joebruin

I owned my previous car for over 12 and half years before leasing my ES300h last year. I had never thought about leasing but though that the deal I got was too good to pass up. I would save over $1k over buying it initially vs buying the car at the end of my lease, due to a lease rebate I received.

My lease has another 20 months on it and I'm already thinking about my next move, buy the car at end of lease or trade up and lease another car, like the GS.

Just curious about what others will do at the end of their lease? Buy or lease another car?

bgryn1976

A few things to consider. These are what I consider ver broad things to consider.

What is the interest rate when your lease is up. Currently it's so low Lexus is giving you free money. As long as it's like the current envirement. The cheapest option will be keep leasing every couple of years.
If Interests rates rise the cheapest option most likely is to purchase and drive it for 10 years.

Look at changing early. I was able to get out of mine with over a year left on the lease. Trading up is always good. I think the biggest reason to buy a GS is you already have a current version ES and simply want something different. I wanted a GS but I was too cheap to shell out the extra money for it. I had a prior version ES so anther ES was a good upgrade for me.

Since you own a Hybred. I would be concerned about battery replacement. long term.

You have weigh all you options when you lease the answer is different for everyone. Some states are better then others leasing. Some times leasing can save you thousands if there is Tax Credits other times it cost you a lot more.

joebruin

I think you are right on all points. I used to be, and probably still am running the car to the ground type of owner. But the prospect of ridiculously good lease deals make me think otherwise. Just curious how did you get out of your previous lease with over one year left?

bgryn1976

In my case I was under the miles allowed on my lease. My lease also had a payoff amount every month. This meant car was worth more then what the payoff amount was so I had equity in the car. The lease put in a pretty good spot 2 years out.

Check trade in values with edmunds or Kelly Blue Book. Make sure you don't say excellent and you should be able figure out pretty quick if you should trade in the car.

I was able to bring it back to the dealer and trade it in. Just like you would with a loan. This assumes you have a lease that allows this. If you financed though Lexus it most likely is like this. The great part about this is everyone wins. Lexus is not stuck with a car they need to sell. The dealer moves a new car and gets to sell a certified used car to someone else. I also win because I get to swap out a new car with simular payments.

It's the only lease I want because it's basicaly a balloon loan with an option to kick the car back. Some leases do not work like this and should be avoided. Usally there hussled though leasing companies.

The only problem I see with leases are you drive too many miles and the car market tanks so you can't refinance and you have to come with penalties to cover the excess miles to turn the car back in. The interest rate is what makse leases such a good deal right now. If we had 10% interest rates leasing might not be such a great deal.

Back in 2008 if you leased you were better off because theUsed car maket tanked. If you had a lease you were in most case way better off then owning.

joebruin

Thanks for the explanation. I'm always curious about the taxes involved. Let's say payoff is 35k and dealer buys car for 36k. Does that mean you pocket 1k or are you the hole for 2k due to sales tax to cover the payoff (35k+sales tax)?

bgryn1976

That depends on the state you live in. In Texas trades reduce the taxable value. This happens regardless of where you trade your car. You are only taxed on the difference. You have to take this into account when you trade a car in. Unless the car is not worth much. In most cases a private sale will not net much after taxes are factored in. .So on car worth 36k you would save $2225 on tax. The downside is they tax the lease like you are purchasing the car.


I know in Texas there are Tax credits availble from leasing companies based on trade in and such. It is also possible to be double taxed in Texas as well for a car on a lease. The best way to avoid this is to get the tax paid by the leasing company. For me I will not lease unless it's offered. It's one reason I did not buy a BMW a few years ago.