# Leasing vehicle



## Harp (Jul 18, 2012)

My wife and I are interested in a particular Toyota vehicle. We are not ones to sell a car every 2 years or want the latest and greatest. However we do need a new vehicle. 

If we leased the vehicle for 64 months, at a lease rate of 2.99%, vehicle purchase price is $31K vs financing at 3.99% vehicle purchase price of $35K. At the end of the 64 month lease the buy-out is $12K. We put approx 9,000km/year, so the 22,500 km limit is not an issue.

Is there any reason why leasing wouldn't make sense in this sceneiro?


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## LBCfan (Jan 13, 2011)

I'd want to be sure of all the numbers. Is $35K the sticker price, are you sure you can't buy it elsewhere cheaper? Can you finance a purchase below 3.99% (HELOC maybe)?

As with all financial things, "if it seems too good to be true, it probably is".


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## heyjude (May 16, 2009)

That's all very well and good, but you still have to fork out a lot of money at the end of the lease to keep the car. Numerous studies show that the most economical way to buy a car is to pay cash and drive it till the end of its natural life. Can you find a way to do this? 

I bought a car for cash in 1995 and traded it in 2012. 17 years, no interest charges. My new car came with an offer of 0.99% financing provided that I paid it off in 3 years (the interest rate was higher for longer loans). I decided that my money could beat 0.99% in the markets (a correct assumption). I am now close to paying the car off and I look forward to many more years of motoring with no more car payments.


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## blin10 (Jun 27, 2011)

heyjude said:


> Numerous studies show that the most economical way to buy a car is to pay cash and drive it till the end of its natural life.


that's true, but a lot of people (including me) don't like to drive same old pos car for 20 years... leasing makes a lot of sense if you like to always be in new and under warranty and not to worry about anything breaking down


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## jwsclark19 (Nov 24, 2014)

Since I have recently bought a new car, I can speak on this. It was also a Toyota. I found the Toyota I wanted, and I waited until they were clearing that model out (roughly this time of year actually). I got 0% financing for 7 years. Price out the door, with taxes and everything was 23k (they also gave me about $1500 off the sticker price). Also, visit several other dealerships, and go back to Toyota with the other dealers' competitive offers. Dealerships are more flexible than you might think. Personally, I think you should just try to haggle them down that so they can give you a better finance interest rate than their lease interest rate.


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## sags (May 15, 2010)

1) Forget about leasing unless you can deduct the cost as a business expense.

2) Check all the manufacturers for 0% financing over the longest time period. 

3) Buy one of their reasonably priced vehicles.

4) Invest your cash in a GIC and get compounded interest for the term of the car loan.

5) Take care of the car and drive it for 10 or more years.


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## 1980z28 (Mar 4, 2010)

I have used a broker 

Went to auction purchase vehicle(milton)dealer action

It was 2 years old with 45k

I only drive maybe 5k max per year

vehicle was 50k plus new,I paid 12k still under warranty

Not for everyone ,as I work as a mechanic so I understand what I am getting

Leasing is a good way to go,at end of lease you have option to keep or buy


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## sags (May 15, 2010)

Harp said:


> My wife and I are interested in a particular Toyota vehicle. We are not ones to sell a car every 2 years or want the latest and greatest. However we do need a new vehicle.
> 
> If we leased the vehicle for 64 months, at a lease rate of 2.99%, vehicle purchase price is $31K vs financing at 3.99% vehicle purchase price of $35K. At the end of the 64 month lease the buy-out is $12K. We put approx 9,000km/year, so the 22,500 km limit is not an issue.
> 
> Is there any reason why leasing wouldn't make sense in this sceneiro?


What the dealership doesn't tell you about leasing a car.............

1) The car remains in the name of the leasing company........... This means several things.

2) At the end of the lease, the vehicle must be safety checked (in Ontario) and a sellers package must be bought. Sales taxes must be paid.

3) The vehicle will be closely inspected upon termination of the lease, and you are responsible for any damage beyond normal wear and tear.

4) The history of the vehicle (Carfax) will show it as a past leased vehicle, and it will be worth less in the future.

5) You can't sell the car without the permission of the owner (leasing company).


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## heyjude (May 16, 2009)

blin10 said:


> that's true, but a lot of people (including me) don't like to drive same old pos car for 20 years... leasing makes a lot of sense if you like to always be in new and under warranty and not to worry about anything breaking down


That's fine if your primary objective is to always drive a newer car. My primary objective is to have safe and reliable transportation at minimum cost.


