Car lease recommendations

In My Humble Opinion
1

I’m considering getting a lease on a new/newish car. My current 88’ Accord lacks airbags, worse! It lacks cupholders.

I may not stray from the $200-$300 range but I am very flexible with my choice of car. Too flexible, in fact. I am so flexible that I have no idea what to get.

Well, I do have an idea. I want the euro Civic Hatchback 2k6 or above, but zat iz nothing but a dream.

Your feedback would be most helpful, one way or another.

Thanks for your time.

2

I’m currently leasing a Honda Civic (2005), and it runs me $250.00 a month.

A couple of consideration when leasing:

  1. mileage is a concern; my lease allows for 12K miles a year. Right now, that isn’t a problem, since I had been living very close to work, meaning I was below my allowance. Now that I’ve moved, and taken a new job that requires me to do some traveling, I’m going to be racking up extra mileage. This will bite me in the ass when I go to return the car.
  2. When you turn in a leased car, you get nothing to show for it. While you may be able to get a discount from the dealer on origination fees if you lease another one of their cars, you’ll have no trade in if you go to another dealer. Thus, you have to be willing to put some cash down at the time you’re lease is initiated (couple of thousand in my case).
  3. Lease terms depend largely on your credit score (mine is very good, and I had my dad cosign on this current lease, as I’d just gotten out of school) and the residual value of the car. Since a Honda does a better job of retaining its value then, say, a Hyundai, I was able to get a better deal on my Honda lease then if I had leased a similar looking (actually, a little sportier) Hyundai.
  4. One particular advantage to a lease is that you can get a new car which is fully under warranty. Since my lease is only three years, it will stay under warranty for the time I own it. No concerns about major repairs.
  5. One particular disadvantage to a lease is that you’ll always be making payments, whereas you can pay off a loan for a car you buy. If you like keeping a car long term, it’ll make more sense to buy. If you’d rather get a new car every 3-5 years, better to lease.

All of this is my opinion. I’m not really a car guy, but these are my observations. I’d welcome anyone, with more car experience, to correct/elaborate on my post.

3

First of all IIRC you can only lease new cars. So you’d be looking at a late model 07’ or a brand new 08’. Jetta has a great offer that fits your price range as long as your credit if ok. How do you feel about Volkswagen? I think German engineering is second to non, but I now a lot of people disaagree.

Also, how much do you drive? A lot or a little? I like leases they take car of most things that can go wrong and you know your car is tip top when driving it. If anything fails you bring it in and they fix it. As long as you didn’t cause the damage I think it’s a fine choice. As long as you don’t try and pull one over on the dealer or seriously abuse the car it’s a good choice.

#1 downfall, you do not own the vehicle.

4

From a financial point of view, leasing is always the worst way to go. Plus there are several possible pitfalls in leasing that most people ignore, often to their detriment; condition at turn in, excess mileage, cost of insurance, etc.
Buying used is the best, provided you take the necessary precautions.
There are a number of online articles on the subject of leasing vs. buying, here’s one from Edmunds: http://www.edmunds.com/advice/buying/articles/47079/article.html

5

I used to work for a finance company (GMAC) in the office where finance requests were evaluated and approved or declined.

They LOVED to offer leases to people, especially young buyers or people with less-than-perfect credit. It was also considered less of a financial risk to the corporation, although I can’t really explain how. I’m sure someone else can - my brain is fuzzy this afternoon.

What I took away from that job was if the finance company loved leases so much, a buyer should be leery of signing on for one.

Also if you get a lease but you can’t continue with payments, if your financial situation should change drastically, it is not as easy to unload the car. Many people have the belief that they can just “return” the car to the dealership, as if they’d only been renting it. It can be tough to find a buyer who wants to take over the lease payments.

If it is the ONLY way you can get a car, due to credit reasons, or if you have a business and are able to use the lease payments as a tax deduction, then leasing is a valid option.

6

While I don’t have a dog in this hunt, I think that the linked Edmunds article is a poor comparison at best.
First off, It is highly doubtful that some one would re-lease a three year old car. Just doesn’t happen. And if it did, I suspect that the lease price would be much cheaper than the $385 quoted. (lease rates are based on the difference of the value of the car at the beginning of the lease minus the value at the end of the lease, plus interest of the amount financed divided by the number of months of the lease. Since the largest deprecation of the car occurs the day you drive it off the lot, a re-lease should cost a lot less.)
Lastly, the comparison does not take into account that the consumer still has $3000 in their pocket, and is paying $300 a month less than the person buying a new car. If the consumer does not have a spare 3K and an extra 3 yards a month but desires / needs a new car, leasing makes a lot of sense.

As a friend of mine who works for a financing arm of a car maker says, “Does it make sense to buy a depreciating asset?” I don’t know, that is for each consumer to decide.

Look at it this way. Buying a new car and leasing a new car are the exact mirror images of each other. When you buy a new car, you make a large down payment and then make a stream of payments on the amount financed. At the end you owe nothing.
With leasing on the other hand, you make no large down payment* and you make a stream of payments, and at the end you owe a large payment if you wish to keep the car.**
*Some fees, and if a car dealer is trying to get to a sexy price point ($199/month) there may be a cap cost reduction.

**From a dollar and cents point of view this is a very dumb way to go