the problem with leasing is that you don't own it after 3 yrs. You still have to buy the car out after that. I think leasing will make sense if the payment on it was like 800$
I just got out of a lease. Lease payments are, essentially, paying for taxes, fees, and primarily, the depreciating value of the vehicle that you’re leasing. It is akin to renting a vehicle for a few years except worse and likely more expensive than actually renting. The dealer determines what the value of the vehicle will be (approximately) by the end of your contract. They will give you the option to buy-out the lease at the price they set when you first signed the contract. Here’s who a lease is good for: the dealer. End of story. Here’s who should consider leasing: folks who don’t understand how leasing works (like myself, at the time), folks who don’t care about actually owning a vehicle, and therefore have something of value (even a depreciating asset is still an asset!), folks who would rather not be concerned with anything other than required “mandatory” maintenance, and folks who would probably trade and buy a new vehicle every few years in any case and don’t mind making monthly car payments for as long as they possess a vehicle. The car/truck is restricted on mileage, modifications of any kind are forbidden, and the dealer has the option of ending the lease at any time if they so choose. It is THEIR vehicle.
@kevinbradley8613 what I thought exactly. I used to date a hairdresser that leased all her cars but she got some tax credit with it through her salon. But apart from getting business credit, I really don't understand why anyone would lease especially since the monthly payment is just about 10% off from just financing.
@@uche007us I wound up going with the lease because interest rates on financing were so high (they’re still stupidly high). I don’t have to drive a lot and the salesperson convinced me that low mileage leasing was a better choice. Financing would’ve been a much wiser decision once I realized how a lease actually works, and the payments were not significantly lower than they would’ve been had I went with financing. I now have a financed vehicle that I hope to have paid off in two years and then if I decide to trade for a new vehicle, I will have much more bargaining power. Never again!!! Do your research or speak with someone who knows BEFORE getting scammed lol 🤦
@@stayreal4l284 some of your payment goes towards the “value” of the vehicle at purchase. Like I stated, your lease payments are actually paying for the depreciation of the vehicle as well as other taxes and fees broken out over the length of your lease term. As an example, let’s say you lease a vehicle at $55K out the door, plus your down payment of, say $5K, leaving you with a $50K contract balance. The dealer/bank determines “your” new vehicle will be worth about $35K in three years (when your lease is done). You negotiated your monthly payments to $700/month. In theory, you should have paid off about $25K (including your original down payment) into the vehicle after three years, but remember your contract value??? In three years you’ll have the option to buy out the lease at the remaining contract balance of $35K or you can opt to get into a new contract with a new vehicle. This is where you will be penalized for going over your mileage if that happened, and have to pay (usually) registration fees (again), the remaining taxes owed on the vehicle, and usually an additional fee (convenience fee) of $500-750. This might be worth it if the actual value of the used vehicle is higher than your remaining balance; however, this is highly unlikely to be the case. Banks and dealers are pretty good at estimating how much a vehicle will be worth at the end of a lease term. On the plus side, you’re buying a used vehicle that you know it’s been taken care of because you’ve been taking it in for all of the required service visits and whatnot, but suddenly, you’ve realized that you’re actually spending nearly $70K for a $50K vehicle. Financing gives you the freedom to pay off the vehicle as quickly as you’d like, and this is not an option for a lease. You’re stuck making the required payments. So after three years of making payments on that car or truck, you still owe $35K before it’s fully paid off. The truck that I’m financing right now, I bought in May. At the rate that I’m paying down the principal, it should be paid off in less than 2 years from now, and in three years, if I wanted to trade it for a new vehicle, I’d likely be able able knock off a massive chunk on my next vehicle, or just be smart and own a vehicle that I’m only paying for insurance to drive haha. Leasing, in my opinion, is just not the way to go, especially if you like to make the car your own. They don’t even want you tinting the windows most of the time, and all of the service visits go back to that dealer’s garage. Forget doing your own maintenance other than keeping it clean. If you have really bad credit, leasing might be a better option, but even at 7-10% financing, it’s much cheaper in the end to finance it outright. If you’re really smart, you’d save up and buy a vehicle with cash and avoid any type of payment altogether lol.
Toyota you buy and keep long term. You dont even account for trade in value. My 2017 4Runner trd pro payed 55k new at that time has 80k miles now. I can trade in for 32k(apraised 3months ago) Most american cars, you lease as they fall apart after warranty is done. Im keeping my 4runner for at least 10-15 years. Its a waste of money to lease, the amount im saving not leasing, i can buy 3 trdpros by the time i trade in mine and my 2017 will be valued at around 20k for trade in. Dealers want you to lease. Endless stream of income for them. Not smart for a buyer.
Excellent video. Suggest you point out that with the lease you don't have a vehicle after 3 years. You must start another lease to reach the 6 years of financing. After the six years, you have a vehicle if you purchase or finance. Maybe you should raise the issue of how long you intend to keep the vehicle? A few scenarios, say 3, 6, 10 years would be interesting. Nice video.
