New 2014 Silverado: Lease or Purchase?

[steveo2155]

Hello,

 

I am considering buying a new 2014 Silverado half ton 4x4, probably crew cab LT model in the next 6 months or so.

I spoke with a local dealership recently and got some prices for purchasing and leasing. The purchase price would be around 36k plus tax with all the rebates, gm supplier discount, etc. The lease price is based off of value around 40-41k, the actual value of the truck. The lease is 39 mo 12,000 miles a year with monthly payment being around 485 a month. Purchase payment would be around 550-560 a month. The lease is also no down payment, only first payment due at signing. I also have a trade in that the dealership said if I lease, they would just cut me a check for the value.

 

I have never considered leasing before and I just had a few questions I was hoping someone with more knowledge of the process could help with. I should first state that if I did lease, I would lease with the intent to buy. I do not want a new truck every 3 years, I want a new truck and plan to have it for years to come. My questions are...

 

1. Should the value that you lease off of (in this case the 40-41k) be based off of the actual value of the truck, or should it be the price after rebates and incentives - the 36k purchase price they quoted me.

 

2. Also, the residual value of the truck after the lease is quoted at 25,856.75. Is this the price I would buy the truck for at the end of the lease? Is this set in stone and does it seem like a good deal?

 

The reasons I am considering leasing first and then purchasing is because of the lower monthly payments (although I think they should be lower) and the fact that I wouldn't have to come up with a huge down down payment to get the monthly payments down to a more comfortable, affordable number for myself. Granted, I know that be leasing and then purchasing I would be having to make monthly payments for a longer amount of time than if I just purchased from the get go, but at least I would have more money in my savings and not have to make as high of monthly payments.

 

If anybody can help me with some of these questions, I would appreciate it. Thanks!

[nomadicdogg]

if you plan to keep the truck leasing may not be an option but if you like the idea of having something new every 3 years that is under warranty it is a good option, as long as you dont have to worry about going over the milage ect

when you buy it you can customize the truck as much as you want, when leasing you have to be careful that it is all easily removed when you go to turn it in
the fact that the payment is so close, I would be leaning more towards buying it.. if they could cut the payment down more might be worth it

the price they give you to buy the truck in 3 years is usually pretty firm but sometimes you can get them to deal a bit, just depends on who owns the lease...
look at it this way though, you lease the truck for 3 years you walk away with nothing and you lease something else or buy something else. You save 60 a month or so over 3 years...
or you buy the truck at the quoted price of 25K or such and then take a loan for that

or you buy the truck, spend the 60 extra a month and if you decide in 3 years you dont want it, you have what ever equity in it to put towards the next.

all in what you personally want to do. I cant lease for the milage but my wifes next one might be a lease as Id like to keep her in something that is warrantied every 3 years, plus she well I do too but she gets bored with the same car sometimes. needless to say I havent had to put tires on anything since 2003. so its all in what you want.
good luck either way

[nomadicdogg]

^ pimpin aint easy

[2016 Sierra Owner]

So you are going to lease for 39 months at $485. Then try not to go over on mileage. Once the 39 months are done you purchase it for $25,000 then finance that for say 60 months at $350ish let's say. Now you have paid for 99 months on this truck. Not a good deal. Just use your trade in value and purchase out right. Even if you did 72 months it's a lot less than 99.

[Hootbro]

Forget the lease and buy/finance outright. You are talking about a $75 monthly payment spread between leasing and financing. That is the cost of one tank of gas. Speaking of gas, have you factored that and insurance in?

 

Your questions and lack of financial savvy has me thinking you are over stepping your actual buying power and setting it up for it to be a low mileage repo at auction.

[nomadicdogg]

Forget the lease and buy/finance outright. You are talking about a $75 monthly payment spread between leasing and financing. That is the cost of one tank of gas. Speaking of gas, have you factored that and insurance in?

 

Your questions and lack of financial savvy has me thinking you or over stepping your actual buying power and setting it up for it to be a low mileage repo at auction.

first off I concur with your point but have to add that is one of the best avatar's I have ever seen!!

[Johnnyb33]

Hello,

 

I am considering buying a new 2014 Silverado half ton 4x4, probably crew cab LT model in the next 6 months or so.

I spoke with a local dealership recently and got some prices for purchasing and leasing. The purchase price would be around 36k plus tax with all the rebates, gm supplier discount, etc. The lease price is based off of value around 40-41k, the actual value of the truck. The lease is 39 mo 12,000 miles a year with monthly payment being around 485 a month. Purchase payment would be around 550-560 a month. The lease is also no down payment, only first payment due at signing. I also have a trade in that the dealership said if I lease, they would just cut me a check for the value.

 

I have never considered leasing before and I just had a few questions I was hoping someone with more knowledge of the process could help with. I should first state that if I did lease, I would lease with the intent to buy. I do not want a new truck every 3 years, I want a new truck and plan to have it for years to come. My questions are...

 

1. Should the value that you lease off of (in this case the 40-41k) be based off of the actual value of the truck, or should it be the price after rebates and incentives - the 36k purchase price they quoted me.

