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Discussion Starter #1
So I walked into the dealership ready to pay $55,100 for an Advanced hybrid, however the salesman and the sales manager said it would be wise to lease, the way he explained made sense at the time but now on the way home it doesn't.


So my payments are $750 a month give or take, for 3 years that's $27,000 that I would have paid with no equity.


If I would have purchased the car, in 3 years, I would owe a little under 30k which is what I think would be worth and might have equity.


My questions are, did I made a mistake? (I called another dealer, found out there was $2000 incentive for a lease so that's why they pushed it on me and they didn't tell me AND pocketed the money, shady.)


The other dealer said that they lease 70% of the time with mdx's. I do like to trade my car in every 3-4 years but I feel like I could have done that by purchasing as well or am I missing something?
 

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Basically a lease is a rental. You pay for XX number of months. Which includes depreciation on the vehicle. At the end of the lease term you give the car back or buy it for the residual. Lease is car mfgs way to sell you more car than you can actually afford. A lease is a good deal for car mfgs and dealers, bad deal for buyers. Once they calculate how much you could wind up paying on the back end depends on excess miles and wear and tear they try to charge you for.
 

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If you take care of your vehicles, drive less than 15k per year, and trade in every 3 years then a lease can make sense.

If you don't take care of your vehicles DO NOT LEASE.
If you drive more than 15k per year (and don't own a business) DO NOT LEASE.
If you are willing to keep your vehicle 5+ years DO NOT LEASE.
 

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Not enough information.
What year did you buy?
What was your down payment
How many miles a year are you allowed?
How many miles do you normally drive?

Isn’t it a little late to be asking for advice?
 

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Discussion Starter #6
Not enough information.
What year did you buy?
What was your down payment
How many miles a year are you allowed?
How many miles do you normally drive?

Isn’t it a little late to be asking for advice?

Lease:

2019 Advance Hybrid
No money down
3 years with 45k miles
I drive between 10-12k miles a year
Asking for advice, either help or not.


My thinking is in 3 years I would have paid $27k approximately through leasing and would owe $27k left


If I did the same thing but purchased instead of leasing, pay $27k in 3 years, the car would still worth more than the other $27k so I would be ahead correct?


Everywhere I'm reading, it recommends to never by a new car due to depreciation and lease, but leasing IS paying for the depreciation so I don'g get it? Maybe because I don't have to pay as much as leasing doesn't costs the whole value of the car into the payment and just partial?
 

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Download a car loan app. There is no way that you can finance a car with no money down and pay $750 a month. Whether you buy or lease, getting a new car costs a lot of money. It’s mostly depreciation. People lease because payments are lower and they can get more car then they can normally afford. On my above scenario your payments would be over $1,000 a month.
Personally, I don’t lease. I like the option of keeping a car,sometimes I actually do. Leasing is too complicated. If you drive 10,000 to 12,000 miles a year.paying for 15,000 may be wasting money,but you may be able to get some of that back. I have owned 35 cars,I leased 1.
I’m able to afford the car I want without having to lease. But if you want to be responsible,buy CPO.
 

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Everywhere I'm reading, it recommends to never by a new car due to depreciation and lease, but leasing IS paying for the depreciation so I don'g get it? Maybe because I don't have to pay as much as leasing doesn't costs the whole value of the car into the payment and just partial?
You have to run the numbers both ways as incentives can be specific to a lease or purchase and may not apply to the other.

However, GENERALLY SPEAKING, leasing is a more expensive way to drive a vehicle for an individual.

There are tax advantages for businesses -- but those don't apply to most personal vehicles.

Leases also often get people buying more car than they should, as instead of taking a lesser payment for the same vehicle, they'll often buy a higher trim or more expensive model and find their lease payment is looking more like the payment on a purchase -- except they will never pay the vehicle off and will always have a payment.

Assuming you're disciplined and the buy/lease comparison is for the same vehicle, let's run some numbers (simplified example, but the principle is there).

