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Related: Culture Forums, Support ForumsIs Leasing a Car a Good Option?
Okay, here is my situation. I am in desperate need for a new car. The car I'm driving has been for the most part pretty dependable but its near 300,000 miles and I've been taking it in to be serviced a lot over the past couple of years. I have a very limited income and can afford to put a huge amount down and make big payments each month. I've never leased or even financed a car before (My credit is not great) My car is 13 years old and when I bought it (it was a year old with very low miles) I paid cash for it. I was making good money then and did not see my luck taking a turn for the worse.
So,any money I need for a down payment will have to be money borrowed.On top of that, I can only afford about $150 a month (possible a little more but not much) I'm curious if anyone out there can think of any other option besides leasing. Any advice or suggestions would be appreciated.
ConcernedCanuk
(13,509 posts).
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I've seen too many people lose their vehicles because they got in over their heads on a lease, and THEN still owed a huge penalty for defaulting.
Best deals for a newer vehicle (mileage a consideration here) is something 2 years old. Any factory "bugs" have been worked out, and not old enough to start deteriorating, some still covered by manufacturer's warranty.
New vehicles are always overpriced - value drops quite quickly the first 2 years, so there's the bargains.
I had more than one customer (I'm a licensed auto mechanic) that had to spend over $1000 (and that's a while back) to get the car certified to buy it out at the end of the lease.
LEASING IS NOT FOR PEOPLE ON LIMITED BUDGETS.
Save $$, sell stuff, get an extra job if possible, and if financing is necessary, keep in mind $$ needed for regular maintenance and unexpected repairs.
Insurance is cheaper on a used vehicle too. Also - remember, if financed, insurance will be much higher because collision coverage is mandatory.
I have no collision insurance on any of my vehicles as the newest one is 7 years old. Besides, your insurance goes UP if you make a claim on collision.
Check your insurance cost for the specific vehicle you want to buy - some are much more than others (e.g. 4x4s).
Theres my 2 cents worth.
Happy hunting.
CC
In_The_Wind
(72,300 posts)You would be better off using the borrowed down payment money to buy a used car.
romantico
(5,062 posts)Very helpful. My problem is I just have no money.I'm doing good if I can scrape up $1,500. I've been told you really can't get a decent used car for less than $5,000.I needed to start saving up for this months or even a year ago or so. Taking my car in to the garage later this morning and if it's what I fear, I will be car less. I've poured a lot of $$$ into the car I have & even had to pay cab fare and car rental fee's in the past. On top of all that my credit is not very good. I am glad to hear about leasing. My hope is that I can get something now, get a second job and save and be able to get a newer care in a couple years or so. Thanks again for the reply!
elleng
(130,974 posts)as I recall there is something like a 'down-payment' when leasing. Its been years and I forget, so just something to keep in mind. (We leased for years, husband preferred it, not sure why.)
I now own my Dad's '93 Toyo Camry Wagon, and hope NEVER to have to acquire another car.
Good luck.
PassingFair
(22,434 posts)We had a 93 wagon. Best car we ever purchased! My daughter drove it
for 4 years, going back and forth to college....
This fall, the brakes failed, and the repair estimate was $625... we decided
it was time to look for another car. One of her girlfriends was car-less, so
we called her parents and told them that they could have the car if they wanted
to pay the repair bill and pick it up at the shop.
They gladly did, and the car is still running GREAT!
We found a low cost, low mileage car for my daughter, but
she misses her wagon!
elleng
(130,974 posts)Phentex
(16,334 posts)to be affordable, you may have to get a longer lease. Not sure if you can find one for $150 a month let alone if your credit isn't looking good. ASK your mechanic if he knows anyone selling a running vehicle for little money. You'd be surprised at how many people get something new and just want to get rid of what they have. Then save your money for a newer vehicle yourself.
PassingFair
(22,434 posts)Sometimes you can find a low mileage, older car for very little.
Problem is, most of them will be gas guzzlers.
I think leasing is a good option if you are SURE that you are not going
to put over 10,000 miles on it over the course of a year, and you can
get approval with your credit rating.
sharp_stick
(14,400 posts)but you have to stay on top of it, especially with the mileage. The low cost leases often have very low annual mileage limits. Also watch the wear and tear, you are responsible for turning it back in at the end of the lease without any excess damage. If there is any you'll have to pay for it.
I've leased a few cars in the past and have never had any extra damage charges even with two kids so it's usually not a big deal. Also the company will be interested in putting you into a new lease/purchase at the end so you can use that to your advantage at turn in time if any expenses pop up.
On the positive side you lease a new car that has a warranty and generally will have much lower repair costs than a running beater that you purchase for the same monthly payment. I'm always nervous of the cheap used car because I'm afraid that as soon as I get it home it's going to need a transmission or some other outrageously expensive fix. You'll still need to make payments while you pay for the fix.
$150 a month is really low, especially without a down payment and not great credit, you might have a tough time finding a sign and drive at that level. You'd have to look at base models. I had pretty good luck with Volkswagen and sign and drive but the payments were quite a bit higher and the cars generally not that cheap. The Jetta will get you kick ass mileage and they do like the Sign & Drive leasing option there. My wife negotiated a good lease on a Nissan Altima as well a few years ago and the Versa is an inexpensive alternative.
