Leasing a truck

[mithesaint]

I'm tossing around the idea of leasing a truck. My Durango is getting near the end of the powertrain warranty, and it's always had the Hemi tick, which I'm starting to despise.

One of the local dealers is running an advertisement in the paper for a lease that almost seems too good to be true.

2015 Ram 1500 Crew Cab Express 4x4 V8. Employee pricing (I can get a employee number for this) is $159/month for 24 months with $1000 down plus tax, title, license. $0 security deposit. 10,000 miles/ year, which is fine for me, I drive between 8-9000 miles per year right now.

I have a few grand in equity in the Durango right now, so I won't loose money if I get rid of it.

What are the pitfalls? What questions do I need to ask? I've always bought used vehicles, so this is all foreign to me. Even with the money down, it will cost me $200/month to drive a new car for the next two years, and that sounds like a screaming deal to me, but I don't know.

 

[claydogg84]

Lease is a fancy word for rental. That's what it is, you'll never have equity. I always urge friends/family to not lease, but $200/month for a new vehicle is a pretty good price.

 

[moey]

Well at the end of the lease you would have spend $5000 and have nothing to show for it. Thats the big difference between buying and renting. Sorry to state the obvious just thought it needed mentioning again.

 

[begreen]

If you buy this truck new, at the end of same 3 yr lease period, how much would the truck have depreciated with 27,000 miles on it? If it's $10K is leasing a better way to go? @mithesaint, is this vehicle for personal or business use? If business, the lease might make more sense.

 

[heat seeker]

I like to get the salesman to tell the price out the door. I then write it down, or have him do it. I've saved myself some nasty surprises over the years. That's how I flushed out a dealer's $450 "service fee" I would pay for the privilege of buying from them. That wouldn't have surfaced until the last moment at signing the papers.

Leasing leaves you no equity, as stated, and leaves you in the position of having to replace the vehicle, perhaps in a rush, at the end of the lease.

 

[RSNovi]

If you are the type of person who likes to own their vehicle for over three years then purchasing is the way to go. If you like to get a new car every three years or less and don't drive a lot of miles then a lease is the way to go. I trade in my cars every two to three years and typically I hope to just get the loan payoff which feels much like a lease in the end. I drive too many miles to lease though.

 

[Guyerst]

On average, a new car loses 40% - 50% in 3 years. The first 3 years are the most expensive in a vehicles life... always. The only way to make it more expensive is to lease it... again, always. I've heard it said that if you want a new vehicle every couple years your better off leasing. There is some benefit to not have to deal with selling the older car I guess, but you will not come out ahead financially.

I'm a huge fan of doing exactly what you have been doing. Buy a vehicle that is a couple years old. Even if you finance it, you will almost always be able to break even when you go to sell, because you aren't financing that huge loss that happens in the first couple years.

Paying cash is even better and always the cheapest way to own any car...

 

[Coolbreeze]

Not sure how much help this will be but I was in the market for a truck last month and I looked at leasing the new F-150 with all the adds they were running. After working it out and crunching the numbers and then as has been stated here a few times coming out of the lease with no equity, I did what I always do. Buy an older truck with low km's that I can beat the hell out of till it dies. I ended up buying a 1999 F-150 with low kms and couldn't be happier with my choice.

 

[Swedishchef]

Paying cash is even better and always the cheapest way to own any car...

I can't say I agree with that one...A vehicle is about the only expensive item in a person's life that, after 1 month, is worth 5-10% less. So if you spend $20 000 on a car, after a month or so, you're car is worth $18000...You should just make a monthly payment OUT of the account that holds the cash you would have spent on the vehicle. Especially since so many dealers offer low interest rates (most 0) especially when you buy new..if you buy used, then some times you'll get the 5-7% range.

Just my 2 cents!

Andrew

 

[Swedishchef]

I'm tossing around the idea of leasing a truck. My Durango is getting near the end of the powertrain warranty, and it's always had the Hemi tick, which I'm starting to despise.

One of the local dealers is running an advertisement in the paper for a lease that almost seems too good to be true.

2015 Ram 1500 Crew Cab Express 4x4 V8. Employee pricing (I can get a employee number for this) is $159/month for 24 months with $1000 down plus tax, title, license. $0 security deposit. 10,000 miles/ year, which is fine for me, I drive between 8-9000 miles per year right now.

I have a few grand in equity in the Durango right now, so I won't loose money if I get rid of it.

What are the pitfalls? What questions do I need to ask? I've always bought used vehicles, so this is all foreign to me. Even with the money down, it will cost me $200/month to drive a new car for the next two years, and that sounds like a screaming deal to me, but I don't know.

It all comes down to personal choice. Do you change vehicles every 3-4-5-6-7-8 years? I have a car that is 10.5 years old. I simply use it for commuting to work. It has been paid off for 5.5 years. I really got my money's worth. People I know change cars every 3 years. Usually the residual value isn't higher than the outstanding balance on finance. So they lease.

Andrew

 

[firefighterjake]

It all comes down to personal choice. Do you change vehicles every 3-4-5-6-7-8 years? I have a car that is 10.5 years old. I simply use it for commuting to work. It has been paid off for 5.5 years. I really got my money's worth. People I know change cars every 3 years. Usually the residual value isn't higher than the outstanding balance on finance. So they lease.

Andrew

We're pretty similar ... I have no problem buying used or new ... mainly because I know that the vehicle will be used for a very long time ... barring accidents. When I sell my old vehicles typically there is not a whole lot of value in them since they're close to their end of life.

 

[Swedishchef]

I always try to avoid having 2 car payments since we're a single income household for the next 2 years.

Andrew

 

[TonyVideo]

I keep cars for 10 years. Just bought my wife a new one. In 5 years I will by me one. 2 cars and only one payment alternating every 5 years who gets the new one. Now is my turn to drive the old one with 170,000 miles but it is a diesel Jeep CRD. Love the vehicle. Plan on it getting at least 300k out of it. If I keep it longer I will just keep putting monthly payments in the bank for a bigger down payment. It is our car fund.