Is leasing bad???

DennisMurray

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Like a lot of things in life, transaction costs and interest costs will greatly affect your ability to accumulate long term wealth.

People who move a lot, for example, end up paying over and over for cost of moving, closing fees, and never move past the point in a mortgage where you are paying nearly exclusively interest and no principal.

And that's a similar point to how I view leasing: car ownership is a necessary thing for life in many parts of the country, and in the case of a Bronco, maybe it's an entry requirement to something else you want to do. I want to be able to vacation to the west (and eventually move to the west) and run trails.

I've adapted a "buy it for life" philosophy as much as I can - in part because of transaction costs, in part because having continuous payments for things means you aren't banking that money for a life when you aren't going to be held captive to a job to be able to pay for the thing. And ideally with a vehicle - if I can stretch the life of it to 10, or 15, or even 20 years - seems like a much better return on investment than continuously having a car payment (which is what leasing sets you up for).

(And total aside, I've had a lot of debate about what the "best" route to get to this is in a vehicle - and there's a lot of trade-offs. Obviously an older vehicle is going to have some higher cost of maintenance than if you continuously keep a car with 0-50k miles.)

It comes down to your values, and what you value and the trade off of your time versus having the possession.





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BuckinT29

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What are the financial implications of returning your lease with the bash plates heavily bashed, wheels rock rashed, and the sides of the vehicle heavily pinstriped?
That will be under you leasing agreement- typically damage to the body is where they will make you pay up or going over your miles.

Normal ware/rare is not something they can get you on.
 

irv0735

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What are the financial implications of returning your lease with the bash plates heavily bashed, wheels rock rashed, and the sides of the vehicle heavily pinstriped?
I didn't say you could actually take it on the trail! 😂
 

broncoj11

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So I haven't bought a new car for 17years...cash purchase of my first car with an inheritance from my grandad...wrecked it 6 months later and lost thousands!!! I swore I'd never buy new again after that and to this day I've never owned anything less than 10years old...I daily drove a 30year old Honda (1989, SiR I imported from Japan into the UK for anyone interested) for 3 years.

So I'm a little confused on how to purchase the Bronco....I don't want to drop all my savings on it cash, I'd much rather keep that invested earning me more money than the interest will be with finance, BUT what's wrong with leasing? I've seen a few people say not to do it and want to know why? I'm not 100% sold on the colours without seeing them in person (would've loved a dark green!!!) And with all these rumours of it getting bigger engines or seeing improvements over the next couple of years I was thinking of leasing my first one then in 2-3years either buying it or upgrading to a newer one if there are different colours or engines. I'm not sure I want to take the risk buying it and in 2 years time they throw the 3.5 Eco in there and come out with some deep green colour and I want it!!!

TLDR is there a reason not to Lease even if I think I might want to swap it for a newer model in a few years?

Cheers
Ash
imo leasing isn’t a great option for us. you don’t own the car, there’s mile limitations etc
 

jimmycarter

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That will be under you leasing agreement- typically damage to the body is where they will make you pay up or going over your miles.

Normal ware/rare is not something they can get you on.
Just say you follow Ford on Instagram and that gave you a very different understanding of what was “normal” wear and tear for this vehicle.
 

Ajusaf

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Leasing becomes even more interesting/appealing with the announcement that you can also lease the accessories... So you can effectively build a true trail ready rig and enjoy it for 3 years and then decide if you want to keep it (buy it) or do something different.
Leasing is not something to exclude from your options as many would have you believe. We are all in unique situations and leasing is the better choice for some people.
If this is the case, Ford will probably offer additional benefits, such as, for an extra $20 a month the vehicle will have coverage between $7500-10K towards any issues like worn tires, damage etc.. when you turn in the lease. I had this option when I leased my Mazda SUV.
 
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Ajusaf

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imo leasing isn’t a great option for us. you don’t own the car, there’s mile limitations etc
Sometimes it works out better if you lease and then buy it at the end. Also if you're a military reserve member and go on active orders you can return your lease regardless of how long you had it and there will be no penalty on miles or on contract.
 

Boxer4

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Sometimes national loss leader lease programs discount vehicles to a point that can match a straight up purchase. Never had a dealer able to match national lease deals. At this time, Bronco will not be one of them. Every lease that I have not done the purchase option, I had the dealer buy out right before the end. No worries on damage or mileage and I make a few dollars. That said, it's a guess that the residual value will be lower than the actual value down the road. I look for high utility and good gas mileage vehicles when leasing. If you do lease make sure you know the actual purchase price. Not counting tax, tags and dealer fees, take the money your are paying out of pocket plus any trade and add that to the Net Capitalized Cost. Compare that to the MSRP( include destination ).
 

