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please unpack the language used in a car lease ad
Posted by: robfilms
Date: August 12, 2018 01:10PM
I have a 2016 Mazda CX-5 Sport AWD with rear camera package that I bought used in March 2016 with 4400 miles (I paid $18k).

I am lending that car to my daughter who is in graduate school in Morgantown WV.

I am now interested in leasing a 2018 Mazda CX-5 Sport AWD.

I have never leased before.

I see the leasing teaser ads.

They say: $139/per month-total payments $5004 + $4682 due at signing ($3948 capitalization + $595 bank fee + first month's payment)

With the above info, I am figuring:

$139 x 36 = $5004/total monthly payments

$4682 - $139 (first monthly payment included above) = $4543

$5004 + $4543 = $9547 total payments

$9547 / 36 month lease = $265.19/actual monthly cost.

Aside from state sales tax, are there other fees that I should expect?

Is the above thinking about arriving at the actual monthly cost (total payments/36 months) correct?

Thanks in advance.

Rob
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Re: please unpack the language used in a car lease ad
Posted by: archipirata
Date: August 12, 2018 01:25PM
A big factor is the mileage allowance on the lease. If you go over the miles you can be on the hook for an additional hefty sum at the end of the lease if you turn it back in to the dealer.



Athens, OH
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Re: please unpack the language used in a car lease ad
Posted by: mattkime
Date: August 12, 2018 01:36PM
There are people that hunt for silly good deals on leases. Sometimes they're available. I'm uncertain if this is one since I don't know about leases. The amount up front vs monthly seems a little silly to me but I guess they need something in case the car is destroyed.



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Re: please unpack the language used in a car lease ad
Posted by: Dennis S
Date: August 12, 2018 01:59PM
"If anyone gets screwed, it will be you, not us."
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Re: please unpack the language used in a car lease ad
Posted by: RAMd®d
Date: August 12, 2018 03:11PM
Is the above thinking about arriving at the actual monthly cost (total payments/36 months) correct?

Good question.

If I knew, I'd tell you.




When a good man is hurt,
all who would be called good
must suffer with him.

You and I have memories longer than the road that stretches out ahead.

There is no safety for honest men except
by believing all possible evil of evil men.

We don’t do focus groups. They just ensure that you don’t offend anyone, and produce bland inoffensive products. —Sir Jonathan Ive

Perfection is the enemy of progress. -Winston Churchill

-An armed society is a polite society.
And hope is a lousy defense.

You make me pull, I'll put you down.

Mister, that's a ten-gallon hat on a twenty-gallon head.

I *love* SIGs. It's Glocks I hate.
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Re: please unpack the language used in a car lease ad
Posted by: davester
Date: August 12, 2018 04:22PM
Quote
Dennis S
"If anyone gets screwed, it will be you, not us."

This is exactly correct. Unless your business gets a tax advantage from leasing, you are generally going to lose money by leasing instead of buying.



"In science it often happens that scientists say, 'You know that's a really good argument; my position is mistaken,' and then they would actually change their minds and you never hear that old view from them again. They really do it. It doesn't happen as often as it should, because scientists are human and change is sometimes painful. But it happens every day. I cannot recall the last time something like that happened in politics or religion." (1987) -- Carl Sagan
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Re: please unpack the language used in a car lease ad
Posted by: Todd's keyboard
Date: August 12, 2018 04:31PM
Also won't be able to answer your question. I am impressed by the $139/month lease rate, though. The trend in leases I see are that many dealers are offering that low an amount by setting terms for twice a month payments, instead of monthly.

Car purchases (and leases) are a classic case of asymmetric information. The average consumer doesn't have the knowledge and experience to be on a level ground.

Would an officer at your bank be able to help set things up (with an explanation) for you?

Todd's unknowledgeable keyboard
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Re: please unpack the language used in a car lease ad
Posted by: Dennis S
Date: August 12, 2018 05:01PM
Call the help number at Clark.com.
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Re: please unpack the language used in a car lease ad
Posted by: wurm
Date: August 12, 2018 05:12PM
I know they generally don't make sense, but if I had a very short (or nonexistent) commute, I'd be very tempted by those $49./mo Honda Civic lease deals I see locally. But with the miles I put on a car, it could never work.
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Re: please unpack the language used in a car lease ad
Posted by: Bill in NC
Date: August 12, 2018 05:17PM
OP needs to spend some time on leasehackr [sic] dot com before leasing.
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Re: please unpack the language used in a car lease ad
Posted by: billb
Date: August 12, 2018 05:44PM
I'd be even more concerned with the language in the lease agreement than the ad, but both employ similar sly perfidy.



