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ChilisWife
God Bless America
Member since 5/05 3572 total posts
Name:
A.K.
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Buying car at end of lease - why is this bad?
New car shopping has been awful - everything is just SO expensive right now and I just don't have thousands to lay out and I don't see the point in having a $500 payment on a mediocre car. So I am seriously considering buying my car when the lease is up in June.
My question is - why does everyone jump down my throat about how terrible this idea is? The way I see it, I could only afford a certified pre-owned car anyway so why not buy the one I have complete history with?
Is it bad because the lease buyout price is always too high, and if so, isn't it negotiable?
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Posted 3/13/11 9:11 PM  |
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Long Island Weddings
Long Island's Largest Bridal Resource |
Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
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Re: Buying car at end of lease - why is this bad?
it's better to have bought the car to start
chances are you aren't getting a warrenty - if yours it up already
and the rates I was quoted for a used car were crazy- so I decieded to start fresh and bought a new car instead
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| Posted 3/13/11 9:18 PM |
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ChrisDee
My Girls
Member since 11/06 9543 total posts
Name:
Christine
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Re: Buying car at end of lease - why is this bad?
Just last week I bought my Ford Explorer at it's lease end. In my case, it was the perfect senerio. Even DH's uncle who leased me the car to begin with said, I would be a fool to NOT buy it out. For me it worked for a few reasons, 1st I had a very cheap lease to begin with(and put 0 down) and the buy out was thousands below what I would spend on that same truck if I bought it used. It only has 23,000 miles. I bought an extended warranty(put it into the loan) and by monthy payments went down. It all depends on the buy out price. My last Explorer(which I wanted to buy) had an awful buy out #. It was $8,000 dollars higher then this buy out and it was the same truck. It did not make sense to do it.
DH has a lot of family in the car biz. If you have any questions, FM me. Maybe I can help.
ETA: My used car interest rate is 3.04%
Message edited 3/14/2011 9:48:13 AM.
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| Posted 3/14/11 9:46 AM |
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DrMeg
Back home!
Member since 5/08 1858 total posts
Name:
Meg
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Re: Buying car at end of lease - why is this bad?
I think in most cases people are against it, because if you add up how much you've paid through the lease, plus your buy out, it would have been cheaper to buy the car outright from the beginning.
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| Posted 3/14/11 9:47 AM |
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familyoffive
LIF Toddler
Member since 6/10 483 total posts
Name:
Candice
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Re: Buying car at end of lease - why is this bad?
I think people say it's bad because in the end you could have got a better deal if you bought it upfront. That being said I plan on buying out my lease when it ends in November. I was planning on buying a new car originally but then I started to do some research. My buyout is thousands less than it would be to buy the exact same car used, and it is very unlikely that it was have the low miles I have. That being said even if I bought the car and then sold it right away I would make money on it. Of course I don't plan on doing that. I am just looking at a very low payment for a very short time which would give me some time without a car payment which would be wonderful! My car will also only be 3 years old at the time so it's worth it to me.
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| Posted 3/14/11 10:25 AM |
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heathergirl
Cocktail Time!
Member since 10/08 4978 total posts
Name:
American mouth
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Re: Buying car at end of lease - why is this bad?
Posted by DrMeg
I think in most cases people are against it, because if you add up how much you've paid through the lease, plus your buy out, it would have been cheaper to buy the car outright from the beginning.
My thoughts exactly. There are good scenarios where it works out better, but all the people I know that did it regret it.
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| Posted 3/14/11 10:35 AM |
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dpli
Daylight savings :)
Member since 5/05 13973 total posts
Name:
D
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Re: Buying car at end of lease - why is this bad?
Posted by DrMeg
I think in most cases people are against it, because if you add up how much you've paid through the lease, plus your buy out, it would have been cheaper to buy the car outright from the beginning.
I don't lease, so maybe I don't know what I am talking about, but this comment is sort of irrelevant, IMO. Of course it probably would have made more sense to buy a new car up front, but today, if you can't afford new and the buyout price is similar to whatever you would spend on a similar used car, I would consider buying it.
I think you just have to look at all the numbers involved in the different options and figure out what makes sense for you. I would rather have my own leased car, which I know the history of over some other used car if the costs associated are similar.
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| Posted 3/14/11 10:44 AM |
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tray831
Dee-licious!
Member since 3/06 5355 total posts
Name:
His Baby
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Re: Buying car at end of lease - why is this bad?
I think it all depends on how much the buyout will be. Usually its way  . I had a leased car; that I ended up leasing for 5 years b/c the they kept offering for me to extend it; so 5 years later it was time to give it up.
The buyout on it was so rediculous and they werent willing to negotiate on it. I ended up buying a pre-owned vehicle that was 4 years newer for much less mileage and much less money than my leased car.
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| Posted 3/14/11 10:52 AM |
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heathergirl
Cocktail Time!
Member since 10/08 4978 total posts
Name:
American mouth
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Re: Buying car at end of lease - why is this bad?
Posted by dpli
Posted by DrMeg
I think in most cases people are against it, because if you add up how much you've paid through the lease, plus your buy out, it would have been cheaper to buy the car outright from the beginning.
I don't lease, so maybe I don't know what I am talking about, but this comment is sort of irrelevant, IMO. Of course it probably would have made more sense to buy a new car up front, but today, if you can't afford new and the buyout price is similar to whatever you would spend on a similar used car, I would consider buying it.
I think you just have to look at all the numbers involved in the different options and figure out what makes sense for you. I would rather have my own leased car, which I know the history of over some other used car if the costs associated are similar.
