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Leasing - educate me. What’s the Pro’s & Con’s?

Radio Guy

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I know many people who have leased vehicles for personal use. They all got screwed in some way and it didn't work out favorably due to putting on more miles than expected or getting dinged heavily for slight but typical wear and damage. They all wished they had just purchased the vehicle and they would have saved some $$ and had more control when selling or trading in on a new vehicle. The only friend I know who made out ok leasing owned a business and was able to write off the vehicle in a way which was favorable for him.
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RobertRinAustin

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I know many people who have leased vehicles for personal use. They all got screwed in some way and it didn't work out favorably due to putting on more miles than expected or getting dinged heavily for slight but typical wear and damage. They all wished they had just purchased the vehicle and they would have saved some $$ and had more control when selling or trading in on a new vehicle. The only friend I know who made out ok leasing owned a business and was able to write off the vehicle in a way which was favorable for him.
Lease regularly and have had no bad experiences.
 

YYCSahara

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So what I don't understand is how are the values calculated?
I've tried playing with some of the online calculators and I'm getting anywhere from $450 to $880 monthly payment.

I'm looking at a Mojave with the MSRP of $58k.

Basically this is how it works in a closed lease (residual is set and can't change)

You have your MSRP, say that's $60,000. Say you want to lease it for 3 years. The leasing company has a residual value in % of MSRP. Say that is 60% (I don't know what this is, but it's set by lease company for every truck).

So residual on this example is $60,000 x 0.6 = $36,000. You go in and negotiate regardless of how you intend to pay. Say you get $5,000 off. Now the price of the truck is $55,000. Your residual is still $36,000 as it's based on 60k, not 55k. Therefore you're responsible for:

55,000-36,000 = $19,000 plus interest, plus tax(es) over the 3 years.

So you can see that its in your best interest to get as much off as you can off MSRP, just like any other purchase. The best lease deals are the ones with high residual as that again makes that delta between price and residual smaller (part you need to pay over 36 months)...

Hopefully that helps.

1 big reason people lease is if you smash the truck up, your insurance can fix it and you can hand it back at lease end with no worry about owning a truck with a huge carfax claim on it.
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