Leased Viper is Sickening

[v10kingsnake]

many in this thread know absolutly nothing when it comes to leasing vs. buying. i have leased many cars and bought others at the same time. you have to ask yourself what is the purpose of the car, will you take care of it properly... I have 2 infants that stain the carpets, spot the leather, scratch paint and so on. the family car is ALWAYS leased. i can let the kids mess it up Within reason, get a few door dings, get by changing the oil every 10-15k and turn the car back and let it be the next guys problem. miles is also a major consideration. the dealer is getting paid the full NEGOTIATED price from a bank, who is really the only paying the dealer. whether the car is leased or bought. they could care less which you do. now that i think about it they probably make MORE money on average from a guy buying because then they can sell him all the bs that many consider on a purchase, like aftermarket custom parts, extended warrenties, security systems... which they mostly never get to sell on a lease. so dont make a dumb statment and not expect to get flamed by those really in the know. you dont want to lease good, it works for me and millions of other educated people. just pray you never end up buying one of my previous leased and trashed vehicles. almost any car runs fine for the first 3-4 years before real maint. is required, so never think twice about the mistreating the lease. my last everyday scratched up work truck, had door dings, burn holes in the seat, oil not changed more than 2 times in 36000 miles and the cheapest gas i could pu tin the tank. I also maybe washed the car 3 times in as many years and it was black so you can imaginge what that looked like. but everything was within my allowances for the exceptable damage allowed and i dropped the truck off one day, sign a paper, and walk away free and clear. how can you beat that. i almost feel bad for the dealers taking such crap back...nawwwwwww not!!!!!!!

 

[Big Medicine]

So the advantage is that you get to tear it up?

 

[JWVIPER]

So the advantage is that you get to tear it up?

No but I think what he is trying to say that in simialr fashion My wifes minvans over the years have all been leased, and
yes infants throw up, food gets all over, car gets many dings in grocery store parking lot, cheap gas, yes, scratches from kids at the shool as they walk by with school bags and guess what, all allowable under a lease, turn it in, no maintennace costs at all after 3 years maybe 2-3 oil changes to be practical and then get another one. At the time this was the right and most practical thing to do, as I mentioned in previous post my MB lease (car is flawless with no mileage) I have bought out the lease at a great deal. Leasing no longer makes sense for me but did in the recent past.

 

[GraphiteGTS]

I have bought many yr-old cars wholesale and sold them 12-24 months later for at or close to what I paid.
I have had Jags, Vettes, BMWs that cost me 500/yr or less in depreciation.
For me, leasing ***** super royally.

 

[AntiVenom]

"Everyone deserves the best life has to offer":

http://www.rentway.com/products/index.asp

 

[DodgeViper01]

Leasing is a good way to get a car that you want and you can keep trading every few years. Also you do not incur all the depreciation. GOOD MOVE! I know of many people that lease top end cars for these reasons. The leasing company that I work with said that people are leasing the $1,000,000 Ferrari Enzo. Lease on that is $7700 a month for 36 months. Now think about that one. It is a drastic one but look at what it costs you. It is a fraction of the price of the car.

On another note, I saw a 2001 RT/10 with 20K miles for lease at $499 a month with $2,000 down and a 36 month period. I wanted the car BADLY since it was soooooo cheep but did not get it because someone beat me to the punch. A second Viper is not that bad ay. LOL!

 

[DodgeViper01]

The RT/10 also had a 15K miles allowed each year. It was a good deal.

 

[kgrif]

Something ain't right! You need to read the lease. There must be some information about early term fees etc.. By the way ,the bank can waive those if they want to. Bottom line is you signed it and now you are obligated to the terms. Check out the residual, etc. I know in my lease it clearly says if i term early I have to pay the higher of the payoff or nada retail. I lease because I never keep a car and if I wreck it I can dump it and move on to the next one. Sorry for your misfortune!

 

[A1998]

Here is the situation a little plainer. I have leased for about 10 years on vehicles for my business. Good move. Low payments, get rid of them in 2 or 3 years, payments are about the same. In fact my first lease years ago I sold the vehicle at the end of the lease and put $2,000 in my pocket. Another lease I had from GMAC, they sent me a check for $500 after I turned it in and said they got more out of the car then they thought it would sell for and rebated back to me. Some leases at the end will let you purchase the car but usually not for much more than the original sale price and interest.

