leasing a car? Please give your opinion

[houstonmacbro]

For too many people, leasing is basically a way to get yourself into a car you couldn't otherwise afford.

There is almost always a cost. Ask yourself why dealers enjoy setting up a lease.

Dave Ramsey (.org) calls is a "fleece" instead of a lease.

Chris Baker on KTRH used to (not sure if he still does) do a commercial for some leasing company (Pro Lease?).

[gwilson]

For too many people, leasing is basically a way to get yourself into a car you couldn't otherwise afford.

There is almost always a cost. Ask yourself why dealers enjoy setting up a lease.

Dave Ramsey (.org) calls is a "fleece" instead of a lease.

It is the same concept as people buying more house than they can afford because interest rates are low, using an interest only loan or ARMs.

It is a viable alternative to people who understand what leasing is and aren't using it to buy more car than they can reasonable afford.

[jm1fd]

It depends mainly on what others have said but another factor to consider is what kind of car you will get. If it is an expensive car then leasing is the best thing to do so you don't get hit hard with depreciation and never have to worry about paying for repairs on fancy systems like laser guided crusie control or an air conditiong system with 4 sensors in the car to monitor temp. and circulate air to where it is more warm; stuff like that.

If it is an expensive car then probably the best thing to do is find one that is a year or two old that has already taken the depreciation hit, and then dump it before the warranty expires. If you lease it, you're still paying for the depreciation....hell...that's pretty much the essence of leasing. Buy it a year or two old and somebody else has already paid for worst years of depreciation. The warranty should cover all those expensive repairs. Also, it is certainly possible to have a lease that extends past the warranty period, and then you'd be on the hook for repairs.

[TJones]

NOTE TO READERS: The lawyer says a lease does not give ownership to the lessee. The car guy says it does. YOU decide who to believe.

WRONG ! ! ! WRONG !!!

Good thing you are done with this thread Red.

Scenario: RedScare buys a new Dodge on a 60 month loan from Capitol One. On the title in Cap One's Vault, it shows Red as the owner, and Cap One as the Lienholder.

Scenario 2: RedScare buys same Dodge on a 36 month lease from Chrysler financial. On the title in Chrysler Fin. Vault, it shows Red as the owner, and Chrysler Fin. as the Lienholder.

Registration in the state of Texas has to be made out the same way the title reads, and that is how you get insurance, that is why insurance companies ask WHO the lienholder is when you buy full coverage on the car, whether it be purchase or lease.

Edited August 1, 2007 by TJones

[millennica]

For too many people, leasing is basically a way to get yourself into a car you couldn't otherwise afford.

There is almost always a cost. Ask yourself why dealers enjoy setting up a lease.

Dave Ramsey (.org) calls is a "fleece" instead of a lease.

Don't know borrow money for a depreciating asset. Many people use credit to buy cars, but you don

[houstonmacbro]

The reason most people lease or finance is because they do not have a spare $10k - $50k laying around to plop down for a vehicle.

[TJones]

Ok, I get what Red and JM1 are talking about, both of you keep going back to the Secondhand lessors. I am talking about doing business with reputable dealerships. Two different animals.

Would I lease from Prolease or Apple, ABSOLUTELY NOT !

Would I lease from a reputable dealer, You betcha !

[millennica]

The reason most people lease or finance is because they do not have a spare $10k - $50k laying around to plop down for a vehicle.

I know, but they're just making someone else rich. Better to save up for the car, buy it, drive it until it won't run anymore and start putting money aside for the next car.

[houstonmacbro]

I know, but they're just making someone else rich. Better to save up for the car, buy it, drive it until it won't run anymore and start putting money aside for the next car.

When you need a car, you need a car. Most people (there are some but not most) don't have the luxury to save up that kinda money when they are pressed with getting to work and getting on with their lives.

It's a nice concept, to pay cash for everything, but not practical or realistic for MOST people.

[jm1fd]

I know, but they're just making someone else rich. Better to save up for the car, buy it, drive it until it won't run anymore and start putting money aside for the next car.

I'm perfectly willing to make somebody else rich to the tune of 1% APR. That's the spread between my auto loan and my savings account.

[TJones]

I'm perfectly willing to make somebody else rich to the tune of 1% APR. That's the spread between my auto loan and my savings account.

JM1, you sell homes, right ?

[RedScare]

Ok, I get what Red and JM1 are talking about, both of you keep going back to the Secondhand lessors. I am talking about doing business with reputable dealerships. Two different animals.

Would I lease from Prolease or Apple, ABSOLUTELY NOT !

Would I lease from a reputable dealer, You betcha !

Just to be clear, I am not participating in the debate on whether to lease, or the debate on who to lease from, secondhand or dealers. That has been covered, and is particular to each person's situation and his accountant.

However, on the subject of who actually OWNS the car during a lease, my statement is that the lessor (leasing company) owns the car, regardless whether it is a dealer or secondhand lease company. The lessee is merely renting the car, and has no ownership.

