I am thinking about replacing my 03' F-250. It seem that I always buy a truck and take a 60 month loan and as the truck get 50-70K miles and around 3 years old, I start to think about a new one.

What I would lease would be as follows:

2006 F-350 Crew Cab V10 XLT Short Box
4X4
Auto
4.30LS
Advanced Security Group
Reverse sensors
18" alloy wheels
Tow Mirrors and Cab Lights
Rear Manual Slider
Privacy Glass
Fog Lights

I would be putting between $5-6000 down.

Me questions are, how much more to get a lease drawn up, for example, a 24 month lease and have a milage term of 40,000 miles for the 24 months? And would a 36 month 60,000 mile be roughly the same money per month or more?

Also, is adding any customization a NO NO? For example, adding a sound system or som aftermarket running boards.

Leasing seems attractive to me because of how often I find myself wanting a new truck. With The miles I drive a year it hase to make financial sense too. Right now I pay $491 per month for 60 months. I only would consider a lease if it was about $100 per month less.

That truck that I listed should run me around $35,500 after price negotiations and minus $1500 for leasing.

Just wondering if it is a option for me.

Thanks

 

Leasing seems attractive to me because of how often I find myself wanting a new truck. With The miles I drive a year it hase to make financial sense too. Right now I pay $491 per month for 60 months. I only would consider a lease if it was about $100 per month less.

With the kind of miles you drive, a lease would be many hundred more a month, not less.And why the heck would you put $5K down on a lease? That's like putting a big down payment on the house you're renting- makes no sense. What you really need to think about, if you want to trade often with those miles, is shortening the term up on the note.

 

Interesting questions. Here we go:

1) Because of the slightly higher rate for 36 vs 24 months, the payments on that truck are virtually the same ($399/ month for 24 months, vs. $401 for 36). I figured those on a truck that stickers for $41700, and I would sell for $36924 ($500 below invoice), less the $1500 rebate, for a final cost of $35424. $5000 cash down, plus tax and plates(as I have no idea what MA charges for tax on a lease).

2) Mods aren't a no-no, but you do have to be careful. If you install something and remove it, you'd better do a good job of hiding holes, marks, etc... or you could be charged for repairs. Most people leave the items with the vehicle. In the case of running boards and other qualified options, you may be able to have the dealer build these items into the lease, adding value to the truck. They become a part of the monthly payment, so you aren't paying for the full accessory's price. They would have to remain with the truck, though, as you've incorporated them into the lease.

4) Be prepared for several people to now take over this thread and tell you how leasing is absolutely evil, a product of Satan himself. Few topics rile FTE members like leasing, and it's usually from people that have never leased, never will lease, and think it's a bad idea because they don't "own" it (like that's an advantage when you OWE more on a truck than it's worth), and their best friend's brother's ex-mother-in-law got burned on a Chrysler Credit lease in 1978. I've been leasing since 1983, and nearly everyone I work with here leases their vehicle. So, if those people in the industry are doing it, I guess we've discovered SOMETHING good about it, right?

 

Did you figure the excess miles in on that Jeff?

4) Be prepared for several people to now take over this thread and tell you how leasing is absolutely evil, a product of Satan himself. Few topics rile FTE members like leasing, and it's usually from people that have never leased, never will lease, and think it's a bad idea because thier best friend's brother's ex-mother-in-law got burned on a Chrysler Credit lease in 1978. I've been leasing since 1983, and nearly everyone I work with here leases their vehicle. So, if those people in the industry are doing it, I guess we've discovered SOMETHING good about it, right?

That would probably be me. I've leased a few in the past when it made sense (.9% rate with a huge residual on a Suburban, for example), but it's been awhile since lease terms aren't that attractive anymore. I should probably keep my mouth shut, though- everyone's got a different financial plan going, and mine doesn't involve car payments.

 

Subtracted three points from the standard residual, allowing 19,500 miles/ year.

 

Thanks guys.

The only reason for putting that much down is net on my trade ofter the payoff.

 

Polarbear has a point, there's a limit as to how much you should put down, ESPECIALLY if it's equity in a trade (creates artificially-low payment now, which jumps next time you go to lease, 'cause the equity was used up in the first lease). But Ernie, you're NOT the one that attacks leasing like a rabid dog. I swear, there are some people here that must have the word "lease" programmed into a subscribed thread, so they can swoop down and rip the thread to shreds. Just wait, they're circling overhead now...

