Ken: Hey everybody glad you joined me. I mentioned on another video. I forget, I think it was a car buying video. I talk to car buying on one of the videos which is available on Dolan’s.com. I said you know not a lot of people are looking it leasing a car. In fact Daria and I are sort of throwing with either one. So I want to just take a couple of minutes and talk about buying versus leasing and I said books have been written on and subject. We could be here for a week and a half. We can do you know 17 videos.
But let’s discuss the pros and cons but before we do, I always forget it’s a very good website and sometimes I think of a websites when I’m talking to you guys is called carbuyingtips.com. So if you have to go there, it’s very good. Carbuyingtips.com, talk about leasing, buying, sales and showroom techniques. It’s really really good. I haven’t seen lately a very good book on car buying and car leasing. But anyway, deciding whether to buy or lease as much more than the dollars and cents consideration. A lot of people say, when you compare the book of leasing, leasing is the best because of XYZ. We’ll talk XYZ. Do you have advice better because you have something left at the end of the process.
I would say probably on balance, we’d like the idea of buying better. Now this is not for everybody because at the end of a two or three year payments of a lease which you got, you can give a key, take the key and hand it back and see you later and then we’ll talk about that. On the other hand, at the end of two or three year payment period no longer the 36 months by the way. Sorry its 72 month. I think the cars going to last six years but I don’t know so i say three years. I think three years is better.
Prose of leasing a car. You like a new car between two or three years. You kind to get a kid out of it, you’re willing to say “well I don’t own it but I can enjoy it, I’m not going to take care of it.” So you like a car and you like to change every two or three—you liked it really. You like to be kept with the new stock coming out. Like serious and who—what are the stuff is like? Fancy in the car. What else, what fancy in the car? Oh technologies got, just technologies done.
Loan or monthly payments. Generally speaking our lease payment is lower than a car payment. Now that’s hard to compare because that‘s how much you put down. But here’s how at least payment as calculated and we’ll talk more about unless we go probably in either both of written word and more video here in Dolans.com.
Cap cost which is the price of the car that you want to negotiate to the best you can minus the residual value at the end of the car payment, at the lease period. Cap cost minus with the car is worth at the end of the lease that number divided by the number of months is basically the payment. So generally, lease payments are lower generally. Lower maintenance cost very often in the lease maintenance cost will be at least partial that cover and going to take care a bit yourself, minimum requirements usually are taking of and you’ll get a pre-good price in the dealership because you lease from their.
So generally lower maintenance cost on the lease generally. And generally don’t forget that you’d only talking about a lease of two or three years and you hope that a two or three years not much is going to go wrong so generally low maintenance that cost and also something you generally, all I can say you can't get but generally one of the positive about leasing a car is that if you use it a good chunk of the time for business and when there’s a tax benefit too bad. So some tax benefit, those are the prose. Watch out of this on the concept, watch out for acquisition fees. We’re talking leasing now and not buying. Watch out for some of the fees that they put on you. Be careful with the fees like we don’t know if the car here, we can go get them and we’ll bring it in. Where dealership pay but we don’t have what you want that this has it. Be careful the fees.
Some insurance companies may charge you more for the insurance if it said lease car. Why? I’m not sure and no why. Maybe one of the reasons why is that maybe you’re not going to go out and take care is to take care of it if you lease it rather than owning it. It’s like a rental car. Now when I rent in a rental company I’m very careful when I rent a car but it’s not my car. So maybe insurance companies will take advantage of that. My lease limits—you know I trouble doing when last the car I lease, Daria and I lease I try to figuring out it was 12 or 15 thousand miles. That’s generally what it is but generally the choices, 12,000 per year. 12,000 to 15,000 miles. What happens if you go over?
Well first of all you don’t want to do that because it could be up to 25 cents or more per mile over the limit. Multiply a quarter of a dollar times every mile over the limit. On the other hand that’s why you want to think about. On the other hand don’t pay for 15,000 miles because that will be more than with 12,000 miles but that sort of the cons. You’re not exactly showing all the concept. You know the exactly sure how many miles you want to drive. Cons of leasing, maybe I don’t want a car every three years. They say a lot okay. I don’t want to lease a car, I want to drive it to the ground. I want to drive at 200 and 25,000 miles. I had a car for 10 years. I bought it 96, I sold it in 2006, about 90,000 miles. I guess I don’t drive a lot because we fly a lot and talk of, you know we fly a lot when we travel. I have a 10 years, I’m driving carefully but not leasing I owned a car. So you don’t care if you don’t get the newest car every two or three years, can't customize a lease car.
Well I want to put a pinstripe and I want to do the mag wheels and do carve and I want to block it. Okay not if you lease it so you can't customize it. You know like the way I felt those terms up, I have no idea what I’m talking about only about cars but I just sort of. What is block means? I think it’s a level that you get it higher? And at least a car I’m not sure I want to terminate the lease, I don’t know. I don’t even think about it.
However one of our upcoming videos, we’ll talk about how to get out of the lease, not to get out of the lease but how to sell on lease. There are people looking to buy them and we’ll talk more about that. One of the cons payments no ownership, its only thing at the end. One thing to be very careful of is when you lease a car, you lease it or you considering leasing your car excess weren’t here. You’re going to pay for it. What is that? Well is there anything that I can put this car over. That’s access weren’t here or it is anything that’s over quarter I put on it. It’s then anything bigger—what is it? How is it defined? Access weren’t here can really, really hurt you. I left my card.
One thing I want to tell you and by the way you can cruise more on Dolans.com another place to get more of this information. I’m trying to just use in general guidelines. Car dealers, I’m not going to like what I’m going to tell you here but that’s the way it is. You know you’re going to lease a car for the second example. Don’t walk in and say I want to lease a car because what’s going to happen very often, they’re going to play the old trick and I hate this, it drives me crazy. We’ll say, can you afford 229.00 a month? That’s okay and nothing doing with the price of the car. Nothing and doing incredible proper that they might make.
Will you go to lease a car? You negotiate that cost they called Cap Cost that cost, at best you can. I say negotiate the car as if you’re going to buy it because that cost price capitalize cost and lease jargon and what I tell you before capitalized cost minus residual value is how much you’re going to have to pay over the life of it, then holding the Cap Cost, the lower the amount of depreciation that you’ll have to pay in terms of lease payments. Negotiate as if you’re buying it. So this is leasing one on one. Some promising cars, we’ll talk more but there’s at least a ball game—some ball game ideas to at least get your thinking. Does leasing make sense for some people? Sure yeah, I'm not against leasing. We talk prose and cons. Some people rather have something at the end of a payment period. Which one to you, decide.
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