2017~2021 Lease end conditions and possible charges?

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2019 CX-5 GT
Whether you lease or buy is certainly a complicated calculation depending on how you look at all the angles and weight them to your particular needs. In my case a car is sort of a waste of money as I am mostly retired and don't drive all that much since the wife and I both have cars. The sensible thing would be to either have one car, or a dirt cheap one for me. But I like having a nice but reasonable car at my disposal so I'm willing to spend the money. I also like rolling them every 3 years since these days the tech (mostly) gets better every year and I never spend a dime on things like tires, batteries etc and the car is always under warranty. But that's just how I weight all the factors personally.

Here's a link to a spreadsheet I use when going into all the negotiations with the dealers that has proved helpful. The interesting thing about a lease is it's irrelevant what the car is actually priced at, only what it costs you out of pocket for the duration of the lease. If you punch in all the numbers for the down payment, monthly cost, your leased miles and few other factors it'll tell you what you're actually paying for the car for the duration of the lease. You can also enter in other data like how much extra miles cost if you go over your leased miles, or how many miles you think you'll use if it's under the leased miles so you can see what it actually will run you per mile, then you can do if/then comparisons.

https://www.dropbox.com/s/2a1907uw7jsxxjp/lease calc.xlsx?dl=0

Hope it might be useful.
Question for you. On the calulator you provided, there are numbers included which I assume are from a previous deal you were working. Do you actually put 4 or 5k down on your leases? This never made sense to me when you could just do the lease with zero down and pay the same amount over time (keeping it in your bank account longer for interest). I do all of my leases with only the first payment due at signing.
 
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'20 CX-5 GT PP AWD
It's just a balancing act. More down = lower monthly. Since I'm mostly retired these days I prefer to give 'em chunk up front when I have the money sitting there and keep the monthly lower as my income will vary from month to month. I could have done zero down but the monthly would have gone up appreciably. That's why I use the sheet, I can tell them to give me a price with different (or no) amounts for a downstroke and look at all the options at once. And again, in the end all that really matters is what the car ends up running you total for the duration of the lease since you don't care about depreciation or the long term value of the car, outside of how that factors into the deal you negotiate from the dealer's perspective.

And I suppose you can look at the interest you could make on the money you don't put down up front. In the stock market right now 4 grand over 3 years might be worth it, though that is of course a gamble. But just keeping it in a savings account you'll probably lose money after inflation as interest rates are crazy low. My savings account is paying .02%. Even a with a 3 year CD you'll be lucky to get .5% at the moment.

It's an interesting trade off right now. With mortgage rates at the unbelievably low percentages they're at the banks don't pay jack on savings accounts and CD's , which make sense. But I'd certainly rather pay 4% on $250000 over 30 years instead of having a $20000 saving account paying me 3% a year. My first mortgage was at about 10%, and I remember my mom telling me she paid 19% back in the 70's on her first condo. But then again, I'm pretty sure that condo cost less than my Mazda. o_O
 
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South Carolina
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12 MZ5 13 CX-5
You build credit through having debt and paying it off. Also with interest rates as they are now, it makes no sense to pay off debt
I couldn't care less about a "credit rating" because I pay cash for everything. I haven't made a car payment since 1999, and if feels oh so good. There is no conceivable way I would ever put myself into that kind of trap of having a monthly payment on something that is absolutely guaranteed to be lose massive amounts of value again.

A lease is even worse. Not only are you outlaying thousands upon thousands of dollars over the course of the rental agreement, (and yes, it absolutely is a rental agreement!) when the agreement is finally over, you have literally nothing to show for the thousands in cash you spent. You're $10-15,000 out of pocket, and yet you have an empty driveway.

But if you for some reason you think that's a good idea, and you like having debt instead of being debt free, knock yourself out.
 
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2010 CX-9 GT
It's just a balancing act. More down = lower monthly. Since I'm mostly retired these days I prefer to give 'em chunk up front when I have the money sitting there and keep the monthly lower as my income will vary from month to month. I could have done zero down but the monthly would have gone up appreciably. That's why I use the sheet, I can tell them to give me a price with different (or no) amounts for a downstroke and look at all the options at once. And again, in the end all that really matters is what the car ends up running you total for the duration of the lease since you don't care about depreciation or the long term value of the car, outside of how that factors into the deal you negotiate from the dealer's perspective.

And I suppose you can look at the interest you could make on the money you don't put down up front. In the stock market right now 4 grand over 3 years might be worth it, though that is of course a gamble. But just keeping it in a savings account you'll probably lose money after inflation as interest rates are crazy low. My savings account is paying .02%. Even a with a 3 year CD you'll be lucky to get .5% at the moment.

It's an interesting trade off right now. With mortgage rates at the unbelievably low percentages they're at the banks don't pay jack on savings accounts and CD's , which make sense. But I'd certainly rather pay 4% on $250000 over 30 years instead of having a $20000 saving account paying me 3% a year. My first mortgage was at about 10%, and I remember my mom telling me she paid 19% back in the 70's on her first condo. But then again, I'm pretty sure that condo cost less than my Mazda. o_O

The other consideration against a large down payment on a lease is that in the event your car is totaled in an accident you lose the down payment. Most or all leases build in gap insurance so it doesn't make sense to prepay the balance.
 
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'20 CX-5 GT PP AWD
I haven't made a car payment since 1999, and if feels oh so good. There is no conceivable way I would ever put myself into that kind of trap of having a monthly payment on something that is absolutely guaranteed to be lose massive amounts of value again.

