Does leasing make more sense??

[WuNgUn]

Leasing is another form of financing and primarily is for people that trade in for new cars every couple of years, and don't really care about having equity in what they own. It's also a way to have a lower payment on a vehicle they can't really afford to purchase.

Right... Which leads me to one of my points about going after a refreshed model Bronco down the road...
New vehicle and equity are kinda a oxymoron anyways. Lol
Pretty much EVERY ford I've owned depreciates faster than the lien amount except for maybe the final year in the term.
BUYING a new car.... And even leasing a new car is just shitty from purely a financial standpoint.

Sponsored

 

[Judge Rufus]

I normally keep my vehicles 5-7 years, so no, leasing makes no sense, for me.

 

[Squatch]

But If you think the trim you selected holds the value very well and you lose less money compare to lease if you sell it in 2/4 years, then you should buy it.

That's possibly the opposite of the truth. If it loses less value than the residual, then you can sell it at the end of your lease instead of just terminating the lease. If you paid less via leasing than you would have with a loan, then you definitely come out on top by leasing.

If you know you want the Warthog, then leasing is the safest method to avoid being upside-down with your Bronco.

Don't, for the love of the flying spaghetti monster, add a bunch of accessories into the lease even if they let you. You'd pay full price&tax for them and have nothing to show at the end and as many decades of used Harley and Jeep transactions will prove, accessories depreciate far faster than the vehicle.

 

[Squatch]

Also, are we talking real dollars or is this all some metric hooey?

 

[WuNgUn]

Also, are we talking real dollars or is this all some metric hooey?

Definitely Metric money at a 30% deficit to US dollars and at a 13% tax rate.
But please, please, don't mock us with hockey memes. Lol

 

[Mattwings]

Right... Which leads me to one of my points about going after a refreshed model Bronco down the road...
New vehicle and equity are kinda a oxymoron anyways. Lol
Pretty much EVERY ford I've owned depreciates faster than the lien amount except for maybe the final year in the term.
BUYING a new car.... And even leasing a new car is just shitty from purely a financial standpoint.

Z plan helps me with that too. I typically get a bit ahead on the price and when you take that off the top, plus the recent incentives, it’s actually been a bit less to lease. It’s all crappy financially. It’s a depreciating asset. Most of us only “need” basic transportation. Everything you spend beyond what you need for living (going to work, getting groceries, basic to and from social and recreational activities) is a luxury. I have several different financial obligations and I try and balance what I spend with what I save and defer some luxuries while indulging in others. I also sometimes choose to pay a premium to transfer risk (insurance, leasing) and I have both two small pensions (I am fortunate to be just old enough that my employers still had them for a time) and 401k. Pensions- the risk is on the provider, 401k the risk is on me. As long as you know what you’re getting into and understand where you pay the premium or where you shoulder the risk, decisions aren’t necessarily “good” or “bad”.

 

[MOBRONCO]

Except in Canada, a $45k Bronco is $65k with tax

The basic math is still the same, a lease makes sense if you can put little down and keep payments low. A large down payment is risky on a lease. Maybe Canada has different rates or something unusual, but the fact doesn’t change that you are just pre-paying your monthly lease by trading in. You can pretend you’re only paying $300-400 a month, but you are just pre-paying with your trade and your real cost is $900+ a month on that lease.

 

[qiyuanhu813]

That's possibly the opposite of the truth. If it loses less value than the residual, then you can sell it at the end of your lease instead of just terminating the lease.

I feel we are taking two different things—I am taking about purchase vs lease, and you are talking about lease end option—terminate lease or buy and sell.

 

[Squatch]

I feel we are taking two different things—I am taking about purchase vs lease, and you are talking about lease end option—terminate lease or buy and sell.

Purchase vs. Lease. If you're talking about concern over the value at the end of a normal lease period, then it's only a concern if you are getting rid of it.

You suggested that it would be better to buy it if the value is higher than the residual at the end of the lease. That's the complete opposite of what you should do unless the total of lease payments is more than what you paid by financing, because you can sell it privately instead of turning it in at lease end.

 

[TJconvert2.7]

As someone who drives over 20k miles a year and cannot lease... I say, if you can, lease. Being able to turn in a lease and replace it with a newer year with netter options sounds amazing

 

[qiyuanhu813]

Purchase vs. Lease. If you're talking about concern over the value at the end of a normal lease period, then it's only a concern if you are getting rid of it.