If people lay out a down payment, make payments for three years, and then have to finance the remaining balance for another 3-4 years, I think they do end up paying a lot more for the car. My BFF is paying almost $50k after 8 years because she bought out her lease on a Nissan that was NOT worth it. Every scenario is unique, but I think, overwhelmingly, it doesn't make that much sense.
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| Posted 3/14/11 11:03 AM |
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dpli
Daylight savings :)
Member since 5/05 13973 total posts
Name:
D
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Re: Buying car at end of lease - why is this bad?
Posted by heathergirl
Posted by dpli
Posted by DrMeg
I think in most cases people are against it, because if you add up how much you've paid through the lease, plus your buy out, it would have been cheaper to buy the car outright from the beginning.
I don't lease, so maybe I don't know what I am talking about, but this comment is sort of irrelevant, IMO. Of course it probably would have made more sense to buy a new car up front, but today, if you can't afford new and the buyout price is similar to whatever you would spend on a similar used car, I would consider buying it.
I think you just have to look at all the numbers involved in the different options and figure out what makes sense for you. I would rather have my own leased car, which I know the history of over some other used car if the costs associated are similar.
If people lay out a down payment, make payments for three years, and then have to finance the remaining balance for another 3-4 years, I think they do end up paying a lot more for the car. My BFF is paying almost $50k after 8 years because she bought out her lease on a Nissan that was NOT worth it. Every scenario is unique, but I think, overwhelmingly, it doesn't make that much sense.
I agree with what you are saying, but I guess my point/question/whatever is that if you leased for a few years, that money is gone. If you leased and now have to get another vehicle, even if you got a used one, you're never getting the money you put into the lease back anyway, right? I guess what I am trying to say is that you are sort of starting from scratch once the lease is up, so all the money you put into that car in the past doesn't really matter. Or am I missing something?
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| Posted 3/14/11 11:20 AM |
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heathergirl
Cocktail Time!
Member since 10/08 4978 total posts
Name:
American mouth
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Re: Buying car at end of lease - why is this bad?
Posted by dpli
Posted by heathergirl
Posted by dpli
Posted by DrMeg
I think in most cases people are against it, because if you add up how much you've paid through the lease, plus your buy out, it would have been cheaper to buy the car outright from the beginning.
I don't lease, so maybe I don't know what I am talking about, but this comment is sort of irrelevant, IMO. Of course it probably would have made more sense to buy a new car up front, but today, if you can't afford new and the buyout price is similar to whatever you would spend on a similar used car, I would consider buying it.
I think you just have to look at all the numbers involved in the different options and figure out what makes sense for you. I would rather have my own leased car, which I know the history of over some other used car if the costs associated are similar.
If people lay out a down payment, make payments for three years, and then have to finance the remaining balance for another 3-4 years, I think they do end up paying a lot more for the car. My BFF is paying almost $50k after 8 years because she bought out her lease on a Nissan that was NOT worth it. Every scenario is unique, but I think, overwhelmingly, it doesn't make that much sense.
I agree with what you are saying, but I guess my point/question/whatever is that if you leased for a few years, that money is gone. If you leased and now have to get another vehicle, even if you got a used one, you're never getting the money you put into the lease back anyway, right? I guess what I am trying to say is that you are sort of starting from scratch once the lease is up, so all the money you put into that car in the past doesn't really matter. Or am I missing something?
Yeah that's exactly it. I look at it as renting a car. You definitely have to start over once the lease up.
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| Posted 3/14/11 11:22 AM |
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Blu-ize
Plan B is Now Plan A
Member since 7/05 32475 total posts
Name:
Susan
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Re: Buying car at end of lease - why is this bad?
This is just one reason I negotiate my leases based on the actual price and not the monthly payment.
If your buy out is low, the mileage is low and you like your car, it should work out in your favor.
The only extra you will have to pay for is the taxes on what your buy out is, a warranty if you want it and possibly a lease termination fee but that can all be negiotiated. Interest rates are very low now for new and used cars.
My dad bought his 2002 camry after the lease was up. He paid the same payment and it was all paid off in under 5 years including his lease period. he did not take out a warranty. He has a really reliable mechanic. btw-we transported the car from Arizona when they moved back here.
He is still driving it and it's in great shape and he hasn't had a payment in years.
I say go for it.
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| Posted 3/14/11 11:23 AM |
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Re: Buying car at end of lease - why is this bad?
Back in '99 I bought my car off the lease. The payments were over $100 less than the lease payment, so it made sense at the time because buying new or leasing new would have been more money, probably. Money was tight for me then, and I really could not afford a new car.
I was also working in the S. Bronx and living on a busy Queens street- so I had no desire for a new car because I knew it would get dinged up or worse.
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| Posted 3/14/11 11:38 AM |
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ave1024
I Took The Wrong Road
Member since 12/07 6153 total posts
Name:
That Led To The Wrong Tendencies
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Re: Buying car at end of lease - why is this bad?
The only way it's worth it to buy a car at lease end is if the blue book value of the car is more than what your buy-out is.
And also when buying out at lease end, only pay cash. Do not finance this. If you finance it, you end up paying double interest (you paid interest for the lease, now paying more interest for the buy out financing). Bad financial move.
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| Posted 3/14/11 11:52 AM |
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ChrisDee
My Girls
Member since 11/06 9543 total posts
Name:
Christine
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Re: Buying car at end of lease - why is this bad?
Just figured it all out(as I stated above I bought my truck at lease end)
I saved over $4,000 off the original price of the car doing it this way. PLUS a $2200 extended warranty. So I actually saved $6200.
It all comes down to the original lease agreement(buy out number) and your interest rate.
In some cases it IS better.
Like I said above, with my last truck(same kind) the numbers were awful and this would have made NO sense.
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| Posted 3/15/11 12:47 PM |
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