I've said it before and I'll say it again: there's nothing inherently wrong with leasing AS LONG AS YOU KNOW EXACTLY WHAT YOU'RE GETTING INTO. An informed buyer is the one that makes the wisest decision, and it it's 10 times more true when it comes to leasing. Check out the following site, move your cursor to the "financing" tab, and then click on leasing. I think this guy really knows what he's talking about...:

http://www.carbuyersedge.com/home.asp

 

Why not just buy it? Mark II is a good guy, and I must have layed in on him the last time he talked up leasing, so I will refraine comment this time. Just remember, leasing is just like renting only spelled differently. You've got nothing to show for making those monthly payments. And you are obligated to make them. Read your walk-away clause very carefully.

I leased a corn planter from John Deere one time. They required I carry insurance on it, pay for any damage etc, keep it up in good shape and the payments were slightly lower than the bank rate to have purchased it. Also, I never could show it as an asset on my balance sheet, but the lease payment WAS shown as a debit.

Everything went along fine during the lease until the 5th year. The lease was up, and to get into another planter (which I HAD to have) the next lease planter was going to be higher. I had nothing to show from the 5 years of payments but larger payments ahead. The tax advantage to the lease was I could deduct the entire lease payment, rather than a loan where just the interest is deductable. The down side was I didn't get the depreciation deduction or the asset after making all the payments. Needless to say no more leasing and I would not recommend it to anyone. OOOPS! Sorry Mark II!!!

Since you have quite a bit of money for the down stroke I'd recommend buying it outright, using your Down payment and the FMCC finance deal for the rebate cash, then immediately negotiate a pay off with your local banker and send FMCC the money, resulting in the loan staying in your local bank where you can pay, make pre-payments or whatever much simpler. And the asset is under your control, and you will have something to show for your monthly money spent on payments.

I really do think Mark II tried to answer your question as best as he could, since you asked him about leasing. Just ask him about an outright deal on that pick-up you want using FMCC money.

 

I appreciate everyone input. I understand everything that was said. But, when you have a question about leasing or buying, what better place than these forums. There is no pressure from a sales person or dealership. I know the answer I will get is true with nothing held back or any bit of deception.

I write this because I am sitting on the fence of trading my 03' super duty. I would only trade it in for a step up. Getting back what I already have is pointless. Unfortunately, these truck are getting quite expensive and really take alot of hard earned income to pay for them.

I would love to go new and YES Jeff and Van Bortel Ford would be a place that I would be stupid not to check out. Seeing that Jeff is only about a few hours drive from me. There is a 2005 F-250 lariet Crew Cab on a local dealers lot that peeks my interest and I am working over the dealership pretty hard. They are surprised how informed I am and actually have been caught a few times in BS. Mostly thanks the this forum and Jeff and Polar specifically. The biggest stickler with this used 2005 is it has the 5.4L and I am used to my V10. The dealer told me this truck stickered at $50K new and with only 11k miles thier price of $34999 was outstanding. I told them that the truck was more like $43K msrp and with a experienced buyer could have baught it for around $37K. Heck a 2006 with the $2500 cash back brings you to to about $36ish K. This 2005 is $34? So why buy this one?

Basically, the only way I would buy this truck is if I could get them down around $29k. With my trade of around $6k net that makes me finance arround $23k. Will they go that low? Who knows. $29k is about $2k over KBB trade in. The dealership told me the KBB on that truck was $37K.

Hey. thanks alot for the help in answering the questions that I had.

Thanks for keeping it CIVIL.

 

with your trade and $6000 boot Ol' Mark II just might get you into a brand new plain Jane SC '06 3 valver 4X V-10 manual/stick with a livable payment schedule. He probably knows a great bank or two if you don't. These big SD's aren't getting any cheaper by waiting, so while there is a lull (if there is one) I'd get in there and pick one off. Buy it, and get the 4.30 rear gears. You'll have a locomotive on wheels!

I wouldn't look at a V-8 or 6.0 diesel, and forget about the lease. Surely, you've got enough money and trade value to swing a cash deal on a '06 SC model.

 

This is something I really struggled with when I got into the business, why would anybody lease a vehicle, when it is just like renting it? The fact is, it is just another form of financing. Take the following hypothetical example:

F350 Regular Cab 4x4

Lease
$35,000 Truck
$5000 Down
$500 per month x 36 months
$12,000 Buyout

or

Finance
$35,000 Truck
$5,000 Down
$500 per month x 60 months

Making this simple, I have choosen round numbers with no interest or taxes on either side for arguement sake.

Fast Forward Three Years to End of Lease

Customer comes in after three years of doing the lease on his F350 Regular Cab V10. He has set the lease up to accomodate his type of driving so the mileage is fine and he opted for Wear Care (don't know if the U.S. has this) so he has up to $3,500 in damages to the truck covered by Ford.

__________________________________________________ _______________

Customer has three options:

1: Buy to trade or sell.

