Car leasing

[dancemommy]

Has anyone leased a car? Our credit score is not so great- we have no credit cards and do not own our home. We have 2 paid off cars so nothing has been reported to our credit in years- it is just past messes that have been paid off, but nothing rebuilt if that makes sense. We looked at buying a car, but our interest rate is so high due to credit that our payments are in the $400 range for an econo car. We have looked at used cars and would be fine with buying a low mileage one, but again, the payments seem so high. We are not interested in buying a junker - we've been there and done that and do not like "surprise" car repairs. And we have 2 paid off cars that we need (we have 3 drivers) that could need repairs- don't want to add a third. So, we are looking at leasing an economical car with great gas mileage. Our payment would be $275 a month which is more affordable than the $400+ to buy. We have never leased- we have always bought and driven our cars into the ground. We are ok with not owning the car at the end of the lease as we would have spent less money over the 3 years of the lease and that is kind of the goal right now. We would like to work on building our credit again and think it may be a good way to do so as well. Anyone have experience leasing? Anything we should know?

[low-1]

We leased our last vehicle, and we won't be doing it again. It was an economical way of getting a newer, reliable vehicle, but at the end we were left with nothing of any value, and a buy-out price that far exceeded the value of the truck. Short term, ie "right now" it may be economical, but like renting an apartment, you are building no value at the end of the term.

If you were the type who routinely trades up every year or two, and it really doesn't seem like you are, then it might be a good option. As far as building credit, I really have no idea so I can't comment on that. All I can tell you is that we tried it one time, and definitely won't be doing it again.

I hope that helps. Your mileage may vary.

[Greebo]

The nick name for a car lease is a car fleece for a reason.

[dancemommy]

But is it better to lease than to end up upside down on a car loan? We've had that happen before with a lemon of a minivan and it was miserable. In order to afford payments we would need to stretch out a loan to 60 months. If we lease we don't end up with a paid off car, but we do have a lower monthly payment and no surprise repairs and we wouldn't end up upside down, right? So not necessarily ahead, but not behind??

[Greebo]

It's better to buy a car you can afford for cash, even if it's a beater, than to finance (aka pay interest on) a vehicle that does nothing but lose value.

[dancemommy]

My huge fear with a beater is unexpected car repairs. At least with a lease I know what I will be paying each month, right? No unexpected transmissions, head gaskets, lights and whistles. Maybe its dumb though...

[Greebo]

My huge fear with a beater is unexpected car repairs. At least with a lease I know what I will be paying each month, right? No unexpected transmissions, head gaskets, lights and whistles. Maybe its dumb though...

You need to use care in selecting the vehicle you buy - have it fully checked out, invest time and some money up front making sure you're buying a used car that runs well.

If you're looking at repairs of $100/month (on average) vs. a lease of $200/month, you end up ahead by $1,200 a year in the end.

The key is to set money aside AHEAD OF TIME for car stuff. We put $250/month into our car maintenance fund, so when my car goes in the shop in a week to have the water pump replaced, the $800 bill we're expecting is already covered in cash -

In your case, if there's no car payment, the car payment money can go right in the "emergency car repairs fund" until you have a comfortable amount set aside.

[dancemommy]

Thanks- taking another look at $10,000-12,000 used cars. It is just a little overwhelming. But hopefully something will pop up to point us in the right direction soon!

[Momto5RN]

it was my understanding at a dealership i was at this weekend that credit rating effects leasing too .

[mndtrp]

$10,000-$12,000 should successfully push you out of the "beater" category. My beaters haven't been above $2,000, and the most reliable vehicle I've ever owned was $7,500.

[Sumacaroni]

Ohmygoodness that's a lot, $3000 was all we spent on a beater car to get us through two years of my running back and forth for schooling. $3000 divided by 28 months = around $110/month and I bet we spent less than $500 on any types of repairs/maintenance. Nowhere near $10,000. Even after I got a job, we only spent $8500 on my 2005 minivan that was 5 years old at the time.

[dancemommy]

We did end up leasing a 2012 Chevy Cruze for 36 months, 12000 miles, $199 a month with no money down. It is getting 40 mgh right now and so far so good. Might not be the right choice for everyone, but we talked to quite a few people first and think it is the right choice for us for right now. We didn't want any financial surprises with this car, kept our per month cost as low as possible, and it will help us to build positive credit. Our income is well in excess of $100,000 which is 300+% more than it was when our credit was harmed. We had a major medical emergency followed by a long unemployment followed by starting a business because there were no jobs to be found. Business is finally going great and is very stable. In 3 more years we will reevaluate and most likely buy again when we qualify for better interest rates. We have just had very, very bad luck with used cars and would rather not do anything unknown right now.

[mndtrp]

Is that 12,000 miles for the entire 3 years? That's... incredibly low. Most people put more than that on in a single year.

[HappyMama]

Is that 12,000 miles for the entire 3 years? That's... incredibly low. Most people put more than that on in a single year.

I was wondering the same , for the exact same reason.

[dancemommy]

No, it is 36,000 for 3 years. It should be fine. It is not our primary family car- just my husband to and from work and his driving around town. We won't take it on trips or anything. Our kids would be WAY too hard on a car for me to ever lease as our primary vehicle that we take on trips, etc.