We've discussed numerous purchasing strategies ever since this site was born but we've never discussed leasing as a viable option.

I'm looking for anyone with some real experience in leasing who can add their personal experiences here though all facts and opinions are welcome as usual in my posts.

Considering the overall costs of these vehicles, especially trucks, I'm exploring all options for the next acquisition, which is way off by the way.

Please, add your input and educate me.

 

If you lease a vehicle at MSRP and then you decide to buy it at the end of the lease, you'll be paying full price.

"She who must be obeyed" leased between 1994 & 8/2013. Ford Red Carpet Leases (1994 Taurus/2008 Edge) were both 24 months.

NotaFord leases were either 36 or 39 months. She never bought any, just turned them in, last was a 2010 Honda Crosstour.

I got tired of negotiating these leases, so I told her in July...find something you like and buy it...and that's what she did.

 

Leases may be different between Canada and USA.

Here the taxes on leases are applied monthly so if you get a good rate and have zero cash down anyway it could be a better deal to get a lease. Otherwise it's almost always better to buy.

New leases are often 4 years term which means you may have to get new tires and change brakes during the lease. Also you not not have 100% warranty during the full lease. And if your situation changes it's much easier to sell a car than to break or transfer a lease.

 

I've never leased a car, and again, it may be different up here in Canada, but the main reason people like leases is if you run your own business. You can write off your vehicle expenses monthly if you lease, which is somehow better for tax reasons than trying to depreciate an owned asset.

I have looked at it for me, and I know that leasing has never looked attractive when compared to financing or cash purchase.

 

My opinion is that leases are for two classes of drivers: those who want to drive something they could not otherwise afford to buy (30K millionaires driving BMWs comes to mind here), and people like realtors, traveling salespersons and business owners who can write off the lease against earnings on their taxes. The average owner should avoid leasing unless they fall into category one above.

 

I have two Fords: a 2012 F-150 " Lariat " Crew Cab, and a 2014 Explorer XLT. I own the truck, but lease the Explorer under a 24 month lease agreement. I have done so for the last 4 Explorers, but have purchased the F-150's. The lease works for me as I have 1,000 miles monthly allowance, no money down, and a reasonable payment. The Explorer is always under warranty, I never replace tires, and this allows me to drive a $45K vehicle. If the Explorer was my only vehicle, I would not lease. But, with two vehicles, the lease works well for me. Like someone said previously, you have to figure your own personal situation, but this works well for me. I have always leased under the Ford " Red Carpet Lease " program thru the dealer. Never had any issues whatsoever.

 

Leases are a great way to go if you like to get a new vehicle every few years, stay within the agreed mileage, like your vehicle being under warranty and take decent care of your vehicle. I lease for my wife for all those reasons. And you may never have to buy tires if you lease and take it easy with the throttle/brake pedal. However, they require a certain tread depth when returning the lease. And could potentially charge you for excessive wear and tear on the vehicle.

I always purchase my own vehicles because I intend to keep them many years. I also don't mind either purchasing an extended warranty or expecting some things may break after 36,000 miles.

 

I think it depends mostly on a few things, your mileage situation, how long you plan on keeping the vehicle, and how well you take care of your vehicles.

For mileage, if your commute is 50 miles each way daily then you probably don't want to lease. Most leases are limited to 10-12K miles per year. Anything over that and you pay at turn in, standard I think is around 30 cents a mile. So it can add up fast if you go over, been there and done that

If you like having a new car every couple of years and the mileage isn't an issue then a lease can be a good thing, just realize you usually will have zero to negative equity in the vehicle at turn in so don't think your going to buy it back after the lease and make a killing. If you keep vehicles until the wheels fall off a lease is probably not a great idea because of the equity issue mentioned above.

If you don't like doing regular maintenance, wash it regularly, or have messy people in your vehicle, a lease is probably not for you. The dealership can and will charge you at turn in for excessive wear and tear if the vehicle is not properly maintained.

I've seen people owe thousands at lease turn in due to a multitude of things, mainly excessive wear and tear or mileage over contract limits.

 

We've leased several vehicles. It's an ok deal to keep your payments lower. You DO have the warranty on the vehicle for the lease term also. I've never leased for more than 3 yrs, not even sure leases go out that far. These days you can set up the term/miles the way you want. The more miles you think you'll put on, the higher pymt you have. It's a little cheaper to over estimate, than to be penalized for going over at the end. If you like to have newer vehicles every few years, it's ok. BUT if you do decide, it's lot like buying, the bigger the down payment, the better off you'll be. Personally, if you can afford to buy, for a short loan term like 4 yrs, do it. When ya lease, you'll ALWAYS have a car payment. If ya buy, you could potentially pay off the loan and own it.

