Honda Car Forum


 

Go Back   Honda Car Forum - Accord Parts Civic Tuning Acura Racing > Honda Acura > Acura

Reply
 
LinkBack Thread Tools Display Modes
  #1 (permalink)  
Old 15 Oct 2003, 08:50 am
Kyle
Guest
 
Posts: n/a
Default Downsides of a lease?

Besides the obvious mileage restrictions and ambiguous 'wear and tear.'
Is there a balloon payment at the end? Etc...?

Reply With Quote
  #2 (permalink)  
Old 15 Oct 2003, 12:24 pm
Don in Phoenix, AZ
Guest
 
Posts: n/a
Default Re: Downsides of a lease?

"Kyle" <kgavin@speakeasy.org> wrote in message
news:ZuGdndRlINZIzRCiRVn-vw@speakeasy.net...
> Besides the obvious mileage restrictions and ambiguous 'wear and tear.'
> Is there a balloon payment at the end? Etc...?


The payment due at the end of a lease is called the residual. This is only
due if you wish to keep the car.

The downsides of leasing -

1) Remember that you are only "renting" the car. Any permanent changes you
make (Installing a stereo system, modifying the engine, etc.) can be used
against you when you turn the car in, as they will estimate the value of the
vehicle at time of turn in. If the value of the vehicle is too low, you owe
them the difference between that value and the residual.

2) In some lease contracts, a much higher insurance minimum must be
maintained on the vehicle (by contract). Requiring 150/300 (PL/PD) is not
abnormal. You should read the lease and check with your insurance agent
before you lease to avoid a nasty "surprise".

3) Many leases will not allow you to leave the state (that the lease was
executed in) without prior approval.

4) Lease payments can change over the life of the contract, due to the fact
that you are making a rental payment PLUS tax. If the tax rate changes,
your payments go up.

Try here for other information:

http://autos.msn.com/leasing/default.aspx

Don


Reply With Quote
  #3 (permalink)  
Old 15 Oct 2003, 03:01 pm
kgavin[at]speakeasy.org
Guest
 
Posts: n/a
Default Re: Downsides of a lease?

Don in Phoenix, AZ wrote:
> "Kyle" <kgavin@speakeasy.org> wrote in message
> news:ZuGdndRlINZIzRCiRVn-vw@speakeasy.net...
>
>>Besides the obvious mileage restrictions and ambiguous 'wear and tear.'
>> Is there a balloon payment at the end? Etc...?

>
>
> The payment due at the end of a lease is called the residual. This is only
> due if you wish to keep the car.
>
> The downsides of leasing -
>
> 1) Remember that you are only "renting" the car. Any permanent changes you
> make (Installing a stereo system, modifying the engine, etc.) can be used
> against you when you turn the car in, as they will estimate the value of the
> vehicle at time of turn in. If the value of the vehicle is too low, you owe
> them the difference between that value and the residual.
>
> 2) In some lease contracts, a much higher insurance minimum must be
> maintained on the vehicle (by contract). Requiring 150/300 (PL/PD) is not
> abnormal. You should read the lease and check with your insurance agent
> before you lease to avoid a nasty "surprise".
>
> 3) Many leases will not allow you to leave the state (that the lease was
> executed in) without prior approval.
>
> 4) Lease payments can change over the life of the contract, due to the fact
> that you are making a rental payment PLUS tax. If the tax rate changes,
> your payments go up.
>
> Try here for other information:
>
> http://autos.msn.com/leasing/default.aspx
>
> Don
>
>


Thanks

Reply With Quote
  #4 (permalink)  
Old 15 Oct 2003, 05:49 pm
Mikeq1139
Guest
 
Posts: n/a
Default Re: Downsides of a lease?

I'll tell you what the problem is. I leased a TL-S two years ago. Since then
I've had my headlights stolen twice - the first caused about $5000 of damage.
I do NOT want this car anymore. But guess what? I'm stuck with it, unless I
sell the car at a HUGE loss - because I'd have to keep making the lease
payments AND pay off the balloon payment at the end.

I'm DONE with leasing.
Reply With Quote
  #5 (permalink)  
Old 15 Oct 2003, 08:36 pm
Dan Krueger
Guest
 
Posts: n/a
Default Re: Downsides of a lease?

See below...

Don in Phoenix, AZ wrote:
> "Kyle" <kgavin@speakeasy.org> wrote in message
> news:ZuGdndRlINZIzRCiRVn-vw@speakeasy.net...
>
>>Besides the obvious mileage restrictions and ambiguous 'wear and tear.'
>> Is there a balloon payment at the end? Etc...?

>
>
> The payment due at the end of a lease is called the residual. This is only
> due if you wish to keep the car.
>
> The downsides of leasing -
>
> 1) Remember that you are only "renting" the car. Any permanent changes you
> make (Installing a stereo system, modifying the engine, etc.) can be used
> against you when you turn the car in, as they will estimate the value of the
> vehicle at time of turn in. If the value of the vehicle is too low, you owe
> them the difference between that value and the residual.
>

I've never heard of that. I guess if you add some odd accessories they may
penalize you. If you upgrade your exhaust, for example, you shouldn't have a
problem.

