Buy vs Lease?

[HenryR]

I know the differences between buy and lease, my buddy is a leasing guy, he assures me if I lease rather than buy it won't cost me more for a lease if I plan to buy out the lease. I'll just stretch out payment over the lease term and finance term on the buy out.

He's recommending since it's an all new design, lease the truck, if there's problems return it, if at the end of the lease the truck is still great buy it out then.

His plan sounds good, any one have ay experience ?

 

[kbUSMC2012]

It’s all about your perception of value. I generally recommend buying over leasing any day of the week, and have never leased a vehicle in my life. Why? You get absolutely nothing out of it. You’re basically renting a car for 3 years. And those mileage limits? Ridiculous. And unless you put down a big fat down payment (“capitalized cost reduction”) your payment is probably gonna end up close to what you could buy it for anyways.

To your friends point, sure, if you have problems in your lease, at the end of the term you can turn it in no harm no foul, but if you decide to keep the truck, not only did you lease the vehicle for 3 years, now you’re financing for how long? 60 months? 72? Now it’s taken you almost 10 years to pay off a vehicle.

If you buy the vehicle and you have problems in the first three years, that’s what the warranty is for. If at 2.5 years, you don’t like it and the truck turns out to be a dud, claim everything under warranty, and sell it fully repaired in good faith to a dealership. But if you love it, in 3 years you’ll probably have a good chunk of equity in it (5-10k at least) which you can do what you want with. You can use that as a down payment on your next truck, you can sell it and keep the cash, whatever you want. If you love it enough to keep it, congratulations, you’re halfway/over halfway done with your financing terms! It’s almost 100% yours! It’s YOUR money when you buy, it’s the dealers money when you lease.

As a side note, I’m not hating on anyone that leases. I get why people do it. Lower payment, new car every three years. I get it. Just me personally, don’t think I could do it.

 

[grinch72]

I personally leased mine. Got a smoking deal and had a ton of incentives. CCAP had dirt cheap money factor and a large residual at the time. I got a truck that was $68k sticker and pay $647 a month with ZERO out of pocket. 36m/12k. No way you could purchase for that without putting down a crap ton of cash. After 3 years I will simply turn it in. If I like it I will consider purchasing a brand new 2022. I'm sure any kinks will be fixed by then and I'm hoping for Level 3 autonomy by then.

 

[HenryR]

It’s all about your perception of value. I generally recommend buying over leasing any day of the week, and have never leased a vehicle in my life. Why? You get absolutely nothing out of it. You’re basically renting a car for 3 years. And those mileage limits? Ridiculous. And unless you put down a big fat down payment (“capitalized cost reduction”) your payment is probably gonna end up close to what you could buy it for anyways.

To your friends point, sure, if you have problems in your lease, at the end of the term you can turn it in no harm no foul, but if you decide to keep the truck, not only did you lease the vehicle for 3 years, now you’re financing for how long? 60 months? 72? Now it’s taken you almost 10 years to pay off a vehicle.

If you buy the vehicle and you have problems in the first three years, that’s what the warranty is for. If at 2.5 years, you don’t like it and the truck turns out to be a dud, claim everything under warranty, and sell it fully repaired in good faith to a dealership. But if you love it, in 3 years you’ll probably have a good chunk of equity in it (5-10k at least) which you can do what you want with. You can use that as a down payment on your next truck, you can sell it and keep the cash, whatever you want. If you love it enough to keep it, congratulations, you’re halfway/over halfway done with your financing terms! It’s almost 100% yours! It’s YOUR money when you buy, it’s the dealers money when you lease.

As a side note, I’m not hating on anyone that leases. I get why people do it. Lower payment, new car every three years. I get it. Just me personally, don’t think I could do it.

I think like you do, but my friend makes a valid argument. I think I'm going to do a traditional purchase. I just wanted to hear other ideas.

 

[HenryR]

I personally leased mine. Got a smoking deal and had a ton of incentives. CCAP had dirt cheap money factor and a large residual at the time. I got a truck that was $68k sticker and pay $647 a month with ZERO out of pocket. 36m/12k. No way you could purchase for that without putting down a crap ton of cash. After 3 years I will simply turn it in. If I like it I will consider purchasing a brand new 2022. I'm sure any kinks will be fixed by then and I'm hoping for Level 3 autonomy by then.

I have a 2013 Yukon Hybrid as trade in. I'm waiting to see the incentives too.

 

[Aggie Rod]

I know the differences between buy and lease, my buddy is a leasing guy, he assures me if I lease rather than buy it won't cost me more for a lease if I plan to buy out the lease. I'll just stretch out payment over the lease term and finance term on the buy out.

He's recommending since it's an all new design, lease the truck, if there's problems return it, if at the end of the lease the truck is still great buy it out then.

His plan sounds good, any one have ay experience ?

Not sure where you live but I leased mine through Autonation. I got a Larime $53k MSRP for under $500 a month with no money down. They are currently offering the same deal on Big Horns in my area.

 

[Gauge]

All about pricing for me. Without taxes figured in my purchase price payment would have been $926 a month for 60 months and my lease payment is $505 a month for 36m/12k miles. 63k msrp truck.

 

[SuperShortMag]

My thoughts, I've done both

If you always buy a new truck when or before your current one is paid off, I think leasing it is a good deal
Leasing will be a couple hundred dollars less payment. This may be the difference in driving a new truck or not.

1) The mileage limit. We loved the 16 and wanted to take it everywhere
2) Hate to add any accessories and spend money on it because you are turning it in
3) Hard to treat it like a truck worrying about damage at turn in
4) The stock tires are junk. There's a chance you will be replacing them right before the lease is done

You will pay more if you lease and buy it in the end. Guys that shop around are getting around 20% or more off of MSRP when they buy.

They can tell you about what your payment will be to buy the truck out in the end now. Run the numbers and see what you think. It will take a pretty good down payment to keep them the same as the lease was.

Just finished up a lease on a 2016. Probably won't do it again. on a truck. Maybe a car that doesn't get any mods and just hauls the family

 

[troutspinner]

I think a buyer needs to get the idea of buying at the end of a lease out of their plan with 8 year loans available. Just be realistic with yourself, do you want a new vehicle every 3 years or do you actually want to own it at the end?

One thing to consider, if you like to trade in often, say every 4 years, if you finance for 5 years, you’ll build a good amount of equity. Do this for a couple vehicles in a row and you’ll create enough equity that will reduce your payments lower than any lease can offer.

I had a discussion with a young 30s distant family member a couple weeks ago. He is a successful person in the accounting field working for big finance. He knows what banks make per se but his personal position on buying / leasing was that he likes to have new cars so leasing works for him but then he further explained, we lease our music right? Do you subscribe to Apple or Google Play music? We lease our cell phones now because the hardware price is built into the plan price and it allows us to upgrade every 1 or 2 years. He went further, renting is the same as leasing, we rent our TV service, electric, water, etc. His point was why is auto leasing viewed as evil when in reality, we lease everything else that is of service or diminishing value.

I thought he made a good point, which is why I comment.