Car Leasing Dangers Exposed: Avoid These Costly Mistakes
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- Опубликовано: 29 май 2024
- If you're wondering "lease vs buy a car"...Don't Lease a Car Until You Watch THIS Video! Vehicles are still expensive right now. Many people are looking for ways to get their car payments down, so they end up getting a lease. Since they are just "renting" the car, they don't ask many of the questions they should ask before signing on the dotted line. This video details many of the main mistakes people make when leasing a car and also details if it makes more sense to lease a new car or finance a new car.
Leave a comment about your car leasing experience.
Not Leasing Vs Buying A Car - Dave Ramsey, But 🚗 Leasing vs. Buying a Car: Which is the Better Option for YOU? 🚗 | Your Rich BFF, But How Do I Buy A Car Without Going Into Debt?, But Leasing vs Buying a Car: Which is ACTUALLY Cheaper in 2024?, But Should I Lease Or Buy a Car in 2024?, But Leasing Vs Buying a Car 101: Which Is Best? (EXPLAINED), But Should I Lease a Car?, or any other video like The Ramsey Show Highlights, Your Rich BFF, Humphrey Yang, KC Mckeown, Meet Alex Park, or Two Cents would make. This is a video where Bradford Irons (aka Mortimer_Money_Coach) explains the Car Leasing Dangers Exposed: Avoid These Costly Mistakes. If you need one-on-one personal finance or business coaching, please hit this link to sign up for a free consultation: calendly.com/mortimer-consult...
I got caught up into that one time. But once I realized made that stupid mistake, I was able to take out a loan from my credit union and buy out the lease. Leasing full term would have costed me $2500 more than what I paid to finance it. But since I did start out with a lease, it did cost me about $500. But at least I was able to stop the bleeding. They make it look like a good deal at the dealership. But once you sit down with the contract and calculator in hand, you can see what's really going on.
One thing that i don't know if it wasn't mentioned that is HUGE is that the buyout of the vehicle is technically a second transaction. So you are paying the taxes on buying your own vehicle!!!
Good point! Thanks for the comment!
Yea because thats tax paid on the remaining value that you initially didn't pay tax on
@@chinosachi8908 yup exactly. Just people don’t realize that they owe that.
Great video, thanks for sharing.
Glad u enjoyed the video!!
Excellent video, thank you sir!
You're welcome! Glad you found it helpful.
You’re that guy, thanks for the info, very useful not so sure I will ever lease, thanks again
Thanks! Glad you enjoyed the content.
Great info thanks
Very educational video! I started to get a lease, until I talked to the loan officer at my bank; essentially she told me the same thing as you. If you are rolling in doe, lease vs buy is of no concern, but if you are like most of us average Joes and Janes, buying is the way to go. Thanks 👍🏾
Thanks! Glad you found it helpful!
@@Mortimer_Money_Coachsay, I heard that if you are part of a credit beureau.no that's not the word... (English is rusty) credit.. Unions? That if you belong to a credit union that they will negotiate the car for you?
You need also to talk about what happens when the car is totaled during the early part of the lease.
Thanks for the feedback. Good suggestion!
Good video but you hit the 2 main points in the end basically
First of all, every car depreciate; so at the end of the 3-4 years, either if you loan or lease, you as user pay that delta. It is just that in the end you own the car for the residual value; but if you want to trade it or sell it, you won't make that much money either, as the price will be lower...
So these 6K more you pay for the lease, in the end are compensated by what you lose when you trade/sell your vehicle once you are done paying it. Whoever get the car and drive off the lot pay the depreciation; there is no way out of it.
Also the second point is cost to maintain the car: when you lease, you just need to keep up with basic maintenance, you don't care about dings, dents and other small things because eventually you will return the car, and most small scratch and dents, unless bigger than a bill size, won't be counted as extra. You can practically drive with no worries as your car has a warranty and if abused you don't care because you give it back at the end of the lease.
Most importantly; leasing is BAD if you plan to buy the car at the end of the period, as most of the time the car value is less than what is asked you to pay as buyout price (pandemic time was really just a fluke). I have yet to see anyone making money out of their leased car by buying it... It is often a waste of money except if you don't have the money, as you are basically paying the car for 4 years at a lower monthly payment; but eventually if you want to keep the car you have to pay the rest no matter what.
I think leasing works for some people; especially the ones that do not want to spend money in repairs and don't care to keep the car. If you own a mid range car, and go to a dealership for repairs; they will clean your pockets; so having a new car every time means saving these expenses in the end, which for a 5-10 years old car are a lot of dough.
During the past few years many people made money buying out their lease. With a lease you negotiate the price. During a lease you pay a portion of that price. When you buy out a lease you pay the difference between the price negotiated and the amount of the price you paid during the lease. That is the residual value.
Over the past few years the residual value was much less than the real value of the vehicle at the time of the lease buy out. Many people understood this. They bought the leased vehicle for the residual value and sold it (often to Carmax or Carvana) at the market value. Many made a few thousand.
Thanks for the comment! I’m glad u liked the video. A couple points to consider:
I agree. The depreciation hits you regardless. That’s one reason I would personally never lease or buy a new car. However, what ur missing is that if u keep leasing, that 40%+ depreciation u see in the first few years keeps hitting u. With a finance, the value doesn’t keep taking that same hit in the following years. The financial argument for a lease goes downhill quickly if they keep leasing.
People often exaggerate the amount and frequency of repairs over the life of the car because its a frustrating experience. But most people drive 13k miles per year. In four years, you would only have 52k mile. Most people aren't seeing significant repairs at that mileage. Cars last 200k-300k miles these days. Only after 100k do most people have to start worrying. And even then, the cost of any maintenance/ repairs typically wouldn't even come close to the price of leasing another new vehicle. (Btw U don’t have to go to the dealer for repairs. They charge double the price)
But i do understand the appeal of getting a brand new car every few years.
Yeah...lots of people made money. But i think those days are coming to an end.
adorable son!
I leased. Worst mistake. Ended up way over my allotted miles and it would have cost me $7k to buy off the miles or 14 to buy the car. Seemed like a good idea initially because it was so easy to get into. Filed for divorce and cars were in husbands name leaving me with shoe leather express so leasing seemed to be the way to go. And I really didn’t like the car! 🙄 Live and learn. 🧚♀️🧚♀️😆☺️
Exactly! You live and you learn. We all make money mistakes.
Much of what he says is not accurate or wrong. Main thing is get educated on leases. Most or all new car leases are closed ended and the interest rate or money factor is less buying as you must have excellent credit to lease. Several other things get your knowledge for a lease somewhere other than this video.
Thanks for the comment!
In the video, I did mention most leases are closed ended. Not sure i really understand your other point, but you have to compare interest rates between leasing and financing with people with the same/similar credit scores if u want a true comparison.
If you own a business, then lease..
Yeah...didnt address buy vs lease for business in this video. How many miles you putting on it each year? What percentage of use is for business vs personal? Lots of things to think about here.
Thanks for the comment
Many misconceptions and inaccuracies here. Too bad, lots of good info as well. But too much that is overly simplified and you absolutely DO get equity if the car is worth more than estimated. Many other mis information here.
Thanks for watching! If you didn't, you should check out the entire video. I mention the possibility of building equity in the buyout section of the video. Having said that, except for covid years, this doesnt happen for the vast majority of people who lease.
Hahaha please be my guest do your own video an explain us all 😄