Finance Guide Center

Lease or buy... and a couple questions on leasing.?

I know it ususally depends on your situation, but what are some benefits to leasing other than lower monthly payments and less money down? Also, if you lease... 1. Do you need to purchase a warranty? 2. What if your car gets totalled? Do you need to continue paying the monthly payments and not have a car? 3. What if it gets stolen? Do you need to keep making payments? 4. When you turn it in, do you have to pay any damage charges? (e.g., dents, scratches, wear and tear? 5. What kind of condition are you required to turn it in? (e.g., Do you need to replace tires for a 3-year, 50,000 lease if they are almost down to needed replacement?) We are thinking of going the lease route, but want to get as much info. as possible. Any input would be great. Thanks... Thanks... good answers. We are actually thinking of going with a honda accord EX... 36 mo./15000 lease. We got quoted at 289.00. This seems to be a good price... with just the first payment down. We did some research, and my uncle let me know where to go... we didn't get any special deals, I just know it is the end of the model-year. Thanks for your input on GAP coverage. One more question... Do you think it is worth it to purchase a warranty, or just go with the factory warranty? Thanks for all input

Public Comments

1. Almost all the time you need to buy a warranty, you have a max on miles and will need to pay for the extra miles. And yes unless you are doing an insurance scam and they pay for the car if it is wrecked or stolen. I would check out the car you want on-line at there website: Goggle BMW and see what there lease is all about. FYI I have done a lease never again!
2. leasing is a total scam...total ripoff. why would you want to make the payments on a new car that you don't get to keep
3. The benefits of leasing are: - 40%-60% lower payments - no down payment (usually) - new car every 2-4 years without used car hassle - lower finance costs - lower sales tax (in most states) However, if you drive more than 15,000 miles a year, don't take good care of your cars, like to drive your cars until the wheels fall off, like to customize your cars, or have emotional problems with not owning your vehicles, then do not lease. Otherwise, leasing may be good for you. 1. If you only lease for a term that matches the manufacturer's new-car warranty, you do not need a separate warranty. For example, for a car with a 36,000 mile warranty, lease it for only 3 years at 12,000 miles per year. 2. Most leases come with automatic GAP coverage or waiver that covers you if your car is totaled in an accident. It pays the difference between the insurance payment and what you still owe on your lease. You do not continue to make payments. 3. Same answers as #2. 4. You only have to pay for excessive damages, over and above normal wear and tear. With most lease companies, this means scratches over 2 inches long, dents more than 1 inch wide, or accident damage. You would also pay for any mileage over your limit. 5. You lease contract will specify the minimum tread depth for your tires. It's usually 1/8 inch. If less, you must replace the tires with ones of the same quality as the original tires. If you are thinking about leasing, you should take the time to learn how it works and how to calculate your own payments. The following web site should be helpful to you: http://www.leaseguide.com/index2.htm .
4. ***BIASED OPINION*** I have been leasing Honda's for the last 15 years. Currently I am leasing both an Accord and Odyssey. Honda has been easy to work with, and Honda Lease Trust is the most straight forward leasing company I have ever delt with. With a new Odyssey running in the low $30's, I really cant afford to write a check or make a $680.00 monthly payment. Last year I leased a brand-new Odyssey EX-L DVD for just $369.00 per month, tax included. I put $2500.00 down and I'm doing a 36 month lease at 15000 miles per year. My Accord is even better! I have a 2007 Accord EX sedan AT. The Accord is just $329.00 per month for 36 months and 15000 miles per year. So for about the same purchase payment as one Odyssey, I have two brand-new Honda's. The nice thing is My wife and I can afford to drive new cars that are always under a factory warranty. And insurance is just slightly higher then standard insurance. Now to answer your questions: 1. Because my wife and I are doing 45000 miles leases', we choose to extend Honda's 36000 mile warranty to 45000 miles. The warranty extension cost us just $8.00 additional per month. 2. All Honda leases include "GAP" protectition at no additional charge. If either Honda get's stolen or totaled out, GAP covers the difference between the insurance value and the amount owed to Honda Lease Trust. 3. See two. 4. Another Honda benifit is they give you at no charge a $1500.00 damage waiver that covers the first $1500.00 in damage at lease turn in. My last car had a few door dings, worn tires and chipped winshield to the total tune of $800.00. Honda Lease Trust covered it a ZERO cost to me. 5. See four. Again, this is biased info based on Honda Lease Trust ONLY. I have never leased anywhere else. Also, I have been working at a Honda retailer since 1998 - although that got me no special lease treatment.
5. Im glad you are doing your homework before considering a lease. I would also reccomend to you not to lease for longer than 3 years 36000 miles. If you do, you are defeating the purpose of a lease. Keep in mind that leasing is really designed to eliminate the cost of major repairs. When you lease for longer than 3/36k you are likely to have some major maintenance bill. (Major being over $200) Generally, you will also at that time be required to replace the tires- depending on tread wear. Typically, on a lease, the only down payment is the initial security deposit, which can be waved. Its usually $200- $500. The last two answers are fantastic. I just wanted to fill you in on something they missed. Good luck!!