A lease is even worse. Not only are you outlaying thousands upon thousands of dollars over the course of the rental agreement, (and yes, it absolutely is a rental agreement!) when the agreement is finally over, you have literally nothing to show for the thousands in cash you spent. You're $10-15,000 out of pocket, and yet you have an empty driveway.
That seems a little bit oversimplified. Whether you pay up front or take out a loan you still have a car which is depreciating over time. If you buy a car for 30 grand, it's worth 30 grand minus X per month / year or whatever. So after 3 years if it's worth 20 grand you're still out 10 G's. If you keep it 10 years it's not worth much (unless you play with collector cars) so it's not like you still have a bunch of money sitting in the driveway. And if you keep it that long it will have certainly have cost you some change to keep it going. Also with leasing you don't find out after 5 years that the some poorly engineered thing like cylinder deactivation has turned out to be a problem and will now run you a big expense to fix.

Debt can certainly suck if managed poorly, but I believe most true wealth is generated by using other peoples money at a rate that pays you more than you're paying them to use it. It's just bad management if the asset depreciates faster than you can use it to generate money. So cars suck to be sure, but if you borrowed money to buy a rental building 20 years ago, and have paid it off while the value of the rental money you take in has climbed steadily since then you end with a long term gain that can fund a retirement, while not leaving you broke from the original purchase. That's another oversimplification but it gets the idea across.

Unions and access to credit is what really created the middle class in this country, without it the vast majority of people would never own a home, which is most people's largest asset. It's all about not using credit to live beyond your means, and having a long term plan to manage your dough.

Just my .02, I'm certainly not a finance wiz.
 
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South Carolina
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12 MZ5 13 CX-5
If you buy a car for 30 grand
That's simply something I won't do. I buy a few year old cars for $10-12 thousand in cash, letting some other sucker take that absolute beating for the first couple years of depreciation. Then I drive it until the maintenance simply gets too expensive. My Mazda 3, I bought at 7 years old with 114,000 miles for $5,600. I drove it until last November when it started using oil at 230,000 miles. Then I sold it for $3200. So, my depreciation was only $2,400, not $24,000! You speak of using someone else's money? Well there it is.

My new car is a 2013 CX-5 that had only 82,000 on it, as clean as if it was brand new, and a full service history down to the wiper blade changes. I paid $9,200 for it, and I suspect I'll have it for at least 10 years, if not longer.
 
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'20 CX-5 GT PP AWD
You're absolutely right, as far as it goes. It depends where you're willing to spend money. I've never bought a new motorcycle, and have sold most for as much as I paid for them a few years later. And I like working on them and doing most maintenance myself. The one I have now I paid 9G's for in '09, have been on it for 12 years and I could probably turn it for about 4500. It listed for 15G's in '05 new so it's a been a fair deal, since I've gotten more than the difference in enjoyment out of it and it's still going strong.

But I hate screwing with cars, so it's worth it to me to roll 'em every three years and never worry about anything more than an oil change. And the advances in the tech, particularly in the safety department, make it a worthwhile expenditure to me. The lane centering / warning noise might have saved me and my wife's ass once on a long drive after a too much fun weekend when I got drowsy and started to drift out of my lane onto the shoulder. I probably would have caught it in time, but the self centering and rumble noise certainly didn't hurt.

Like most things in life it's just a matter of how you want to use your money. One man's waste is another's worthwhile toy...
 
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South Carolina
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12 MZ5 13 CX-5
You're absolutely right, as far as it goes. It depends where you're willing to spend money. I've never bought a new motorcycle, and have sold most for as much as I paid for them a few years later. And I like working on them and doing most maintenance myself.

Talking about bikes, this is my current project: a 74 CL125 that I'm restoring. It's going to be sweet when I'm done with it!

IMG_20210122_174814269.jpg
 
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2018 CX-5 Sport
It is always cheaper to buy a car with cash, new or used. That being said, the used car market is insane right now. I helped sell my niece's 9 year old Nissan Rogue with 131K miles on it, and she got 5,000 for it, parked in my yard for 4 days. I was shocked she got that much.
 
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2018 CX-5 Sport
That's simply something I won't do. I buy a few year old cars for $10-12 thousand in cash, letting some other sucker take that absolute beating for the first couple years of depreciation. Then I drive it until the maintenance simply gets too expensive. My Mazda 3, I bought at 7 years old with 114,000 miles for $5,600. I drove it until last November when it started using oil at 230,000 miles. Then I sold it for $3200. So, my depreciation was only $2,400, not $24,000! You speak of using someone else's money? Well there it is.

My new car is a 2013 CX-5 that had only 82,000 on it, as clean as if it was brand new, and a full service history down to the wiper blade changes. I paid $9,200 for it, and I suspect I'll have it for at least 10 years, if not longer.
And say the person bought that CX-5 with cash. They would have paid 18K for it, say 19K, and after owning it for 7 years they got $9,200 for it. So they paid $9,800 over 7 years or $116/month.
 
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'20 CX-5 GT PP AWD
Talking about bikes, this is my current project: a 74 CL125 that I'm restoring. It's going to be sweet when I'm done with it!
Nice! I owned a CB350 and a CL350 long ago. I crashed one and it disappeared off the side of the expressway and I never saw it again. The other one was a dog, but after I recovered I took it out to see if I still had the cajones to ride. As I was riding along it literally shot out one of the plugs from the cylinder head and it landed about 10 feet away on a lawn. I took this as a sign, parked it and just walked away. I got a registered letter about 5 years later from someone who had it in their garage and wanted me to pay for storage. I went to their house and explained it sure wasn't me that had put it the garage, and made them hand it over. I parked it behind a friend's house while I was deciding what to do with it and it was stolen from there. Life can be funny sometimes...
 

Antoine

Administrator
This thread seems to have run its course.
It does seem like it has...A reminder for everyone, please do keep threads on topic and for those that are straying off topic, please try and get them back on track, much appreciated, thanks!

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