[jm1fd]

JM1, you sell homes, right ?

Nope.

[houstonmacbro]

However, on the subject of who actually OWNS the car during a lease, my statement is that the lessor (leasing company) owns the car, regardless whether it is a dealer or secondhand lease company. The lessee is merely renting the car, and has no ownership.

But I mean c'mon ... by that logic the banks actually own the houses folks pay mortgages on, and the cars they drive and make payments on ... leases or not.

[gwilson]

I know, but they're just making someone else rich. Better to save up for the car, buy it, drive it until it won't run anymore and start putting money aside for the next car.

I don't think you understand the concept of the cost of money.

If I want to buy a $50,000 car and I have $50,000 in cash, it makes NO sense to plop it all down on a depreciating asset. If I were in the situation to pay cash for a car, the smart move would be to put that cash in a savings account and accrue interest and use the money to pay down a zero interest car loan or a low factor lease. You will MAKE money on your cash while minimizing the impact of the depreciation.

Paying cash for cars and driving them in to the ground makes little to no sense as the cost for maintaining a vehicle increases exponentially as it ages as well. It makes no sense to own a vehicle out of warranty unless it cost you $2500 bucks and only $1000 a year to maintain.

This doesn't account for those who actually want and or need nice cars or don't want to drive the same car for ten years.

PS: I lease my car, my name is on the registration and the title.

Edited August 1, 2007 by gwilson

[TJones]

But I mean c'mon ... by that logic the banks actually own the houses folks pay mortgages on, and the cars they drive and make payments on ... leases or not.

That is true, Red thinks that your name doesn't appear on the title in a lease, he is wrong, YOUR name is on the title as Lessee, that is how you get it registered in your name. Red is also under the assumption that you own the car if you do a straight purchase, this is also wrong, you don;t own anything until you pay off the loan, the bank owns it until then. Red, try making 59 payments without missing a beat then tell the bank to go to hell, I ain't paying anymore, on the 60th payment, and you'll see just WHO owns that car.

Edited August 13, 2007 by TJones

[gwilson]

That is true, Red thinks that your name doesn't appear on the title in a lease, he is wrong, YOUR name is on the title as Lessee, that is how you get it registered in your name. Red is also under the aaumption that you own the car if you do a straight purchase, this is also wrong, you don;t own anything until you pay off the loan, the bank owns it until then. Red, try making 59 payments without missing a beat then tell the bank to go to hell, I ain't paying anymore, on the 60th payment, and you'll see just WHO owns that car.

Technically you own it with the bank as a lien holder. In the contract you sign with the bank, you give them the right to come take the security if you default on repayment of the loan. So saying the bank owns the car isn't entirely accurate. Yes, if you default, they can come get the car (if they can find it) and sell it to make the money back. But you still technically own the car. This is also why, for example, if you owe the bank $2,000, they take possession of the security and liquidate it for $4,000, they have to give you the remainder less any costs.

Same thing with a house. You own the house, but the bank is the lien holder.

[RedScare]

That is true, Red thinks that your name doesn't appear on the title in a lease, he is wrong, YOUR name is on the title as Lessee, that is how you get it registered in your name. Red is also under the aaumption that you own the car if you do a straight purchase, this is also wrong, you don;t own anything until you pay off the loan, the bank owns it until then. Red, try making 59 payments without missing a beat then tell the bank to go to hell, I ain't paying anymore, on the 60th payment, and you'll see just WHO owns that car.

I never said your name is not on the title. I agree that your name is on the title as LESSEE. However, the leasing company is on the title as OWNER. On a typical bank loan, however, gwilson is correct. You own the property, but the loan contract gives the bank the right to repossess (car) or foreclose (home) if you default on the loan, without going to court. This is not rocket science. It is taught in college business law classes. Frankly, those who cannot distinguish between a bank loan and a lease have NO business signing leases OR bank loans, as it shows that they did not read what they are signing.

[TJones]

Red, red, red.............you are viewed as an owner, you can sell that lease if you want, you can trade that lease in if you want,it is your car, just like a conventional loan, as long as the lienholder gets their money, they don't care what YOU do with that car.

The leasing company will show as LIENHOLDER. Your name is on the OWNER line of said title. YOU are responsible for maintaining the insurance on it, just like a conventional loan, as required by the state of Texas. Prolease isn't required to maintain it, YOU are. Here, I'll give a little, how about CO-OWNER then, with the lease company still being the Lienholder. The state looks at YOU, the driver, of the lease as the one who has to maintain financial responsibility on that lease, not the leasing agent. Insurance and registration has to read as the title reads, that's the law couselor, you know that.

