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"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 |
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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 |
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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. |
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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 > > |
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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 |
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