car leases

just had a terrific experience with honda. we had two leased cars, a pilot and accord, expiring july 3 and september 3, respectively. the accord had some minor damage to the hood. anyway, the dealership called us interested in getting back the accord, claiming they could sell it and would be happy to take car of the last three payments, worth 930. we were over the mileage limit by about 12,000. no sweat. no charge. they'd take back both cars now and put us in a new, loaded pilot -- i no longer drive, so we're down to one car -- no money down, 450 a month. the '03 pilot was costing us 399 monthly..

wow. it was all done in a day.

question: is it typical that, to keep your business, dealerships will go to any lengths to please you? or does this all sound too good to be true? all i know is we went from 710 a month in car payments to 450 a month, with our insurance also plummeting about 1,200 a year.

 

Wife and I have to turn in Hondas next year, as well.

You're paying 260 less in car and 1,200 less in insurance but you're also short a car. The payment on the one car is $50 more than it was, too. Maybe you could have gotten a deal where you still get to pay $350, but what the hell do I know? I'm leasing two cars, how bright can I be?

 

Most automakers are eager to move new cars and this time of year get aggressive in promotions.

Used Accords sell like hotcakes and new Pilots aren't the hottest thing on Honda lots right now, so it looks like you were in the right place at the right time. Good job!

 

Why do you guys lease instead of buy?

 

i can only speak for myself. we lease because we never have enough savings to buy. also, we've grown accustomed to having a car payment and like the idea of having a new car every three years.

as for our deal, i don't know, i guess since we didn't put a dime down up front, a 50 buck bump in our pilot payment three years later seemed pretty good to me. especially considering them taking back the slightly damaged accord three months early and 12,000 over the mileage.

timing is everything i suppose. i'm just not used to mine being good timing. usually, when it comes to finances, my timing is all bad.

 

A few points here ...

-- My parents lease a Lexus and the lease is up in a few months. The Lexus they leased costs about $40K new. They've paid Lexus about half of that for 3 years. If they want to buy it in a few months, they can buy it at the wholesale price for about $18 K. If they turn it into Lexus, Lexus will try to sell it at the retail price of $28K. So my dad was making the point to me, in explaining this, that car dealers LOVE when they can get a person to lease a car and then go right into another lease. They don't want the person leasing the car to buy it at the end of the lease. They'd rather them go into another lease. Then they can sell the car the person turned in and make, in the case of my parents car, an extra $8K. Then, in a few years, they'll be able to repeat the process.

-- As to why to lease. Cars do depreciate quickly so they're not the best investment. Plus, in this conversation I was having with my dad, he was talking about how they make cars safer all of the time (by doing things like adding more air bags) and how there is an advantage to having the latest car since it's likely a safer car. Of course, my spouse and I own one car outright and are making payments on another. So much for listening to dear old dad. Of course, the reason we were having the conversation I referred to above is he was trying to get us to buy the above car (at the wholesale price.)

 

Firsttime caller is right. If automakers didn't HAVE to offer you the car at lease's end, they wouldn't.

We leased for a long time; two Accords and an Infiniti G20. All three were swell cars. We grew weary of car payments, though. We bought a Maxima off the showroom floor in 9/98, and it's still running well at 160k miles. Payments ended years ago. That's a great situation.

Our goal is to pay for only one car at a time. Right now, we're two years into a 5-year deal on a Toyota Sequoia. If I can keep the Maxima going until 7/09, I'll be clear to buy myself something new if necessary. That's when I make a trip to the Infiniti dealership.

 

no car payments would be ideal. leasing has just become a way of life for us, due to the down payment issue. lack of funds get us every time.

 

If I was a dealership and I could convince someone to make payments to me perpetually until the end of time, I'd bend over backward to keep their business.

 

There are pros and cons to both leasing and buying.
As bogie pointed out, I'm sure you got the deal on the Pilot because dealers all over are struggling to get big SUVs off their lots right now. I have a good friend who sells Fords and you wouldn't believe the deals you can get on virtually any SUV right now.

To answer your original question, Shockey, dealers will go to certain lengths to keep the customer happy. But car dealers rarely do anything that adversely affects their bottom line. You may have gotten a better deal that you had before. But they got a vehicle off their lot that they might have had trouble selling and added a car to their lot that they'll have no problem selling.

I come from a family who switched from buying to leasing in the mid-90s. My folks would lease Hondas and Toyotas and buy them after the lease was up. They would then turn around and sell them private-party at a good profit and go lease a new one.
Personally, I don't care what kind of vehicle I drive as long as it is reliable and halfway decent on gas mileage. Mrs. Leather and I have two cars, both of which are paid off and we will drive each of them until they die. I know there is a decent segment of the population that enjoys having new cars, either for style or safety reasons. We're not part of that group. Personally, I just don't see why you would put money into something that depreciates so quickly. I'd rather put money into my house, which can appreciate.

There are also other ways to get money for that up front down payment. If you own your house, you can refinance and pull out some equity. Credit unions often offer better interest rates than banks and dealers.

 

I've never leased. I know there are promotions and such but are there always no money down promos? Don't you sometimes have to put money down when leasing?

Leather, I LOVE what you're parents do. That's a BRILLIANT idea. If I don't buy that car from my parents, I may suggest that to them.

 

i know full well that dealerships don't do anything that isn't profitable for them. i've always known that no one gets over on a dealership. but my concern isn't that the dealer makes money. it's whether i'm getting a good deal, too. we weren't buying the leased cars when they were up. we turned one car in three months early, with some damage and extra miles we didn't have to pay for, and ended up in a new car for 50 bucks a month more than three years ago.

the dealer turns around and sells the accord next month? good for them. they maake money on leases? good for them.  everybody wins, no?

or maybe i'm just a moron when it comes to such matters.