Thinking about leasing a Chevy Traverse tomorrow. Any advice? Never leased, but as far as I can tell - it would be to my advantage to do so - given my current situation.

Very, very few people benefit from a lease. Usually only certain tax deduction situations for business owners. For MOST folks, it's not nicknamed a "fleece" for nothing. The dealerships don't come up with these plans because they are your friends.

The rule is that leasing is a bad deal, there are exceptions to just about every rule though.

Don’t do it

I understand the basic sentiment but here's what I like:
I won't be in debt to a depreciating asset
My wife will be the driver and has less than a 10 mile round trip to take both kids to school and herself to work, daily.
We use my truck for road trips
Plan to use GAP insurance
Plan to put zero or very little down

I'd like to hear about the problems/risks. I think I've recognized most.

Thanks for the feedback so far.

If you got 5K, just find something and buy it outright.... my .02

I’m not gonna deal with a used vehicle - not for the family.

Then sounds like you've got your mind made up.

It’s between buying new or leasing. Leaning toward leasing for 3 years, then buying either that vehicle or a new one for cash.

yep. Sounds like it. Let us know how it turns out when you have to cover the stains in carpet and seats from the kids. That small dent from a roll away buggy at wal-mart. When you turn it in you have to pay penalties for crap like that no matter if your buying it or not. Had a friend get burnt by gm like that. He figured everything up and spent a 10-15 grand for a lease

If it's bad enough I'll buy it outright. If not I'll buy a new one.

The good thing is that since you're going with a Chevy that it will at least be under warrantee the whole time you're making payments on it.

Seriously... Go look at a Mazda CX-5. Best smaller SUV out there and super reliable. Mrs. Irish gets almost 30 mpg on her daily commute.

If you're dead set on a lease then look at the residual value of the car. It might be lower than you expect and then when the lease is over you can just buy it knowing that it's been well taken care of by you and you're getting a low mileage, good used vehicle.

Personally... I would never lease, but then again I don't like car payments. It is an investment in a depreciating asset.

You're right. Your money will be gone and you'll have nothing to show for it.

Your wife is talking you into a lease. Don’t do it Terrible idea.

What's the difference in the payment price for a lease as to purchasing new?

Why would a dealer choose to lease a vehicle that he could sell and collect cash up front? Yep, you guessed it. Only if the NPV of a lease is greater than an NPV of a sale.

Exactly what I was going to post.

Better to have a depreciating asset at the end, rather than NO asset at the end.

Vehicles are a necessity....depreciating or not.

If this was a math assignment you would buy a used vehicle.

I would look to purchase a used vehicle in the $15,000-25000 range.

Now is the time to buy a sedan, values are very low on sedans.

How many children do you have?

If you cant afford to buy a new car outright in cash, then you should keep what you have or buy what you can afford.

Nah. Those car and truck dealers probably have jets because we're smarter than them

I'm confused by this post. So your mind is made up to lease, was this just to say, "Hey guys, just wanted you to know I'm going to lease a Traverse."?

Wanted to hear the ‘why you shouldn’t’ side. Nothing is set in stone.

I've never heard someone that did one, say that a lease was a good idea.

Plenty of good & reliable used cars, probably at/under $5,000 would fill that role. That would be a much wiser use of your dollars.

I think it's all about the situation. Only time I've thought it "might" be a good idea is if you have a small budget and are looking for something for say a college student and only need a couple years before they buy their own. You get a new car, low payment, and it's covered under warranty for anything that goes wrong on it. Yeah you don't have anything to show at the end but it's a lowest ultimate cost analysis in my mind on buy vs. lease in this case.

All that being said, it's the fine print stuff you have to be leery of. How much down, how many miles do they drive and what's the penalty for going over, damage repair, etc. If I'm just needing a car then I'm like the rest, a lease is probably not the way to go for a personal car.

We are on our fifth leased vehicle. It works great for us and we have equity ($6k) in the one she is currently in. I've NEVER paid any money down either.

I worked with a guy who never bought anything and always leased . Got a new car every 3 years and swore this was the cheapest option for him. He said he would always have a car payment anyway and leasing(renting) did not bother him.

How do you have equity? Are you saying if you turned the car in, they would cut you check for $6k?

If you've got this mindset, you've already been defeated...

Absolutely not true. I own a small business and will always have car payments. I know several people that have a TON of money in the bank and they always have car payments.

I never thought leasing was a good idea. But with some dealers you can come out cheaper leasing than purchasing than you do buying out right.

I'd like to hear more on this concept as well. I can't think of a way you'd have equity in something you do not own, but maybe there's a way. I can see how the car company would, but not the lessee.

But why? Driving a ton of miles?

I certainly think that most people can drive a car longer than 5 years, especially if it's starting out new.

I leased a 2017 Civic hatchback for my kid in college. List price was 22,500 ( the hatchbacks are a little higher).

I paid 4k down on the lease with the option to buy in 3 years.

My kid works part time while going to school and his car payment is 125 bucks a month. So he will pay a total of 4500 dollars at the end of the lease.

At the end of the 3 year lease we will buy the car for 14,000.

