Purchase or lease? Pros and cons.

[jhalkias]

For me, this will be a numbers issue when I see what Ford is going to offer. I used to lease all the time because my wife always wanted no worries with the car, and we kept to the mileage (I used to drive a company car). Now, I buy because my mileage (I buy my own car now) is about 31,000 miles a year driving about 100 miles a day to and from work. So I am blasting through the warranty pretty quickly. If Ford offers great financing like the 0% 60 month on my current car, I will probably bite the bullet and buy. If not, I may do that new "lease type" option thinking I may buy the car at the end. It all depends on the numbers and my options as a higher than average mileage driver.

 

[timbop]

If I turn it in after the lease.

yes, but you can defer that decision to keep it or return it until 2025 when you see what is available. If there have been quantum leaps in battery and charging tech, return it. If not, keep it.

 

[hybrid2bev]

yes, but you can defer that decision to keep it or return it until 2025 when you see what is available. If there have been quantum leaps in battery and charging tech, return it. If not, keep it.

I think I got his point now. He's weighing which is better in the end, either keeping the prestige of having the First Edition of the MME that was made OR to get something new with greater battery and range when the term is up.

 

[Redundant]

For me, this will be a numbers issue when I see what Ford is going to offer. I used to lease all the time because my wife always wanted no worries with the car, and we kept to the mileage (I used to drive a company car). Now, I buy because my mileage (I buy my own car now) is about 31,000 miles a year driving about 100 miles a day to and from work. So I am blasting through the warranty pretty quickly. If Ford offers great financing like the 0% 60 month on my current car, I will probably bite the bullet and buy. If not, I may do that new "lease type" option thinking I may buy the car at the end. It all depends on the numbers and my options as a higher than average mileage driver.

Isn’t that going to be too much milage for a “lease”?

 

[hybrid2bev]

Isn’t that going to be too much milage for a “lease”?

No, not necessarily . In this case the customer could select the 19,500 miles per year option. Then purchase the remaining mileage per year upfront if they live in an eligible state. If you know how many miles you drive you may be able to plan ahead and structure the contract accordingly. The max mileage allowed is 99,999 for any term. OR If you know you are going to buy the vehicle at the end of the term instead of returning it, then the mileage would be irrelevant.

 

[JamieGeek]

No, not necessarily . In this case the customer could select the 19,500 miles per year option. Then purchase the remaining mileage per year upfront if they live in an eligible state. If you know how many miles you drive you may be able to plan ahead and structure the contract accordingly. The max mileage allowed is 99,999 for any term. OR If you know you are going to buy the vehicle at the end of the term instead of returning it, then the mileage would be irrelevant.

Of course you could plan all of that ahead and have everything setup and then something happens, say a global pandemic, which causes the # of miles you drive to go to essentially zero....just sayin... lol

 

[zhackwyatt]

Of course you could plan all of that ahead and have everything setup and then something happens, say a global pandemic, which causes the # of miles you drive to go to essentially zero....just sayin... lol

That's about as likely has a meteor hitting us....get serious, that'll never happen.

 

[Sneezy]

My .02 worth.

Leasing can be good/bad.
Lease if you want a new car every 2 or 3 years
It's always under warranty
Payments, depending on "how well" the vehicle leases can be lower.
For me, it's my company car so it's a corporate tax write off
You drive under the miles per year. I might drive 7K a year (this year is way off obviously)

The bad side
You always have payments which = spending more
You can't customize it if that is your thing
You have to watch your miles. My sister (against my warnings) leased a car one time. She went way over the miles, ended up buying out the car so as to NOT pay for the overage in miles. She didn't like the car and it became costly to maintain. She wasted a lot of money.
You may or may not do well at the end of a lease. My 2014 Camaro SS was an incredible lease. I did well. my 2017 sucked. My Caddy XT4? Don't know yet.

I usually suggest to individuals to not lease unless you NEED a lower payment.

 

[GregM]

For me it comes down to tax credit and miles covered.

A BEV shouldn't have the maintenance issues that an ICE has, so a lease does nothing here.

I understand that the technology is moving fast, maybe faster than needing to hold onto the car for more than 5 years...so if you buy and wanted to sell after 3 years, of course that comes into consideration - but there is nothing holding me back from a resale play to get something new and shiny.

So I go back to if Ford structures its lease differently for the Mach E than an ICE - namely how they address miles - that would be something that shifts me away from buying.

