Lease knowing I'm going to buy it..smart or dumb?

J

jhu8

Member
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16 CX-5 GT AWD w/ Tech
Okay so I've been doing research and haven't been able to find good information, and of course the dealer is going to tell me what I want to hear to make a sale. So I'm looking at a 16 AWD CX5 GT with tech. I had my mind set on purchasing but of course, leasing gets me a much better, comfortable monthly payment in the process of starting my life (just bought a house). So now I'm thinking about leasing, especially after learning that the mileage restriction ONLY is in place if I turn in the car at the end. But if I buy it, then it doesn't matter and just buy it for the residual price. So my mindset is that I'm going to go over the 10k/48 month lease but just going to but it anyway. Is this dumb guys? Without going over the recommended 2000 down max for a lease, $1600 down gets me a monthly payment of 299. Over the lease I'll spend $14600 something, and the dealer said the residual is $16800.

So it seems like the amounts equal up. What do you guys think? I know there are a lot of knowledgeable people here so I figured this would be my best shot at getting accurate information. I've never leased so this is brand new to me. I know people bash it saying I'm paying for a car twice but based on the numbers, I'm still going to pay the cost of the car. Just drawn out longer because I'm able to get a cheaper payment in the beginning. Thanks in advance.
 
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When it comes time to buy out the lease in 4 years, who are you going to borrow the $16800+tax from?

Most lenders and credit unions for USED CARS, like to lend max 80% of Blue Book value, and mileage under 120k.

If you trade in your leased car at the end of term for another car, the dealer will pay off the car and you do not have to consider any of the end of lease fees, over mileage fees, condition penalties, etc.. You only have to consider those fees if you plan on walking away from a leased vehicle and returning it to the leasing company.

A few times at the end of the lease terms, I have been $1000-2000$ positive in value, and used that positive equity to help roll into another new lease.
 
Wouldn't it be just like getting any used car? Whether I use the dealers bank or my own bank? Why would there be an issue in getting a loan for that amount? I have refinanced my cars through federal credit unions to get a better interest rate. What am I missing?

As for your second point, I thought trading it back in was the same thing as turning it back in? So there's a difference? Excuse my ignorance, just trying to learn about it. My understanding was it was either you walked away(pay any fees), buy the car at the end of the lease, or just lease another car.
 
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jhu8 said:
So my mindset is that I'm going to go over the 10k/48 month lease but just going to but it anyway. Is this dumb guys?
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This is not a good idea.

Leasing a car sometimes makes sense for people who like to get a new car every 3 years and would trade in a three year old car even if they owned it.
It can also make sense for people who are unsure about the car they are getting and want the option to walk away form the car after 3 years.

It doesn't sound like you fall into either category and you're planning to use leasing as a way to get a car that you couldn't otherwise comfortably afford.
The '16 AWD GT with tech is a really nice car, but considering that you've just bought a house you would be much better off with a cheaper car. (base model CX-5?)
 
jhu8 said:
Wouldn't it be just like getting any used car? Whether I use the dealers bank or my own bank? Why would there be an issue in getting a loan for that amount? I have refinanced my cars through federal credit unions to get a better interest rate. What am I missing?

As for your second point, I thought trading it back in was the same thing as turning it back in? So there's a difference? Excuse my ignorance, just trying to learn about it. My understanding was it was either you walked away(pay any fees), buy the car at the end of the lease, or just lease another car.
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At the end of the lease, say because of mileage the book value is $16,000.
The lender will want to lend 80% of book so that's $12,800.
Will you be able to come up with the difference at the time lease is up? $3200+tax...

You can turn it in, you can buy it out +tax , or you can trade it in.

I look at it as a rental car.
Take the down payment, and your 4 years of payments, +4 years of insurance, +4 years maintenance and parts, +4 years registration, and divide by 1460 days to get your rental cost per day.

$1600+$14352+$3360+$1200+$1000=$21512 divided by 1460 days = $14.75 a day rental car.
 
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I didn't know a lender would only give 80%. I've never had That happen before. I mean if I want a loan for x amount, a bank should give that assuming I qualify.

But in the end, I'm not paying anymore right? It all adds up to the actual price of the car between what I'd pay for 48 months and than the residual. I am hesitant and don't know what to do but I do appreciate everyone's input.
 
jhu8 said:
I didn't know a lender would only give 80%. I've never had That happen before. I mean if I want a loan for x amount, a bank should give that assuming I qualify.

But in the end, I'm not paying anymore right? It all adds up to the actual price of the car between what I'd pay for 48 months and than the residual. I am hesitant and don't know what to do but I do appreciate everyone's input.
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I am going with a worst case scenario here with the 80% loan to value.
Here is a link to some good info. http://www.carsdirect.com/auto-loans/lease-buyout-car-loans-good-idea
 
piotrek91 said:
This is not a good idea.

The '16 AWD GT with tech is a really nice car, but considering that you've just bought a house you would be much better off with a cheaper car. (base model CX-5?)
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My thoughts too. The base CX-5 is a lot of vehicle for 2/3 the price.
 
RG_Flyer said:
My thoughts too. The base CX-5 is a lot of vehicle for 2/3 the price.
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Agreed, or a certified pre-owned GT that someone is just turning back in... Mazda CPO rates are .9 and 1.9 financing for long terms + still get the warranty.
 
