I'm about to lease for the first time and don't really know how to go about it.
I'm looking to lease a Honda. Probably just a Civic. I keep hearing you don't really have to put anything down? Is this true? Any help would be great.

Looking for the 36 month lease with more mileage per year. 15k I guess. Thanks!

I read the special edition Civic comes with an aux jack for your mp3 player!

DO NOT LEASE A CAR!!!!!!

this according to consumer advocate/radio host/zen genius Clark Howard

Edit:

Source:http://clarkhoward.com

Leasing is only to be done when you can't really afford the car you want. In which case, you probably shouldn't go for it anyway. All those payments, nothing to show for it at the end. Escpecially sad when it's a honda, which would have a respectable resale value at the end.

You would've spent more on the purchased car, but at the end, you'd have (not only a car, but) a thing worth some money, as opposed to nothing.

Ditto what Yail said. Don't lease. Leasing is for businesses who plan on trading out cars every 2-3 years. Save up the cash for a solid downpayment.

Interesting, all. I hear what you're saying, but I really don't have much for a down payment right now and I need a hoopty in the next two weeks. Any more advice is appreciated.

These doodz is right. Don't lease.

You can get a pretty good deal on a year old used car, especially if they made changes to the body shape or other decent overhauls.

In January 2004 got a 2003 Malibu (newly redesigned 2004s were released in October 2003) with 16k miles for somewhere in the neighborhood of $12-13k. I only put down just $1500, but my car at the time was becoming more unreliable by the day.

Even more affordable were 2003 Aleros, which were only a year old from the newly discontinued Oldsmobile line. I looked at one of those for $9000.

I was shopping by mileage and price. I got silver, which was preferable to the black/maroon/white, but I chose it because the mileage was lowest.

Look for ad cars, and specifically ask to test drive the ad cars only. There's no haggling, and the car is priced to sell.

For an alternative to Honda (which in my opinion, are great cars but a tad overpriced), try a Mazda Protege. I had one for 6 years and it was a solid car. No problems whatsoever.

Yeah, the aforementioned Clark Howard always reccomends buying a slightly used car over a new one. Another quote from his site.



Also, not to be a shill, but bookmark that dude's site. He's got all kinds of sage advice and Massive travel deals.

We lease both cars because the mileage is tax deductible if you drive for business. If you put $0 down, then your monthly payment will go up. The key factor is the leased car's residual value which is the dollar amount that the car can be purchased for at the end of the lease. Most of the time the residual will be about 50% off the price of the car, so if a Civic is around $17K, the residual may be around $8500.

So, what I recommend to you is walk around the dealership's used section & see what 3 year old Civics are going for once you have the residual number. If they are going for considerably more than the number they quote you, then you will have some equity in three years and a lot of flexibility when it comes time to make a decision on what to do with the car. They will really want the car back from you as the lease will have a pretty stringent maintenace schedule and they know they will have a high quality used car to sell.

If you find out that the Civic isn't the best positioning for you in three years, check out Accords and CRV's.

Note, we leased a CRV in 2002 and the car holds it's value so well I was able to upgrade to an Acura MDX for an extra $75 per month after only two years of the three year lease because I had gained the "equity" described above.

Lastly, you are still negotiating on the sale price of the car- that is how the lease price will be set, so make sure you don't get confused by all the numbers they will throw at you. If you can get them to knock off 20%, then your monthly payment will be lower. If the salesman is a jackass about lowering the price, just mention that you can lease the car through Costco for invoice + $500 and you really shouldn't be paying more than that. Also instead of an interest rate, you will be quoted a money factor which bascially works the same way- the better your credit score, the lower your rate.

More information than you wanted probably, but hopefully it helps. PM me if you want to discuss further offline.

I lease and have for the last 6 years; I'm not really interested in owning anything at the end. Same reason I won't be a homeowner either.

I haven't run into any problems with the dealership because my cousin owns it and usually cuts me a pretty sweet deal. I've liked the whole leasing idea but as others have already attested it's clearly not for everyone.

Leasing usually requires cash down, plus your first and last months payment.

You can get zero-down car financing everywhere. Car makers are desperate to move product.

Leasing only makes sense if the payment is deductible, i.e. you use it for business.

Consider buying a used car, at least you won't be paying for depreciation. Target something in the 3 - 5 year old range if you want a new car.

www.dealsonwheels.com if you want to look for something a little more fun.

Yikes.

To reiterate what everyone else said: only lease if you feel like throwing your money away. Seriously. There is NO benefit to consumers for leasing.

