mustang68w

I was talking with my local dealer tonight and I told him that I would like to keep my payments around $300-$350 a month. If I sold my two '68 mustangs I'd be able to put $10,000 to $15,000 down. The sales manager then said if I want payments to stay in the $300 range I could lease to own with about $6,500 down. Now my credit isn't terrible, but it's not the best either hence the hefty down payment I was willing to go for. I would really love to keep one of my classic mustangs so $6,500 is doable for me, but I've never owned a new car let alone delt with anything like a lease. I need a lot of opinions here, because my new job starting late this summer might require some long distance journies so I definately need a new car. I would just love to keep one of the classic stangs if leasing to own is a good deal. Thanks a lot for the imput. :headbang:

kevinb120

WOAH! You should rarely put any large money down on a lease

Are you trying to get a V6 or V8? the lease residuals on V6s are fantastic right now...


Even on a buy payment, why get rid of 6500 in ACTUAL cash to save virtually the same ammount of money devided by the loan term??? You can get an extra $125 from your savings account to make up the difference if you need it in a tight month, but its a lot harder to come up with $4000 for an emergency...If you are doing anything but paying cash(and thats not always the best way) its all about finding a balance on lease/buy/money down/payments ect that fits YOU. Everyone is a little different. Like the money down analogy, if you feel that you would blow through rather then save the 6500, then put it down(on a purchase) when you buy the car...:P

In a nutshell, leasing for the MOST part, is for a person who does not drive a lot of miles and likes to frequently change cars. If you get another car every 2 or 3 years, typically you never stop making payments. The IDEA of a lease is to pay for the time you DRIVE the car rather then the entire car. The true caviat to this is the car has to be one that is favorable to leasing to begin with. This has a lot of factors, primarilly resale value in both the 'real world' and the auto companies 'version' of it(i.e. stepping up on the 'value' to make leasing attractive).

This is why luxury cars like Lexus are much cheaper to lease then make payments on for 2 years and trade in. Recently Ford has stepped up quite a bit on CERTAIN cars when for years rebates have made it cheaper to buy. You do have the option to refinance and actually BUY the car at the end of the lease, but not all cars are equal by any means. Typically its better to just turn it in (on a non luxury car with a 36 or less month lease) when its over. In basic terms, think of it as renting a new car.... Its a complicated alternative that works very well for CERTAIN people. One of the good things is you walk away from it with no negative equity, not still making payments on a 4 year old car you're bored with, nor having to sell it yourself. One other lease advantage is if you are 'moving up in life' say, just out of college, where you can afford one new not-so-fancy car NOW but in two or three years can move UP in budget later-as opposed to buying a cheaper used car you will get rid of in 2 years anyway. You also know exactly to the penny how much you will spend on that vehicle the day you sign the paperwork.

Figure out EXACTLY what you want to get from your next car and its intended use(high mileage or not, toy to modify or keep bone stock, etc) and I'll throw you some advice.

I don't like the sound of 'lease to own', it may be a baloon payment scam too. Either you LEASE the car and follow the mileage and other rules and turn it in when its done or you BUY the car to own with cash or a normal bank loan. There are a lot of strange options floating around that I would avoid.

The lease rate(aka lease 'factor) on the V6 is very good right now, with my driving record kinda stinking for another year and my tendency to change cars nearly every year, I just leased one for 2 years simply to have a decent car with a low payment that I really cant spend money modifying nor trading in in 8 months. For me it was more of a simple budget control thing that was the trade off so I could afford a new motorcycle(a Ducati, yum yum) too rather then getting a GT at 500 a month and spending about the same in mods with double the insurance. I basically took MYSELF out of the new car market on purpose for 24 months....

scramblr

Also, how about the penalties when you turn the car in? I did a little homework on this a few years ago and found the fine print is really fine. If I remember right there are multiple charges for things such as stained seats or carpet, scratches on dash or paint, etc. Not "damage" per say, but normal wear and tear. The dollar figure was crazy. Maybe things have changed...

V10

Kevin is right.

If you intend to own the car, buy it, don't lease it. Lease to own will end up costing you a lot more $. All you are doing is trading off low payments up front, for more finance charges later on when you buy it.

As Kevin says, you should only lease if you only are going to keep the car for 2 - 4 years ( or whatever the lease term is), not put a lot of miles on it and will keep it in good condition.

os121

I've leased, and won't do it again. I agree w/Kevinb, leasing is for folks who (a.) drive low miles, and (b.) want to change cars every 2-3 yrs. From your post, it sounds like you want to keep the car. If this is the case, here is what will happen to you:

1) You will say goodbye to whatever down payment you make. $6500 is huge for a $20k-$30k car.

2) I'm not sure about CA, but my state will hit you with sales tax on every payment, and property tax once a year.

3) At the end of the lease you have nothing. If you intend to keep the car, you will have to buy it from the leasing company. This is not just like buying a car .. it IS buying a car. You pay the residual value, and all the other little fees on top, taxes, etc. Granted you have some influence on what this value is, based on the terms of your lease, but you don't own the car until you buy it at the end.

I understand how you would want to hang onto your classic cars. Think about ways you could creatively finance the new car without getting into a lease (unless your goal is to jump from this lease into another one).

Good luck ! (B)

eighty6gt

What kind of interest rates are you getting?

What do the words "to own" add to the term "lease" in this context? Sounds odd.