22500 minus the 4k I paid down is 18,500.

18,500 minus the 4500 in payment he paid brings the total to 14,000

We basically got zero interest and everything paid in is straight equity.

It can work out if you do a little research.

A lease is not a house and you can’t have “equity” in a vehicle. As soon as you drive it off of the lot it depreciates. Let us know how the real numbers worked out when your finished. Not how it looks on paper besides I bet you could straight out buy that vehicle cheaper at a car sale. You said list price. I’ve never paid list for a automobile.

So a lease is where you pay the difference between residual value at the end of the term and the negotiated sales price. So let's say I lease a car that cost $50k and at the end of the 3 year term the car will be worth $35k. With that I would pay the $15k over 3 years or 36 months. The residual value (35k) is the "payoff" at the end of the term. You could actually buy the car for that price. In most cases that value is based upon mileage on the vehicle (say 36k miles). So at the end of the 3 years that vehicle with 36k miles is worth $35k.

In our case my wife only puts 6-8k miles/year so at the end of the term let's say we have 20k miles instead of 36k and the actual trade value on the car is $37k. In that instance you have $2k in equity as it's worth more than what is owed.

So I take that vehicle to another dealership, instead of turning it in at the original dealership. We negotiate the new vehicle sales price and the trade in price on the old lease and they ask me do I want a check for the difference in trade value or do I want to apply to the new lease. I apply it to the new lease and do it all over again 3 years later. I've done this 5 times now and the equity keeps building. I started with ZERO down and back last December when we leased the last one I had right at $6k showed as a down payment.

They were not hiding anything because I negotiated the sales price of the new one and the trade in value on the old one. It works for my application but may not for everyone.

Spot on Mudler. I used to think a vehicle payment was just part of life, but finally wised up. It's an anchor. We haven't had a vehicle payment in years. Our vehicles are older, but safe and reliable. Sure I have to work on them from time to time, but it beats making that payment every month.

Like said before. If this was a mathematical problem then you would buy used. Why work just to pay for a car thats gonna be worthless by the time its paid off and interest and insurance. Hell naw. And the family....buy them a cell phone incase they break down. My wife drives an older car and keeps her pay check. We want to pay our SMALL house off and enjoy life with money in our pocket and own what we have. Thats the way i was raised though. If you really want a new car or lease car then i hope you find a good one. I wish u the best but i think its a really bad idea.

While I agree with the majority that a lease is a bad idea, how many of you that have spoken against leasing have actually done a lease and it was a bad experience?

I haven't so, can't say if it's a good/bad option.

I’ve only leased one vehicle back when I was in my twenties but another thing to know is that I was required to have higher than state minimum liability on insurance. Now that I’m older, I already carry that but at less than 25 that was a big jump.

Im not trying to be mean or harsh but that sounds crazy. Its black and white on the contract. You know what the deal is. Thats like, well i cant say cause i never committed murder so i gotta go kill someone to be able to comment. You have to research before you act. Not act on a idea just to find out if its worth it. If i dont think its a good idea from my research then i dont need to do it. It dont take a genius to figure out the best deal. First, why would the dealer let a man take a car for a few years and only be able to drive it for so many miles then have to return it? When the dealers goal is to sell cars. Cause they are gonna make a killing. I dont know why they call it leasing. It should be called renting. The only way i could see leasing is if you wanted a brand new car every year or so and didnt want to keep buying and selling the old one. And losing a lot of cash would be no issue. Im confused on the equity. Your saying you bought a car and used it then sold it back for more money in other words? Beating a dealer at his own game? I know what equity is but i think they are just setting you up to take a chance on you being a customer for a purchase. If you drove the car then sold it and got your equity out of it and didnt lose then the dealer would be losing. I know u sold it at another location. Why? Cause you had to do leg work just to hopefully get lucky and u did. They are not set up to lose. They are set up to make money AND to trick the customer into thinking the customer got over on them. When in reality they are making a killing.

The issues I can think of off the top of my head with that whole thing....

1. You will pay list price for a brand new car. Who does that nowadays?

2. Most anyone with decent credit can get zero % financing on a new car purchase these days.

3. When you buy the car for $14K at the end of the lease, do you get 0% financing? I would guess no, but I suppose I could be wrong.

4. $14K financed over the remaining 2 years of a "standard" 5 year car payment plan even at 0% would be $583/month. If you don't get 0% on what is not a "used" car, the payment goes up from there.

You're basically given the terms of the purchase when you get the lease.

Not always but often youre total dollars in payments can be cheaper with a "lease then purchase" than just a purchase. Cheaper payments over a longer period of time.

Like in the example above...you're working off brand new MSRP list price, not a negotiated actual sales price. You're simply choosing to take a discount on the back end.

You've done this several times and have $6K in equity.

If you'd bought, and negotiated a MODEST 10% discount off the new sales price on each vehicle purchased, where would you be?

Thats a whole lot of leg work, time spent and risks and negotiations if you have done this 5 times and you STILL dont own a car. I would cash that 6k in and run to an auction and buy a 5k car and be done with it. Then u own the car, liability insurance only, and you have no car payment.

Read my post again. I never pay list