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I am struggling b/w leasing / financing. I basically will keep the vehicle for around 4 years. If I lease, I simply just pay per month and when the 48 month is reach, I just have to return the vehicle. Again, I always have to option to purchase..which I don't think I will, but want to keep this option open, just in case I love the vehicle. If I finance, I will do a 60 month finance, but most likely will sell the vehicle after 4/5 years (maybe b4 the 60 month finance period ends). I am a newbrie in this lease and finance terms. So I don't know the pros and cons. Can some of u give me some suggestion as to which one will cost me less?
 

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I think the best advice to do with leasing is BE CAREFUL! Read the FINE print very carefully and know what you're getting into. Unless you have some special circumstances, such as using the vehicle in business, I think that, in most cases, a lease is a good thing to avoid. It sounds so easy, just make the payments and give the car back when the lease is over, BUT! Many folks find surprises they did not expect when the "party" is over. Just thinkin'......

Jerry O.

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2001 Odyssey GG LX
 

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I enjoyed reading Look Before You Lease by Michal Scott Kranitz.

It explains all of the basic tricks and traps. Also, Consumer Reports has a really good flow chart that might be of help. I believe it's on their web site, although you might have to be a member.

Hope this helps.



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-Andrew Starks
 

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Leasing? Let's see. Here's what I've heard.

You give them some form of downpayment. You then proceed to make your monthly payments. Then at the end of the lease, you get to make them another large (I think they call it a balloon) payment. And woe be unto you if you put more miles on the vehicle than the contract allows. The per mile penalty adds up very quick.

In the end, you pay almost as much for the vehicle as you would have if you'd bought it outright only when it's all over with, you don't have the vehicle anymore. It reminds me of renting an apartment. I've know people who were making apartments rents higher than other friends house payments. I have a hard time wrapping my mind around that concept.

Having said that, maybe not all lease contracts have the balloon payment or mileage penalties I mentioned although I don't remember talking to anyone who's leased a car saying they didn't have at least one of these. If you can write the lease off as a business expense, I can certainly understand that. Either way, as said before, you need to be "very" careful!!

For the average person, such as myself, I see absolutely no advantage to leasing.

FWIW & Good luck!



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Drive Safe,
Steve R.
'01 SS LX
Cargo tray, leather steering wheel, mud guards, alarm, fog lights, transmission cooler, in-dash CD player, Kelton subwoofer, under seat storage tray.
 

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Leasing has a lot going for it and a lot going against it but there is one basic thing I would never do:

NEVER lease the car for longer than the warranty period. I wouldn't want to pay for a repair on a car I didn't own.

For lots of good financial info including the whole lease/buy thing check out www.motleyfool.com

Dave
 

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Leasing is not as bad as some people think as long as you know what you are doing.
From my experience, firt of all you need to understand leasing and know the terms and calculation. One good place for newbie to learn is edmunds.com, you go there and click 'advise', then 'leasing', you'll learn all the basic terms and calculations with examples. Then you can go back to edmunds' homepage and click 'townhall', there you go to 'finance, warranty & insurance' and then click 'lease questions-ask here'. In there, you can ask the host who is working in the auto industry and has all the most recent lease info on almost every car. I have asked him about the Ody, this van has quite high residual value and Honda provides reasonable 'money factor' for it.
Hope this info helps you out.
Also, leasing makes sense only for cars with high residual value such as Mercedes/BMW/Lexus... and vehicle with high demand such as Ody, because leasing is basically paying for the car's depreciation with interest. Cars with high residual value (less depreciation) cost less to drive. However, you have to know how many miles/year you normally drive and lease accrodingly.
Overall, just prepare yourself with all the terms and calculation, then ask the host for the most recent 'money factor' and 'residual value', calculate yourself the monthly payment. Armed with all these, you can walk into the dealer showroom and negotiate with confidence.
 

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Leasing isn't a bad deal at all if:
you have no wish to have a car more than 3 years - see my post above about longer term leases

you keep your cars looking like new - if they look "lived in" you may get hit for excessive wear & tear

you are brand loyal and are likely to get your next car from the same dealer - you are likely to get a big break on wear & tear and any other end of lease charges if you are signing up for a new lease

you covet a car that costs more per month than you can afford to finance

you can estimate the number of miles you are likely to put on a car over the term of the lease

Many of the sites mentioned above have a "total cost of ownership" calculation which takes into account the fact that you don't own the car at the end of the lease term. Many people, myself included, have no desire to own a car more than 3 years old. That doesn't mean that I'm going to lease but it does mean that leasing is a good option for me to consider. Annual depreciation spikes in year 4, therefore I've always felt that you're better off selling before this occurs - but that's just me. I'm wrong a lot - just ask my wife.
 

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There is an entirely different way to look at this equation that most people don't see. Leasing can be viewed as just another way to finance. The only way to make a truly informed decision is to calculate the imputed interest rate on the lease (us accountants know how to do that, and I would always be available to do that calculation for anybody on this board). Further, you have to have a very realistic (conservative) view of what you could sell the vehicle for on the open market at the end of the lease.

Additionally, with leasing, you pay your sales tax over the life of the lease, not up front - so you are in essence financing less.

With that information, you can calculate how much interest you are really paying over the life of the financing.

It's a very complicated topic, and my explanation probably only makes it worse. I have gone both routes, but only after very careful consideration and calculation.

-Erik
 

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I, too, thought about leasing before I financed my Ody. I bought the Ody instead of leasing for two reasons: (1) I driver more than 15K per year (2) the residual value of most leasing companies on Ody is kind of low, which makes the monthly payment somewhat higher. I came across the following website for leasing vs. buying comparison. You may want to take a look.
http://www.calcbuilder.com/cgi-bin/calcs/AUT3.cgi/Kiplinger
 

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Having purchased and leased, there are some considerations which are often overlooked:

1) Make absolutely certain that your state's lemon laws treat a lease the same as a purchase.

2) Make certain the sales or use taxes are being calculated and applied properly. In some states you are only responsible for sales/use taxes on the portion of the vehicle you are "using". Also, if the taxes are rolled into the contract (i.e. not paid up front), you're going to be paying a "finance charge" on that amount as well.

3) Unless you like tempting fate, get gap insurance. Since it's an extra expense, it should be factored into the lease v purchase matrix.

4) If you see any language in the contract that says "Open End", RUN!

5) DIY and similar types who like to do mods should forget leasing. Avoid modifying the vehicle in any way, shape, or form without WRITTEN consent. I know a guy who got whacked despite the fact that he had an OEM accessory installed by the same dealer from which he leased the vehicle.

FWIW........
 
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