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Confused by some of the hate on the lease option. Seems wise for those wanting Low Down and Lower Monthly Payments

11Bronco1776

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Maybe I am missing something significant so help me and others like me out here if that's true.

For those people that are unable to or are hesitant to throw down a large down payment, leasing seems like a good option. Leasing allows for you to put less down and have significantly lower monthly payments then straight financing would with the same amount down.

Example using my numbers but plug your own into it to help you out;

My Build is $54,170. A lease at 48 months allows me to only put down $5,353 driving 13,500 miles a year and gives me a monthly payment of $575.

Financing with that same amount down, $5353, a 48 month term at 3% interest gives me $1,067 month payment. A 60 month term gives me $866 a month payment. 72 Month term is $732 a month payment.

In order to get anywhere near my lease payment of $575, financing, I will need to put down $20,000. At 3% interest and a 60 month term and I am sitting at $603 a month payment. Extend my term to 72 months and I am now at $510 dollars a month.

So if I am unable to make a large down payment or I am wanting to keep more of my cash in savings for now, it seems like leasing is simply a better option.

By the end of my 4 year lease term I believe I will owe approx $21,217 dollars. Original MSRP $54170 minus my down payment $5353= $48817. Minus what I pay during the term of lease $27600........ $48817-$27600=$21,217. (I know that interest isn't accounted for and for the act of simplicity I am keeping it that way.)

Now, am I correct in stating that regardless if you lease and then end up buying out your Bronco or finance your Bronco from the get go you will still be paying the same price of the Initial MSRP, minus differences in interest and some nominal fees of course?

In my view A lease is really letting you change up when you pay the large down payment. I.E. doing it now vs doing it later, in this example 48 months down the road I can pay my remaining balance of $21,217 or even finance the car for another couple years to pay off the remaining balance. Thus allowing you time to save for that buy off amount if needed.

I see a couple of other perks to financing, I.E. not paying sales tax on total vehicle price on initial purchase, but will save those for later as this was alot to throw out there. I hope that all makes sense and I look forward to the thoughtful reply's.

Thanks for bearing with me on a long post. Damn excited for getting me and the fam a Bronco and want to do it wisely.
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PSUTE

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Maybe I am missing something significant so help me and others like me out here if that's true.

For those people that are unable to or are hesitant to throw down a large down payment, leasing seems like a good option. Leasing allows for you to put less down and have significantly lower monthly payments then straight financing would with the same amount down.

Example:

My Build is $54,170. A lease at 48 months allows me to only put down $5,353 driving 13,500 miles a year and gives me a monthly payment of $575.

Financing with that same amount down, $5353, a 48 month term at 3% interest gives me $1,067 month payment. A 60 month term gives me $866 a month payment. 72 Month term is $732 a month payment.

In order to get anywhere near my lease payment of $575, financing, I will need to put down $20,000. At 3% interest and a 60 month term and I am sitting at $603 a month payment. Extend my term to 72 months and I am now at $510 dollars a month.

So if I am unable to make a large down payment or I am wanting to keep more of my cash in savings for now, it seems like leasing is simply a better option.

By the end of my 4 year lease term I believe I will owe approx $21,217 dollars. Original MSRP $54170 minus my down payment $5353= $48817. Minus what I pay during the term of lease $27600........ $48817-$27600=$21,217. (I know that interest isn't accounted for and for the act of simplicity I am keeping it that way.)

Now, am I correct in stating that regardless if you lease and then end up buying out your Bronco or finance your Bronco from the get go you will still be paying the same price of the Initial MSRP, minus differences in interest and some nominal fees of course?

In my view A lease is really letting you change up when you pay the large down payment. I.E. doing it now vs doing it later, in this example 48 months down the road I can pay my remaining balance of $21,217 or even finance the car for another couple years to pay off the remaining balance. Thus allowing you time to save for that buy off amount if needed.

I see a couple of other perks to financing, I.E. not paying sales tax on total vehicle price on initial purchase, but will save those for later as this was alot to throw out there. I hope that all makes sense and I look forward to the thoughtful reply's.
Thanks for bearing with me on a long post. Damn excited for getting me and the fam a Bronco and want to do it wisely.
Again, not disparaging any posters. All of us are buying what works for us. Same as finance options. Not a fan of leases, but if it works for you, go for it!!!
 