I also want the tax credit.

So jury is still out for me.

 

[zhackwyatt]

I usually suggest to individuals to not lease unless you NEED a lower payment.

My .02 cents, if you are leasing a car because you need a lower payment, you should probably be looking at a cheaper car. Far too often people buy more car than they can afford.

 

[eager2own]

My .02 cents, if you are leasing a car because you need a lower payment, you should probably be looking at a cheaper car. Far too often people buy more car than they can afford.

Well, on that point, that’s how I feel about auto financing as a whole. I decided a while back that I already give banks enough of my money on my Texas-sized mortgage. So for me, it will be an outright purchase on this like my other vehicles. It’s just as easy, but better, to force myself to save the money upfront, than to do it on the back end with additional interest.

 

[zhackwyatt]

Well, on that point, that’s how I feel about auto financing as a whole. I decided a while back that I already give banks enough of my money on my Texas-sized mortgage. So for me, it will be an outright purchase on this like my other vehicles. It’s just as easy, but better, to force myself to save the money upfront, than to do it on the back end with additional interest.

I think that's true for just about anything but a Car loan or a Mortgage. For both of those I can probably get an interest rate lower than what I could get from investing that same money that I'm stocking away.

When I remodeled my kitchen, I took a cash-out refi because the rates were so cheap. Lowered my monthly payment, invested the difference, and tied the remodel to the equity of the house. It was a win, win, win.

 

[GregM]

Well, on that point, that’s how I feel about auto financing as a whole. I decided a while back that I already give banks enough of my money on my Texas-sized mortgage. So for me, it will be an outright purchase on this like my other vehicles. It’s just as easy, but better, to force myself to save the money upfront, than to do it on the back end with additional interest.

On that point, to save on the interest of a loan - a lease and then buying it out at the end, would actually help on the extra money that you need to put towards a loan payment + interest (assuming you need a loan to buy vs. having the cash to buy outright...) - right? (of course not getting into equity, depreciation, etc...)

 

[eager2own]

I think that's true for just about anything but a Car loan or a Mortgage. For both of those I can probably get an interest rate lower than what I could get from investing that same money that I'm stocking away.

When I remodeled my kitchen, I took a cash-out refi because the rates were so cheap. Lowered my monthly payment, invested the difference, and tied the remodel to the equity of the house. It was a win, win, win.

I still believe that nothing in life is free. People say “but I got a 0% APR on the car loan” but they ignore that the same dealer offered a cash back or 0% APR. Thus, by taking the “free” loan, all that person did was forego a better price on the car — essentially prepaying for the interest on the “free” loan.
In general, banks don’t make money by lending others money for less than its present value.
I’m not saying it’s always better not to borrow, but situations outside of real estate (which unlike our cars will hopefully appreciate) are rare.

 

[JTK44]

Honestly, I wouldn't lease. However, sometimes it is more convenient to lease, because lease payments are generally lower than the monthly payments for a new car. Thus, it may pe more convenient. Still, this is not about me, because I prefer living without debts. More than that, since I've got a mortgage, I'm saving every penny in order to get rid of it earlier. With the help of Mortgage Broker London company, I managed to get the perfect deal at great money. I couldn't imagine that I will find such a nice offer that will give me the possibility to close the loan before the term. In fact, it is up to you, to buy the car or to lease.

When you buy a car and finance it, you are spreading 100% of the purchase price over a set number of months.

When you lease you are spreading a portion of the depreciation, usually between 40% and 45%, over a set number of months.

Most of the time the difference between the interest rates when you buy vs. when you lease are not significant.

Bottom line: the monthly payments over the same period of time, the lease must be substantially less than the monthly payment when you finance.

If the residual is 60% over a 3 year lease, (you are paying 40% of the purchase price of the car) to get similar monthly payments when you finance the finance term would have to be 2 1/2 times as long or 7 1/2 years.

An absolute rule of leasing that may apply: If your budget only allows a monthly finance payment of $500 a month, never lease a more expensive car where the payments are also $500 a month. Always lease the same car and pocket and save the difference between the finance monthly payment and the monthly lease payment.

Two other rules of leasing: leasing 101:

• Never, I repeat never put any money down to reduce the monthly lease payment. Everything including sales tax and acquisition fee should be rolled into the lease.
• Never lease beyond the manufacturer's warranty period-