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Re: please unpack the language used in a car lease ad
Posted by: Ombligo
Date: August 12, 2018 06:49PM
There will be dealer fees too. You will likely be required to have gap insurance, so get a quote from your insurance agent (which will be cheaper than what the dealer offers). The cheap ad is likely for one specific car, just like car sales, each car has it's own price and the lease price will depend on that price. As for mileage, the lease will stipulate how many miles you can have on it at turn in. Most leases are now allowing you 10k/year. If you think that is low, you can have it set higher (for a higher monthly fee).

The dealer will completely ignore the advertised deal unless you bring it to their attention.

A lease is generally a losing proposition, but if you are in a situation where you have limited upfront cash and need monthly payments to be as low as possible, a lease gives you that.



“No persons are more frequently wrong, than those who will not admit they are wrong.”
-- François de La Rochefoucauld
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Re: please unpack the language used in a car lease ad
Posted by: AllGold
Date: August 12, 2018 08:43PM
Quote
davester
Quote
Dennis S
"If anyone gets screwed, it will be you, not us."

This is exactly correct. Unless your business gets a tax advantage from leasing, you are generally going to lose money by leasing instead of buying.

Leases aren't always a bad idea. Only almost always. wink smiley

robfilms, your math is mostly correct, but as Ombligo points out, there will probably be some additional fees (gap insurance, etc.).

I leased a car once. Once was enough for me to learn my lesson. That lesson came at the end of the lease when I had absolutely nothing to show for the payments I made. Zero equity in any car and I had to start over.

$4682 is a nice down payment. You won't get payments that low on a purchase, but you will have something to trade, sell or keep at the end of the term.

I assume you know this, but I'll say it anyway. With a lease you're paying only for depreciation--plus all the fees, of course. That's why the payments are so low and why you have zilch at the end of the lease.

Of course, depreciation is greatest when the vehicle is new.

This is not an answer to your question but I think the best approach is to buy a 2-3 year old used car that has already taken the major depreciation hit. A lot of those cars are lease returns. grinning smiley



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Re: please unpack the language used in a car lease ad
Posted by: richorlin
Date: August 12, 2018 10:46PM
Unless you can take off the lease as a business expense, leasing is a very bad idea, You are paying almost $10K over three years and then have nothing to show for it but a bunch of receipts.



richorlin

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Re: please unpack the language used in a car lease ad
Posted by: tenders
Date: August 13, 2018 05:29AM
C'mon, whether leasing makes sense depends entirely on how you use/approach a vehicle.

If you are trying to minimize long-term cost of ownership, leasing isn't for you but neither is buying new vehicles. Separate question. I agree it is smart in this case to buy cars 2-3 years old and hang on to them for a long time.

If you tend to want to be in a new car every 2-3 years, as a lot of people do, leasing can make a lot of sense compared to buying and selling each time. The more miles you tend to drive, the less likely the lease will be the better solution.
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Re: please unpack the language used in a car lease ad
Posted by: dk62
Date: August 13, 2018 07:49AM
Quote
tenders
C'mon, whether leasing makes sense depends entirely on how you use/approach a vehicle.

If you are trying to minimize long-term cost of ownership, leasing isn't for you but neither is buying new vehicles. Separate question. I agree it is smart in this case to buy cars 2-3 years old and hang on to them for a long time.

If you tend to want to be in a new car every 2-3 years, as a lot of people do, leasing can make a lot of sense compared to buying and selling each time. The more miles you tend to drive, the less likely the lease will be the better solution.

Absolutely agree. I like to have a good new reliable car. I do not want to deal with repairs, lost time due to breakdowns etc. In addition, I absolutely abhor negotiating trade-in price on my used vehicle and have no intention of wasting time trying to sell it on my own. Because of frequent international travel and judicious use of wife's car, I do not put more than 10K/year on my car. Therefore, most of my cars over the past 15 years have been leases and I have been very happy with the experience. And I do not remember ever having to pay any gap insurance. Ultimately, the dealer will have to honor the advertised price, especially if the ad comes from the manufacturer (otherwise you can complain to the manufacturer with consequences to the dealer). I did use a lease broker a couple of times, but not when a manufacturer deal was available.



Edited 1 time(s). Last edit at 08/13/2018 07:50AM by dk62.
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Re: please unpack the language used in a car lease ad
Posted by: robfilms
Date: August 13, 2018 07:54AM
thanks all for the sharing.

as mentioned above, i have never leased which is why i was seeking info from those who had.

as to whether leasing is good or buying used is better, that is probably left to someone else's thread.

i am simply wondering from those with real world experience, whether my calculations were correct and what other ancillary charges i could expect to be asked to pay.

so far, the only new info was the idea of gap insurance. thank you for that thought.

i continue to welcome any sharing that can further offer new insights.

as always, thank you in advance.

thumbs up.

rob



Edited 1 time(s). Last edit at 08/13/2018 07:54AM by robfilms.
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Re: please unpack the language used in a car lease ad
Posted by: Ombligo
Date: August 13, 2018 08:23AM
While it won't be part of the lease, I have been told that you should plan to buy a set of tires just before turning the car back in. Otherwise the dealer will say the tires are worn out and charge you their inflated price on new ones.

