Leasing a Vehicle (Bought a Truck)

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2/3/2018 1:46 PM

Long story short I am in the market for a new truck. I am a Chevy guy, but would not hesitate to buy any of the Big 3. I am going to go 1500 crew cab. Keep it pretty basic as I do not care much about luxury.

If I buy the vehicle outright I will be putting down about $15k and probably take a 4-5 year loan (7 year only if they are offering 0% like Chevy currently is).

Ford is currently offering a 24 month lease at $229/month with about $3k down. I have not gone in and talked actual numbers with them yet....But this is intriguing. I have a 1 mile commute to work everyday, So I only put on about 6,000 miles per year.

I just do not know how I feel about giving the vehicle back with nothing to show at the end. I do not plan to do any modifications to it. I see there is a buyout option for most leases, with the price TBD at the start of the lease.

Anyone lease a truck? Pros? Cons?

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Tomac and/or Anderson for 2020.....

2/3/2018 1:57 PM

You can buy it at the end of the lease, usually for what half the value of the truck

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If you like uncle tony's meatballs, you'll love his sausage

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2/3/2018 1:59 PM

Vehicles are depreciating assets. With the amount of mileage you put on in a year I think a lease would be the way to go. At the end of the lease you have the option to buy the vehicle or lease a new one. I'd personally lease a new one that way I wouldn't worry about sinking money into a vehicle that won't be worth more than what the market dictates.

If you're worried about going over the allowed mileage because an unexpected long trip or two comes up you could always rent a car. Those are pretty affordable.

Just my opinion and Chevy makes a great truck.

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"Sorry Goose, but it's time to buzz the tower."

2/3/2018 2:50 PM
Edited Date/Time: 2/3/2018 2:52 PM

You are going to be paying for 12-15,000 miles per year on a lease and only putting 6000 miles per year?

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2/3/2018 3:16 PM

You have a mile to get to work? Just a suggestion here. Keep what you have. Walk to work. Put the payment you save in the bank. You’re welcome.

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2/3/2018 3:30 PM

First thing is how long do you keep vehicles? And why do you want brand new? We typically keep vehicles
10 years. For us, leasing makes no sense. For a business that can fully write off the lease it might make sense.
Average Joe, I could never figure it out why someone would lease unless they change cars like socks.
TM

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2/3/2018 3:40 PM

I would have a hard time paying new vehicle prices for a 1 mile commute. But everyone has different cost/benefit outlooks.

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2/3/2018 3:46 PM

Scooter : I currently drive an 89 Jeep Comanche that has been fully restored. 6 Speed, 3 link suspension, all new interior, etc. But, there is absolutely no room in the truck for moto weekend (or anything for that matter) Single cab, short box is just not cutting it anymore...Plus no air conditioning. I want to sell it while it is still worth big $$$ as it is in near perfect condition.

I want something newer with a warranty because, frankly, I am sick of working on vehicles. Between bikes, sleds, street bikes, RX7's, I have too many irons in the fire...I have never had a car payment, and I really have no other payments to speak of, besides my mortgage.

I have not driven anything remotely new my entire life. I have been driving an 87 RX7 and my 89 Comanche for the past 6 or so years. I just blew up my Mazda....so it is time to make power...

If i lease I would probably buy it outright if I liked the truck. The problem in PA is salt. Penndot salts the shit out of the roads here so vehicles do not last. In 10 years the fenders will be rusting off any truck that is on the road.

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Tomac and/or Anderson for 2020.....

2/3/2018 3:47 PM

Ebs wrote:

I would have a hard time paying new vehicle prices for a 1 mile commute. But everyone has different cost/benefit outlooks.

I ride every weekend, and have to travel a bit to do so. In the winter I am usually riding my sled (snow permitting of course).

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Tomac and/or Anderson for 2020.....

2/3/2018 4:36 PM

newmann wrote:

You are going to be paying for 12-15,000 miles per year on a lease and only putting 6000 miles per year?