You suggested that it would be better to buy it if the value is higher than the residual at the end of the lease. That's the complete opposite of what you should do unless the total of lease payments is more than what you paid by financing, because you can sell it privately instead of turning it in at lease end.

Still feel completely different things we are discussing here. I am comparing purchase vs lease with the known condition—if you know you are going to have it for 2/4 years only and then upgrade to newer trim or other models. If a car can holds it value strong, and purchase price - resell is less than the 2/4 years lease cost(include the potential gain if you buy when lease end and resell), purchase is a good idea. However it is difficult to predict the market at the time you decide lease or buy.

 

[Squatch]

Still feel completely different things we are discussing here. I am comparing purchase vs lease with the known condition—if you know you are going to have it for 2/4 years only and then upgrade to newer trim or other models. If a car can holds it value strong, and purchase price - resell is less than the 2/4 years lease cost(include the potential gain if you buy when lease end and resell), purchase is a good idea. However it is difficult to predict the market at the time you decide lease or buy.

We're discussing the same thing. I'm just saying that you are making assumptions that are most likely false.

In order for it to be better to purchase--given that you get rid of it in 2 years for a Warthog--it has to be cheaper than a lease like you just said.

2-door Badlands, no options:
$43,590

2-year lease with $0 down:
$851
24 payments x 851 = $20,424

5-year purchase with $0 down @5%:
24 payments x 823 = $19,752

Assuming that you can sell it for the same dollar amount either way, it seems like an easy win for financing, right?

Except that financing doesn't include taxes. Two year leases are always expensive, because that's the highest rate of depreciation and the most unpredictable.

Here's another thing that scenario doesn't take into account: you still owe interest on the financed vehicle whereas the leased vehicle has a fixed residual value.

The difference between the two above is only $672

The lease only paid taxes on those two years of the vehicle. The financial loan includes the taxes on the entire amount of the vehicle. Unless your taxes are less than 3% it's going to be more than that $672 without taking into account the interest on those taxes.

*The numbers are from Ford.com and none of that is actual financial advice.

 

[qiyuanhu813]

We're discussing the same thing. I'm just saying that you are making assumptions that are most likely false.

In order for it to be better to purchase--given that you get rid of it in 2 years for a Warthog--it has to be cheaper than a lease like you just said.

2-door Badlands, no options:
$43,590

2-year lease with $0 down:
$851
24 payments x 851 = $20,424

5-year purchase with $0 down @5%:
24 payments x 823 = $19,752

Assuming that you can sell it for the same dollar amount either way, it seems like an easy win for financing, right?

Except that financing doesn't include taxes. Two year leases are always expensive, because that's the highest rate of depreciation and the most unpredictable.

Here's another thing that scenario doesn't take into account: you still owe interest on the financed vehicle whereas the leased vehicle has a fixed residual value.

The difference between the two above is only $672

The lease only paid taxes on those two years of the vehicle. The financial loan includes the taxes on the entire amount of the vehicle. Unless your taxes are less than 3% it's going to be more than that $672 without taking into account the interest on those taxes.

*The numbers are from Ford.com and none of that is actual financial advice.

This is because 1)the lease residue for a BadLand is the lowest compare to other trim, nearly 10% diff. If you do the same calculation on a base model with same msrp you will find the diff 2) MF for Bronco is very high, convert to interest it is about 6%-7% someone mentioned it in other posts(Ford accept MSDs?). Plus you have the flexibility to lease a longer term-48months for a lower monthly payment and transfer the lease out anytime.

 

[Russ1Bronco]

I'll be leasing a 4 door base...with 7 of the low cost options for 323 a month for 48 months ..with 4k down..(and this isn't counting my A/Z plan discount..which should make it less)..I was going with a 2 door,with the same options,and that monthly payment was 311 a month...for 12 bucks a month..I'll take the 4 door..both choices are for 13,500 miles...when 4 years arrive,Ill make a decision to buy or return...I won't be modifying...just maybe getting the wheelies painted black..This will be my first car payment since 2010...

 

[JZZ]

Right... Which leads me to one of my points about going after a refreshed model Bronco down the road...
New vehicle and equity are kinda a oxymoron anyways. Lol
Pretty much EVERY ford I've owned depreciates faster than the lien amount except for maybe the final year in the term.
BUYING a new car.... And even leasing a new car is just shitty from purely a financial standpoint.

Exactly buying a new car almost always is a terrible decision only bought three new out of sixteen in my life one when I was 18 and stupid 2 for my wife and why trade in if your vehicle is worth 20000 most likely in this market will be a quick private sale for more money

Sponsored