Bobjann

Thinking about leasing a car (for my son and not a Lexus). Has anyone ever leased a car and gotten burned by doing so? Anybody have any stories?

pbm317

Unless you haven't fully vetted out the sale price, residual and money factor, there's not much to get "burned" for. Just know all the various acquisition and disposition fees. Take good care of your car so you don't get hit by wear and tear, and stay within your mileage bounds. Yes, you'll likely be "upside down" in the car for most of the lease period, but that only would burn you if you're trying to get out early.

mmarshall

I agree. Read the lease-contract carefully so that you are familiar with it and can accept its terms, particularly the specifics of the Wear-and-Tear Clause. If you don't think that you can keep the car in physically as good a shape (dents, scratches, cracked glass, etc....) as the contract specifies, or can stay within its stated mileage-limits, then leasing may not be for you.

And, also consider that even if you yourself are diligent in taking care of a car, it's obviously beyond your control if a piece of road-debris hits it, things from trees (walnuts, acorns, branches, etc...) fall on it and cause dimples, you have storm damage, some kid on a bike sideswipes it, or some dimwit in a parking lot lets his or her shopping-cart roll into it.

NYKnick101

The only way I know people getting really screwed is wear and tear and mileage for a car. My friends GF leased a VW and she went over the limit of allotted miles in a lease. When she asked to buy it, it was well over what the car was actually worth. It is all stuff that could have been foreseen and avoided though

SW17LS

It's just all about understanding the terms and how a lease is calculated. A lot of people get screwed and never know it. Lots of ways for the dealer to hide profit in a lease. If you know how it all works, and you know what the residuals, money factors and all SHOULD be for a particular model, it should be no problem.

Question, why lease something for your son? To me in a situation like that if you're going to pay for a car for him, you should just buy him a car he can keep. Don't know how old he is, but the issue is you get to the end of the lease, will he be able to replace the car or buy it out on his own?

In general you never want to lease a car and then buy it, you're better off to buy it from the start.

Sulu

One thing to remember about leases is that you do not own the car; think of it as a long-term rental. Like a rental, you pay only for the portion of time and miles that you use the car. You sign a contract to use the car for a certain period of time (24 months, 36 months, 39 months, etc.), for a specific average number of miles/kilometres that you will drive each month (1000mi, 2000km, etc.), and 'normal' wear and tear.

At the end of that lease period (the rental), you return the car with the agreed-to number of miles/kilometres (or less) and with the 'normal' wear and tear; or you can buy the car for the agreed-to buy-back value.

If you return the car with greater-than-agreed miles, you pay a penalty of some amount for each mile over the limit; if, at the signing of the contract, you believe that will drive more than the contract-specified distance, you can buy more distance up front at some amount per mile (which is typically less than the lease-end penalty).

If you return the car with greater than 'normal' wear and tear (be careful of how the contract defines "normal"), you pay a penalty. Or you can get the dings, worn windshield wipers, worn tires, etc. fixed at your own expense prior to returning the car, at an amount that may be less than the penalty. If you made any modifications to the car, remove them before you return, otherwise you may be charged a penalty to remove them.

If you want to get out of the lease early, you have to pay out the remaining months of the lease and return it, or you can try to find someone who is willing to take over the remaining lease payments. You can also buy it at the buy-back value PLUS the remaining months of the lease, and keep it or sell it. If you are lucky, someone may be willing to buy the car before lease-end for equal or greater price than what you still owe on it. Some (used car) dealers may be willing to do that if you have a good, well-taken-care-of car.

If you are thinking about lease-to-own -- leasing and then buying the car for the buy-back value -- it may be more expensive than buying or financing the car at the start, unless you find a particularly cheap lease rate.

Remember that if you lease, someone else owns the car so there may be other restrictions and stipulations. There may be a requirement for more insurance. You may not be able to return the car to another dealer if you move (you may have to return to the original dealer). And there may be restrictions about where you drive it (there may be out-of-country restrictions).

If you understand all these conditions and are willing to put up with them, leasing can get you a new car often at a lower monthly rate than financing.

rogerh00

One thing to watch for is a turn in fee. I leased a Honda many yrs ago and when the lease was up the dealer said I owed then $400. I was livid. I hadn't read the fine print before signing the lease, my bad. I haven't ever leased another Honda.

sunny416

from what i heard from friends. its usually the wear and tear the dealerships get you on. like said previously you are "renting a car long term"

FastTags

Not yet, but if you go over the mileage and do not wish to keep the car, you are screwed.

SW17LS

Not really. You can always look at your options for trading the car in instead of turning it in. If they can get you the residual at least for trade then the mileage isn't an issue.

Even if you do have to pay for excess mileage, you aren't "screwed" you just used the car more than you told them you would, and had to pay for that use.

Its like saying "If you book a hotel room for 3 nights and stay for 4 nights..they're going to screw you by charging you for the 4th night".

FastTags

yes, I guess what I forgot to mention if you over the mileage by at least 20,000 then even a trade in wont help you. Of course you can recoup some of the money by trading it in or by selling the vehicle, but you will never get all 20,000x .25 cents= $5,000 back

Sulu

The mileage limit is a bit of an artificial barrier. I agree that paying the over-mileage fee may be considered as merely paying for what you used, but some may see it as an expensive penalty. Because it is in the contract, over-mileage is charged as a penalty.

You can avoid the over-mileage penalty if you don't return it. Buy it and keep it, or sell it to someone who is willing to pay at least the buy-back value (hopefully more than the buy-back value). Not everyone looks at more-than-average miles as a penalty. If you pay the leasing company the buy-back value, any over-mileage or wear-and-tear penalties don't matter.

rogerh00

So what is the buy back value at the end of the lease? Is it just the residual value or some other number based on blue book or what? The deal I assume must be done thru Lexus Financial and not the dealer. Are there any other fees attached to a buy back?

JDR76

As I recall, the Lexus disposition fee is $350, but will be waived if you buy or lease another Lexus (or Toyota?) product.

tmf2004

iTrader: (15)

what kills me about leases is how can the dealer predict what the car is worth at the end of the 3yr term. Car values go up and down daily... Where do they come up with these numbers?