Well you guys bring up the other option that I was gonna do. Just get a used 14/15 GT instead. I drove a 15 and 16 back to back yesterday and yes, the 16 is more refined but I think I would be okay with a 15. Used 14/15s are between 22k and 27k. Of course the one I drove yesterday was with only 19k miles and was $27k. So it wasn't much different than a new one. Just a matter of finding a good deal I guess or lease. Do you guys think leasing is bad cause I'll lose money or what? Just trying to see why its bad besides the mileage limit, even though I'd jsut but it out. Dealer makes it seem like its amazing but I know its not all that great. Thanks guys.
 
As a person who is "Just starting your life" I urge you to not buy or lease until you have taken Dave Ramseys course
http://www.daveramsey.com/specials/welcome?ectid=bing.dr3

He recommends that you buy the car you can buy for cash. Drive that car and save the equivalent of a payment. Work your way up until you can buy whatever car you want for cash. Then keep making the payments to yourself and you can keep buying new for cash if new is what you want. It's not about driving junk, it is about doing things different.

Lack of debt gives incredible freedom

“live like no one else so that you can live like no one else.” Dave Ramsey
 
leasing with the intent of buying is a sure guarantee to over pay on a car. Either buy it, or don't rush it.
 
Only reason I'm needing a new car is become I'm an RN and I have to be able to get to work no matter the weather. We don't get tons of snow here, but we usually get a decent amount. Enough to make it an issue at times.

But inlinev, that's kinda where I'm at. I'll just hang tight till I find what I want/can afford. I won't buy just to buy when its not the version I don't want(aka the sport cx5). So we'll see. The lease option just gave me the option but didn't realize it'd mean I'd end up over paying.
 
If you are thinking of leasing just to afford it, its to much money for you. Leasing is for people who don't mind a car payment, drive low miles and always want the trouble free of driving a newer car.

Also remember if you lease with a buy out, your going to extend how long it takes to buy the car. So you take a 4 year lease then buy for another 4 years. No car is worth 8 years of payments and by then you'll be looking for another car.

Don't over extend yourself. Be smart and buy what you can afford. I just bought a 2016 GT loaded with options, but I saved over the last 4 years. No loan payments, cash deal. It's amazing how much they will come down when you say your paying cash. This was my first new car I saved up to buy and I'm so glad I did.

Save your money for more important stuff, like home and family. You'd be glad you did in the long run.
 
jhu8 said:
Only reason I'm needing a new car is become I'm an RN and I have to be able to get to work no matter the weather. ...
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good for you for choosing nursing! (sez the hubby of one)

try asking dealers and insurance company for any sort of first responder type of deals or discounts - a few dealers have them here
we got a 10% discount from insurance co by changing group affiliation

also if in a union, they often have discounts/deals with various suppliers
 
If you cannot afford to buy it then you should not buy it. This is the kind of backwards financial thinking that got this country into personal dept troubles in the first place. Leasing was designed to get people to buy more vehicle than they normally could afford to. You will pay more in interest and fees leasing and then buying over just financing with the super low interest rates currently now available. You'd be better off financially to go with a sport or touring or buying used.
 
jhu8 said:
Only reason I'm needing a new car is become I'm an RN and I have to be able to get to work no matter the weather. We don't get tons of snow here, but we usually get a decent amount. Enough to make it an issue at times.

But inlinev, that's kinda where I'm at. I'll just hang tight till I find what I want/can afford. I won't buy just to buy when its not the version I don't want(aka the sport cx5). So we'll see. The lease option just gave me the option but didn't realize it'd mean I'd end up over paying.
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It sounds like you at least want AWD... maybe buy a leftover '15 Touring AWD?
 
Kedis82ZE8 said:
It sounds like you at least want AWD... maybe buy a leftover '15 Touring AWD?
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Yeah exactly. I can afford the 16 I just don't want to spend what I would at this time because I'm knocking out my student loans first and foremost. Which is why I don't have the down paymemt I normally would so may payments are higher than id ideally like. Reasoning behind the leasing idea and not requiring a down payment.

But I will most likely be going for a a used 14/15. Actually trying to find the differences between those two years and if I should focus on one year or another.
 
jhu8 said:
Yeah exactly. I can afford the 16 I just don't want to spend what I would at this time because I'm knocking out my student loans first and foremost. Which is why I don't have the down paymemt I normally would so may payments are higher than id ideally like. Reasoning behind the leasing idea and not requiring a down payment.

But I will most likely be going for a a used 14/15. Actually trying to find the differences between those two years and if I should focus on one year or another.
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Not a lot of changes... on '15--->

"What's New for 2015
The 2015 Mazda CX-5 is mostly carryover from last year. The only notable change is the addition of Mazda Advanced Keyless Entry as standard equipment on Touring and Grand Touring trim"

Also 4/14 and later 2015's have the same mirror design as the '16s.
2013-mazda-cx-5-mirror.jpg

2015-mazda-cx-5-side-mirror.jpg



AT shifter design is different as well.. I can't remember when latter design went live in '15. I have the newer latter version.

2014-mazda-cx-5-grand-touring-gear-shifter.jpg

00K0K_bwjbVBOGU0P_600x450.jpg


I think in an old thread last year there were also a few bushing PN's in suspension that were different in '15s but can't remember which ones. Just one minor difference.
 
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