of expenses. They have leased expensive SUV's for 20 years. I remember one leased vehicle in particular. It was a 1997 Dodge Durango. I remember seeing the Chrysler lease program on this vehicle in the section of a Twin Cities newspaper. I added up all the costs for that 36 month lease and realized this was going to cost them a minimum of nearly $18,000, barring any excess mileage penalties and repairs. I thought that was a lot of money to squander in 3 years and not have a thing to show for that money spent, since they turn the vehicles in at the end of every lease. I have never purchased new, nor have I leased, but at present, I totaled up all the vehicles I purchased in the past 22 years and it comes up to nearly $110k, and I still have 5 vehicles sitting in my garage and shed. My in-laws have spent somewhere between $150k and $200k, and they have 1 expensive SUV sitting in the garage after all that. They DO NOT generally have repair bills to contend with, since all this new equipment has factory warranty taking them to the end of the lease, but I also have not spent an atrocious amount of money on repairs either.

I looked into leasing a drying bin for our farm a few years ago. The actual purchase price on that was around $60k. If I financed it through Farm Service Agency, I had interest payments on top of that initial purchase price. If I leased it, and purchased at the end of the lease, it was going to cost me about $13k more versus buying and financing with Farm Service Agency. I thought that was a waste of money in having to pay an additional $13k, or roughly another 20 percent cash outlay for the same item in the end.

My parents leased a machine shed on a 7 year payment plan, with a final payment amounting to a small amount, which was required to be placed on a lengthy depreciation schedule, which my dad determined he would be dead before that wrapped up, but through the lease, he could capture a larger portion of the cost through lease payments before he started retirement. That had its advantages for his specific situation.

I recently looked into leasing a car. This would be the first new car I have ever considered acquiring ever. When we penciled the payments out, with a financed purchase after the end of the lease, I found it to be really no different in what it would cost overall. I looked at purchasing, and then financing over a 5 or maybe 6 year period. I compared this to leasing, then financing the outright purchase after the lease was up over a slightly shorter period of time of either 3 or 4 years. We based this comparison on what we knew at the time and historic experience with financing used cars. Again, in that comparison, we found no significant difference going either way.

From a balance sheet perspective and how a lending institution views you as a customer, the advantage of a lease is there is not a liability (debt) on your balance sheet. You have an annual expense tied to the lease payment, rather than a depreciation expense tied to that leased vehicle. You do not list that vehicle as an asset on your balance sheet, though. Another positive is that if you find the vehicle to be a "lemon," you are not tied to owning it at the end of a lease, and it becomes someone else's problem, rather than yours. Some probably are willing to have a greater annual lease expense, versus the depreciation expense and potential/probable repair expenses. One could view this as a way of "controlling/managing" expenses, too.

I do find it rather troubling the organizations, the cooperatives, and BTO's, and others, who, in my opinion, are probably over-utilizing leasing. In the case of a large farmer owned cooperative I know of, I think the patrons haven't a clue as to how little the company (an ultimately the patrons) truly owns, while putting on quite a show for their customer patrons with all the "fa?ade" of investment into property, plant, and equipment. Maybe that is my problem. I spend money to upgrade and add worth to my operation in the long run, while not breaking my bank account. I also remember how disgusted my family was with the write-offs and debt restructurings of the BTO's, who didn't learn a thing in the 1980's!

Iam with you Showcrop, if I pay three years on something I had better own it, I farm dont need any more
write off's

I have a leased Gmc terrain for one of my guys to drive. First time ever I've had a lease. Probably not going to again. I was able though to use my GM card earnings to lower the payments in the beginning

I don't believe in leasing. The only way I can see that it should be allowed is for very short term jobs in a bussiness and a tractor would only fall into that class if the person needed it to do farming for only one year on limited time to have the ground of the one year. Backhoe for just one job of perhaps only a month. If you need that hoe for a year buy it. And if you don't need it after that time sell it.

back in 95 wqhen i got my 95 cummins dodgew , they talkt me into a dealer lease program ,,,. NEVER AGAIN ,,. Them Basturds said my interest rate would 5% ,, Ainmt NO WAY they figure interest like me ,, THey Really soktitvto me !!! ,, I paid a wextra 2 gfrand to get out of their PONZy Peanut BUTTER PANSY SCHEME ... lib eral s in disguise

The advantages to leasing are mostly in tax savings for businesses. Lease payments are immediately deductible. If the business owns the vehicle, they must use a complicated depreciation schedule.
Another "advantage" is that it allows individuals to have possession of a more expensive car than they would normally be able to afford. So, instead of driving a Chevy, you can drive a Buick or even a Caddy. BUT, if you cannot afford the more expensive car to begin with, the end of the lease might hold some unpleasant surprises.

In essence, leasing allows you to purchase the USE of a vehicle for a defined period of time. Leases also have a built in PROFIT for the leasing company. Owning bypasses and eliminates this profit. Also note that if you buy a vehicle, and you end up with a few minor parking lot dings, you just ignore them. Not with leasing. They estimate and charge you for every little thing that they can legally charge you for.

Last but not least, at the end of a lease, you have a basket full of receipts and you own NOTHING.

consumers reports analyzes lease over owning,, and every year reports that a lease will cost you about $2400 to $2600 over a purchase. As to always having a new vehicle.. yes.. but you also take a beating over and over on the first year depreciation losses...

But since when did a new car not be an emotional event and not necessarily a well thought out financial planning event.

Not with leasing. They estimate and charge you for every little thing that they can legally charge you for.