[millennica]

Believe me, I understand the concept of money and I have plenty invested in various instruments, enough to retire and live very well on spending only the interest. I'm just not into cars, purchasing expensive cars or purchasing them on credit. As far as I'm concerned, cars are simply a means of transportation and it doesn't matter what they look like. I purchased my first car at age 20 with cash and have been saving up for the next car and purchasing with cash ever since. Maybe I've been lucky, but I have been driving the same 1988 Volkswagen Fox since I purchased it new with cash in 1988. And except for regular maintenance, I've spent less than 1,000 on repairs. That's what I've done and plan to continue doing although I understand that not everyone want to so what I've done insofar as cars are concerned. I'm not trying to convert anyone to doing things the way I have, but I'm not interested in doing things differently when it comes to my auto purchases.

[RedScare]

Okay, TJ, you forced me on this one.

You sir, are an idiot. Go research the issue, because I am tired of explaining something as simple as lessor-lessee law. And, because I do not wish to revisit this thread, anyone else who agrees with TJ is also an idiot.

I hope I have made myself clear. You may begin your temper tantrums in 3...2...1...

[TJones]

Okay, TJ, you forced me on this one.

You sir, are an idiot. Go research the issue, because I am tired of explaining something as simple as lessor-lessee law. And, because I do not wish to revisit this thread, anyone else who agrees with TJ is also an idiot.

I hope I have made myself clear. You may begin your temper tantrums in 3...2...1...

Lowest common denominator, always results to namecalling. ZZZZZZZZZZZzzzzzzzzzzzzzzz, how boring.

See you in another thread Mr. Sheister.

[RedScare]

I apologize for the name calling, TJ. Your insistence on giving a wrong definition to such a simple concept frustrated me after a long day. I apologize to the forum members as well. Henceforth, I will keep my opinions of the intelligence of forum members to myself.

[jm1fd]

And except for regular maintenance, I've spent less than 1,000 on repairs. That's what I've done and plan to continue doing although I understand that not everyone want to so what I've done insofar as cars are concerned.

Hopefully you'll be able to continue to do so as long as you wish. I will caution you, however that as time goes by it may become increasingly difficult to keep an old car running. Manufacturers are not making parts for as long as they used to, and some parts for cars built as recently as the mid 90s are impossible to find new or remanufactured.

[gwilson]

Believe me, I understand the concept of money and I have plenty invested in various instruments, enough to retire and live very well on spending only the interest. I'm just not into cars, purchasing expensive cars or purchasing them on credit. As far as I'm concerned, cars are simply a means of transportation and it doesn't matter what they look like. I purchased my first car at age 20 with cash and have been saving up for the next car and purchasing with cash ever since. Maybe I've been lucky, but I have been driving the same 1988 Volkswagen Fox since I purchased it new with cash in 1988. And except for regular maintenance, I've spent less than 1,000 on repairs. That's what I've done and plan to continue doing although I understand that not everyone want to so what I've done insofar as cars are concerned. I'm not trying to convert anyone to doing things the way I have, but I'm not interested in doing things differently when it comes to my auto purchases.

certainly a different mentality and that is understandable.

I apologize for the name calling, TJ. Your insistence on giving a wrong definition to such a simple concept frustrated me after a long day. I apologize to the forum members as well. Henceforth, I will keep my opinions of the intelligence of forum members to myself.

you can compliment my intelligence all you like! ;o)

[emirate25]

Do you guys recommend in leasing a car?

I live in downtown houston and my job is two blocks away.

i dont have a car right now...just walking around and getting friends to take me to places.

[sevfiv]

depending on how difficult it is to get to the places (besides work) where you want to go, you might consider forgetting about buying/leasing a car, and maybe get something small for short trips (bike, moped?).

for longer distances, just rent a car.

Edited August 4, 2007 by sevfiv

[Watchful]

When you need a car, you need a car. Most people (there are some but not most) don't have the luxury to save up that kinda money when they are pressed with getting to work and getting on with their lives.

It's a nice concept, to pay cash for everything, but not practical or realistic for MOST people.

The vast majority of people who lease don't end up leasing the car that they NEED....they end up leasing the car that they WANT. Just the way it is.

[Mr. Chenevert]

How do you figure that ? The gross is the gross, there is no seperate percentage that salesmen get paid for doing a lease over a purchase.

Every dealership has their own commision system, however I know that several dealers (not necessarily in Houston) give their salesmen different commision rates depending on what type of transaction was performed.

Leasing is the most lucrative to the dealer, and thus the salesman gets a better rate. For this reason, he or she may be willing to negotiate a lower purchase price since they will end up with the same amount of cash in their pocket.

Financing through the dealer was the second most lucrative option, and obviously, someone paying in cash was the least lucrative for the dealer. All three often have different commision rates.

Again though, every dealer has their own commision system.

[houstonmacbro]

The vast majority of people who lease don't end up leasing the car that they NEED....they end up leasing the car that they WANT. Just the way it is.

Perhaps true. I don't have the numbers to say otherwise.

I guess my original point was that for most people, the people who work everyday to pay bills and stay one step ahead, do not have a big wad of cash to pay for something in full like that.

Most people.