I have always been against leasing. My daughter who is one year out of college and employed is in need of replacing her vehicle.

She is considering leasing a Civic EX for $159 a month 12,000 miles a year for 36 months. She likes the fact that it is new and she would not have to worry about repairs. The Total of payments being less than $2000 a year I struggle to advise her against it.

When Looking for a vehicle to purchase she has been in the $14K and under and would like to put $5k down. To keep her payment at $220 or less.

Seems to me most 3 year old cars that you buy today for $14K would most likely depreciate at least $2k a year for the next 3 years.

So what do you think Lease or no?

gg

what is the down payment on the lease? how much does she drive per year?

my local honda dealer had seme offers over the past 2-3 years where you could get a low mileage lease (10k/year) with $0 down, $99 or sometimes $129/month. Lately they don't have this offer anymore, it is more like $149/month and $999 down. And the lease is only 24 or 30 month, which means you have to go through the same hassle of renewing even more often.

Anyway, do the math and see what makes more sense. maybe a lease is the way to go.

also check this out.

[slickdeals.net]

I know it is not a honda, but it seems to be some sort of plug-in car.

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space-time
what is the down payment on the lease? how much does she drive per year?

my local honda dealer had seme offers over the past 2-3 years where you could get a low mileage lease (10k/year) with $0 down, $99 or sometimes $129/month. Lately they don't have this offer anymore, it is more like $149/month and $999 down. And the lease is only 24 or 30 month, which means you have to go through the same hassle of renewing even more often.

Anyway, do the math and see what makes more sense. maybe a lease is the way to go.

It will depend on her lease approval, it could be $0 down if she qualifies or up to $999 down.

Even then they offer $500 credit for college grads. So the most she would have to put down would be $499.

gg

oh yeah it is a 3 yr /36,000 mile lease

gg

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goosegunner
oh yeah it is a 3 yr /36,000 mile lease

gg

is this enough for her? how much does she drive now? what if she moves or change jobs and has a longer commute? take all this into account.

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space-time

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goosegunner
oh yeah it is a 3 yr /36,000 mile lease

gg

is this enough for her? how much does she drive now? what if she moves or change jobs and has a longer commute? take all this into account.

I think it would be close. I have asked her those same questions.

I did see that the overage is 15 cents per mile, so 5000 miles would cost her $750. Not too terrible divided over 3 years.


gg

If possible hopefully I can convince her to put the $5K in a separate account and add to it monthly over the next 3 years.

gg

Cars are just a depreciating asset, leasing lets you rent the item (Car) at a low monthly cost.

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"he is going to start WW3!!!!"

Leases are fine if you understand you are paying for the period of highest depreciation of the vehicle.

They are great for fun-to-drive but unreliable vehicles like anything made by VW.

Buyout at the end of the lease will probably be around $14k, so if she wants to keep the car at the end she could use those 3 years to save.

That's kind of a tough one. My late wife and I looked at leasing back when we got our new '94 Accord. From research at the time, it said to look at the residual value of the car at lease end (along with payments, etc.) vs. what you'd spend buying a car to see if it was really worth buying/owning or leasing. The presumption here being that you'd lease to own.

I'm a fan of buying a car and holding it for a good 7-10 years, so I'm kind of conservative there. I'm kind of a Honda guy (in much the same way I'm an Apple guy) - I've owned Hondas/Acuras for 20+ years. I've found their quality to be impeccable. Never a single issue that wasn't normal maintenance, on both new and used. My early used models (when I was your daughter's age) had nearly 100k miles on them at purchase and in the case of my '86 Prelude, 163k miles on it when I sold to another young person. All were rock-solid dependable.

So I guess what I'm saying is look at sites like Edmunds for total cost of ownership, residual values, etc. and from there you can likely extrapolate if leasing is better than buying in this case. And also look at gently loved [for me, that'd be Hondas/Acuras] cars and then do some figuring. You can find some real peaches out there, even models coming in off leases. My elderly neighbors drive a 2010ish Civic; I'd be shocked if it has more than 20,000 miles on it. Cars like that are such sweet deals.

Thanks for the info everyone. She is still considering it, but her main concern now is the miles allowed.

Anyone know how they treat wear and tear? Do they hammer you when you turn it back in?

gg

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goosegunner
Do they hammer you when you turn it back in?

Of course!

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Saint Cloud, Minnesota, where the weather is wonderful even when it isn't.

I'm generally against leasing. The main reason is at the end of the lease you have nothing. No equity or trade-in value. So you start again at zero.

If you're ok with that, and understand that you're paying only for the depreciation of the vehicle (which is why the payments are lower) I guess you could do it.

It depends on what incentives are being offered. Sometimes they will have favorable terms for financing on a purchase and sometimes they have a "sale" on leasing.

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goosegunner
Thanks for the info everyone. She is still considering it, but her main concern now is the miles allowed.

Anyone know how they treat wear and tear? Do they hammer you when you turn it back in?

gg

I considered leasing but I put 23k miles per year on a car, so it really didn't make sense for me. This may be unique to Subaru (or to this particular dealer), but this is one of the most straightforward explanations of the pros and cons leasing I've seen.