Who Leases? Who Purchased?

[wallyuwl]

Maybe a dumb question, but is financing a car like financing a house, where the first several payments almost entirely go to interest rather than principal (I.e., you won’t get any equity in the car until several months of payments?)

If so, I’d think that financing at a high rate with a dealer is bad news since even 3 payments before refinancing could mean a few thousand dollars.

It is the same idea, but not nearly to the extreme as with a house. But yes, early on you will be paying more of each payment towards interest than you will be later on. So maybe you'll be paying $60 interest each payment early on, but only $20 interest in payments toward the end of the loan. The higher the rate, and the longer the term, the more interest you'll pay early on and in total over the life of the loan.

The dealer I bought from did not ask me what term I wanted. I was even going to be willing to pay the 3 months with Chrysler Capital so they got their kickback. But when they automatically signed me up for 84 months, and I saw the rate even with an over 800 credit score (a longer team increases the rate), I refinanced before making the first payment.

 

[JJRamTX]

I don't know... i pay less than half a percent of interest each month on my lease and I've been making a good return on the stocks I've bought with the extra discretionary income I have had over the past few months.... but that's just me..... snowflake and tesla have been killing it

Sent from my SM-N975U1 using Tapatalk

I purchased but Totally agree on the stock profits! Between Tesla, Apple and Costco I got a free truck in just the last 7 months.

 

[Jako]

Maybe a dumb question, but is financing a car like financing a house, where the first several payments almost entirely go to interest rather than principal (I.e., you won’t get any equity in the car until several months of payments?)

If so, I’d think that financing at a high rate with a dealer is bad news since even 3 payments before refinancing could mean a few thousand dollars.

Amortization Calculator | Bankrate

Amortization is paying off a debt over time in equal installments. Part of each payment goes toward the loan principal, and part goes toward interest.

www.bankrate.com

$50,000 for 5 years at 5%

$615.80 in interest for the first 3 months

You can play with the numbers but that is an example of the cost. Higher rate, longer term = more $$$$.

 

[Swicago]

Purchased Laramie Ram and Jeep Cherokee for wife. Financed 10k each to get get the extra rebates. Held the loans for a month and paid them off. Could care less if the dealer lost their kickbacks, they were asshats anyhow

 

[KMach]

Decided to lease to probably buy at the end if it has been good. I built the truck and got exactly what I wanted nothing more nothing less. 21 1500 quadcab. Flame red, bighorn level 2, night edition, off road package, hemi non etorq, 3.92 gears. Tow mirrors and rear wheel liners as well. Price was about 45k after rebates.
I am $350/month 12k mile 42month lease with 6k down. Love it, it will be the official replacement to my little 99 Dakota as they are twins once I retire her.

 

[Jako]

Decided to lease to probably buy at the end if it has been good. I built the truck and got exactly what I wanted nothing more nothing less. 21 1500 quadcab. Flame red, bighorn level 2, night edition, off road package, hemi non etorq, 3.92 gears. Tow mirrors and rear wheel liners as well. Price was about 45k after rebates.
I am $350/month 12k mile 42month lease with 6k down. Love it, it will be the official replacement to my little 99 Dakota as they are twins once I retire her.

NICE! I'm a long time buyer/owner so I have no experience with leases. I always question those last 6 months when the warranty is up on a lease but don't know. I had looked at doing something similar but I did not like the numbers. Figured I could sell the Ram "cheap" and the deal would be the same. Wish you all the best.

 

[tr0n]

I leased mine. 36 months at $419+tax, $0 down (just first month and license up front), 15k miles a year. This is the first time I've leased, but the math just works out really well on this deal and I've never kept a vehicle more than 3 years anyway. That said, there's a good chance I'll buy this at the end. With a $32k buyout, I should be in a really good position even if I just want to flip it and lease another one.