Let's take the lease deal Acura is currently advertising:

$439 per month for 36 months (2019 MDX SH-AWD)
$3,299 due at signing
10k annual mileage allowance
$47,295 MSRP

Purchase:
$47,295 Purchase price (you'd negotiate better -- but, again, conservative example)
$3,299 down payment
$43,996 financed at 1.9% APR for 60 months
$769 per month

For comparison, let's assume that this vehicle would reliably last 12 years with normal maintenance. The reality is you could get longer life, but this is a conservative example.

Over the course of the 5 year term you'd pay $46,154.
You then drive the vehicle an additional 7 years with no monthly payments.
Total cost for 12 years, not including maintenance: $49,453.
And you still have a vehicle that you can continue driving or sell for a nominal amount of money (even if it's only $5k)

With the lease option, to get you 12 years of vehicles you'd have to execute four leases. Assuming you could get similar deals, each time, you'd pay:

$3,299 due at signing of lease 1
$15,804 in payments for lease 1
$3,299 due at signing of lease 2
$15,804 in payments for lease 2
$3,299 due at signing of lease 3
$15,804 in payments for lease 3
$3,299 due at signing of lease 4
$15,804 in payments for lease 4

Total paid over 12 years while leasing: $76,412. And you're left with nothing. You better crack out the checkbook, because you need to either lease another vehicle or finally buy something. Also, you had better keep the vehicles in good condition and NOT go over on your mileage. Penalties apply, otherwise.

Ultimately do what you want.

If you know you'll keep good care of the vehicle and you don't drive much and you can't resist trading in every 3 years, then leases are fine. They're not the most economical way to drive a vehicle, but that doesn't make them evil.

However, if you were prepared to purchase and you're asking what makes the most financial sense, then it's typically to PURCHASE.
 

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If you lease,you pay $27,000 and you owe nothing else,except a disposal fee. Unless there is damage,or you’ve gone over your mileage. Or the car needs tires.
 

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Thanks for your service!

Leasing vs. buying is a personal decision. Most people I know lease because they want a new car or mainly new tech every two / three years.

If money is an issue then always buy it’s a better deal.

Seems like you already leased? What help are you looking for?

Most leasing folks don’t join or post on these forums... for good reason. They don’t own the car and could care less about it but these forums get a lot of new owners of Certified Pre-Owned vehicles. Especially when they have issues.

I don’t know this to be true but my friends tell me they like to lease because they can fill the car up with the cheapest gas out there like 87 from Bart’s Mysterious Gas

They never do oil changes. Maybe add a qt when needed of $1 oil at the .99 cent store. No regard for oil type or weight.

They never bring it in for service unless it’s a warranty and only if they get a loaner.

They do change the wipers and fill the wiper fluid for their safety though.

So it seems my friends found benefits to leasing.

Oh and they never buy the cars back which becomes a CPO for the next guy.

At least you didn’t lease an off-lease CPO.
Phew. You Dodged a bullet.
 

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Discussion Starter #11
Thank you all SO MUCH! Taking the time to respond is much appreciated.


I already leased the car but after thinking about it I don't know if I made the right choice. The dealer offered me out of the lease to buy the car. However I do tend to trade my cars in every 2-3 years so people say to lease.


Say the car is $55k. By the time my lease is over, I've paid $27k ($750x36) making the car's value $28k after 3 years which I think the car is worth much more than that in 3 years (Advance Hybrid).


Based on this should I go back and buy the car even if I were to trade it in within 3 years to have some equity?



If I bought the car, I would be paying interests of 1.99 percent of 45k ($899) assuming I put 10k down and my payments are $1,300/month for 3 a 3 year loan.
 

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Check the paperwork, all contracts I have signed had a three day clause. So you can be comfortable about a decision that you may have been coerced into making.
 

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Thank you all SO MUCH! Taking the time to respond is much appreciated.




Say the car is $55k. By the time my lease is over, I've paid $27k ($750x36) making the car's value $28k after 3 years which I think the car is worth much more than that in 3 years (Advance Hybrid).


Based on this should I go back and buy the car even if I were to trade it in within 3 years to have some equity?



If I bought the car, I would be paying interests of 1.99 percent of 45k ($899) assuming I put 10k down and my payments are $1,300/month for 3 a 3 year loan.
$1,300 a month is a lot. If you can afford it,that’s fine. I’d probably go with 4 years. I also wouldn’t count on 1.99 rate on a hybrid.
 