I agree with newmann, you would be paying a depreciation schedule based on 12,000 miles per year but not using half of it. Basically paying for more than you are using.

I would suggest buying a 1-2 year old truck, so it still would look new, still be under full factory warranty. But let someone else take the 1st year depreciation hit. Keep it 2 years then sell it and do it again. If you compare the investment versus lease payments you should end up ahead (and your payments are paying down what you owe- not just "rent" payments).

Never understood why people buy brand new vehicles, anything that loses 20-25% of its value as soon as you leave the lot just does not make sense to me. I like nice things, but I'll let someone else take the initial depreciation hit.

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2/3/2018 4:45 PM

Leasing makes sense for people who trade in vehicles every 3-6 years anyway. It's just admitting that you have truly been renting when it comes down to it.

Usually a low lease payment comes from a high residual value, so if you are planning to buy the vehicle at the end of the lease, you'll pay more for it than a lease with a higher monthly payment, etc.

Most lease prices don't include sales tax, so if you live in a sales tax state remember to figure that in as well.

There's 2 main components to a lease payment; the "rent", and the interest. The rent is the agreed upon "sales price" minus the residual value. The interest is figured on the entire price or value of the vehicle, though. Most of the time lease purchasers are payment focused, so dealers can play with some numbers to make themselves more money. One of those ways is to reduce the mileage allowed, or to extend the lease a few extra months. I know that a guy I worked with could make a ton more money by writing a 39 month lease instead of a 36 month lease, as long as it still only allowed for 36K miles.

Don't tell the dealer that you are considering leasing. Haggle the best "purchase price" first, then after you reach agreement on that, talk about your financing options.

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2/3/2018 5:11 PM

APLMAN99 wrote:

Leasing makes sense for people who trade in vehicles every 3-6 years anyway. It's just admitting that you have truly been renting when it comes down to it.

Usually a low lease payment comes from a high residual value, so if you are planning to buy the vehicle at the end of the lease, you'll pay more for it than a lease with a higher monthly payment, etc.

Most lease prices don't include sales tax, so if you live in a sales tax state remember to figure that in as well.

There's 2 main components to a lease payment; the "rent", and the interest. The rent is the agreed upon "sales price" minus the residual value. The interest is figured on the entire price or value of the vehicle, though. Most of the time lease purchasers are payment focused, so dealers can play with some numbers to make themselves more money. One of those ways is to reduce the mileage allowed, or to extend the lease a few extra months. I know that a guy I worked with could make a ton more money by writing a 39 month lease instead of a 36 month lease, as long as it still only allowed for 36K miles.

Don't tell the dealer that you are considering leasing. Haggle the best "purchase price" first, then after you reach agreement on that, talk about your financing options.

Thanks for the explanation. Ive never bought a newer vehicle and have always paid cash. I’m going to head out on Monday and see what I can find.

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Tomac and/or Anderson for 2020.....

2/3/2018 6:42 PM
Edited Date/Time: 2/3/2018 6:43 PM

APLMAN99 wrote:

Leasing makes sense for people who trade in vehicles every 3-6 years anyway. It's just admitting that you have truly been renting when it comes down to it.

Usually a low lease payment comes from a high residual value, so if you are planning to buy the vehicle at the end of the lease, you'll pay more for it than a lease with a higher monthly payment, etc.

Most lease prices don't include sales tax, so if you live in a sales tax state remember to figure that in as well.

There's 2 main components to a lease payment; the "rent", and the interest. The rent is the agreed upon "sales price" minus the residual value. The interest is figured on the entire price or value of the vehicle, though. Most of the time lease purchasers are payment focused, so dealers can play with some numbers to make themselves more money. One of those ways is to reduce the mileage allowed, or to extend the lease a few extra months. I know that a guy I worked with could make a ton more money by writing a 39 month lease instead of a 36 month lease, as long as it still only allowed for 36K miles.

Don't tell the dealer that you are considering leasing. Haggle the best "purchase price" first, then after you reach agreement on that, talk about your financing options.