Was that thru Chrysler Capital or Ally? How much off MSRP were you able to get? That seems way better than the payments I'm getting from dealers around me! (MN)

 

[Jako]

Was that thru Chrysler Capital or Ally? How much off MSRP were you able to get? That seems way better than the payments I'm getting from dealers around me! (MN)

Good questions. One of the members on the forum got a great deal with leasing. However that was early on the 2019 Ram introduction and had to travel from NYC to Pa. FCA/Ram and the dealerships know what hey have now. Supply and demand!/?

 

[KMach]

NICE! I'm a long time buyer/owner so I have no experience with leases. I always question those last 6 months when the warranty is up on a lease but don't know. I had looked at doing something similar but I did not like the numbers. Figured I could sell the Ram "cheap" and the deal would be the same. Wish you all the best.

My first lease as well, I have multiple older vehicles and havent had a payment in over 10 years. But now i have no equity in anything. Rather than having a $900/month payment, i plan on buying this out for the $25,000 at the end. The remaining 6 months it will still have powertrain. I am a tech, if i suspect anything wrong it will be fixed during the 3/36.

 

[Jako]

My first lease as well, I have multiple older vehicles and havent had a payment in over 10 years. But now i have no equity in anything. Rather than having a $900/month payment, i plan on buying this out for the $25,000 at the end. The remaining 6 months it will still have powertrain. I am a tech, if i suspect anything wrong it will be fixed during the 3/36.

When I did the numbers I think the leasing was 450-500. A fellow member leased the Ram for about 350 but I didn't know him at the time and I don't know if I would have been able to get the same deal. He leased (which he plans on buying out) when the Rams first came out. The time between his lease and my "shopping" the Ram had grown in popularity. There are plenty of Ram dealerships in the NY/NJ metro area and over time visited about 9. Not impressed with the dealerships and sales people but finally had a sales manager who had 20 years of experience and the "game" was over.
I financed at 1.9 with my credit union (which was another hassle/disappointment) for a payment of 805 for 60 months.
Buying a new model year can be a roll of the dice, particularly with all the electronics. I was fortunate to purchase the "lifetime warranty" by a few days thanks to reading the forum. Some issues but very happy with the Ram.
As a "tech" and the warranty is up, what are your abilities and options to perform work later on?
I had an issue where it would not come out of first gear (resolved itself an hour later) but the dealership replaced the battery and updated the TCM. Still have issues with the ANC and backing up applying the brakes which I have a dealer appointment next week to address. I'm not educated in what is involved (hardware, software, procedures) but it seems to me we are locked into the dealership for some problems.

 

[Cgo]

Purchased mine, details in sig. $650 per month for 60 months. Would never lease a truck. I drive 100 miles per day and use my trucks like trucks.

 

[Ortiz7983]

I leased my purchase.

 

[Turaco]

Been leasing cars since 2003 getting a new one every 2 to 3 years and so does my wife now. Would never buy a car, outside maybe a used mercedes coupe/roadster for the weekends. Love the truck, the gas mileage though, lol, but it’s all good.
2021 Ram Laramie
MSRP $72,300
10k miles a year (working from home)
$1500 Down
$460/month
24 months

 

[Gozar]

Leased with the plan to buy at the end of the lease but...................now that we own a Polaris RZ and my wife dearly wants a travel trailer I may have to upgrade to a 2500.
There are not many 1/2 ton towable toy haulers and even fewer (none) that offer the level of creature comforts needed to have a happy life (happy wife).
I am working on getting her to consider a class c or class a motorhome and pull the utility trailer/toy behind it.

 

[Mirowpl]

I have always purchased and financed my vehicles. I am on my third ram, first one was a 2003. I hold on to them and use them like a tr7ck so they get banged up and such. I do take care of them so they run good. I have never leased a vehicle nor never will. The match long term never makes sense for me, but for some I understand that lowest payment and down payment are important.

 

[Turaco]

I have always purchased and financed my vehicles. I am on my third ram, first one was a 2003. I hold on to them and use them like a tr7ck so they get banged up and such. I do take care of them so they run good. I have never leased a vehicle nor never will. The match long term never makes sense for me, but for some I understand that lowest payment and down payment are important.