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Since you already said you tend to trade every 2-3 years just stay where you are with the lease. If in 3 years the residual value (lease end) is less than the market value you can capture that on the trade-in. Just make sure you shop several dealers to make sure they are giving it to you. If the market has shifted and it's lower than expected you are protected by the lease and owe no additional depreciation if it happened. Having been in and around the car business for 30+ years, most of the caveats for leasing are gone as dealers typically aren't allowed to hide the purchase price and other tricks that used to allow them to gouge the buyer. There are still a few built in profits for the dealer at the end of the lease, but they are relatively minor. Also, on a 36 month lease you can expect to start getting calls from the dealer offering you an early out starting around month 25, especially if there is equity in the car.

The only real downside to leasing, other than a forced decision point at the end of the lease (of course you could buy it out at that point), is the possibility that your mileage needs change or your need for the car period. Say you get a new job that provides a car and now it just sits not driven costing you the payment every month. If that happens 6 months after you buy it and you are way upside down that's obviously a problem too, but leasing tends to leave you more upside down early in the contract than buying. Drop your miles way down and there is no credit for unused miles. Go way over and the per mile cost is through the roof.
 

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Check the paperwork, all contracts I have signed had a three day clause. So you can be comfortable about a decision that you may have been coerced into making.
Depends on the state. In the three states I’ve lived in there have been “no cooling off period”.
 

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I lease. There are several positives to leasing.

1) Technology in cars seems to get outdated faster than engine failure. My 14 MDX Bluetooth stopped syncing with my I phone after I updated the phone to newer IOS systems. Acura no longer supports 14's.

2) With CARFAX these days, everything seems to be documented. Especially car accidents, hail damage, etc. If you finance your car and own it, and it gets in an accident (even if it is not your fault)...the damage shows on the Carfax and now it lost value on a trade in....no used car manager wants that car on their lot with a blemished Carfax. With leasing, you are not penalized with a blemished Carfax as long as the car is repaired. My wife was rear ended a few years ago, it happened to us. No issues at lease turn in.

3) If the manufacturer incentivizes a lease with a low money factor or high residual (or both), it can be attractive. If it is not incentivized, it may not be the right way to go.

4) As mentioned above, if you have equity at the end of your lease, trade it in instead of turning it back to Acura. The equity is yours and can be applied to your new purchase. You can pay off and/or trade a lease at any time. You just CANNOT turn the car back to Acura until you qualify for the Pull Forward program (if you lease another Acura)

5) Acura usually has good lease programs vs. other makes. Just do your research a head of time. Money factors and residuals can be found on car forums (i.e. Edmunds)
 

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I lease. There are several positives to leasing.





5) Acura usually has good lease programs vs. other makes. Just do your research a head of time. Money factors and residuals can be found on car forums (i.e. Edmunds)
Acura has good lease programs because of their high residual value. Also good when buying and trading.
 

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Thank you all SO MUCH! Taking the time to respond is much appreciated.


I already leased the car but after thinking about it I don't know if I made the right choice. The dealer offered me out of the lease to buy the car. However I do tend to trade my cars in every 2-3 years so people say to lease.


Say the car is $55k. By the time my lease is over, I've paid $27k ($750x36) making the car's value $28k after 3 years which I think the car is worth much more than that in 3 years (Advance Hybrid).


Based on this should I go back and buy the car even if I were to trade it in within 3 years to have some equity?



If I bought the car, I would be paying interests of 1.99 percent of 45k ($899) assuming I put 10k down and my payments are $1,300/month for 3 a 3 year loan.
Then you've made a right decision.

If you'll like the vehicle that much after 3 years then purchase it outright and you'll only loose like $1500 vs if you were to purchase from the beginning.

We always lease one vehicle, one that gets the most beating (kids, dog, etc...), at the end I either sell it and make some money or just turn it in and get something else new. It's always under warranty, it always has new tech, new tires, not to mention good business write off. This is our second MDX and Acura rolled all unused miles into our new lease, they also returned our last payment and we didn't have to pay a penny for any wear or tear. Lease is not for everyone but it works great for us. Different strokes for different folks.
 
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