Can you help me with this lease? Numbers inside

[Doggman1525]

I'd also be wary of leasing a vehicle I planned to use for any serious offroading or overlanding. Even if the current plan is to keep the truck when the lease expires, things can change over 3 years and maybe it won't seem like such a good idea when the time comes. There's usually an inspection at the end of the lease. Any mods, damage, or just wear and tear that exceeds their definition of normal will get charged to you if/when you hand back the keys. I leased a little sports hatch back in the day when I wanted more car than I could really afford. Had big 20" wheels and sidewalls about as thin as the soles on my shoes. By the end of three years of slamming through Colorado potholes all four wheels were beat to $h!t. The fine print in the lease, which I was too stupid to read, must have been written for SoCal or Florida, not a climate with four seasons. That plus a ding from the wife backing into a dumpster just before the lease end-date cost me an extra grand.

Leases are great if you use your vehicle for business (and your business leases the vehicle) or you are well off enough that automobiles are just another consumable to you, the money doesn't matter and you just enjoy having the latest, greatest and most stylish toy. For the rest of us it's just a way to take an already complex process and make it more complicated thereby wringing a few more of your hard earned dollars out of your wallet. That said, pretty sure everyone here is a responsible grown-up, this is just MHO, you do you.

 

[kreinhard]

My experience with the one lease I've ever had............ Leased a new truck with the plan to purchase it in the end (at the time couldn't afford the payments on a conventional loan) I was happy with the monthly payments and life was good for 3 years, the lease was up and I was all set to switch the residual balance over to a conventional loan, that's when I realized what residual value meant.......... went to the Stealer's to do the paperwork, was hit with "Your ballon payment (residual value) is "X" dollars, due today", "it's a used vehicle and your interest rate will be (insert crazy number here) and as a used vehicle the length of the loan is limited to 3 years." "Your payment will be "X" more than lease payment and you barely qualify for the loan, so there is no negotiation, unless you'd like to flip the lease to another vehicle, then "X" processing fees will be rolled into the new lease."

I ended up financing through a credit union with a much lower interest rate, but the "used vehicle rules" still applied etc.......... and I ended up paying many thousands more than if I just purchased it out right in the beginning. I did keep the truck for 12 years and it was a good truck.

If you plan on keeping the vehicle, just be prepared for the end of lease dramatics.

I, too, have leased exactly one car in my life time. That was a vehicle my ex-wife absolutely had to have. I tried, repeatedly, to explain to her that leasing is financial grifter talk for "you are financing the depreciation for a couple of years and we get the asset at the end." She wouldn't hear it. We eventually ended up divorced, but that's a different story.

Leases are sold on "you only pay for the part you use!" basis but that really means "you pay for the depreciation, plus some interest, then we get the asset and sell it to the next owner, at interest, and you have nothing to show for your payments." Bottom line, in my opinion: if you can afford a lease payment but not a loan payment, you're buying something you absolutely cannot afford. You'll end up making eternal payments on assets you never end up owning.

Also, bonus old-man wisdom: the cheapest car you will ever own is the one you're driving right now. Courtesy of my grandfather.

 

[Mookie242]

All good points. I just think the opportunity cost of buying today is enormous. And don't forget, if you're not buying with cash, you will pay interest too. And, if you are buying with cash, then you forfeit all the investment opportunities you could have gained with that money.

Also, think about what cars will be like in 2030 and beyond. Personally, I will not be happy with a 2025 Land Cruiser when comparing it to a 2030 SUV that drives itself, talks to other cars on the road, has all the latest gadgets, and gets 50+ mpg. Or is fully electric with lightning charge times and 500+ mile ranges.

 

[BlueCruiser]

All good points. I just think the opportunity cost of buying today is enormous. And don't forget, if you're not buying with cash, you will pay interest too. And, if you are buying with cash, then you forfeit all the investment opportunities you could have gained with that money.

Also, think about what cars will be like in 2030 and beyond. Personally, I will not be happy with a 2025 Land Cruiser when comparing it to a 2030 SUV that drives itself, talks to other cars on the road, has all the latest gadgets, and gets 50+ mpg. Or is fully electric with lightning charge times and 500+ mile ranges.

There are several good online buy vs lease vs finance calculators out there to run scenarios. Seems like most cut off lines for ownership for many makes and models are 4 years.

Perhaps the classic use case for leasing are the German sedans to regularly roatate a nice car at a slight premium but avoid the horrific depreciation, maintenance, and repair expenses.

Certainly car features are changing rapidly. However, fully automous or electrified SUVs of the caliber we all want (drives itself, talks to other vehicles, 500+ range, rapid charging etc.) are probably 20+ years away from a technology standpoint and longer depending on priority of adoption.

 

[Mookie242]

I disagree. There are plenty of automotive experts that believe full self-driving is not far away. Just yesterday, it was announced that the Chinese car company Zeekr will be releasing free full self-driving to the public beginning in April. BYD also announced yesterday that its new cars will be able to be fully charged in 5 minutes. Who knows what other advancements will come in the next 5 years.

 

[BlueCruiser]

Perhaps. I applaud your enthusiasm.

However, based on the number of complaints in this forum about Apple Car Play, a much simpler application and which the industry has been working on for over a decade, I reserve the right to be skeptical.