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Thursday 17 August 2017
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Is Leasing Right For You?

Is Leasing Right For You?

In early 2014, leasing is coming back with a vengeance.

I reported last week in my free weekly newsletter that in the 4th quarter of 2013, and so far in 2014, leasing was at an all-time high. Leasing has become a hot topic once again on the Car Pro Radio Show. So, is leasing right for you?

Understand that leasing is not for everyone. Although some will disagree with me, if you drive more than 20,000 miles per year, you have no business leasing. There are some real advantages to leasing for sure, but only if you are not a high mileage driver.

The reason I like leasing is because if you just stay within the allotted mileage, you cannot owe more on your car than its value at the end of the lease. If you do, simply walk away. If you have equity, you get to keep that for your next lease or purchase. For me, the perfect lease is three years or less. Odds are you won’t have to buy tires, and you won’t be out a ton of money on maintenance costs like timing belts, etc. You always have the latest options and safety features.

If you are going to get on a cycle of back-to-back leases, you have to get in the mindset of never owning a car. While leasing, you are paying a lower than usual monthly payment which allows you to buy a nicer model, or pocket the savings. These are all things to consider when pondering whether to lease or buy.

If you are a person who likes to be without a car payment and drive a car until the wheels fall off, leasing is not for you. I would never go into a lease planning to buy the car at the end of the lease, as this defeats the advantages of leasing in the first place.

I recommend, too, leasing directly from a dealership instead of a third party lease company. The third party lease companies purchase from local dealerships, mark them up, and then generally stretch a lease out to four, five, or six years. That is just too long to lease in most cases and why add that extra profit margin when it is not necessary?

I would tell you also that many times, there are low lease interest factors offered from the factory to help keep payments low. This is very prevalent with the imports and luxury brands. A third party lease company does not have access to those rates. I hear from people all the time who have been burned on leasing from years ago. Today, the manufacturers love leasing because it puts you back into the market sooner and should result in them selling more cars. Some manufacturers make leasing such an attractive proposition it is hard to resist.

One recent trend I am seeing is senior citizens who are leasing. They like the freedom of not having to part with their cash, or not having to commit to a long finance contract.

So if leasing is right for you, and you are sure of your mileage driven, it is a great way to get a car. After all, you are only paying for the best years of the car’s life, the first three years.

Photo Credit:  argus/Shutterstock



8 thoughts on “Is Leasing Right For You?

  1. Robert LaRey

    Mr. Reynolds,
    Considering 2014 or 2015 Lexus ES 350.
    I have paid cash for all my cars for years. A friend suggested I should lease my wife’s next car since she drives very low miles (she currently is driving a 2005 Lexus ES330 with 72000 miles). I’m wondering if a dealer would consider giving me a money factor equal to around 1% APR if I pay all of the payments (prefer 48 Mos.) plus TT&L and fees in cash up front? I would also have to get a selling price equal to what I can buy it for for cash. If you know of a Houston Lexus dealer that would be receptive, please let me know.

    Reply
    1. Jerry

      Robert, thanks for listening to the show. Dealers don’t set lease rates, residuals, or money factors, that is all done my Lexus Financial. However, I do have a great Lexus dealer in Houston who will take good care of you, and they do pre-paid leases all the time.

      Here’s contact info for Westside Lexus, Alex will take good care of you. Thanks for listening to the show.

      Westside Lexus
      12000 Old Katy Road
      (Katy Freeway at Kirkwoood and Dairy Ashford)
      Houston, TX 77079

      Alex Winnicki: CAR PRO Manager
      awinnicki@westsidelexus.com
      Direct Line: 281.369.1433

      Jerry Reynolds, President
      Car Pro Radio Network

      Reply
  2. kathye

    Hi Jerry, we are retired, play golf ergo travel out of town hauling 4 people with 4 sets of golf clubs.
    Also travel to Seattle to visit our youngest son in Seattle where the weather is not always as nice as it is here in Ca. I know you are formerly from the Sacramento area and so have one or more dealerships you would recommend if a person were to be interested in leasing a new Suburu. Is there any difference in the 2015 from the 2014, except for the year? Is the Suburu fairly quiet? We have a remarkable 2002 Honda Accord(except for the peeling black paint, of course,..have they corrected that problem by the way?)We plan to keep the Honda. I wasn’t real wild about the road noise in the Honda, would that be different in the Suburu…Lots of questions I know, but you are the answer man.

    Reply
    1. Jerry

      Good to hear from you! Thanks for listening to the show. I love Subaru products and think the Forester would be perfect for you. Not much change in the 2015 at all, they re-did it completely last year.

      Talk to my friends at Elk Grove Subaru, they will take great care of you. Click: http://www.carprousa.com/dealer/elk-grove-subaru

      THANKS for listening to the show.

      Jerry Reynolds, President
      Car Pro Radio Network

      Reply
      1. Joe jackson

        I have three months left on my lease I have a 2015 Cadillac SRX I’m leasing. Wanting to lease a 2017!Lincoln select is $488.00 a month for three years a good lease price. With $3000 down

        Reply
        1. Jerry Reynolnds

          I assume you are looking at an MKX, which is a great SUV. If it is $3000 total down, that sounds like a fair deal. – Jerry

          Reply
  3. Craig

    Could you comment on the inspection a lease car goes through when its returned and what the person who returned the car is responsible for.

    Reply
    1. Jerry

      It varies by lease company, but generally the main things they look for is body damage larger than a quarter, broken glass, torn upholstery, and in some cases, tire wear. Some companies are picky, others more lenient.

      Hope this helps!

      Jerry Reynolds, President
      Car Pro Radio Network

      Reply

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