Lease residuals revealed.

[mkenny28]

I always lease , i own a company so I get 100% write off on payments. When my lease is up on my latest F150 I'll buy it out for the remaining balance personally. Same with my Mustang, company pays majority of the car, i buy a 4 year old car for approx $10,000. I keep keep it fully serviced, I know the car history etc.

^^^^ This. Except I usually just turn my Explorer in for the latest and greatest model and the same payment.

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[phil1336]

^^^^ This. Except I usually just turn my Explorer in for the latest and greatest model and the same payment.

There is nothing to be said for negotiating any purchase with a simple "how much a month" is the payment point of negotiations, sorry.

 

[mkenny28]

There is nothing to be said for negotiating any purchase with a simple "how much a month" is the payment point of negotiations, sorry.

When leasing a vehicle for business purposes and getting a new model of equal or greater value (feature wise) for the same lease price per month is a no brainer when the increase per new model is generally around 1800.00 per year and I don't ever plan on owning any of these vehicles. I don't purchase anything based on monthly payments but leasing is a different beast. And leasing for business purposes is a good business model.

 

[elfiero]

I'm a newbie here, but I have to add this: Living on someone else's dime is never a winning deal. Here is how I do it: I walk in, sit down and go back and forth with the "unseen" new car manager, until we both arrive at a price we can live with. I write out a check and drive away. Eight years later, I rinse and repeat. I pay no interest, I'm beholden to no one, and don't worry about paint nicks, etc. I watched my parents live their entire lives owing someone for something, and I promised myself I would never follow that example. There were a lot of lean years in the beginning, but it was/is worth it. If leasing was that great of a deal for the customer, do you really think manufacturers would offer it? The only people it's good for is those that have the write-off from a business.

 

[Mustang Convert]

I'm a newbie here, but I have to add this: Living on someone else's dime is never a winning deal. Here is how I do it: I walk in, sit down and go back and forth with the "unseen" new car manager, until we both arrive at a price we can live with. I write out a check and drive away. Eight years later, I rinse and repeat. I pay no interest, I'm beholden to no one, and don't worry about paint nicks, etc. I watched my parents live their entire lives owing someone for something, and I promised myself I would never follow that example. There were a lot of lean years in the beginning, but it was/is worth it. If leasing was that great of a deal for the customer, do you really think manufacturers would offer it? The only people it's good for is those that have the write-off from a business.

You are looking at it too narrowly. Why would I dump $30,000 cash into this car (a depreciating asset) when I can keep the money invested and earn a greater return on it than the interest rate I am paying.

For you, it may be about peace of mind, but economically, paying 100% cash up front is usually worse than financing at low interest rates.

 

[EuroBoy]

some of you are missing the point of leasing.

sometimes leasing has great advantages especially when manufacturers offer killer lease deals.

yes leasing is great in that it allows one to write it off if you some kind of business. Another great benefit is that you only pay taxes the amount of time u own/use the car...most of the time it's like 1/4 or 1/3 of the msrp. If you like to constantly change your car every 3 years then leasing is a great option.

however, you have to look at the big picture and crunch the numbers. there is something called the residual. a lot of times leasee's actually end up paying a lot more to "borrow" the car vs buying it straight out and either selling it on their own or trading it in. So u have to take those two scenario's and figure out which is the best route.

for example, for a 2015 v6 base model, if you are paying 300 a month for 36 months with 3000 drive off (300 of that is your first month payment). Your total out of pocket expenses will be 13500 (36 months 15,000 miles a year). Now if the residual buy out of that car is $20k, then cost basis to lease that car is based on a valuation of 33,500. Now would u pay 33,500 for a base v6 ? This is assuming the buy off amount is $20k. You also have to add taxes on the buy off amount if you do decide to buy out the lease.

sometimes it makes great sense to lease since the lease payments plus buy out rate comes in at a super low total valuation of the car. for ford, I'd rather lease if the math makes sense. Who knows how much these cars will be worth in 3 years.

 

[Apwrx]

20k residual for v6 would be ridiculous:headbonk: I'd guess more in the low teens. Just like financing it all depends how well you negotiate.

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