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Can’t believe these numbers, would think we’re talking about a German luxury vehicle not a Toyota… Man, what happened?
the problem with leasing is that you don't own it after 3 yrs. You still have to buy the car out after that. I think leasing will make sense if the payment on it was like 800$
I just got out of a lease. Lease payments are, essentially, paying for taxes, fees, and primarily, the depreciating value of the vehicle that you’re leasing. It is akin to renting a vehicle for a few years except worse and likely more expensive than actually renting. The dealer determines what the value of the vehicle will be (approximately) by the end of your contract. They will give you the option to buy-out the lease at the price they set when you first signed the contract.
Here’s who a lease is good for: the dealer. End of story. Here’s who should consider leasing: folks who don’t understand how leasing works (like myself, at the time), folks who don’t care about actually owning a vehicle, and therefore have something of value (even a depreciating asset is still an asset!), folks who would rather not be concerned with anything other than required “mandatory” maintenance, and folks who would probably trade and buy a new vehicle every few years in any case and don’t mind making monthly car payments for as long as they possess a vehicle.
The car/truck is restricted on mileage, modifications of any kind are forbidden, and the dealer has the option of ending the lease at any time if they so choose. It is THEIR vehicle.
@kevinbradley8613 what I thought exactly. I used to date a hairdresser that leased all her cars but she got some tax credit with it through her salon. But apart from getting business credit, I really don't understand why anyone would lease especially since the monthly payment is just about 10% off from just financing.
@@uche007us I wound up going with the lease because interest rates on financing were so high (they’re still stupidly high). I don’t have to drive a lot and the salesperson convinced me that low mileage leasing was a better choice. Financing would’ve been a much wiser decision once I realized how a lease actually works, and the payments were not significantly lower than they would’ve been had I went with financing. I now have a financed vehicle that I hope to have paid off in two years and then if I decide to trade for a new vehicle, I will have much more bargaining power. Never again!!! Do your research or speak with someone who knows BEFORE getting scammed lol 🤦
@@kevinbradley8613you forgot to mention the part where all the money you paid for leasing get credited towards the car if you choose to buy it out
@@stayreal4l284 some of your payment goes towards the “value” of the vehicle at purchase. Like I stated, your lease payments are actually paying for the depreciation of the vehicle as well as other taxes and fees broken out over the length of your lease term. As an example, let’s say you lease a vehicle at $55K out the door, plus your down payment of, say $5K, leaving you with a $50K contract balance. The dealer/bank determines “your” new vehicle will be worth about $35K in three years (when your lease is done). You negotiated your monthly payments to $700/month. In theory, you should have paid off about $25K (including your original down payment) into the vehicle after three years, but remember your contract value??? In three years you’ll have the option to buy out the lease at the remaining contract balance of $35K or you can opt to get into a new contract with a new vehicle. This is where you will be penalized for going over your mileage if that happened, and have to pay (usually) registration fees (again), the remaining taxes owed on the vehicle, and usually an additional fee (convenience fee) of $500-750. This might be worth it if the actual value of the used vehicle is higher than your remaining balance; however, this is highly unlikely to be the case. Banks and dealers are pretty good at estimating how much a vehicle will be worth at the end of a lease term. On the plus side, you’re buying a used vehicle that you know it’s been taken care of because you’ve been taking it in for all of the required service visits and whatnot, but suddenly, you’ve realized that you’re actually spending nearly $70K for a $50K vehicle. Financing gives you the freedom to pay off the vehicle as quickly as you’d like, and this is not an option for a lease. You’re stuck making the required payments. So after three years of making payments on that car or truck, you still owe $35K before it’s fully paid off.
The truck that I’m financing right now, I bought in May. At the rate that I’m paying down the principal, it should be paid off in less than 2 years from now, and in three years, if I wanted to trade it for a new vehicle, I’d likely be able able knock off a massive chunk on my next vehicle, or just be smart and own a vehicle that I’m only paying for insurance to drive haha. Leasing, in my opinion, is just not the way to go, especially if you like to make the car your own. They don’t even want you tinting the windows most of the time, and all of the service visits go back to that dealer’s garage. Forget doing your own maintenance other than keeping it clean. If you have really bad credit, leasing might be a better option, but even at 7-10% financing, it’s much cheaper in the end to finance it outright. If you’re really smart, you’d save up and buy a vehicle with cash and avoid any type of payment altogether lol.
Toyota you buy and keep long term. You dont even account for trade in value. My 2017 4Runner trd pro payed 55k new at that time has 80k miles now. I can trade in for 32k(apraised 3months ago) Most american cars, you lease as they fall apart after warranty is done. Im keeping my 4runner for at least 10-15 years. Its a waste of money to lease, the amount im saving not leasing, i can buy 3 trdpros by the time i trade in mine and my 2017 will be valued at around 20k for trade in. Dealers want you to lease. Endless stream of income for them. Not smart for a buyer.
Excellent video. Suggest you point out that with the lease you don't have a vehicle after 3 years. You must start another lease to reach the 6 years of financing. After the six years, you have a vehicle if you purchase or finance. Maybe you should raise the issue of how long you intend to keep the vehicle? A few scenarios, say 3, 6, 10 years would be interesting. Nice video.
Awesome breakdown with realistic numbers
None just buy. If you cant afford it, tuff luck.