Who here leased their Bronco? Can you share how it went?

[DesertMike680]

I leased my Big Bend for 48 months at 10.5k miles with $4500 down. Payments with taxes are at $510 a month. I plan on buying out my Bronco within the next two years.

Also, I sold my previous 2018 Mazda 6 with 58k mileage to CarMax for $18,400. I owed $14,100 so came away with a nice down payment. It's now on their website selling for $22,400 here in Vegas.

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[John Auer]

I also have leased many vehicles, for myself and was in the car business for about 10 years. Correct me if I’m wrong, but the lease payment is made up from two calculations. One is the depreciation, the difference between the capitalized cost (the negotiable ‘price’ of the car), and the residual value. The other part is the finance charge, which is the cap cost plus the residual, multiplied by a money factor. The money factor, unlike an interest rate, doesn’t appear anywhere on the lease contract. The way leases are structured makes it difficult to compare apples to apples. I like leasing because of the convenience and getting a new car every couple of years. It definitely costs the most because the biggest hit in depreciation is the first couple of years. The least expensive way to buy a car is to buy it used, pay cash and drive it until the wheels fall off. That’s not me.

 

[John Auer]

2. You just repeated what he said, differently.
3. You do pay taxes on the total price in some states. I want to say in Texas..?


Also no one should ever put money down on a lease, just saying for anyone reading.

I’m NY, you pay tax on the monthly payment, up front. We used to pay the tax with the payment. That changed years ago, now NY wants their sales tax up front. I also agree that you should never put money down on a lease. I usually walk out of the dealership for less than $100, usually for transferring plates. I even roll the sales tax into the payment. If the car is stolen or totaled, I don’t have to fight to get the down payment back.

 

[Techun]

You are correct, but that applies to a loan with GAP insurance as well as a lease.

I usually put 20-30% down on purchases and borrow the rest for whatever the best interest deal is. Because of the down I skip the gap insurance. My insurance offers a 20% higher value for total loss option for a few bucks a month, I buy that instead.

That's not true.

If I take out a traditional loan and put 5k down on my bronco, and get totaled immediately, then I will get paid for the value of the car. Most likely will still lose some money but it depends on the insurance company. I know one advertises 100% new car replacement.

If you lease and put $5k down, you're out $5k for nothing.

If you lease and put $0 down, you're out $0.

You absolutely should not put $ down on a lease. Roll that amount into the monthly payments.

 

[BroncoAZ]

That's not true.

If I take out a traditional loan and put 5k down on my bronco, and get totaled immediately, then I will get paid for the value of the car. Most likely will still lose some money but it depends on the insurance company. I know one advertises 100% new car replacement.

If you lease and put $5k down, you're out $5k for nothing.

If you lease and put $0 down, you're out $0.

You absolutely should not put $ down on a lease. Roll that amount into the monthly payments.

Yes, you will lose the down payment on a buy just like a lease.

If you buy/lease a $50K vehicle with $5K down that gets totaled driving off the lot, insurance is going to value it the same lease or purchased with a loan. Assuming they give you $45K you will be out $5K either way lease or buy. If you have a zero down lease with GAP insurance then you walk away owing nothing, same as a zero down loan with GAP insurance. If you put $5K down on either a lease or purchase that $5k is gone regardless as even with GAP only the remaining loan or lease will be satisfied.

You can buy new car replacement insurance that pays an additional amount to make you whole, some companies advertise it for free. Mine is USAA’s car replacement assistance coverage, an additional insurance option that pays you 20% more than the actual cash value on the vehicle. It is also available on leased vehicles just the same. I bought such coverage on the policy for my Raptor and Touareg. For my Toyota lease I purchased Toyota GAP coverage. Beware, GAP is not standard on most leases these days, you have to buy it as an add on in the finance office.