BobPA wrote:

Thanks for the explanation. Ive never bought a newer vehicle and have always paid cash. I’m going to head out on Monday and see what I can find.

All good advice, but I have found that you should lease when the manufacturer is offering “lease specials” because you will get the lowest interest rate (calc from the money factor).

We always lease my wife Acura’s, and just recently leased another new MDX because they had a “lease special” going on. Our interest rate is .09%. You won’t get this low of an interest rate unless they are running a special.

Acura also lets us turn in the leases 2 months early without penalty and gives us 4,000 bonus lease miles (meaning we can go over the lease mileage by 4K without penalty)...

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2/3/2018 8:26 PM

Bob, if you can afford the payment, with no real debt, that’s good. Seriously though, and this is just me, I’d walk to work, if the weather is decent. That short drive is hard on a vehicle. Down east, I parked my rig about 1/2 mile from the house, if I didn’t go to my shop. Walk that all the time, enjoyed it. My woman’s 30+ yr old dope smoking useless kid had another 1/4 mile to go, and he drove, 5 days a week. Keep the car 10 minutes in the driveway in winter, to drive 1 minute. Christ, he could’ve been there in that time.

I drive a 99 Yukon, and pull a little flatbed utility trailer. Yes, I’d love to have an enclosed, but hate to part with the money more. Totally get what you’re saying about the inconvenience of the situation, would love to have more myself.

On the upside, if you’re going to trash a vehicle driving a mile to work, no better choice than a lease. Guess you just commit to “renting”, and pay away.

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2/3/2018 8:49 PM

I've always felt that the lease vs buy argument hinged on what sort of vehicle you want and how long you plan to keep it. A high-depreciation vehicle (think european), probably better to lease, and most newer Bimmers, Jags, etc. On the road are leases. If its something that holds its value well and you plan on keeping it 5+ years, I dont see how buying wouldnt be the best choice.

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2/3/2018 9:32 PM

BobPA wrote:

Scooter : I currently drive an 89 Jeep Comanche that has been fully restored. 6 Speed, 3 link suspension, all new interior, etc. But, there is absolutely no room in the truck for moto weekend (or anything for that matter) Single cab, short box is just not cutting it anymore...Plus no air conditioning. I want to sell it while it is still worth big $$$ as it is in near perfect condition.

I want something newer with a warranty because, frankly, I am sick of working on vehicles. Between bikes, sleds, street bikes, RX7's, I have too many irons in the fire...I have never had a car payment, and I really have no other payments to speak of, besides my mortgage.

I have not driven anything remotely new my entire life. I have been driving an 87 RX7 and my 89 Comanche for the past 6 or so years. I just blew up my Mazda....so it is time to make power...

If i lease I would probably buy it outright if I liked the truck. The problem in PA is salt. Penndot salts the shit out of the roads here so vehicles do not last. In 10 years the fenders will be rusting off any truck that is on the road.

Not to hijack the thread but I had an 89 Comanche when I was a kid. It was totally redone with a 3 inch lift. It was my favorite vehicle ever. One of my biggest regrets was getting rid of it. Hang on to that thing forever!

And leasing is okay if you don't put a ton of miles on. Me and my wife leased her Jeep SUV she had. It does kind of suck when you have to return it and the manufacturer you're interested in isn't having any good leasing options when you're ready to do it again. After her last lease was up we bought a new vehicle mainly because it was 0% APR. Hard to pass that deal up. If you don't end up leasing I would consider waiting til they have that perk.

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2/3/2018 9:36 PM

Leases can be a money pit or a boon, depending on what you do with it. Since you drive so few miles, I like your chances. Here's why:

1) You can negotiate the mileage of your lease. If you admit that you're only going to put 6,000 miles on the truck, you can demand that the residual value goes up by the same amount that they would charge you for excess miles. In other words, if they charge you 9 cents per mile over the 12,000 mile limit on the lease, then they should increase the residual by $0.09 x 6,000, or $540, if you go 6,000 miles under. This reduces your monthly payment. Technically, you can write a lease for any amount of miles and the residual will vary accordingly.