Mr. Customer loves truck but decides that a new Super Cab would be the way he wants to go this time around.

Mr. Customer has $2,000 in equity as the truck is appraised for $14,000 by his dealer so he pockets $2,000, or he sells this truck privately to his neighbour for $15,000 and pockets $3,000 and moves into his new truck.

2: Drop Off.

During the term Mr. Customer gets rear ended and has damage of $7,500 done to his truck, insurance has repaired the truck but no doubt the vehicle depreciates because of this.

His dealer appraises the truck for $10,000. Mr. Customer chooses the drop off option, It is not his fault the truck depreciated so we she he have to take the $2,000 loss.

If customer had have choosen purchase option this $2,000 would be carried over to his new lease or loan.

3: Purcahse option.

Customer has enjoyed the truck and wants to keep it. He has the option value of $12,000 which he decides to finance through his bank.

__________________________________________________ _______________

Basically what leasing does is takes the responsibility of the owner of the vehicle, and puts it in Ford hands.

As for the mileage issue that always comes up regarding leasing. If you know the amount of mileage you plan on doing then lower the lease end value and raise the payments so you will set yourself up for the future.

If there are any questions please ask, I run the lease department at my dealership.

 

This is something I really struggled with when I got into the business, why would anybody lease a vehicle, when it is just like renting it? The fact is, it is just another form of financing.

Actually, you're right. The thing with leasing is that you're resigned to making a payment forever- there's never a time where that title actually winds up in the safe deposit box. Or accumulate equity for a down payment on the next one. And...you hope nothing bad, like unemployment or some other unforeseen emergency, comes up about the time the lease gets rolled over to the next one.

To me, leasing takes control of the vehicle and hands it to the lease company. Chalk me up as a car guy that doesn't lease.

 

Boxcar,

Automakers love folks like you. You're in a bind. In your particular case, you drive too much to justify a lease IMHO. Yet, you tend to trade your truck every 3 years, which we all know is not the smartest thing in the world from a financial viewpoint. Since you drive more than the average guy, your trade is worth even less than it would normally be. In addition, it's possible that you owe more on your truck than it is worth - negative equity.

You have the urge for a new truck, something I can relate to every day. Think about the situation for a minute. My suggestion would be to resist the urge to get into another truck even though the deals are very sweet out there right now. Every month you hold onto your truck, the closer it is to being yours. The percentage of equity increases with each payment. Why not consider keeping it until the loan is paid off and then jump into something. If you tend to want to switch out of your truck every three years, why not look for a nice used one with low mileage?

Leasing is the poor man's way of driving a new car every XX amount of months. They don't want to have to worry about repairs and breakdowns after 36 months. They are willing to pay more for this convenience or comfort factor. Maybe they don't drive more than 12,000 miles a year.

Personally, I've never leased a car simply because I drive too many miles. I do get the urge to replace my vehicles frequently though. So, I almost always buy a used vehicle that's about 3-4 years old. This way, the depreciation hit has already been absorbed by the original owner. I still get a "new" car that I can dump at any time I like without taking a blood bath on it. I've kept my '98 Explorer for 18 months now, that's about as long as I hold onto them. I just get bored and want something else. So, I understand the rationale for leasing even though I think it's not too smart from a financial perspective.

The bottom line is that buying a new vehicle is not a matter of investment. In nearly all instances, the vehicle will lose value no matter how little it is driven or how well it is kept. So, if someone buys a new vehicle, they should really keep it until it costs more to maintain and repair than it is worth. This might be 15 years or more for some people but only 5 for others. At least the entire life of the vehicle has been realized. If I ever do get a new F-250, I'm keeping it as long as possible even though I always want to switch out. I can't justify the expense of moving out of a new truck and buying another new one after just 3 years.

Is buying a new vehicle right for most people? Probably not. Is leasing a new vehicle wise for most folks? Probably not. Yet, most of us do one or the other more frequently than we should. That's just the way it is and what keeps the economy going.

 

Good post- but it takes me back to an original contention of mine- most car deals come down to two major items: Cash down and monthly payment. The rest is pretty much background noise.

 

Polar,

That's why it would appear to me that unless you can earn interest at a better rate than on the loan you are paying to finance the car (i.e. 0% financing), you should pay only pay cash for a new car.

Since the interest on an auto loan is not tax deductible, there is no benefit to taking out a loan except that you have a new car that will cost you more than what you paid for it.

An exception to this might be to take a line of credit or home equity loan and pay for the vehicle in cash from these funds. This way, you'll get the interest deduction on your income tax return. You'll still pay more for the vehicle but you'll get something back on the payments.