To lease or not to lease.....

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daytomann

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OK, heres the deal...When I get this LR3. I'm going to want to keep it for awhile, at least 7-10 years.
I know leasing is usually best for people who like to rotate cars every couple of years or for people who believe its better to "rent" something that depreciates rather than buy...

Would it work out to lease an LR3, in order to get slightly lower payments, for the first 3 years...then purchase it at the residual price at the end of the lease?...or would I come out better to just buy it through conventional financing?
I'm asking becuase I've never leased a vehicle and, ironically, I've never kept a vehicle longer than 4 years tops...HA! (at least I've always managed to stay right side up..even if its just barely LOL...)
But this one has to be a keeper...so what do you guys think?
Thanks!
 

joey

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I have never heard of anyone coming out on the good when leasing. I am sure that someone out there has, but leasing just doesn't compute in my line of thinking. Even if your planning on keeping the vehicle, you still have to pay a bunch of lease processing fees that you will never recoup.

Leasing is good for business that just want to show a loss on something at the end of each year.

This is all just my opinion.
 
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MightyMax

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You said it yourself, a lease is only good for people who don't want to own something or people who want to flip vehicles regularly.

I don't believe in leasing at all. If you actually do the math...you end up paying more in the long run.
 
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jazzkiller34

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MightyMax said:
You said it yourself, a lease is only good for people who don't want to own something or people who want to flip vehicles regularly.

I don't believe in leasing at all. If you actually do the math...you end up paying more in the long run.

sorry, but i just had to chime in here. leasing is actually a lot cheaper than buying. most people, especially the kind who drive $70k + vehicles, get out of there vehicles on an average of 3 years. if you purchase a vehicle, and go to trade it in after 3 years, you are going to be upside down (on a range rover, you will be upside down a lot!). whereas, in a lease, you turn it in and get right into a new one.

and as an example of how a lease saved my ****. i'm currently leasing a ford lightning. i ended up crashing it pretty bad. they had to replace the frame and basically rebuild the truck from the ground up. total cost was in excess of $20k. now, if i purchased the truck, and i tried to trade it in, the dealer would **** me on the amount they could give me because the vehicle was in an accident. but, because i leased it, all i have to do is drop off the keys and i don't have to worry about the loss.

you have options at the end of a lease, not obligations. one way for sure to know if leasing is good or not, go to your local dealer and ask how many of their employees lease. at my dealership, it's like 90%. and if people who know cars are leasing, that should tell you something.
 
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jazzkiller34

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daytomann said:
OK, heres the deal...When I get this LR3. I'm going to want to keep it for awhile, at least 7-10 years.
I know leasing is usually best for people who like to rotate cars every couple of years or for people who believe its better to "rent" something that depreciates rather than buy...

Would it work out to lease an LR3, in order to get slightly lower payments, for the first 3 years...then purchase it at the residual price at the end of the lease?...or would I come out better to just buy it through conventional financing?
I'm asking becuase I've never leased a vehicle and, ironically, I've never kept a vehicle longer than 4 years tops...HA! (at least I've always managed to stay right side up..even if its just barely LOL...)
But this one has to be a keeper...so what do you guys think?
Thanks!

if you're for sure keeping it, purchase it. buying out your vehicle at the end of a lease is usually a very bad financial decision. the reason being is most of the time the residual value (the amount the lending institution says the vehicle will be worth at the end of a lease) is higher than the vehicle is worth. paying more than something is worth is not a good idea.
 

roverman

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Lease it: I've owned 4 rovers outright and just leased LR3. With every one of them, I had this notion that I was going to run it into the ground. But cooler ones just kept coming out...

If you buy it, you pay sales tax on the whole price for starters. Also, let's say you own it 7 years. If you drive 15k per year, you will have 105,000 miles on it, and it will be worth about $7000-$8000 when you are through. If reliability is the same as the older LR's, you can figure at LEAST $5000 for tires, brakes, general repairs. So you are out about $49000 over 84 months or $583/mo.
I leased mine (it was a demo w/6000 miles) for 24 months for $550 out the door and a get a new one in 2 years and the government doesn't get to overtax me. AND BEST OF ALL: I NEVER EVER HAVE TO WORRY ABOUT OWNING A LAND ROVER THAT IS OUT OF WARRANTY!!!

Of course, the longer you own it - given minimal repair 'investment', the further ahead you will get.

roverman.
 
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mcortazz

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it is very simple. take your estimates monthly payments over the term of your loan and compare that to the cost of your lease payments for the term. At the end of your lease term you have to then factor in a new set of payments for the new car loan. Unless you are ready to hand them about half the cost of the car (probably around 44% of the cars original value). From a strictly financial standpoint unless you plan to use the cash you saved by leasing to invest at a 8% return(estimate) you will be losing considerable money.

In recent years the lease vs buy equation has been easier to answer as lease rates have forced payments near 80% of loan payments. Similiar to the current housing market(in the opposite direction and for different reasons) with such inflated house prices the monthly costs to rent vs buy makes the monthly cost of renting much easier to handle

mike
 

roverman

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Simple? Did you just say it's better to buy a depreciating asset that costs more than leasing it and to rent an appreciating investment such as a house that allows you a huge tax writeoff?
House: A lessor generally tries to rent their property for at LEAST their payment on it (mortgage+ property taxes). You can't write off the rent and you can't realize any of the gains on the property so you are paying 100% + your tax bracket 130% or so, more than you'd pay if you bought it. That's why people like to be landlords. The ONLY reasons I can figure to not own is if you don't plan on staying put very long - prohibitive closing/transfer costs- or you can't afford the downpayment. Will your house appreciate? That's another question altogether.

Car: Land Rovers depreciate as fast or faster than any car (this side of an Audi A8). I believe my numbers above show that in this case, your out of pocket cost is close, but lower, to lease. AND you get a new car every couple of years. And the above is if you own it for 7 full years. If one was to buy it and trade it in two or three years, the advantage falls much more in favor toward the lease.

It appears to me that you are only taking into account the monthly out of pocket expense and not the depreciation/appreciation/tax factors.

Of course this fails to take into account the value in the joy and pride of ownership.

Peace,
Roverman
 

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