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## sags (May 15, 2010)

1980z28 said:


> I have used a broker
> 
> Went to auction purchase vehicle(milton)dealer action
> 
> ...


That is a great way to purchase a good vehicle............but as you said you have to know what you are buying as everything is sold "as is" condition.

We have Gardner auctions around here and they sell a lot of used vehicles.........repossessed etc.

It is where a lot of used car dealers get their inventory............jack up the price...........and sell them at high interest rates to buyers who can't qualify for bank loans.

Thing is............they don't even safety check them until they are sold..........so they have no idea what shape the vehicle is in.


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## OptsyEagle (Nov 29, 2009)

The biggest problem with leasing is that the dealer gets to violate you twice, instead of just once. With leasing they have a run at you again, when you bring the car back. They will walk around the car and point out a whole bunch of meaningless scratches, etc., and tell you that they will cost you a few thousand dollars ... BUT... if you buy/lease another car from us, we will waive these costs. Then, with this new car, they proceed to go to work on you like you are a hooker in a lumber camp on payday.

That's their plan anyways. Better to buy. Also, verify WHO guarantees that residual value. If you don't watch them closely, they will put your name in that spot. They have quite a few nasty practises that leasing provides them, since most Canadians could not calculate a lease payment if their life depended on it. Might as well sign over your paycheques to them if you are not fluent in the language of leasing. Remember, there are no honest car salesman. If the one you are talking to was honest, the dealership would have fired him/her long before you ever got to talk to them.


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## Eclectic12 (Oct 20, 2010)

blin10 said:


> ... leasing makes a lot of sense if you like to always be in new and under warranty and not to worry about anything breaking down


Some other situations where leasing makes more sense is for a business where the lease means 100% of costs can be written off versus ownership or where the driver is of an age/health where they are not sure how much longer they will be driving.


Cheers


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## supperfly17 (Apr 18, 2012)

1980z28 said:


> I have used a broker
> 
> Went to auction purchase vehicle(milton)dealer action
> 
> ...


Can anyone attend such auction in Milton? Or dealers only?


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## Addy (Mar 12, 2010)

Harp said:


> Is there any reason why leasing wouldn't make sense in this sceneiro?


Just FYI when you lease a vehicle, no matter how much you've paid off on it, if you get into an accident and it's a write off, or if it's stolen and not recovered, you will never get any of your money back. The company you lease from has no vested interest in fighting for more money, money which you get back, not them, and the insurance company has no interest in paying you any more than what is owing on the lease.

Read the fine print on that lease and you'll see something in there to this effect.


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## Ihatetaxes (May 5, 2010)

Addy said:


> Just FYI when you lease a vehicle, no matter how much you've paid off on it, if you get into an accident and it's a write off, or if it's stolen and not recovered, you will never get any of your money back. The company you lease from has no vested interest in fighting for more money, money which you get back, not them, and the insurance company has no interest in paying you any more than what is owing on the lease.
> 
> Read the fine print on that lease and you'll see something in there to this effect.


One of the reasons I have never put a dime of down payment on any lease. Lets be honest, leasing is renting a car. If I rent a car from Budget when on vacation and it gets stolen I wouldn't expect a cheque.


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## 1980z28 (Mar 4, 2010)

supperfly17 said:


> Can anyone attend such auction in Milton? Or dealers only?


You have to be with the dealer,great deals to be had,can get auction list before bidding


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## zoya (Mar 20, 2011)

Addy, it depends on what kind of insurance premium you have. My leased car was stolen some years back (2nd year of a 3 year term), but because I was paying for the full replacement value I got back they money I've paid for the 2 years.


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## Electric (Jul 19, 2013)

sags said:


> 2) Check all the manufacturers for 0% financing over the longest time period.


Is there really such a thing as 0% financing? I always assumed the discount you get for paying cash approximates the interest the manufacturer would pay on the bond it would otherwise have to issue.


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## sags (May 15, 2010)

Electric said:


> Is there really such a thing as 0% financing? I always assumed the discount you get for paying cash approximates the interest the manufacturer would pay on the bond it would otherwise have to issue.


We bought a new car last July. The only option available was 0% financing.

Maybe someone could go in with cash and try to get the equivalent discount...........but who would they talk to ?

The dealership wouldn't have the authority to agree to such a deal.


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## Electric (Jul 19, 2013)

There is no free money. The interest was simply built into the price you paid for the car.


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