Do your homework on any financing and make sure you know what's due and when. Try not to sucked into any balloon payment loans or buy here pay here joints that are pretty much loan shark scams.
Best of luck.
romantico
(5,062 posts)It really depends what the mechanic says today. It's a Honda and it has 285,000 miles and my mechanic says it will make it to 300,000 easily. I'd be in good shape if the car lasts me until March or April. By then I'm sure I could get the extra money I would need to get something a little more reliable. What's scary is the thought that you take it in and are told it's not worth fixing.It's like you are as of right now car less. That kind of fear for me is just indescribable. This car has had so many nine lives and I've been very happy with it, I just feel my luck is gonna run out sooner or later.
My problem now is money. If a good deal came up, I'd have to pass because I don't have it. Hopefully after the first of the year I can get a second job and save. Wish me luck today everyone and send good vibes my way that it's not a major problem and can be fixed! Thanks again for the replies!
Kali
(55,014 posts)leasing is a maybe if you don't actually drive that much, keep the vehicle in top shape, like that new car thing every couple years, interest for loans is high
buying if you tend to keep a car forever and if you put a LOT of miles on per year.
I am looking for a vehicle myself. I got trapped at a dealership last month and they were trying all kinds of things to put me in a car, including a lease with increased miles - 20K a year - that was almost tempting! so do know the lease terms can be more flexible than they let on if you decide to try.
I felt kind of bad for walking out of there, but with all the wheeling and dealing they were throwing at me the bottom line was just not changing. They would not come down enough on the used vehicle I actually wanted.
here is another article http://auto.howstuffworks.com/buying-selling/buy-or-lease.htm
Aristus
(66,393 posts)When you buy a car, you're paying money in order to own the car.
When you lease, you're paying money so that someone else can own the car.
romantico
(5,062 posts)I've decided that leasing is not an option that is best for me. That and the fact that I really can not afford it. Thankfully the problem with my car was not too major and can be fixed without putting me in the poor house. Still, I am pouring A LOT of $$$ into this car and have to start thinking about getting a new one. While I was waiting at the garage today I gave myself a March deadline. I think my best bet is to try and save as much as I can between now and then and get what I can afford. Right now I drive very little. I don't really drive the car more than I have to,which I think is why it has lasted as long as it has. Luckily, I live in an area where I don't have to do a lot of driving. Grocery store,post office,gas station, movie theater,shopping areas,and so on are within a couple miles to where I live.
Anyways,thanks for the advice. It really did help me today!
Boom Sound 416
(4,185 posts)Buying asap. In ny anyway, no one buys cars in winter. The closer we get to spring, prices get a little more firm, because more folks are out.
Fastcars
(204 posts)But another thing to keep in mind is, that unless things have changed since I sold cars about a decade ago, you actually have to have better credit to get a favorable lease over financing.
Boom Sound 416
(4,185 posts)1. Take the amount of money for the down payment you would need to borrow and borrow it and buy a beater to get you through the "now." The trick will be to get one without needing any maintenance. Probably should go Japanese.
2. Lease, but beware. Lots of fees. Mileage limit. 36 mo. commitment. No maintenance. Reliable. Loaner car if needed. Then you just give it back or buy it.
Hassin Bin Sober
(26,330 posts)There's the rub. If you buy it at lease end, you screw yourself by paying their over-inflated residual value. Plus you pay sales taxes on the residual value sale price as if you are buying a used car from a third party - because that is what you are doing. Balloon note contracts like GM's SMARTBUY avoid the double taxation pitfall because the car is title to you and you are merely refinancing. A lease is just a more complicated balloon note.
Keep in mind, you already paid the sales taxes in the lease payment cost. Lease payment = depreciation (sale price minus lease end residual) + sales taxes (on the entire vehicle price sold to the leasing company. not just the resid. amount) + carrying costs (interest on the entire sale to lease Co.amount including taxes and fees) + admin fees (acquisition charge).
If you give it back, you have to buy/lease another car if you need wheels.
Often times people bite the bullet and buy their off lease car back even though it is over-priced - because at least they know it is in good shape and hasn't been wrapped around a pole. And it's cheaper than new.
Leasing is a bad idea if, like my partner, you want a new car and get a bug up your ass before the contract is up. You really screw yourself if you trade early. You have to pay residual plus remaining payments. It's like breaking an apartment lease, paying the landlord all his payments, but not living in the apartment.
This is why leasing is a bad idea for people who keep cars for 10 years and 300k miles. Or bad for people who want out early.
graywarrior
(59,440 posts)Have a 2010 Honda Fit that leased at $228 per month including sales tax. Property tax was $300 + per year and I had to put down $1500. I leased for 3 years at 12,000 miles per year. Lease ran out in November and I only have 32,000 miles on it.
Got a loan from a credit union for 11,000 to pay it off and figure I'll sell it in a year or two. Right now, book value is $16,000. Not a bad deal.
You can also consider buying a used vehicle from Enterprise Rental. A good friend of mine got agreat deal and the car is in excellent condition.
Good luck!
Hassin Bin Sober
(26,330 posts)Our used car manager picked an SUV up for his mom from enterprise
RebelOne
(30,947 posts)Response to romantico (Original post)
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