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You are wrong about that! When you lease a vehicle they allow for normal wear which includes normal dings, dents and scratches. They do not charge you for every mark on the vehicle, that would be unreasonable. Do a little research before you post complete BS like you usually do! All leasing companies allow for marks on the vehicle when it gets returned with no charge! Take a look at these examples:

https://www.ford.com/finance/lease-end/wear-and-use

https://www.gmfinancial.com/finance-options/excess-wear-and-tear.aspx

https://chryslercapital.com/lease-end-options/mileage-and-wear#the-wear-table

One customer at my former job switched cars a lot, still had the desire for hot rods. He leased a BMW 760 for a couple of years- to purchase then was $80K. He was not able to write it off toward his business, but his reasoning was that in MI at the time, he only paid sales taxes on the portion of the value of the car he was leasing- I think he said $16K vs. $80K, so a difference of $960 vs. $4800. Additionally, he reasoned that at lease end, he turned it back to the BMW dealer for them to worry about finding a buyer. He didn't figure the market for used $80K vehicles was that strong, if you want to spend $60K plus, you want new, not two years old. He knew he would lose interest during the two years and want out anyway, which was okay to him. Same guy had Maserati, Vette, Mazda RX-7, Mercedes, Cadillac XCR, Mitsu 3000GT, 65' Chevelle, etc. And he let me drive most of them back and forth from his place to our shop. Cool guy.

Like someone else said, I called about a lease on a minivan when ours was wearing out. "That was sold long ago, but we have others here for twice that amount..." Not for me.

On the cost, it depends. Sometimes the manufacturers put real sweet money factors (lease speak for interest) on models they want to move. The last Lincoln Mark VII I sold/leased we moved the guy from a purchase to a lease, he saved a little bit over the purchase and we picked up about $900 in gross. This worked well for him because he knew he was probably going to want a Mark VIII when they came out so he had a Mark VII, knew what he could buy it for at lease end if he didn't like the Mark VIII and if he did he could walk away from the Mark VII and get the new model. Of course it's been 20 plus years but then if we had a thin deal but it was a lease the house would take lease deals it wouldn't take on sales. The big thing about a lease is folks don't know as much about them and so it was easier to work a little extra gross in the sale and some folks were out right fraudulent in their sales tactics. The whiz bang sales force a few years before I showed up closed a lot of lease deals with the promise that they'll be tons of equity when the lease is over, folks got real upset when there wasn't and started buying cars elsewhere. It got so bad our parent company opened another L-M point with a different name to avoid some of the anger. This was another reason they went from being the 2nd largest Lincoln Mercury in the world to being the 2nd largest Lincoln Mercury dealer in the Tampa bay are.a

(quoted from post at 11:26:06 09/08/17) Lease if you need a newish vehicle for image sake, you're high income so the write-off of all the lease payment by your business gives a tax advantage over the normal 7 year depreciation on owned vehicles, and you drive less than 12,000 miles a year. Just figure on turning the car in and leasing another when the time comes, and paying that monthly lease payment forever. If you think you might want to buy it after the lease, you'll probably be better off buying it at the outset. And be sure you stay within the allotted mileage- they really hose you for extra miles.

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This^^^.

Leasing only makes financial sense if you fit the EXACT profile where leasing has advantages. Outside of that profile, there are no financial advantages to leasing.


Leasing works if you:
- Buy a new (new-new, not new to you) vehicle every 2-3 years.
- ALWAYS stay under the allocated miles.
- Are in a tax situation where the full benefits of leasing are reaized (almost always because of exclusive business use of the vehicle).
- Benefit from having no maintainance or repairs that cost money and take the vehicle off line.

Very, very few personal vehicle owners fit this profile, so leasing is nearly always a bad idea for personal vehicle owners who do not use the vehicle for business.

Grouse

(quoted from post at 00:54:19 09/09/17)

Not with leasing. They estimate and charge you for every little thing that they can legally charge you for.

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You are wrong about that! When you lease a vehicle they allow for normal wear which includes normal dings, dents and scratches. They do not charge you for every mark on the vehicle, that would be unreasonable. Do a little research before you post complete BS like you usually do! All leasing companies allow for marks on the vehicle when it gets returned with no charge! Take a look at these examples:

Click to expand...

When I turned in a Jeep Grand Cherokee a few years back, they used the "credit card" method. Guy walked around the car and if a credit card could cover the mark, it was ok. Well, the front fascia had 2 scrape marks, each less than the size of the CC, but he said it was from the same incident. Even though there was clean paint between them, he counted them as one. Charge to me: $300, unless I got it fixed. Windshield had a stone chip that was repaired by our insurance company. Guy said, nope, windshield had to be replaced or we'd get a $ 400 charge. Didn't matter that your average person wouldn't see the repair, it was that good. Tried to hit us up as a "smoker vehicle". $100, IIRC. Never mind that I told him we don't smoke and nobody has ever had a lit cigarette in the car.

I went to the local auto store and got a small rattle can of matching paint and clear coat to spray the fascia. Couldn't tell from a distance that it was repainted. Luckily, our insurance company had told us prior to the windshield "fix" that if it wasn't accepted at the end of the lease, they'd replace it, which they did. Evidently they'd had experiences with the local Chrysler dealer before. Wife sprayed some air freshener in the car. Took it back again to the dealer, (this time at night), a different person looked it over and no charges. So, yup, they'll try and get you any "Legal" way they can. jimg. did not post complete BS.