> 2) In some lease contracts, a much higher insurance minimum must be
> maintained on the vehicle (by contract). Requiring 150/300 (PL/PD) is not
> abnormal. You should read the lease and check with your insurance agent
> before you lease to avoid a nasty "surprise".
>

These limits are not high by today's standards. They protect you more than the
bank. I carry higher limits than that because it's inexpensive and if something
should happen I don't lose my house. There are too may high dollar lawsuits
these days to get cheap on liability coverage. My only complaint with leases is
that they often require very low deductibles. I prefer $1000 since it makes
sense financially to pay for anything less out of pocket. This might be negotiable.

> 3) Many leases will not allow you to leave the state (that the lease was
> executed in) without prior approval.
>

I've never heard of that either with six leases from three "banks". Seems too
restrictive to me. I can take my car to Canada if I wanted to drive 1500 miles...

> 4) Lease payments can change over the life of the contract, due to the fact
> that you are making a rental payment PLUS tax. If the tax rate changes,
> your payments go up.
>

This varies by state. Some charge tax on the full price of the car up front.
Others charge only on the payments. If your car is stolen, you are better off
with the latter arrangement. Also - some states cap sales tax on cars so an
increase may not affect you. Either way, if you buy the car for the residual
value you will pay the tax for that transaction since you are the new owner.

> Try here for other information:
>
> http://autos.msn.com/leasing/default.aspx
>
> Don
>
>


Reply With Quote
  #6 (permalink)  
Old 22 Oct 2003, 01:37 pm
Al Hearn
Guest
 
Posts: n/a
Default Re: Downsides of a lease?

Just to make some points that address items in your post:

Lease-end residuals can be negotiated with some, but not all, lease
companies. If the lease-end value is considerably higher than the
vehicle's market value, then it's time to negotiate. On the other
hand, it's possible that the residual may be lower than market value
and you can purchase/resell to make a profit. This is not common, but
it happens.

1) Your description is for an open-end lease, which is not used for
consumer leases in the U.S. anymore (some use still in Canada).
Closed-end leases are the usual. These are often called "walk-away"
leases since you can return the car at lease-end with no further
obligation (assuming no mileage fees or wear fees), even if the car
has greatly depreciated in value.

2) It's true that leases require higher than minimum insurance
coverage but, in these days of sue-happy accident victims, it's good
to have as much insurance as you can afford - lease or purchase.

3) Only local lease companies prohibit you from leaving the state --
and local leasing companies are rare these days. National banks,
financial companies, and car manufacturer's financial arms (e.g. GMAC
and Ford Credit) do not have these restrictions -- although they do
prohibit taking the vehicle out of country (Canada is sometimes OK).

4)It's true that your lease payment can change due to sales tax rate
changes, but this is a minor part of your overall payment. What is
more common is if you move to another state that has a different rate.
Your payment can go up or down slightly as a result. But paying sales
tax only on monthly payments (in most states) is better than paying
sales tax on the entire car, in one lump sum.

Try here for more information: www.LeaseGuide.com/index2.htm

-----------------------------------

"Don in Phoenix, AZ" <DJDixon1@cox.net> wrote in message news:<iqfjb.1949$B_2.1394@okepread02>...
> "Kyle" <kgavin@speakeasy.org> wrote in message
> news:ZuGdndRlINZIzRCiRVn-vw@speakeasy.net...
> > Besides the obvious mileage restrictions and ambiguous 'wear and tear.'
> > Is there a balloon payment at the end? Etc...?

>
> The payment due at the end of a lease is called the residual. This is only
> due if you wish to keep the car.
>
> The downsides of leasing -
>
> 1) Remember that you are only "renting" the car. Any permanent changes you
> make (Installing a stereo system, modifying the engine, etc.) can be used
> against you when you turn the car in, as they will estimate the value of the
> vehicle at time of turn in. If the value of the vehicle is too low, you owe
> them the difference between that value and the residual.
>
> 2) In some lease contracts, a much higher insurance minimum must be
> maintained on the vehicle (by contract). Requiring 150/300 (PL/PD) is not
> abnormal. You should read the lease and check with your insurance agent
> before you lease to avoid a nasty "surprise".
>
> 3) Many leases will not allow you to leave the state (that the lease was
> executed in) without prior approval.
>
> 4) Lease payments can change over the life of the contract, due to the fact
> that you are making a rental payment PLUS tax. If the tax rate changes,
> your payments go up.
>
> Try here for other information:
>
> http://autos.msn.com/leasing/default.aspx
>
> Don

Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are On
Pingbacks are On
Refbacks are On


Similar Threads
Thread Thread Starter Forum Replies Last Post
Need to get out of a car lease? Want to get out of a car lease? jeff81@myway.com Honda 3 0 18 Nov 2005 07:36 pm
Need to get out of a car lease? Want to get out of a car lease? mstreka@myway.com Honda 2 0 18 Nov 2005 07:32 pm
Moonroof visor for new Accord? (any downsides?) techman41973@yahoo.com Honda 3 2 04 Sep 2005 02:47 pm
Need out of your Car Lease? Matt Acura 12 22 Nov 2003 12:24 pm


All times are GMT -5. The time now is 02:57 pm.


Attribution:
Honda News | Autoblog
Powered by Yahoo Answers




Powered by vBulletin®
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.6.0 PL2 © 2011, Crawlability, Inc.
HondaCarForum.com is not affiliated with Honda Motor Company in any way. Honda Motor Company does not sponsor, support, or endorse HondaCarForum.com in any way. Copyright/trademark/sales mark infringements are not intended or implied.