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11Bronco1776

11Bronco1776

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Again, not disparaging any posters. All of us are buying what works for us. Same as finance options. Not a fan of leases, but if it works for you, go for it!!!
I am looking for errors in my thinking so if you see any point um out! Go UTES!
 

mrxg78

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Sorry but I didn’t have the patience to read through the whole thing. My 2c

-yes it’s a lower payment and might help some people

-the residual value is low, that is why the payment is higher then it should be. I think I read somewhere that Ford has placed it at around 50-55% while we all know it’s going to be higher.
My guess that’s why people are frustrated
 

kodiakisland

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I think many in the off road community are less familiar with leasing because it usually doesn't make sense for an off road vehicle. Obviously, plenty of people will never leave the pavement and not put a lot of miles on it, and a lease may make sense for them.

If you need to lease, lease, if not, buy. I don't think any one is judging.
 

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Has there been hate on the lease option? I've missed that somewhere.

I've never leased a vehicle before but my understanding is the contract you sign up front lays out what the buyout amount will be assuming you conform to the contract, eg mileage, modifications, damage. As long as the buyout makes sense, have at.

The problem with leasing is when you use it as a long term rental service. lots of people do this, trading in every two or three years. You end up throwing a lot of money away with no equity to show for it.
 
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11Bronco1776

11Bronco1776

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I think many in the off road community are less familiar with leasing because it usually doesn't make sense for an off road vehicle. Obviously, plenty of people will never leave the pavement and not put a lot of miles on it, and a lease may make sense for them.

If you need to lease, lease, if not, buy. I don't think any one is judging.
Not worried about the judgment, well this one at least, it is said Jesus is coming again.....

Just trying to see if I am wrong in my calculations and if so for someone to help a brotha out.
 
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11Bronco1776

11Bronco1776

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Has there been hate on the lease option? I've missed that somewhere.

I've never leased a vehicle before but my understanding is the contract you sign up front lays out what the buyout amount will be assuming you conform to the contract, eg mileage, modifications, damage. As long as the buyout makes sense, have at.

The problem with leasing is when you use it as a long term rental service. lots of people do this, trading in every two or three years. You end up throwing a lot of money away with no equity to show for it.
I've read several other threads about leases since the lease went live and even before actually that paint it pretty negative. Maybe I should change the title to this thread as that isn't my main gripe....I think.
 

marjen

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Not sure how you are getting that number. If I put in a badlands at 50,675 with $5003 down for 48 months and 13,500 miles it says $647 a month.
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hemiblas

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I'm not a lease expert, but agreed with what you said and you didnt include the interest. Over 4 years that is probably about 10k.... I think you still pay the sales tax up front? and as you mentioned there are fees that you didnt account for. If you cause any damage to your vehicle that will reduce what it is worth when you go to turn the vehicle in.

Your final payoff for the vehicle is way off because you didnt include the sales tax since you are buying it at that point, the interest, and the fees...
 

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BadSquatch21

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Most people don't grasp all the inputs and risks that go into the true cost of ownership of a car. If you truly model out the risk/reward/opportunity cost of it all and if you don't put a lot of miles on it, leasing can make a lot of sense. I chalk it up to ignorance.
 

elnorte

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I am looking for errors in my thinking so if you see any point um out! Go UTES!
Well, you weren't an 11C, so people may doubt your math skills, however, your math is accurate and in the end it all depends on peoples wants, needs, or pocket books.

Edit: dammit my math is bad too. I wasn't an 11C that is why.
 
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NotApplicable

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My take on the lease option is that it’s a new vehicle so the residual values are estimated with no data, and they are lowballing the resale. Thus, the lease is likely inflated because they’re guessing it will lose more value than it actually will over the lease period?
 

Akinmx

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For me 13,000 miles per year is not possible. This will be my daily driver AND weekend fun car. I'll probably be putting 18-20k miles on it per year easy.
 

Bronco4lyfe85

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Yeah I’m not sure where that payments coming from either. I leased my challenger for whatever god awful reason for 6 months before refinancing and I paid like $628 a month for 48 months with 4K down and it was 50K. No way you’re getting a $575 payment, more like $700.

Also, I’ve never seen a lease outside of those killer deals they run for promotions that wasn’t designed to make you pay 5K+ more than the out the door price. Leases are not designed to be financially smart, if they were everyone would do that and never buy.
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