 

2. Also, the residual value of the truck after the lease is quoted at 25,856.75. Is this the price I would buy the truck for at the end of the lease? Is this set in stone and does it seem like a good deal?

 

The reasons I am considering leasing first and then purchasing is because of the lower monthly payments (although I think they should be lower) and the fact that I wouldn't have to come up with a huge down down payment to get the monthly payments down to a more comfortable, affordable number for myself. Granted, I know that be leasing and then purchasing I would be having to make monthly payments for a longer amount of time than if I just purchased from the get go, but at least I would have more money in my savings and not have to make as high of monthly payments.

 

If anybody can help me with some of these questions, I would appreciate it. Thanks!

[Johnnyb33]

The residual ( the price you can buy it for in 39 months) is based on the MSRP. The rebates have nothing to do with it.

 

I am the finance manager at a Chevrolet dealer. Have lots of experience and knowledge on the subject.

 

How long do you typically keep your vehicles for?

That payment seems really high for a lease. I am leasing my 2014 LTZ double cab for $520 and I had $4000 negative equity on my trade.

 

There are many benefits of a lease, but it is definitely not for everyone. Lots of good points so far in this thread for both options.

[steveo2155]

Hootbro - I am not over stepping my buying power. Like I said, I don't even plan on doing anything for awhile yet. This isn't my first truck purchase either. I have never missed a payment on anything and have good credit. I simply had no clue about leasing and was just asking questions - you know this is a forum, I thought this was the place to ask questions and get information on different things. I am trying to gather information now so I know if I should and can buy a new truck when the time comes. I have a truck that I have insurance and pay for gas on now, so yes I have factored that in. If I need financial advice, I will let you know.

[quickvert1]

Im glad I leased mine..cause theres so much I learned and want for my next one and im sure the 2017s will be much better

[steveo2155]

Yes because I am sure that is what you did, paid cash.

[reldridg]

Hey SteveO apart from the financial advice when I was looking at buying a truck recently I also did a similar comparison to what you are doing right now. I usually do not buy brand new cars so when looking at a brand new truck I thought well maybe I will look at the leasing option.

 

With the mileage limits, and price of the lease it just did not pan out because I generally keep a vehicle for 6 or more years. It would be kind of silly to lease a car, and then look at buying it after I have been paying on it for 3 years.

 

With the low interest rates of today to me it makes more sense to purchase the truck on a loan you can get 5 and 6 year loans for around 2% or less, these rates are about the same as inflation so it is almost like it does not cost you to borrow money.

 

If you are waiting for 6 months you will probably be able to find a leftover 2014 and get it for even less since at that time the 2015s will be on the lots.

 

I say buy it will save you a lot of money in the long run over leasing.

[Hootbro]

Hootbro - I am not over stepping my buying power. Like I said, I don't even plan on doing anything for awhile yet. This isn't my first truck purchase either. I have never missed a payment on anything and have good credit. I simply had no clue about leasing and was just asking questions - you know this is a forum, I thought this was the place to ask questions and get information on different things. I am trying to gather information now so I know if I should and can buy a new truck when the time comes. I have a truck that I have insurance and pay for gas on now, so yes I have factored that in. If I need financial advice, I will let you know.

 

So why start the thread if you are not looking for financial advice?

 

You start a thread asking about leasing instead of buying. Then talk about wanting to have a low or no down payment, and then talk about wanting the monthly payments low as possible. Sorry if I misconstrued your posting, but it shows classic traits of over stepping buyers as you cannot have it all of low payments and no down payments. New vehicle pricing has risen faster than inflation and wages. On $40K-$50K vehicles, no or low money down is a negative equity out the gate situation.

 

Seems to me you came in with a preconceived decision for leasing and expected myself and everybody else to back that up and that is not happening.

[Savagecanuck1]

Leasing is great for those of us that can write off the whole lease as a business use.I lease for that reason and con,t like to tie up my cash on a depreciated asset. Your lease rate seems high.My lease is based on a 40k value,1.5% 35 payments. GM promo payed 1st month residual is $22,800.I put 3k in cash down so payments are $505/month all taxes in.In 3 years

I don't have to worry about getting hosed on a trade .If I couldn't write it off I would purchase. I also get 20,000kms/year

Leasing is great for those of us that can write off the whole lease as a business use.I lease for that reason and con,t like to tie up my cash on a depreciated asset. Your lease rate seems high.My lease is based on a 40k value,1.5% 35 payments. GM promo payed 1st month residual is $22,800.I put 3k in cash down so payments are $505/month all taxes in.In 3 years

I don't have to worry about getting hosed on a trade .If I couldn't write it off I would purchase. I also get 20,000kms/year

[Savagecanuck1]

Leasing is great for those of us that can write off the whole lease as a business use.I lease for that reason and con,t like to tie up my cash on a depreciated asset. Your lease rate seems high.My lease is based on a 40k value,1.5% 35 payments. GM promo payed 1st month residual is $22,800.I put 3k in cash down so payments are $505/month all taxes in.In 3 years

I don't have to worry about getting hosed on a trade .If I couldn't write it off I would purchase. I also get 20,000kms/year