Hi guys,
my family is getting a new car, but in leasing it, and we are new to leasing car and stuff. so i was wondering how does it work, and anything bad about leasing. thanks!
also im wondering if i lease the car, is it mean i can not do anything on the car like tint, some print job and some mod?
thanks alot!
Nick

 

Leasing is good for some, and not so good for others. It all depends on your personal driving and financial situation. If you put a lot of miles on a car, don't take decent care of it, and do a lot of mods, it's a bad way to go. If you don't drive much, do take good care of it (no dings, scratches, spills, or accidents), and don't do any drastic mods, it can make sense.
Leasing is much like renting. You never own the vehicle or gain equity in it. At the end of your lease, you have the option of buying the car or turning it back in. One major positive thing about leasing is it allows you to drive a nicer car you wouldn't normally be able to afford. But again, if you drive a lot of miles, you'll be charged for them and that can get very expensive.
I personally love leasing because I drive well under 10k a year, like having a nice car, and like to get something new every few years. In fact, I have sold my leased cars to private parties (then paid off the residual) for more than they are worth, and pocketed that money. I then use that for the down payment on the next one. So essentially, I am never taking money out of my pocket for the new one. (Only works if you drive very low miles and keep the car in A++ condition).

 

when the lease ends and im buying it back, does it make more exepensive than i just pay it off?...what if i have accident while im leasing it? do i have to buy the car or else?
and what happen if i just don't like the leasing car anymore? can i cut out in the middle of the lease? and what happen if i do some mods, like tint, HID and some print job like print the top in black? are they going to charge me for those things when the lease ends?
thank you so much!

 

Which car are you considering? Painting the roof black would be considered as altering the vehicle which would be bad for a lease. The dealer wants to be able to put the car back on his lot for sale w/o potential customers thinking the car was raced or abused. Modded cars often convey such a message, even if they haven't been treated bad.
At the end of a lease, you have the option of buying the car out and owning it or simply turning it back in and walking away (assuming there are no excess charges for over miles and wear and tear). A third option is to sell the car privately and pay off the loan/balance to the finance company who owns it. This only works good if you can sell the car for more than they say it's worth. I have done this and pocketed the difference. The finance/lease company doesn't care what you sell the car for, as long as they get their pay off as it was established originally in the lease contract.
If you want to get out from under the lease half way into it, you will be responsible for whatever payments you haven't made. A contract is a contract and you have to carry it out. Sometimes they "forgive" a few payments near the end, but that's usually if you are getting another similar car from them.
As far as having an accident while leasing, there are many factors and some gray areas. I think you are responsible to have the car fixed properly with your own insurance, but I am not certain. I am not sure how they treat it after that, but gap insurance could come into play. I can't help you too much there.

 

you can still modify the car even when you lease. the thing to remember is that when the lease is done you either have to remove the stuff you added or give it back with it still on the car. my is350 is leased and i modified a lot of it already.

 

If you lease through Lexus Financial, the lease comes with GAP insurance built-in in case of an accident.

 

Leasing is not much different than financing a car. You actually need to negotiate a price to purchase the car then a leasing company which could be Lexus financial services will lease you that car based on the purchase price of the car, the residual value of the car, (what the leasing co. says the car is worth after the leasing period. It is a percentage of the original MSRP.) and the money factor (this is just another way to state interest rate).

So let's say you lease/purchase a $40,000 msrp car for $35,000 for 36mos. The leasing co placed a 50% residual value on the car and the money factor is .00150. Your payment will be based on $15,000($35,000-$20,000) over 36mos. Money factor can be converted to interest rate by multiplying .00150 by 2400 or 3.6%. The residual value of the vehicle would be $20,000(50% of $40,000) at the end of term. You can either purchase the car for $20,000 at end of term and do what you please, keep it or sell it. Or you can turn it in to the leasing co. Or you can trade it in and let the dealer purchase the vehicle from the leasing company.

Mileage and condition are checked at the end of term. You can do whatever mods you want to the car with the knowledge that it could affect your end of lease turn in costs if those mods devalued the vehicle. Basically a inspector comes to inpect the car prior to returning it to the leasor. You are allowed normal wear and tear w/o penalties. "Normal" wear and tear can mean two different things to two different people though.

You can let go of your lease prior to the lease termination. You are still responsible for the remaining payments. Let's say you dislike your leased car after two years. You still owe 12 payments. You can sell or trade your leased car. If your leased car held it's value you may be able to get the residual and your remaining payments on the trade but unlikely.

Leasing is good because you only pay interest on the difference between purchase price and residual value. Or as in the example above, $15,000 where as when you purchase a car you pay interest on the entire value you borrow. Although if you sell the leased car before end of term you still pay that interest, or money factor/rental fee for the remainder of term.

Check out this link for more complete info on leasing a car.http://www.ridewithg.com/index.php/l...y-i-prefer-it/

 

Leasing is good because it minimizes your expense. You never have "equity" in a car, since it never appreciates in value.

If you keep a car for several years, leasing is not a good idea. If you like to flip cars every 2 or 3 years, you only pay for what you use, and don't get hit with the loss of depreciation.

 

try reading this link too if you have time

http://www.leaseguide.com/

 

If you are planning on buying the car at the end of your lease... you are better off just buying the car in the first place.

 

Leasing has certain tax advantages for self-employed professionals in the US, although advice on that should come from their tax accountant.

As far as accidents, no problem, just have it repaired properly. Acceptable amount of wear and tear for turning in leased vehicles is rather generous.

 

i am leasing my 08awdis250 and wen my lease is done, i plan on waiting for a bit to see if i like the 3rd generation and then i plan on BUYING the new is350 or whotever fast car for the 3rd generation, depending on whether i like it. leasing isnt for people who wish to mod. it costs a lot and at the end, you might have to remove most if not all the mods done to a leased vehicle.

 

If you are already planning to buy out the lease at the end, i.e., keep the car longer than 3 years, why not just buy it?

With a lease, if you want out before 3 years are up, you have to find someone to take over the payments, or buy out the lease. It's like leasing an apt--you have a specific term. You can't just up and leave early.

 

ok, thank you guys! i understand alot now.
thanks again!

 

way too many variables to tell if it will cost more or less vs financing. in MY case... lease for 3 years/15k miles, $0 down and then financing the buyout over 2 years ends up being cheaper than a 5yr purchase. thats my case, not everyones... i got a good deal and good lease rate. and monthly payments for the 1st 3 years are way less than a financing option.

If you can finance at .9% then it would be cheaper to finance.. but at the time i got my car lease rates were equal to 1.52% and finance rates at 5.5%. that was a year end clearance and most times finance rates are less than lease rates, but not always.

with lexus you should be able to buyout at anytime you want. I go onto the LFS website and it tells me what the buyout is should i buy out today.

also, after 3 years i have to possibility of renegotiating the buyout price... if they lower the price to keep me in the car, then its just that much better of a deal. if they stay firm on the price, i can walk away.