I heard from a friend that if you first lease a new vehicle, then opt to buy it later, you end up not paying as much? Anyone heard of this? Or am I getting smoke blown up....there?

 

you're getting smoke blown up there, leasing a vechile is something to do if you only plan on keeping it a year or two, if you opt to buy the vechile at the end of the lease you have to pay the remainder owed on the vechile, say you leased it for 2 years at 350 a month, agreeing on a 22000 dollar payoff that is 8400 dollars lets say 2000 went to intrest. ok so thats 6400 dollars toward the 22000 dollar amount of the vechile leaving a total owed value of 16,400 then you have to take in the value drop of the vechile which most people would say anything you buy drops 2000 when you pull it off the lot, so take in just the 2000 dollar price drop and thats 14,700 that the vechile is worth where you are oweing them 16,400 thats also not counting mileage and wear and tear.

 

Definitely getting smoke blown up there. You'll end up paying more buying the vehicle that way. Your payments can be lowered, but you'll be stretching it out over a longer period of time. Plus in Ohio, you now have to pay sales tax on the total amount when you lease, not just the depreciated amount. If you then buy the vehicle later, you pay sales taxes on that transaction as well. Gov't double dipping sucks.

 

I leased mine...did a ton of S#$t to it and now want to keep it. Dont lease then buy if you think your saving cash...because your not. But I put about $12,000 to mine in the last year and dont ever plan on getting that back. So in two when the lease is up i'll just buy it. Where else could I get a loaded truck with everything I could possibly want done to it, know that its been well maintained for the past three years and low mileage for $20,000? I couldnt so why not. Besides I just sold my HD Heritage Springer and want a new bike, I cant have it both ways.

 

it works about the same as the rent to own furniture. YOu always pay way more than if you just bought it. The only way it worked for me was I bought my company supplied vehicle at the end of the lease. The company paid the big lease payments (because of the anticipated low residual value due to high miles) and I got a higher mileage vehicle that I knew was treated and maintained well since I had it from day one.

 

Your friends either smoking crack or didn't make it far in math class. You end up actually paying more after you factor in interest.

 

Another negitive is the interest rate is much higher when you try and buy it. Now your buying a "used" truck.

 

Thanks for the replies ya'll. It sounded too good to be true. Besides, if it were true, it would be being done everywhere. Now to go call him a dumbass.

 

 

In most cases you are right, leasing then buying the lease out is more expensive....unless you get a real low lease rate to begin with....leased a 2000 Suzuki estem for my son, interest on the lease was 0.9% for 4 years, almost every penny went to pay down the debt...when the lease was up I had a lot of equity in the car..so I bought it...cheapest car I ever bought over time...
My wifes 2002 Sonota is leased, not as good an interest rate, 2.5% over 4 years...when the lease came up, the lease company offered to release it to me for the same rate and after 3 years the buy out would be $1.00....
You have to shop around for everything not just the car/truck that you want, most dealers have many Dealer plans to chose from...

 

Good point. Leasing is a good way to go, if you need the cash flow and are looking for low payments. An easy way to decide whether to buy it after your lease is up is:

If the residule value is greater than the blue book value, don't buy it.

If the residule value is less than the blue book value, buy it.

'Course a lot of mods will not increase the KBB value, so if you're like Muddyape, you would be better off buying it.

 

I think it all depends on the buyout and interest rate.....I just leased my 06 at the beginning of December......lease rate is 0.5% for three years and buyout is 20,000 and change.......this is Canadian funds.....with a lease payment of 464.00 per month (Canadian) including taxes with 0 down, I couldn't go wrong and there would be no way I could purchase finance this vehicle at 4.0% for the next 5 or 6 years, payments would be way hi for me.

The way my dealer worked it out was 51% of sticker price would be the buyout, you have to negotiate the sticker price.....very important !!!!!!!

Am I going to buy it out at lease end? not sure....all depends if the vehicle is worth purchasing and what the rate would be for a new one......