By your logic one should never put money down on a purchase either. I used to play that game of doing a 72 month loan with nothing down, and once I owed less than the truck was worth I would pay it off quick. If the truck got wrecked in the first half the GAP insurance would pay the biggest number. Then I got my finances straight and started just putting down 20-30% and paying off the remaining 6 year loan in 1-2 years. Some would say you could do better paying the car loan normally and investing the rest in the market for a return higher than the loan interest rate. I hate monthly payments and trucks really do drive better when they are paid off.

 

[Techun]

Yes, you will lose the down payment on a buy just like a lease.

Sorry, that's just not true.

Again, if you put 5k down on a lease and it's totaled you get nothing.

If you put 0 down on a lease and it's totaled you get/are out nothing.

So, that alone proves you should never put money down on a lease. There's nothing to gain and everything to lose.


For the purchase scenario, there are a lot of factors in play, mostly the vehicle choice and the insurance policy. But generally speaking you get paid the value of the vehicle so the down payment amount is completely irrelevant. If you put 20k down and the vehicle held all of its value you're out nothing. If you put 0k down and the vehicle value dropped 20k you're out 20k.

 

[Cyclone1]

Well this thread went exactly as suspected. Lol

I just wanted some feedback from guys that leased their Broncos.

 

[Hornet]

I’ve leased for the last 12 years, purchased a 2021 bronco demo which I’m buying this time, just got rid of my 2019 Landrover Discovery Sport, leased, had 10 months left on lease, paid off lease early & purchsed, then just last week sold to Carvana for a $10,000 profit, to use on purchasing my21 , the only time a lease is bad is if you go over on the mileage, they rob you then, when that happened I had to pay an additional $4000 , so that’s the pros & cons, but a new car every 3 years is nice. Good Luck

Brilliant!

 

[heynow14]

If you put 5k down on a lease and someone crashes into it when you drive off the lot, you're out 5k with nothing to show for it. That's why you shouldn't put any money down on leases.

This is 1000% accurate. Without gap insurance, money down on a lease is bad business. Further, lease rate, money factor, interest rate - whatever you call it becomes an opportunity cost against another investment. Say your rate or money factor works out to 2.5-3%, you'd be much better off putting that down payment into the stock market and making 10-12% (what with the bull market and all). Tying up capital in a deprecating (and leveraged) asset like a car is rarely smart money folks...If you have good credit, then you should someone else's money to buy things...generally speaking...

 

[Drex]

Please explain how I lost money on my last lease....

I leased a Wrangler Unlimited - automatic, hard top, cold weather package for zero down, sign and drive for only $420 month. Kept it two years and traded it in to buy a new car. The value was so high that I was able to just walk away from it. So I basically got to drive a new Wrangler Unlimited for a monthly payment of $420 for a couple years and then turn it back in. No other costs. That's a pretty good deal if you ask me. I've leased my last 4 or 5 vehicles because I like to get a new car every couple years and I like to keep my payments low. Now, I will admit...Ive been upside down before, but not as much as when I would buy cars...even used ones. But my point is that people crap on leasing but it can be a better option sometimes. Try buying a car and then selling it in two or three years. Yikes. I actually know people that purchased cars and when they went to trade them in years later they were thousands upside down.

as you like;

You paid 24 x $420 or just over $10K. That is about $5000 a year, gone.

Let's assume the Unlimited was $45K. After five years they end up depreciating about 10% per a couple online charts (or $4500), I guessed at a 2015 for your year and you would own a vehicle worth $40K after five years. The interest paid would probably be similar between buying and leasing. With two or three leasing terms (five years) you would have spent $25000 over the same time period and have nothing, while you would have had a truck worth $40000 (using car loan calculator and ignoring interest as they would be similar to a lease) with $14,070.29 in equity for a $750 a month payment over those two years. So.... ($750-$420) x 24 is $7900 and change. That means if you bought instead and spent an extra $7900 in two years and you now have $14070 in equity. You are $6k in the hole by the end of your first lease. The numbers get progressively worse if you daisy chain leases like you have. In nine years of leasing (between your four or five times), you have spent $45K, or the entire purchase price of a Wrangler with nothing to show for it. (remember interest and taxes paid will be roughly the same) Buying it would mean you have an nine year old Wrangler worth $34K (using the historical 3% depreciation per year of the Wrangler for the same $45K (interest is a wash)

So, yes, you spend more and you get to drive a newer vehicle under warranty all the time, that has value to some folks, if the extra money is worth that extra value to them, then it is a good deal. Strictly from an impartial financial viewpoint though, it is a loser idea to lease, especially if becoming a serial consumer of them.