Unfortunately, this lease has no penalties for early payoff, they clearly state the residual and what the purchase price is at the end of the lease. It doesn't matter if I pay it off 4 years early or wait till the end of the lease it is still the same price. What burns me up is the fact I told my Dodge dealer this was going to be a short term lease and I got stuck anyhow. I know you can payoff a GMAC lease early and not get charged for more than the purchase price and interest. I thought this lease would be the same way, but thought wrong.
A1998

 

[FikseGTS]

what!@?? this is not true at all.....

Or to spell weigh wrong....

Manufacturers and dealers love leases, they get full MSRP on the car. I'd never do it.

 

[MaxedGTS]

Something ain't right! You need to read the lease. There must be some information about early term fees etc.. By the way ,the bank can waive those if they want to. Bottom line is you signed it and now you are obligated to the terms. Check out the residual, etc. I know in my lease it clearly says if i term early I have to pay the higher of the payoff or nada retail. I lease because I never keep a car and if I wreck it I can dump it and move on to the next one. Sorry for your misfortune!

well said

 

[KWIK96]

Quote:
I think I could have gotten better rates from the mob!!


Right there in the very first post you hit the nail on the head.

 

[A1998]

Trust me, there is nothing noted in the lease. I have read it ten times!! I contacted the bank and spoke to them personally. Same story. Not willing to give me an inch here!!

 

[joe117]

I've never seen any situation where leasing saves money other than when you lease as part of a business for tax reasons.

Anyone who leases for reasons other than business, is only leasing to get lower monthly payments at the expense of higher total cost.

If a lease isn't business related I just don't see how it can cost less than financing.

 

[Big Medicine]

Leasing is a good way to get a car that you want and you can keep trading every few years. Also you do not incur all the depreciation. GOOD MOVE! I know of many people that lease top end cars for these reasons.

Actually, depreciation is exactly what you ARE paying, along with some interest & fees.

 

[Bugeater]

What I believe he was trying to say was that you do not incur total depreciation of the asset. Better yet, most smart lessor's will not incur the "standard" depreciation, which would be MSRP - Residual value.

To give Joe117 an example of much better lease vs. buy situation would be my 1999 Durango lease.
* Leased for 38 months based on the 36 month residual (residual didnt technically drop down until 39 months, so they gave me the 3 year residual). How does that help? well I got to divide the depreciation by 38 instead of 36.

* Searched and found the highest quoted residual for this make/model. In 1999, it was 62%

* "Bought" the SUV for Invoice, with zero capital cost reduction. ZERO out of pocket. MSRP was 36,000+. My monthly
payment was 300-something. Cant remember exactly.

39 months later I dropped off the truck.

Why was this better than buying?
The banks absolutely f*ed up residuals in the late 90's. Especially on SUV's. The actual residual was roughly 40%. That is based on what they got at auction, since most lessors opted not to purchase the vehicle.

Assuming you bought in this case, you would have financed the sale price, paid monthly on a 30,000 loan, in my case paid full property tax for 3 years, and if you sold the vehicle 39 months later, you would get nowhere near 62% of MSRP in the open market. Used 1999 Durangos in 2002 were not selling for 23,000. More like 17-18K. Thats if you sold it outright. Trade-in, well, lets just say it was more like 14. The lease vs. buy in this case was over 5K advantage lease.

Granted, many banks failed due to overestimating residuals in the late 90's and have become more conservative, but there are still many cases where total expense is less on the lease side of the house.

3 biggest things I look for when even considering leases:
- Residuals over 50% for 36+ month terms.
- Subsidised rates by manufacturer, or banks that want to increase its portfolio in this area.
- Make/Models that are easy to negotiate price. Residual is based on MSRP, so whatever you knock off MSRP affects your payment substantially.

 

[joe117]

Bugeater,
This sounds like a special case. I still stand by what I said.

 

[Bugeater]

No problem. It wasnt that special, as literally hundreds of banks lost BILLIONS in leases during this period. They definately are not as popular, as I recently looked into leasing an Excursion diesel thinking the residuals would reflect the current used market value that these things typically carry (hold up extremely well)...

What did I find? Banks dont care if its a diesel. They have a 42% residual after 36 months. Less if its a 4X2.
Much harder to find the deals...but not impossible. Its about time they got smarter...

 

[Hisserman]

Where can you look up bank residuals?

