Thinking about leasing

[Hobbit1969]

Good Morning! I'm hoping to get some insight into leasing. My husband and I have mid 700 credit scores (all debt paid off, only mortgage and car left). We purchased a used vehicle last year but the term is 72 months (which I hate) at a $399 payment.

 

We're thinking about leasing because one, we don't drive many miles (I work from home and he is retired) and we like the idea of a new car every few years. A local Dodge dealer has a vehicle we are interested in and we were quoted a payment of $649 a month for 36 months. Having owned dozens of cars in my lifetime, I don't view them as an asset, hence the leasing consideration. Our current car right now is in the "sweet spot" where the KBB trade in value is just a little shy of what is owed, and the dealership has agreed to pay it off no issues. Yes, the payment is larger than what we have now, but I am viewing it in the sense that the term is shorter, and obviously, not being upside down with a purchased car (something we have lived with many times).

 

I'd love to get insight into leasing and whether we should go for it. I understand the basics, but am I missing anything big-picture that would make leasing not be viable? Thanks in advance for any advice!

[MarvBear]

$649.00 Monthly...............Ouch.  Does that payment include sales tax for your state where the vehicle is to be garaged?

 

Usually a 36 month lease is comparable to a 72 month purchase contract.

[Hobbit1969]

15 hours ago, MarvBear said:

$649.00 Monthly...............Ouch.  Does that payment include sales tax for your state where the vehicle is to be garaged?

 

Usually a 36 month lease is comparable to a 72 month purchase contract.

I'm (honestly) not sure if that includes tax. After we looked at the SUV and said we liked it, he walked off and came back with numbers scrawled on a piece of paper (I told him 36 months, 10k miles). I told him no way with those numbers, and we left. He contacted me yesterday suggesting that all cars/SUVs with third rows are going to be in that cost/price range.

 

Part of why we looked into leasing, is we have a good friend who is the director of the puppy rescue we foster with. She has leased the entire 11 years we've known her. I asked her about her lease payment, and her lease is lower than our current finance payment. Our current vehicle is coming up on its third major recall since we've owned it, and looking at the 72 month payment plan and the annoyance of the recalls, I started thinking that maybe we should go with a lease so we aren't constantly battling being underwater in our car value. Since we've been in that position in the past (underwater) I kind of feel I want to "figure it out" now while dealers are willing to fully pay the car off without an issue.

 

Marv, I'm wondering if I could get your insight. Should I abandon the idea of a lease, or if I do want to do it, do I need to look at a different vehicle? The two different dealers I spoke with suggested that wanting a larger SUV I won't get a lower lease payment than $600. Because of the work we do (my husband is constantly picking up puppies in cages and transporting them to the vet for the rescue) we need/want a larger SUV. With it being year end and our credit scores being excellent and no debt I was hoping to take advantage for us to  get a larger SUV. So, do we just give in and buy? I'm not keen on buying because we usually go for newer-model year pre-owned but inevitably we go for price and wind up not getting what we want. I guess I felt leasing would allow us to get new, and knowing that even if we weren't keen on the vehicle, we'd be getting new in a few years.

 

** Actually, I'm editing to ask...Right on the website for the dealership is a graphic that says lease a 2024 Durango R/T for $379 a month (36 months, $2k due at signing plus first payment, etc.). The vehicle we were looking at is 10k LESS than the R/T. How does one go about getting these "great" deals that are advertised? The salesperson tried to say I needed the friends and family discount, but then when I  asked the payment difference, he said the payment would go from $649 to $629!

Edited November 13, 2024 by Hobbit1969
add on question

[Glacier]

Sometimes vehicle manufacturers will subsidize certain vehicles that they chose.  In this case, maybe they manufacturer has too many Dodge Durango R/Ts sitting around, and is offering a subsidy on that model and trim level.  So, then that more expensive vehicle becomes less expensive.

[CreditSucksNot]

3 hours ago, Hobbit1969 said:

do I need to look at a different vehicle?

 

I think you need to look at multiple different brands/vehicles.  If your need for a large vehicle is based on the rescue efforts my feeling is a third row SUV is WAY too big.  I have a Rav4 and if I put the back seats down I can fit two large crates in my car and close the hatch.  I would start checking out Toyota and Honda and first thing I would look at is what is the height/width of the rear entry and the clearance inside with the seat down.  Measure the crates you typically use or at least the largest one and you can sit at home and research different makes/models without the pressure of a pushy sales person.  Narrow it down to two makes/models then go test drive and see which one you like.  By then you should already know the price point you are looking at.