If you're looking for a deal, the best deal you will get on a car is to NEVER deal with the floor salesman. What you need to do is get yourself a Costco membership or, if they have a car-buying program in your state's credit unions sign up with a credit union. Costco has a deal with car dealerships where you buy through them and get fleet pricing. Fleet pricing, if you're not aware, is essentially the invoice price that the dealer pays the manufacturer of the car plus a small fee (usually under $500.) In the end, you usually wind up saving a couple/few thousand dollars on the car and best of all, NO HAGGLING. The price you are quoted is the price.

I have been doing this for quite a while now and the deals cannot be beat. For instance, my 2003 Toyota Matrix was listed at $18,500. The lowest any dealer would go on the price was $17,200-500. I walked out of the fleet managers office with the keys in hand after going through my credit union's car-buying service (same deal as Costco) having paid $16,200.

If you want to get an idea of what you'll be paying, look up the car you want on Cars Direct. (You can also try buying through them, but I've heard of some issues and fees that get tacked on.) That's about the invoice price you'll pay. The Civic EX Sedan shows $15,992 here in Phoenix.

And, by the way, you don't have to have a down payment. I've never put anything down on a car. It just helps to lower the monthly payment. If you're concerned about monthly payments, look into longer-term loans. You'll be tied to the car a lot longer, but if you weren't going to sell it anyway it might work out for you. Check out how deals work by using the very helpful calculators at Motley Fool.[/url]

my wife and I leased her car as we don't plan on keeping any cars for more than 3 years, she doesn't put many miles on it, and really when you end up keeping a car for years you end up not being able to sell it for shit anyway. if we bought the same car instead of leasing we would be putting a lot more cash into a depreciating asset instead of using that cash to do more productive things.

On a typical 60 month payment plan, you generally will be breaking even somewhere around the third completed year of payments. You can sell the car at that point, if you want to, and you might even actually make some money on the deal. Anytime after that and you will see a profit unless the car has been abused. At three years on a lease, you give up the car and get absolutely nothing back. And often you get to pay the dealer because they're going to knock money off for every scratch, ding, nick, rub-mark, speck of dirt, etc., on the car. Guaranteed - unless you lease from that dealer again, and then they will make what seems to be a very sweet deal. The lease ALWAYS works out best for the dealer, and not the buyer. They want you to lease and keep leasing from them. It's a huge profit for them - not only do they make more on your monthly payments (plus that big up-front payment) they get a car back in a few years that hopefully is in good condition (if not, they're going to pull that cash outta yer bum - they WILL get their money regardless.)

i dont care about what they make - I just know we put very little down, have a very reasonable payment every month for 3 months, then we turn it back in. no fuss no muss - plus my wife makes a lot of money so its really no skin off my back. cars are getting so expensive these days that unless you buy some POS the monthly payment is ridiculous unless you get a 5 or 6 year deal and by then the car will be worth jack shit.

Costco, eh? I do belong! Thanks for the info!


np: Billy Joel-Uptown Girl

The other big advantage I've found for us is that one can lease the length of the factory warranty and when one finances a two year old car with only a year left, they need to be every specific as to what the extended warranty they are about to purchase covers.

Leasing is right for some, purchasing for others, but rparis is 100% correct when he refers to it as a depreciating asset unlike a home.

A car is a horrible investment. I had this argument all the time at my old job.

A car is a means of servicing a need you have, which is the need to go make money. It is another form of groceries, not an investment. You always lose money, the question is how much you lose over what time period. New american car in the mid $20k range is generally the fastest loss ratio around, excpet for crazy exotic $$ cars.

Example:

Old boss had a 2003 Chevy Monte Carlo SS, and our german buddy who was here for a year bought a used 1994 Corolla with 180,000 miles for $1300. The Chevy was 1 year old and had depreciated from $29k down to $13k in less than 2 years. The corolla was probably about $9k to start with, 10 years ago. So somebody who had originally bought that corolla could have gotten 11 years (and counting) or 201,000 miles (and counting) out of that $9k, which is a hell of a lot of productivity.

Someone took the other side of this one?

I wasn't surprised at the first, but when the next person joined the cause, I was totally blown away.

Yes, I had this argument with two people.

What could they possibly argue? That if you keep it in good shape for 25 years it will be a "classic" and you can sell for a profit?

Yes, ignoramii like you and I are apparently swayed by the popular misconception that a new car depreciates significantly as soon as you drive it off the lot.

Neither of these two ladies could explain their position to this layman. It was way over my head.

One of the debaters also once asked me, "Well, if evolution is true, how come I never see no monkey cross the road and turn into a human?"

I'm "invested" in two cars. My daily driver I bought for $5,000 last year, I've already had offers to buy for $8,000.

My second I picked up last month, and will have to "invest" further to bring it up to speed, but what I sink in I'll get back nearly dollar for dollar, then I can ride out the appreciation.