2) In many cases, the value of a low-mileage vehicle will be greater than the residual value according to the lease. In this case, you can buy the car and then sell it for a profit, or get market trade-in value from the dealer if it's more than the residual. My dad has done this on two cars when he went to trade them in for newer models.

3) If your new truck is soft in the market, sometimes the dealer/manufacturer really doesn't want it back. Since they HAVE TO take it back according to the lease agreement, you can leverage this situation. My stepmom had a Volvo that she really didn't want when the lease was up. It was worth so little in the market that the lease company offered to sell the car free & clear for $12K (her residual was about $25K.)

In the end, you get what you pay for; leases tend to look good from a monthly payment standpoint and loans are better for building equity in a car. Truly though, you are paying $X for the truck (capitalized cost,) and it will be worth $X minus $Y at the end of the lease term, whether you owe that much or not. If you want to keep the truck long-term, I'd do a purchase. If you want to check it out and then walk away, lease it and put most of that $15K in the stock market instead. It will be worth far more than being buried in a depreciating asset.

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Braaapin' aint easy.

2/4/2018 9:27 AM

agn5009 wrote:

Not to hijack the thread but I had an 89 Comanche when I was a kid. It was totally redone with a 3 inch lift. It was my favorite vehicle ever. One of my biggest regrets was getting rid of it. Hang on to that thing forever!

And leasing is okay if you don't put a ton of miles on. Me and my wife leased her Jeep SUV she had. It does kind of suck when you have to return it and the manufacturer you're interested in isn't having any good leasing options when you're ready to do it again. After her last lease was up we bought a new vehicle mainly because it was 0% APR. Hard to pass that deal up. If you don't end up leasing I would consider waiting til they have that perk.

Photo

I love this thing, and I have more man hours in it than I can count. But, with the salt on the roads of PA I would like to sell it before is turns into a pile of rust. It was rattle can black when I bought it BTW.
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Tomac and/or Anderson for 2020.....

2/4/2018 9:29 AM

I love that truck

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2/4/2018 9:35 AM

Thanks for all the suggestions bros. It had never crossed my mind to buy/lease a new vehicle in the past, so it is all new to me. I guess when I turned 30 I got sick of driving cars from the 80's...I mean I love my RX7 too, but I feel like I lose an inch out of my spine every time I drive her (stiff suspension and shit roads)...Plus I turned up the boost and lost the ground wire to the secondary injectors...needless to say detonation and Wankels do not mix.

I will have to get some solid numbers from the dealers tomorrow and come home and do some calculations. Ford is running a lease program right now, and Chevy is offering 0% on their 1500's. Credit is good so I should be eligible for all the good offers...

Thanks again for the insight

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Tomac and/or Anderson for 2020.....

2/4/2018 9:43 AM
Edited Date/Time: 2/4/2018 9:45 AM

MR. X wrote:

I love that truck

Thanks man. It was built from the ground up. Surprisingly was not too rusty when I bought it. But had no interior to speak of...and was 2WD haha.

Right before paint Photo

Photo

I have no pics of the finished interior for some reason...And I found a color matched cap too

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Tomac and/or Anderson for 2020.....

2/4/2018 9:50 AM

Check inventories at the dealers try to find something that's been sitting on the lot for a bit and work with the fleet manager. Fleet Sales managers have more leverage and more room to make deals especially on inventory that's been sitting around.