 

I think you are looking at vehicles that are way bigger than what will get the job done.  Don't forget you also have to factor in the higher cost insurance, registration, taxes, and maintenance.  I think with some research you can find a good mid-size car that will get the job done for a much more reasonable monthly payment.  A payment over $600 on a lease is beyond ridiculous for as little as you drive even for the reason(s) you do drive.

[Hobbit1969]

2 hours ago, Glacier said:

Sometimes vehicle manufacturers will subsidize certain vehicles that they chose.  In this case, maybe they manufacturer has too many Dodge Durango R/Ts sitting around, and is offering a subsidy on that model and trim level.  So, then that more expensive vehicle becomes less expensive.

 

Thanks! Oddly enough, the vehicle we were looking at is the R/T. I emailed the salesperson to ask him why I can't get that price and his response was "When you have, Employee discount, returning lessee, first responder, active military, and as you mentioned $2,000 due PLUS first payment, title and taxes." My husband is a military veteran, but we don't have any of the other discounts. I'm fine with the 2k upfront, first payment, etc. But they still quoted me $649.

[MarvBear]

The capitalized cost and the breakdown are either in the Lease agreement or provided separately if requested by Reg M.   And that is what you are paying for the vehicle.   In the pinned section of this forum, I have a Chrysler Lease Worksheet   If you can get the information to complete it properly for your state you can verify each element of the lease.

[Glacier]

23 hours ago, Hobbit1969 said:

 

Thanks! Oddly enough, the vehicle we were looking at is the R/T. I emailed the salesperson to ask him why I can't get that price and his response was "When you have, Employee discount, returning lessee, first responder, active military, and as you mentioned $2,000 due PLUS first payment, title and taxes." My husband is a military veteran, but we don't have any of the other discounts. I'm fine with the 2k upfront, first payment, etc. But they still quoted me $649.

 

Many dealers in my area advertise the same way.  They advertise price/payments assuming you qualify for every single discount/rebate available.  Frustrating when you find this out, and the car will be more.  I no longer go to those dealers when I am in the market.  

[Hobbit1969]

I decided to contact the dealership where we've purchased our last two vehicles (Ford). It's a smaller dealership that "feels" more friendly if that makes sense, and they didn't disappoint. I had already applied online (and was approved) for Ford Credit so we decided to go with an Explorer. Because my husband wanted the fold down bench seat for the second row as opposed to the captain's chairs, we had to go with (based on inventory) an RT which was a bit higher than base models, and the one we wanted (color, in stock) had a lot more options. That said, they gave me an initial amount/payment and I so no, too high. They came back five minutes later and the price/payment worked for us. It is higher than our finance payment, but we agreed we are comfortable with it based on how much more vehicle we are getting. Plus, our trade in was fully paid off with no negative equity so win-win. Interestingly enough, unlike the Dodge dealer, this dealer gave us a bunch of incentives (including X Plan) without asking. My husband (who is the primary driver) is very happy and loves the new car!

 

Thanks again for all the insight!

[MarvBear]

congrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrrats!!!!!!!!!!!!!!!!!!!!!

[hdporter]

I'm late to this thread, having been travelling much of this last week.  Still. I wanted to weigh in on the lease vs purchase discussion (for the sake of future consideration).

 

Leasing is most appealing for those whose ownership profile is annual mileage of 12k-15k/yr, and who have a strong bias to trade in a vehicle upon loan payoff.

 

This pushes the per mile ownership cost up vs longer term ownership, but for those flush with cash and willing to indulge, there's nothing "wrong" with striving to drive a vehicle with up to date features and conveniences.

 

I'm a creature of a different stripe.  I take pleasure in a car that I've thoroughly "broken in" and into which I slip behind the wheel, feeling like I've put on a familiar second skin.  I like anticipating exactly how my vehicle will respond, and if I've played my upkeep cards right, it's likely that my car will perform better in it's 2nd 100k than it's first.

 

I indulge in car detailing every 10k-15k mi, to ensure it looks and feels it's best.  It goes without saying that I rigidly adhere to the maintenance schedule.

 

I have a 2006 Lincoln Zephyr (rebranded MKZ) that I take much pleasure in driving, despite having a 2020 fully-loaded MKZ in reserve in the garage that I use for longer trips.  (I purchased the 2020 after the model's discontinuation was announced, entirely thrilled with my ownership experience of the 2006.)

 

Suffice it to say that my annual and per mile average ownership cost is considerably lower than rolling over a car every 4-5 years.  Insurance prices dip considerably after those 4-5 years.  With thorough research, you should be able to select a vehicle that promises an infrequent repair history at moderate cost.