The concept of leasing has always been elusive to some. You pay for depreciation of the vehicle based on mileage and duration of lease. It’s a stress free ownership of the vehicle and with the deals on current vehicles it’s very attractive to most. If you put 50k miles a year on your truck, yes, leasing is not for you, lol. But for most it works out great, including myself. Just remember, the more mileage you put in your truck the more it depreciates, yes, your monthly payment wont change, but higher mileage means lower selling price, we all know how that goes. Not to mention costly out of warranty repairs, time lost driving to mechanical shops, etc.

 

[Jako]

The concept of leasing has always been elusive to some. You pay for depreciation of the vehicle based on mileage and duration of lease. It’s a stress free ownership of the vehicle and with the deals on current vehicles it’s very attractive to most. If you put 50k miles a year on your truck, yes, leasing is not for you, lol. But for most it works out great, including myself. Just remember, the more mileage you put in your truck the more it depreciates, yes, your monthly payment wont change, but higher mileage means lower selling price, we all know how that goes. Not to mention costly out of warranty repairs, time lost driving to mechanical shops, etc.

It is not only high mileage but also low mileage that leasing is a no go. My 2001 has 84,000 miles and was the primary vehicle for 5 years and than was relegated to a secondary vehicle. That is 20 years which equates to close to 7 3 year leases. Factor in the reduced cost of insurance for collision and fire and theft (NYC rates for me) and it amounts to a hefty sum. Of course I am not driving a new vehicle every 3 years but my 2 year 2 month old Ram is doing plenty fine for me and hopefully well into the future.

I can also understand how some must have a reliable vehicle and a new vehicle covers that to a degree but not a certainty.

I was debating a lease versus buying initially because the Ram did not have a track record. At the end of the lease I could return it if things looked to be a potential problem. When I did the numbers I came to the conclusion I could always trade/sell at a reduced price and the numbers would be the pretty much equal. And if things worked out buying I would be ahead of the game. So far I'm happy with the decision and thanks to the forum members I was able to get the lifetime warranty with a few days to spare.

Another aspect is children, flipping the car to them but that is another topic.

 

[Mirowpl]

The concept of leasing has always been elusive to some. You pay for depreciation of the vehicle based on mileage and duration of lease. It’s a stress free ownership of the vehicle and with the deals on current vehicles it’s very attractive to most. If you put 50k miles a year on your truck, yes, leasing is not for you, lol. But for most it works out great, including myself. Just remember, the more mileage you put in your truck the more it depreciates, yes, your monthly payment wont change, but higher mileage means lower selling price, we all know how that goes. Not to mention costly out of warranty repairs, time lost driving to mechanical shops, etc.

Agree but this assumes the buyer does not mind always having payment. I will have this paid for in less than a year by paying extra. Then i have a very new paid for vehicle. I do buy the Chrysler extended warranty as an insurance policy of sorts. Btw the way I am a retired from the financial industry and I fully understand all the ins and outs of leases vs loans vs cash and possibly investment arbitrage

 

[Turaco]

Agree but this assumes the buyer does not mind always having payment. I will have this paid for in less than a year by paying extra. Then i have a very new paid for vehicle. I do buy the Chrysler extended warranty as an insurance policy of sorts. Btw the way I am a retired from the financial industry and I fully understand all the ins and outs of leases vs loans vs cash and possibly investment arbitrage

I can pay off my lease too and have no payment for two years, but that’s besides the point that I was trying to make, which is in a lease you pay for the depreciation of the vehicle. Plus I like having new vehicles every two to three years. I agree that you will be paying less if you buy and keep your car for 10 years, but that’s not what I’m after. If I wanted to save money on a car I would buy a used diesel vw jetta and that would def be cheaper, lol.
Another things is folks dont like dealing with having to sell used cars, everrybody trying to lowball you and trying to save every penny they can. I did that once and never again. Im in and out of the dealership with a new vehicle, no headaches.

 

[Mirowpl]

Well said.