 

This is exactly my thoughts. Lease for my wife and buy for myself. She only drives about 7000 miles per year so I could do a lease, set up a normal 1000 miles per month and then use the leased vehicle as our travelling car.

I want to thank everyone for their input, more ideas and comments are welcome.

 

There is another option on here that has not been mentioned. You can do one-time payment leases and they will sometimes give you a little more negotiation on price (bump up the residual on the vehicle or something). This is when you make all of the payments initially (downpayment). That is if you don't want to have monthly payments and you will be paying for typically 32-40% of the vehicle - but still not own it. We did that once but then decided it was better for us to put less down up front and make the payments. We leased for my wife for about 9 years and I leased for a while. The reasons are for what some have mentioned on here. My wife was always in a fairly new vehicle and was always completely covered under warranty.
I have also done pretty well with most of my leases near the end of the term. My wife barely puts any mileage on her vehicles so it is not uncommon for us to have a vehicle for 3 years with only 15k miles total. I made money on a few leases, broke even on a few and lost on one.
That being said - we currently own both of our vehicles (well one has payments) - but it is because she fell in love with my Expy when I bought it and my daughter is at an age where it is not uncommon to have multiple munchkins with her.
I know most frown on leasing like the afore mentioned "$30k millionaires driving BMW's" - but this is personal preference. It worked well for us because we had a strategy behind it. Certainly I could have purchased a few year old vehicle for my wife when she became a mother. I opted to lease her a new sport utility and accepting the fact that if she decided to keep it then I would have overpaid because of the way leasing strategies are set up or negotiate at the time of buyout. That was never really the case for us due to the limited wear & tear we put on her vehicles.

Long explanation - but this is something I am pretty familiar with. Feel free to PM me if you have any direct questions. Or the mods can let this run if they feel it beneficial to others.

 

People can debate about what costs more, lease or loan, but the real expenses roll up when you buy vehicles more frequently and both methods encourage payment-driven-thinking and more frequent buying of newer vehicles. Cars can easily be the largest expense during your life. Cutting expenses in that area can pay off big. And I'm not talking about lease vs. loan... I'm talking about no payments at all.

Your whole mental outlook will change when you don't have a car payment. It's amazing how content you can be with your vehicle when it enables you to keep stuffing money in your bank account. And the best part is when you do buy again, you'll be able to afford an even nicer vehicle then you could have if you were still making payments the whole time!

I have to say it was pretty easy to get in a cash only situation. All I did was figure out a sensible payment I could afford and then cut that budget in half. Then when I bought a vehicle I made double payments and got out of loan in ~2 years. Then I drove the vehicle a few more years and kept paying myself the payments the whole time. I did this for my wife's car and my own car. Before I knew it there was enough cash to buy anything I wanted with a lot left over. First, I bought my wife a new car and then a few years later bought myself a nice new F150. I'll keep each vehicle 10 years and pay off the house in that time. No car payments is like a gift that keeps on giving. Give it a try and you won't regret it!

 

Rent or buy you are never without payments. Just look at it long term.
Rent a car for 5000$ a year = 50,000$ over 10 years
Buy a car for 50,000$ paid within 5 years and keep it 10 years. Same thing.
Renting will always be more expensive unless you buy and resell cars every 1-3 years.

For me it's mostly about being free to trade whenever I want. That and I prefer to buy 3-4 years old cars. Still in good shape but so much less expensive than new.

 

The thing that set this thread into motion was the chain of events that happened to me this year on my 2004 Expy.

We bought the truck new and it's been bullet proof all along except for the fuel pump. At 81K miles the pump went out, $1100 repair and we're rolling again thinking that we'll never have to do that again.

This year as the truck was reaching the 90K mile mark, I changed plugs, belt, new tires ($700) and I had the dealer perform a cooling system and it's second trans flush. All preventive measure to keep her healthy well into the future.

The fuel pump goes out again at 96K miles. So, two years and 15K miles goes by, the pump is out of warranty, Ford won't assist and I pay another $900 repair. I just don't have enough free time from work to do this work.

So, now I've dropped $2500 on a 9 year old vehicle this year alone and it's still a 9 year old vehicle. Cheaper than making a payment for sure but definitely frustrating no less. Now for peace of mind I have to re-establish a AAA account in the event that my wife gets stranded again.

I'm more concerned about keeping my bride in a newer vehicle with a warranty. My last F-150 was 22 years old when I sold it and this one will be old when it goes by the wayside as well.

Great ideas and comments have been offered, keep em coming.

 

IDK, my 15 year old expedition sees 250-350 miles a week and i have no concerns about taking it anywhere. keep up on the maintenance and that Expy will keep going for ALONG time with minimal issues...much cheaper then a lease payment or regular payment.

just my opinion though...