Might trade into a 17 what to look out for

[milligan]

Nobody said it was better for him to buy a new truck versus keeping his, but thats not what the OP asked is it? Hes asking if he should trade his lease in or buy a new one. In his particular circumstance, my advice is lease a new one or buy a new one because buying his current lease will have cost him ore than had he originally bought it. Leases work for those who want a new vehicle every 2-3 years, not those who want to try before they buy for 2-3 years.

 

 

 

But, he's already paid the harsh part of the lease. What he needs to look at now is his truck on the open market. If he can buy it out for 25k then its worth doing if it retails for 30k+. Its his truck vs the open market now, regardless of his previous payments or purchase history on the truck.

 

As for advice to the OP, I'm not really sure why you'd want to take on another 35-45k on a new truck when hardly anything has changed.

[Donstar]

Nobody said it was better for him to buy a new truck versus keeping his, but thats not what the OP asked is it? Hes asking if he should trade his lease in or buy a new one. In his particular circumstance, my advice is lease a new one or buy a new one because buying his current lease will have cost him ore than had he originally bought it. Leases work for those who want a new vehicle every 2-3 years, not those who want to try before they buy for 2-3 years.

 

The op was actually asking about issues with the '17's. Your advice, "Worst thing you can do financially is purchase a lease at the end of the term." is what I question. Most of us have done creative financing at some point in our lives and I argue that leasing then buying out can be a very effective way to purchase a truck. The money on the lease has been spent. When the op is faced with the choice in August to buy a new truck, lease a new truck, buy a used truck, or buy his leased vehicle I believe buying the lease is the better choice!

[Silverado Steve]

If you have an example of how leasing then buying after is cheaper overall than buying is overall cheaper, im all ears.

 

How is buying out his lease a better deal then leasing a whole new truck? when you factor in loan value on the purchase price, he'd be better off leasing again and habing a new truck under warranty right?

 

The op was actually asking about issues with the '17's. Your advice, "Worst thing you can do financially is purchase a lease at the end of the term." is what I question. Most of us have done creative financing at some point in our lives and I argue that leasing then buying out can be a very effective way to purchase a truck. The money on the lease has been spent. When the op is faced with the choice in August to buy a new truck, lease a new truck, buy a used truck, or buy his leased vehicle I believe buying the lease is the better choice!

[Silverado Steve]

Perhaps, but honestly do you think anyone is going to pay private value on a truck that they can get from a dealer; especially one that is most likely out of B2B warranty. There are few examples where people are able to buy out there lease turn around and sell it for a substantial profit. If so, dont you think dealers would command more of a purchase price at buyout time? There are a lot of ancedotal examples thrown out there, but few if any real $$ figures. People care about real examples, nit what ifs. Reality is leasing is a commited way of life and a commitment to always having payments. Leasing makes sense for thise who want a new car ever 2-3 years and meant for dealers to let someone else pay the depreciation and then turn around and sell a used car for another profit, not a means to help the buyer put money in theirs.

 

But, he's already paid the harsh part of the lease. What he needs to look at now is his truck on the open market. If he can buy it out for 25k then its worth doing if it retails for 30k+. Its his truck vs the open market now, regardless of his previous payments or purchase history on the truck.

 

As for advice to the OP, I'm not really sure why you'd want to take on another 35-45k on a new truck when hardly anything has changed.

 

[Thomcat]

Because you never ever come out ahead purchasing a lease buyout than buying new case in point. You are paying the perceived potential depreciation with some sort of money down when leasing. When buying, you are paying the current market condition of the vehicle at that time. Many people have bought their trucks brand new for 20% some have even got up to 25% off which equates to $10K-$15K. Factor in the loan terms up front. On a new car the loan % is lower than buying a 3 year old car. Also, after leasing a car 3 years, you tack on a 48-60 month loan, you now have had essentially 72-84 monthloan with a higher % yield. At the core, you have essentially paid more for the same car in the tail end than the beginning. Ever wonder why dealers love leases, they make more money over the course of the vehicle, if you keep the vehicle in pristine condition, they can charge more money at sell time and you lose negotiating room....its not a hard concept to figure out.

 

Any reputable financial financial consultant will advise never to take a loan on items you can afford to buy outright. Here's a real world transaction for you:

$47K MSRP '13 Avalanche bought for $39.5 cash/trade in 12/12 with 14K miles for $36K against a $49.5K MSRP '16 Silverado in 2/16 for $3K cash and additional tax+tags $500. You lease and you cannot get all the heavy discounts and rebates and end up paying more than the end value with depreciation. Leasing and credit companies are not in business to lose money and the type of vehicle and projected depreciation are already factored into the loan, so there is no way you can come out over a cash buy, especially in these days of low interest rates and uncertainty of future market activity over the service of the loan.

 

The real advantage of a lease is it enables one to buy more vehicle that they can afford to buy outright by driving a vehicle owned by someone else that they continue to let you drive only so long as you make the payments - that's how some people that can only afford to buy a Spark, drive around in a blown out Suburban - default on payments or damage the vehicle and it is they, not you, that determine the level of repair and pay any additional costs necessary to satisfy their investment - the buyout offer when one exercises the option at the termination of the lease will always include the lender's profit, that's why a concrete buyout price is never included in the original contract.

 

That's also why the type of vehicle people drive never impress me - is it a person that bought the Malibu outright or a person driving a Mercedes that cannot even afford to buy a Malibu outright? Leases cost us all money by artificially raising MSRP prices to place in competition those people that can afford to pay for the vehicle with those that can only afford to lease - hence heavy discounts/rebates for cash/trade buys to compensate for non leasees.

 

BUT, the real and most important advantage of buying the vehicle outright is that title is only in your name, no secondary liens - you own it and have 100% control over its use, maintenance and repair. On two occasions the children smacked up the vehicles with significant damage and another the wife's Trailblazer was "T" boned by an uninsured running a stop sign. I simply have the tow taken to the nearest GM/Chevy dealer with their own body shop. One or two days later insurance adjuster shows up and comes up with a figure and I tell him you must cut the check made out ONLY to me since I own it outright with no lienholders - after a brief discussion (because they always want top write out a two party check to me and the body shop) and verification they must cut the single party check minus the $200. deductible as the sole damaged party. Then I walk into the showroom, kick around a few test rides and decide on the type and price of a new vehicle asking Kelley Blue Book value in excellent condition against my wreck sitting in his body shop plus signover of the amount of the insurance check plus any differential in cash. Showroom manger calls the body shop and confirms the damage and estimate to work with (and how much of the estimate is actually dealership profit!) Argument is that the trade once restored to original excellent condition. Before the end of the day it is taillights down the road in my new vehicle, no loaners, no waiting for repairs, no arguments about the repair work. Worth every extra penny I might spend in aggravation for bad rebate timing for a new vehicle with 36 mo bumper to bumper. Can't do that with any leased vehicle!