Mattwings

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Ford offers “wear care” that covers some damage outside of “normal wear and tear”. I have leased my last 3 F150s and with wear care the dealer literally didn’t even look at the vehicles when I brought them back. I have run the numbers a bunch of times and the premium for leasing is about $1k over two years here in MI on the F150 including the wear care (assuming normal maintenance items like tires and brakes). For that $1k I have had brand new models every two years and been able to try out different options and features (hated the sunroof on my 16, so I didn’t buy the truck). Now I want the Bronco, so I can walk away from my current F150, even though I planned to buy it and the residual is in the range of the value of the truck currently. Ford has been great about extending my lease as I wait for the Bronco as well. All of that depends on the price, residual value, wear care cost and interest rate on the lease (my last three leases I qualified for .25%, which is a big factor in the relatively low cost). They incent the F150 like crazy here in metro Detroit, so I will be curious to run the numbers and see which way I go with the Bronco that will likely have little to no incentives. Just look at the Ranger right now. Locally they are actually more expensive then the comparable F150 once you go through all the options and incentives. All because the Ranger is selling 100% of what they can build.
 

Garemlin

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I leased my F-150 only because, being completely honest, my credit took a major hit after my last divorce. I would have never been able to afford the financed payment. I actually went over my alloted miles and traded it in for my current Grand Cherokee a year early so it didn't make a difference. They gave me above my buyout so I didn't have to roll any negative equity. I also leased my Grand Cherokee because I knew I was only going to have it until the Bronco came out. So I will be in a situation again where I don't need to roll any negative equity.
 

jtzako

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For a daily driver it can be fine but you definitely would not want to lease a vehicle like a bronco if you are going to use it for offroad etc. There's almost no way you'd have the vehicle in the right turn-in condition at the end of the lease.
 

JRB45833

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One thing I haven't seen mentioned is that typically if you lease they want you to lease a higher end model (i.e. Outter Banks or Wildtrack with the Bronco) as those are the models that will have all the bells and whistles that will make it easier for the dealer to sell once the lease is up. In fact, 9 times out of 10 the lease payment will be cheaper on a higher end model than it will be on a stripped down base model because of the significant difference in estimated end of lease market value.

As others have noted, the lease v. buy really depends on your circumstances and how you plan to use the vehicle. Remember that with a lease you're going to have to put at least a couple grand down up-front, be it cash or trade-in. The mileage limitation can be a real problem for some. If you commute an hour each way to work every day a lease probably wouldn't be a good option. If you want to take it out on trails, you definitely do not want to lease as they will ding you for every dent, ding and scratch that falls outside the "normal wear and tear" parameters (light scratches less than 1" long, shallow dings smaller than a dime, etc. would be "normal wear and tear for example).

Another thing to think about if it applies is that if you're self-employed and use the vehicle as your work vehicle all or a portion of your lease payment is tax deductible as a business expense (here in the U.S.), whereas if you buy you can only write-off the depreciation.

Another plus to leasing is that (like in the Bronco's case) if it's a new or redesigned model it takes away some of the risk of being the guinea pig for that new design should it end up having a lot of issues as it will be covered under the factory warranty the whole time you have it. Also, if it does end up being a problematic vehicle you aren't stuck with it and won't be responsible for the significant drop in resale value that will go along with it. Just turn it in and walk away at the end of the lease and the financier eats that loss.

Leasing can also be a good way to get into a more expensive vehicle for the long haul that you otherwise wouldn't be able to afford buying it from the get-go as you can spread the payments out over a longer period of time. Yes you will pay interest over a longer period, but these days the interest rate on a lease is usually very low or even zero % if you have good credit and/or wait for a factory promo. I went this route with my current truck where I leased it for the first 3 years then paid cash to buy it out at the end of the lease and ended up saving about $4k over if I would have purchased it outright from the beginning.
 

Sunchaser99

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I think it really comes down to if it leases well or not which from my understanding ford leases typically are terrible. It’s something to think about as I been leasing for past 6 years. Leasing has worked well for me with no money down and lower monthly fees, all under warranty. Let’s see what happens with the bronco? I’m afraid first year or two the prices will be terrible due to demand.
 
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Proudy202

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One thing I haven't seen mentioned is that typically if you lease they want you to lease a higher end model (i.e. Outter Banks or Wildtrack with the Bronco
Well given that I've gone from a Big Bend to a Black Diamond and now I'm really set on a Badlands I don't think that's an issue anymore :ROFLMAO:
 

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