A lease will allow you lower payments, as mentioned, because you're only paying for the change in value of the car from the time you start driving until you get rid of it in 2 or 3 years.

Around here the residual value (value at the end of the lease) is poor, so the lease payments are really high, within shooting distance of the purchase payments. I'd never lease a Mustang here b/c of this.

Find out what the residual is, the amount you're actually financing, what happens with the taxes, mileage limits, etc.

kevinb120

If you do lease and feel you may get a few dings or wear and tear you can get a wear-care package that covers most damage. I work at a dealer so I have quite an advantage for a lease car as I get my car washed 2-3 times a week and have every type of paint touch up/dentworks/upholstry repair 'buddies' at arms reach here If you opt for higher mileage leases, the payment advantage dissapears very quickly(I got a 12k mileage as I rarely do more then 8-9k miles a year).

Figure a Mustang GT around 28k'ish with 6000 down is about a $420-450 ish payment for a 60 month loan. Best way to ballpark a 5 year payment is roughly $20 per $1000(dont forget to add taxes to the price for that ballpark) financed to do a quick budget check with average good credit.

I would probably buy a not-so-fancy one if you are going to do a lot of mileage(or just get a junker for work). The V6 premium I bought had only IUP and the Pony package(pretty all-inclusive super high value packages) and invoiced at about 21500. With 4000 down it would be about $360ish a month for 60 months. Avoid longer term financing like 72 months if at all possible.

poldrv

The problem with leasing is that at the end of the lease you own nothing for your two years of $300 X 24 ($7200). Ford will also want a security deposit. Supposedly you get the deposit back at the end of the lease but it never happened to me. If you are going to lease be prepared to be bent over by the dealership.

cop on my back

It is not more expensive to lease a car!!! That is if you plan to keep it or not.

If you lease with the intent to keep it, it is cheaper, but not much.

The only money you save is the interest in financing the tax. Basically, when you buy a car you pay all the tax up front (14% here) and then when you get a loan, you are paying interest on that tax.

When you lease, you only pay tax one month at a time, so you save by not having to finance that.

The is always the payout amount at the end of the lease, you have to keep that in mind, but it should be reasonable.

mustang68w

I thank you all for your input. I do want to keep the car, but if the GT/CS turns out nice I will probably want one of those so I was also thinking of leasing for 2 yrs, then buying a GT/CS........ just a thought

kevinb120

Currently Ford is waiving the security deposit and including the first payment(first payment on just about any car through FMCC) on the V6. The promo rate 'lease factor for tier one customers is (think of it as 1%) Residuals for V6 coupes with auto's for 15k mile leases is an amazing 62%(-2% for a manual/add 2% for a lower mileage 12k lease). The lease rate on the GT stinks, they really are not targeting them right now. F150/Fusion/500/Freestyle/V6 stang are the bargains right now. Just find out the 'lease factor' or interest rate from someone in the loop so they dont add rate 'points' on you.


If you finance the same new vehicle with no money down and trade it in 2 years, typically you will be out the 400x24(8000) and still be at least $3000 upside down....

kevinb120

It is rare that the 'buy' figure at the end of the lease is cheaper then what you can purchase a used one for. You have to do the math on any particular vehicle at the time. On the 24 month lease it's rare the buyout would be better then used ones. The V6 also has a 1.25%/50% residual for 36. If you get a good discount on the vehicle when you buy it and like the car enough to 'repurchase' it at the end of the lease, it should be close to a very good price on a used twin. Plus, you know every mile the car drove. But most lease candidates want a change by then anyway. If you want a new car every 2/3 years, why would you want to buy a used one all of a sudden?

The mileage is a HUGE factor as well, you have to be very careful not to go over it by any substantial amount if at all. One senario that happens is somoene has a short commute at the start of the lease, looses the job/gets a promotion/gets divorced, etc; and they drive 3 times as much in the last half of the lease. I had one fellow that was more then 15k miles OVER the allowance and it was something like $9000 in penalties. Lucky enough he was able to trade out of it instead at a much lower loss($2500) against a new car with big rebates. He would of been about the same upside down anyway if he had just financed it because of the miles on it.

kevinb120

If you can keep within the mileage(there ARE higher milage leases too), and keep the car stock and in good shape then a two year lease may work for you on a V6 with only a little money down to keep it in the $350 ish range. I would think of the car right from the get-go as a temporary vehicle though and not think of long term ownership at the end. You just need to go to the dealer VERY prepared for the details in advance. I wouldnt think of it at all on a GT, but then again I wouldn't be thinking of a payment that starts with a 3 on one either.

mustang68w

Thanks Kevin for all of your insight. Though V6's are cool I'm definately a GT kinda guy. Sooooooo I guess it's time to bite the bullet and just go ahead and sell the classics. I need a newer car and really really want a new GT........ I guess the good thing is I'm only 23 and I am getting out of the Marine Corps in a couple months after a long 5 years. I have a sweet job lined up when I get out that pays very well so if I want the classics later in life I'll have the time and money to do it then.

kevinb120

If you're going GT then definately buy. You need to find a balance of giving up cash in hand versus a payment that works for you when you're ready.

And thanks for your service for our country! :usa:

You can always PM me when you are ready and I can help you get the best deal possible from a dealer.

chowgp

don't lease to own. My dad lease for 5 years and at the end they wanted 17k for the car when it was only worth 12k. Plus they charge him for all these things, like a little scratch.