cliff notes:

reason to lease ^^^

reason to buy ^^^

i'm somewhere in between... buy but keep 6-7 years.

 

No. The original dealer sells the car to Honda financial for $33,595.00 They also sell the lease which gets them a commission. They're done. Honda and the dealer get paid for the car by Honda financial just as if you had bought it.

Honda financial services the lease, they charge interest and fees for doing that, and at the end of the lease, they get the car back. Or...you can buy it or sell it or trade it as long as you get at least the residual value of $23,701. You can buy the car, trade the car, or sell the car at any time during the lease as long as Honda financial gets $23,701 + the remaining lease payments.

When we discuss a subsidized lease, the manufacturer is offering incentives to lease the vehicle in the form of rebates (for instance Lexus has a $2,500 rebate on the GS now but only if you lease, when I leased my Jeep they had a $3,500 rebate but only on a lease), high residuals (which reduces payments but raises the buyout price, and the risk for the lender), and low money factors (which is interest). For instance assuming $33,595 is an MSRP price, that residual of 23,701 is a 70% residual which is VERY high. That would be an example of how the manufacturer might subsidize a lease. It could be that $33,595 is a negotiated price, thats why you want to negotiate the price as low as you can on a lease, because the residual is calculated off of the MSRP.

Not at all. Any dealer can take in a lease return, I've returned say a Cadillac lease to a Lexus dealer. The dealer just does the inspection and takes possession of the car for the leasing company. The leasing company then takes possession of their car, and allocates it to a dealer depending on demand, inventory requests, dealers CSR rating, etc. The dealer who leased the car is absolutely not guaranteed to get the car back on a lease return. If you turn a car into a MD dealer...they may send it to NY for example, if a dealer in NY really wants that car. Or...they may sell the car at auction to an end user or another used car lot if they think they will get more money that way than sending it to a dealer.

My Lexus dealer prefers to take cars in on trade instead of doing lease returns for that very reason, they want the car...and as long as they can give the customer the lease buyout on trade its a win win for everyone, customer saves the sales tax or maybe even makes some money on the car depending on the value(I traded my 2010 ES instead of turning it in and made $1,000 on the deal, plus I saved $1300 on sales tax on the GS, so overall trading over turning in made me $2,300), and they are assured to get the car for their CPO fleet.

 

it just goes to show everything in life is negotiable.

i have to look into this...

 

i've leased before and would like to do it again, but one thing that's holding me back is the mileage allowed. on luxury brands they only allow 10k miles/yr and the payment would go up exponentially if you want to add extra miles.

 

Actually, my wife and I went into our local Lexus dealership looking at the RX and asked if we wanted to lease it for 12k miles instead of the advertised 10k miles, our payment would only go up $17 a month. Not too bad.

 

yeah, but i was looking at 15k - 20k /year. 6 years ago i leased a 2008 535i with 18k miles/year and the payment was substantially greater than the advertised 12k/year.

 

The basic Lexus lease is 15k miles. They have lower mileage leases but the actually adjust down from the 15k. Anything over 15k they just back out the cost of the mileage from the residual at 15k. My last Lexus lease was 18k.

Also, you can trade out of the lease so if you are over your mileage as long as the dealer gives you the buyout on trade you owe no mileage penalty.

 

I have a small business lease was by far a better option. in 1 year we leased 4 new cars for our office all with very little money out of pocket. 2013 750li $110k, 2013 evo x gsr $36k, 2013 volt $40k, 2013 gs350 fsport $58k. Retail valve for all 4 cars was about $240k. We put 5k down for 750, 2k down for the evo, 2.5k down for gs, 0 down for the volt after ca rebate. Total out of pocket $9500 and less than $2300 a month including tax we have 4 new cars. Instead of dumping 240k into car that depericate we put it in the business, if our 240k give us return if 1% a month it pretty much cover our monthly payment. We still have a gx470, ls460, ls430, is350 that was purchase and paid in full we dont even drive. Those car depericate so much that it would of save us money if we would of lease them instead of purchase. For me unless it is a car i plan to collect like a ferrari all my future cars is going to be lease.

 

you do save on interest charges during the lease term if you plan to lease up front then buy out right in the end...my dad did this on one of ES sedans they've had and factored out to come out cheaper than financing outright. we probly would have still had that 3ES had it not been hit and written off, car ran impeccably as the same day we bought it.

as said before though, many factors play into leasing and it being cheaper for your personal preference

 

For me , the next three years will be an exercise in restraint. I already have that itch for another car and I am only 3 years in on my LS. I keep promising myself that I will keep the car until its payed off. We will see

 

having never leased, it's a little weird being forced to purchase or start a new lease in just 2-3 years and always having a car payment. even if the payments are low, $500/month is nothing to sneeze at.

both cars fully paid off = very nice feeling

 

Not really. It depends on the money factor, which goes into the "rent charge", which is the analog of the interest payment.

 

You can't say "not really", i.e. he's wrong...and then say it depends on the money factor.

If you're getting a $2,500 rebate from Lexus for leasing and a very low money factor you might save money leasing then buying it out.

 

hehe tammer, decide after you pick up the brakes from me please

that's exactly why he and i said "as said before though, many factors play into leasing and it being cheaper" and "it depends on the math and the situation"?

 

Yes it is....