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2/4/2018 10:43 AM

Bob--- Ive been an auto dealer for over 35 years, and specialize in the Finance end of it. There's WAY too much information to digest about leasing and financing to learn it all on a Moto forum. But a couple of quickies. Leasing can be great for the right buyer. But it doesnt appear that you be that guy. If you are planning on keeping your vehicle longer than 3 years ,then its going to be very difficult to find a lease program that will be financially prudent(one that saves you money over a straight "buy")

Also be aware that most franchise dealers will have several financing institutions that offer leasing alternatives. You are not locked into JUST the manufacturers backed lease program. Every lease program offers different "lease rates" which differ from conventional "APR" interest rates on a retail purchase. Also different "residual value" which is what the bank feels your vehicle will be worth at lease-end. Usually 40-60% of original MSRP(depending on many variables---type of vehicle, length of lease,mileage expectations,etc,etc)That figure actually has more influence on your payment than any other number except "capitalized cost" which is basically the amount you are financing. Residual value is also the number that the bank uses to calculate your "buyout" if you decide to purchase your vehicle at the lease-end. sometimes its a percentage of the residual value, sometimes its a percentage plus fees etc.

Another fact- you will pay a "use tax" on each payment. In Pennsylvania its 6% +3% for a total of 9%on each payment. Unless you live in Allegheny county or one of the other Pa counties that have the extra 1% tax,then it will be a total of 10%. And never put down a ton of cash on a lease,unless you are doing a a "one pay",in which case CAN save you a few bucks.

I dont know what part of Pa you're located ,but I may be able to direct you to Dealers that won't rip your eyelids off.. But I will recommend to you as I do to everyone,based on all my years in this biz as everything from sales to finance to manager to owner (mainly involved in GM/Ford/Ram) ---to buy a Toyota. As good as all the products are these days, Toyota still has a substantial edge in quality,reliability and a HUGE edge in resale.

If you want me to help you more thru this,I'll be happy to.

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2/4/2018 10:44 AM
Edited Date/Time: 2/4/2018 10:45 AM

Not an answer to your question, but your current truck will bring serious bank. That is a badass rig.

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2/4/2018 2:04 PM
Edited Date/Time: 2/4/2018 2:13 PM

Check out leasehckr.com

Sometimes leasing a car can get you on top at the end when you’re buying it out....sometimes not.

Idea is to get the vehicle with 0 drive off and a payment at below 1% per month if the agreed selling price of vehicle.

Example: 30,000 vehicle should have no more than a $300/mo lease payment. 1% rule.


My wife drives a forrestor. 0 drive off and no first month payment. We pay $240 a month. It’s selling price was 32,000. So we were way under the 1%. At 30 months we plan on buying the lease out or selling it to car max. Taking the extra cash and putting it in our pockets and will try to lease another at that time. I had to call 10 dealerships and wheel and ended up driving 4 hours away to get the car. Local guy wanted 2500 down and first months payment ($380 a month) for same car at a lower mileage lease than what I got hers for. So there’s wiggle room in everting. Just gotta find the right dealer that wants to move units.

Ohio salt is bad. It’s easier to lease a vehicle for my wife and then turn it in or buy it out. than to work on vehicles. Or travel to Florida to buy one ....

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GP740
Since 1987

2/4/2018 2:31 PM

BobPA wrote:

Thanks for all the suggestions bros. It had never crossed my mind to buy/lease a new vehicle in the past, so it is all new to me. I guess when I turned 30 I got sick of driving cars from the 80's...I mean I love my RX7 too, but I feel like I lose an inch out of my spine every time I drive her (stiff suspension and shit roads)...Plus I turned up the boost and lost the ground wire to the secondary injectors...needless to say detonation and Wankels do not mix.

I will have to get some solid numbers from the dealers tomorrow and come home and do some calculations. Ford is running a lease program right now, and Chevy is offering 0% on their 1500's. Credit is good so I should be eligible for all the good offers...

Thanks again for the insight

Be careful with the 0%. Usually it's 0% or x amount off. With good credit you can get a low interest rate at a credit union, and end up paying less in interest than the x amount off. Google "auto loan calculator" to see how much interest you'll pay at ~2% rate. With 15k to put down you ain't financing much.
That said, the 0% rate is awesome. Make the min payment and it won't cost a dime more

Btw, you can get the street legal Alta for 15....