 

[Cyclone1]

as you like;

You paid 24 x $420 or just over $10K. That is about $5000 a year, gone.

Let's assume the Unlimited was $45K. After five years they end up depreciating about 10% per a couple online charts (or $4500), I guessed at a 2015 for your year and you would own a vehicle worth $40K after five years. The interest paid would probably be similar between buying and leasing. With two or three leasing terms (five years) you would have spent $25000 over the same time period and have nothing, while you would have had a truck worth $40000 (using car loan calculator and ignoring interest as they would be similar to a lease) with $14,070.29 in equity for a $750 a month payment over those two years. So.... ($750-$420) x 24 is $7900 and change. That means if you bought instead and spent an extra $7900 in two years and you now have $14070 in equity. You are $6k in the hole by the end of your first lease. The numbers get progressively worse if you daisy chain leases like you have. In nine years of leasing (between your four or five times), you have spent $45K, or the entire purchase price of a Wrangler with nothing to show for it. (remember interest and taxes paid will be roughly the same) Buying it would mean you have an nine year old Wrangler worth $34K (using the historical 3% depreciation per year of the Wrangler for the same $45K (interest is a wash)

So, yes, you spend more and you get to drive a newer vehicle under warranty all the time, that has value to some folks, if the extra money is worth that extra value to them, then it is a good deal. Strictly from an impartial financial viewpoint though, it is a loser idea to lease, especially if becoming a serial consumer of them.

as you like;

You paid 24 x $420 or just over $10K. That is about $5000 a year, gone.

Let's assume the Unlimited was $45K. After five years they end up depreciating about 10% per a couple online charts (or $4500), I guessed at a 2015 for your year and you would own a vehicle worth $40K after five years. The interest paid would probably be similar between buying and leasing. With two or three leasing terms (five years) you would have spent $25000 over the same time period and have nothing, while you would have had a truck worth $40000 (using car loan calculator and ignoring interest as they would be similar to a lease) with $14,070.29 in equity for a $750 a month payment over those two years. So.... ($750-$420) x 24 is $7900 and change. That means if you bought instead and spent an extra $7900 in two years and you now have $14070 in equity. You are $6k in the hole by the end of your first lease. The numbers get progressively worse if you daisy chain leases like you have. In nine years of leasing (between your four or five times), you have spent $45K, or the entire purchase price of a Wrangler with nothing to show for it. (remember interest and taxes paid will be roughly the same) Buying it would mean you have an nine year old Wrangler worth $34K (using the historical 3% depreciation per year of the Wrangler for the same $45K (interest is a wash)

So, yes, you spend more and you get to drive a newer vehicle under warranty all the time, that has value to some folks, if the extra money is worth that extra value to them, then it is a good deal. Strictly from an impartial financial viewpoint though, it is a loser idea to lease, especially if becoming a serial consumer of them.

Wow, you are smart. Thank you for clearing that up.

 

[sotto1979]

I work for a dealer and will be leasing mine this month. The residual is great esp on the Base and Big Bend where the lease is not good is the money factor. Ford is using standard lease rates which are 5.30% on a 36 month lease, and that is what is driving up the monthly payment. The reason I am leasing is because I would never buy a car. It's a deprciating assett. I would never buy a house if I knew in 3 years it would be worth half it's value and nethier should you. You also have the option to buy it close to the end or trade it in if you have equity

 

[Boxer4]

The reason I am leasing is because I would never buy a car. It's a deprciating assett

Never say never- some leased vehicles expiring now are worth as much as their initial net capitalized cost.

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