 

[Bugeater]

If you find a place on the net that is free, let me know. I know ALG does research for alot of manufacturers, but I typically have to go ask the dealer, then banks I have used in the past for "their" residual.

The fact that some banks want to promote or demote certain types of investments, and as a result subsidize or reduce what the industry has set as a fair residual makes most people have to call to get the exact value.

 

[malcoll]

You have to be a <font color="red"> fool</font> to lease a car.

Instead of calling you names.....like I was going to, I will just ask you why, and what gives you your experience to say so ????????????????

Craig knows everything about cars... you know his Dad owns a number of investment grade muscle cars and Craig has an entry level job at Volvo.

 

[Franko]

I've leased my past 3 cars and sold them all after 2 years and made between $3k-$5k. This is with $0 down. Why put lots of $ down when you can have it work for you else where?

What is also a big factor is your credit scores!

Also, i always buy new-used. Why get hit with the depreciation when somebody else can?

I'm not an expert but it makes financial sense. With all my car leases i'm saving 1k per month compared to financing. I leverage most of my money so that $1k per month will make me lots and lots of $ in the future.

In my opinion, financing is like getting a 30 year fixed mortgage. For me and how i switch cars, a "30 year fixed" isn't the right choice for me.

Just my opinion, but what do i know, i just like fast cars

 

[joe117]

"I've leased my past 3 cars and sold them all after 2 years and made between $3k-$5k."

"With all my car leases i'm saving 1k per month compared to financing."

Would you go over that in a little more detail.

 

[GraphiteGTS]

Franko, I don't believe the numbers will bear out that claim. You're saving 1000 per month???
Leasing a car is about like "purchasing" a Florida timeshare.

 

[DR VIPER]

Another lease horror story.....it seems like it's happening so much these days.I totally hear you and it should have been explained to you up front without having surprises later!

 

[Franko]

Sorry if I didn't make sense in my prior post. My last 3 vehicles were leased but i only kept them for between 2 and 2.5 years. I put zero down and was able to come out ahead between $3k - $5k for each car when i sold them. Not a whole bunch but i always thought i would be in the negative by leasing.

My current 3 vehicles are leased as well and in total of all 3 cars i'm saving $1k per month compared if i were to finance all 3 vehicles.

I leased all my cars used but in new condition. I have been patient with leasing all my cars to find one that was a great deal. For example, my '03 SRT10 i got for only $63k and it had only 300 miles. I feel like i will not get hit with the depreciation that the original owner did.

I make good money but not great money so the extra $1k has helped me invest (mostly real estate) in which my return has increased dramatically (real estate in san diego has been good for homeowners).

I'm also a believer in interest only mortages because my $560k mortgage with a $1575 monthly payment helps me invest in other properties with a great return etc.

So my point is this, leasing for ME has worked out great, it has allowed me to budget my money in other ways that have paid off greatly for me.

I'm not saying that i know everything, just sharing my theory that has worked for ME.

Thanks!

Frank

 

[joe117]

How did you lease your last three vehicles and end up selling them?

Do you mean that you bought them at the end of the lease period and then sold them?

Could you just go over the numbers on one of the cars? The cost of getting into the lease, the total of lease paymennts, the cost of getting out of the lease and the price that you received for the car?

Do this for the car that you made $5k on in 2.5 years with no money down.

"total of all 3 cars i'm saving $1k per month compared if i were to finance all 3 vehicles."

Do you mean that the total of the three lease payments is $1k less than the three loan payments would be?

Have you taken into consideration that in the case of the loan, you get to keep the three cars at the end?

 

[Big Medicine]

Wow, $1575 on a $560k mortgage is a 3.4% rate. Do you have to pay PMI? Curious how much that would be on such a large loan.

 

[GraphiteGTS]

Interest-only home loans are scary to this redneck.

 

[joe117]

I don't see them as scary. If you plan to buy a house, only stay for a couple of years and then sell,
You wouldn't have built up much equity anyway if you had been paying down the principal.

If the property goes up in value, you will have made money on that rise in value when you sell.

Having said that, I don't see where the interest only loan is going to save you much on your monthly payment.
How much principal would you have paid on a $560k loan in the first year of thirty.

If you are so heavily into debt that the interest only loan is going to allow you to get into something that you couldn't afford if you paid interest, you are probably in debt more than I would place myself.

But of course that's me.

I'd still like you to go over the car lease where you made $5k.