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2/4/2018 3:14 PM

MR. X wrote:

I love that truck

BobPA wrote:

Thanks man. It was built from the ground up. Surprisingly was not too rusty when I bought it. But had no interior to speak of...and was 2WD haha.

Right before paint Photo

Photo

I have no pics of the finished interior for some reason...And I found a color matched cap too

Did you paint it? Looks great from the pictures

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2/4/2018 4:12 PM

Leased a RAV4, bought it after 4 years in 2010, took a couple more years to pay off and it worked well.
Had it for 11 years. I never had any intention of turning it in, just keeping the payment manageable.

Bought a new Canyon AllTerrain, kind of a second mortgage. But at least I get to use it everyday.

In Canada, GMC has third party leasing. There is even a subjective box to check for $900 that will allow them to overlook....somethings. Like I said, subjective. Instof the old “don’t worry about it” if you release from the same brand, you might get a bill for $2500 for bodywork. Rental car company tried that one a work truck. A wax and it would have looked as good as new.

I think I would consider leasing a car but not a truck.

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Dirt biking from 11 to late 50’s, loves wood riding on the old 525.

2/4/2018 9:28 PM
Edited Date/Time: 2/4/2018 9:34 PM

Dude being honest dont do it.

Take 5-8k and buy the cleanest lowest miles silverado. 2008 ish on craigslist you can find with around 90k miles as the goal. You put 6k a year on the truck. An 08 silverado will last you uh i dont know for forever.

Paying 3k down and 230 a month and holding full coverage is insane to me for a 1 mile commute.

Honestly just for the 3k down you could get a clean truck to last you more than 3 years. I got my s10 with 50k miles on it for 4k... Wont cost me a single payment or full coverage every month...

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2/5/2018 7:38 AM

OldPro277 wrote:

Bob--- Ive been an auto dealer for over 35 years, and specialize in the Finance end of it. There's WAY too much information to digest about leasing and financing to learn it all on a Moto forum. But a couple of quickies. Leasing can be great for the right buyer. But it doesnt appear that you be that guy. If you are planning on keeping your vehicle longer than 3 years ,then its going to be very difficult to find a lease program that will be financially prudent(one that saves you money over a straight "buy")

Also be aware that most franchise dealers will have several financing institutions that offer leasing alternatives. You are not locked into JUST the manufacturers backed lease program. Every lease program offers different "lease rates" which differ from conventional "APR" interest rates on a retail purchase. Also different "residual value" which is what the bank feels your vehicle will be worth at lease-end. Usually 40-60% of original MSRP(depending on many variables---type of vehicle, length of lease,mileage expectations,etc,etc)That figure actually has more influence on your payment than any other number except "capitalized cost" which is basically the amount you are financing. Residual value is also the number that the bank uses to calculate your "buyout" if you decide to purchase your vehicle at the lease-end. sometimes its a percentage of the residual value, sometimes its a percentage plus fees etc.

Another fact- you will pay a "use tax" on each payment. In Pennsylvania its 6% +3% for a total of 9%on each payment. Unless you live in Allegheny county or one of the other Pa counties that have the extra 1% tax,then it will be a total of 10%. And never put down a ton of cash on a lease,unless you are doing a a "one pay",in which case CAN save you a few bucks.

I dont know what part of Pa you're located ,but I may be able to direct you to Dealers that won't rip your eyelids off.. But I will recommend to you as I do to everyone,based on all my years in this biz as everything from sales to finance to manager to owner (mainly involved in GM/Ford/Ram) ---to buy a Toyota. As good as all the products are these days, Toyota still has a substantial edge in quality,reliability and a HUGE edge in resale.

If you want me to help you more thru this,I'll be happy to.

Thanks for the write up. I live about 20 minutes from Wilkes Barre, basically smack dab in Nottheast PA...Luzerne county. I am not afraid to do a bit of traveling if need be. If you have time, shoot me an e-mail bob@hlpowersports.com.

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Tomac and/or Anderson for 2020.....