Can anyone confirm this?



“No persons are more frequently wrong, than those who will not admit they are wrong.”
-- François de La Rochefoucauld
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Re: please unpack the language used in a car lease ad
Posted by: dk62
Date: August 13, 2018 10:04AM
No, never happened. Should be part of normal wear and tear.
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Re: please unpack the language used in a car lease ad
Posted by: dk62
Date: August 13, 2018 10:08AM
To get back to the original question, I do not remember ever having to pay for anything outside of the quoted deal. You can choose to pay up front a lesser amount for any final damage (like $500 for up to $2000), or for annual service, or for any other thing that the dealers usually try to up-sell on. The worst being "I do not have the exact car with the options, but this one is close and only a bit more expensive." But you do not have to and can always go to the next dealer.

And look at the fine print to see if there is a "lease-end payment" - usually if you decide not to purchase the car at the end of the lease or lease another car from the same manufacturer (in which case the payment gets pushed back to the end of the next lease).



Edited 1 time(s). Last edit at 08/13/2018 10:10AM by dk62.
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Re: please unpack the language used in a car lease ad
Posted by: Mr645
Date: August 13, 2018 10:19AM
TIP: Never put money down on a lease.

If something happens to the vehicle, a crash, stolen, your out that money
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Re: please unpack the language used in a car lease ad
Posted by: space-time
Date: August 13, 2018 11:19AM
Quote
Mr645
TIP: Never put money down on a lease.

If something happens to the vehicle, a crash, stolen, your out that money

This makes a lot of sense. Better to pay more per month, rather than put all money down at once, as long as the total payment is the same.

Also in my state when you buy a new car, registration is for 4 or 5 years. After that you renew every year. If you sell the car, move to another state, etc. you lose the registration fee. Not sure how it is for the lease, maybe they force you to pay only for 3 years, but that is still another (small) payment upfront that you do not recover if your car is totaled or stolen during the lease.

Another question is what happens to options and accessories. the most costly ones are upgrades like remote starters and towing packages/hitches/roof racks. If you install those, do you pay all cost? when you return the car, do you leave them on the car? They are quite expensive and you have nothing left after 3 years.
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Re: please unpack the language used in a car lease ad
Posted by: RAMd®d
Date: August 13, 2018 11:39AM
charge you their inflated price on new ones.

I see what you did there.


The trend in leases I see are that many dealers are offering that low an amount by setting terms for twice a month payments, instead of monthly.

That seems really sleazy to me.

But no doubt that's made very obvious in the ads, in plain text.




When a good man is hurt,
all who would be called good
must suffer with him.

You and I have memories longer than the road that stretches out ahead.

There is no safety for honest men except
by believing all possible evil of evil men.

We don’t do focus groups. They just ensure that you don’t offend anyone, and produce bland inoffensive products. —Sir Jonathan Ive

Perfection is the enemy of progress. -Winston Churchill

-An armed society is a polite society.
And hope is a lousy defense.

You make me pull, I'll put you down.

Mister, that's a ten-gallon hat on a twenty-gallon head.

I *love* SIGs. It's Glocks I hate.
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Re: please unpack the language used in a car lease ad
Posted by: dk62
Date: August 13, 2018 12:09PM
Re: expensive options - you pay the same percentage of depreciation as you do for the rest of the car. Not the full cost. I do not know about floor mats.
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Re: please unpack the language used in a car lease ad
Posted by: robfilms
Date: August 13, 2018 12:43PM
all helpful.

again, thank you.

i am going on the basis of total payments.

i do not need a low monthly to make this work.

as for options, it is not my style.

i will buy the good floor mats either on the web or used.

but i hear you about:

no/low down payment
possible need for gap insurance
disposition fee at the end of the lease.

i continue to welcome any and all insights.

thumbs up.

rob
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Re: please unpack the language used in a car lease ad
Posted by: wurm
Date: August 13, 2018 03:53PM
Quote
dk62
To get back to the original question, I do not remember ever having to pay for anything outside of the quoted deal.

At least in MA, the sales tax is added onto every monthly payment. I believe they charge the sales tax that would be due on the difference between the purchase price and the residual value, then divide that amount by the number of monthly payments in the lease you sign.
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