car lease term

joe_mnApril 19, 2007

i am looking at 2 similar cars to lease. same money down and payments are the same/month but one term is 30 months and the other is 39 months. I just want a new car for awhile. I have been driving old clunkers for too long. but at the end of either lease, i will need something else. another new car, or maybe a newer used car. I always thought the shorter the lease, the higher the payments but in this case they are equal. I have not mentioned the cars since they are both boring bland dull imports. something will seats and wheels.

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steve_o

It all has to do with what the leasing company thinks the car will be worth at the end of the lease. Consider a very popular model that cost, say, $25000 new, and was predicted to be worth $20000 at the end of three years. Now consider a less-popular car that cost $25000 new but was predicted to be worth only $16,000 at the end of three years. Since your lease payment covers the difference, it's possible that you might have to pay the big difference in 30 months and less of a difference over 39. Therefore, the lease terms will be different. If you look at the residual values of the cars you're thinking about, you should find a substantial difference.

    Bookmark   April 19, 2007 at 10:39AM
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jasper60103

Some of these lease contracts are really strange.
My dad once took a lease and then realized he wanted to keep the car part way through the lease. Anyway, it turns out in the end, they wouldn't even sell him the car back (I know this sounds crazy, but that's what he said).
They actually sold him a different vehicle, but same make, model and year.

Since you realize you'll need a car in the end, make sure you have the option to purchase.

-jasper

    Bookmark   April 20, 2007 at 9:34AM
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joe_mn

each yr a new car will probably cost 5% more so the longer i can lock in a low payment is the best way to go. of course accords have had 200/mo payments for 4yrs now with 2500 down. i think the miles/yr are the same. how does honda do that? weren't accords cheaper 4 yrs ago?

    Bookmark   April 22, 2007 at 9:53PM
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steve_o

They still can fiddle with the model or the specific equipment it comes with. There also has been a bit of a trend of companies taking features out of cars to reach (or stay at) a certain price point. I'm guessing that that Honda is not equipped exactly the same for all four of those years.

    Bookmark   April 24, 2007 at 10:58AM
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joe_mn

the dealer said 500 down plus TTL. payments are 220 for 30 months. fine. write it up. oops, they forget to mention the 595 aquistion fee. loose the Aq. fee i told them. ok, they came back and said 240/ month with no fee. they said that with a straight face. why do people do things like that? does playing with the numbers give people the impression that the deal is better? see, we dropped the upfront fee but added it back into the payments. and you wonder why buying cars is such a HUGE pain in the butt.

    Bookmark   April 26, 2007 at 8:32AM
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steve_o

why do people do things like that? does playing with the numbers give people the impression that the deal is better?

Obviously buyers bite often enough to make it worth dangling the bait. On one purchase, I told the sales rep that I would do the deal if I paid no more than my current payment for two years. That would have brought the price for the car to what I considered to be a fair deal. The sales rep actually said that I could have the payment I wanted -- if I paid for six more months than I wanted. I'm not stupid, lady. It took a few days for them to think about it and come to their senses.

Dealers also play on the fact that most people have committed themselves emotionally to the new vehicle, and are more willing to give up on the negotiations, especially when the payments are put in -- uh, creative -- terms.

    Bookmark   April 26, 2007 at 9:48AM
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joe_mn

the dealer called this morning and said that with only 500 down that no other dealer will waive the acquisition fee. I called another dealer at lunch and he said no problem/no fee. I went over to get the offer in writing and its true. I am going back tonight after work with the wife to get the car.

    Bookmark   April 26, 2007 at 4:11PM
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joe_mn

we got the car last month. now the deal is nothing down but TTL and the lease is only 24 months. oh well, 500 is nothing to sneeze at but it only adds up to about 16/month more so i guess we can live with it. but that is at a different dealer. maybe they have an Aq fee too.

    Bookmark   May 25, 2007 at 11:15PM
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