Leasing advice

Robby

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I’m thinking of leasing a ranger with the intent to buy If I still like it at the end of the lease. Is this a good approach?
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RedlandRanger

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I’m thinking of leasing a ranger with the intent to buy If I still like it at the end of the lease. Is this a good approach?
That is what I'm doing - it is a way to extend out the purchase - I intend to keep my truck for quite some time. My last Ranger I owned for 14 years.
 
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Robby

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Ok and yes I had my ranger for 15 years. I definitely keep vehicles for a long time. Are you saying it is a better idea when you are going to keep them?
 
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Robby

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Also are leases pretty much the same across dealerships or are they able to be negotiated as well
 

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Using a lease as a bridge loan is only good if the terms are good.

I originally leased my Ranger, but ended up buying it out last month. The lease terms really are not that great for a truck with such a high anticipated residual. If you intend to keep it, skip the lease (take a look at the "rental fee" in your lease terms to get an idea of money that you'll never get back...chances are it is higher than the interest you'll pay on the entire loan amount if you finance).

If I were you I'd go with the highest term loan that has a competitive interest rate (that you can afford).
 


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I leased mine and was ok with the terms. I was originally going to purchase and then decided when it came in that I wanted to lease for the following reasons. 1) I wanted to keep my payments down and 2) I got a little nervous about buying a first run new vehicle. If there are problems over the next 3 years, I will walk away. If not then I will definitely buy it out at the end of the lease as this is my favorite vehicle I have ever owned!
 

RobF8GT

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I was going to buy outright as well but ended up leasing. I agree with ExChief45, if the Ranger has problems or the resale value is terrible I have a way out in 3 years. With the buyout ( plus tax ) and the 3 year lease my difference in price is $850. I took the money I would have spent buying the truck outright and invested it in a GIC at 2.2%. That will make up the $850 difference plus some. If the Ranger holds its value , more than the buyout, I can buy the Ranger out and trade it in on say a new Bronco or just keep the Ranger. The terms of the lease let me have 25,000 Km a year mileage. I don't see a downside to leasing.
 

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Ok and yes I had my ranger for 15 years. I definitely keep vehicles for a long time. Are you saying it is a better idea when you are going to keep them?
Just buy it of you are keeping it.

Why waste years of payments?
 

Hounddog409

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I was going to buy outright as well but ended up leasing. I agree with ExChief45, if the Ranger has problems or the resale value is terrible I have a way out in 3 years. With the buyout ( plus tax ) and the 3 year lease my difference in price is $850. I took the money I would have spent buying the truck outright and invested it in a GIC at 2.2%. That will make up the $850 difference plus some. If the Ranger holds its value , more than the buyout, I can buy the Ranger out and trade it in on say a new Bronco or just keep the Ranger. The terms of the lease let me have 25,000 Km a year mileage. I don't see a downside to leasing.
Downside of leasing is 3 years of spending money with nothing to show for it at the end.
 

Alan

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I am leasing mine. Lower payments and I was also suprised at the insurance not going up hardly any. Also I get more options at the end. Refi to purchase or trade in for the new ranger. Just be sure its a closed end lease and you choose enough mileage so your not stuck with a huge bill if you decide not to purchase later.
 

RobF8GT

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Downside of leasing is 3 years of spending money with nothing to show for it at the end.
The way I see it is, you do have something to show for it. You have options. You can buy it out, which if you do its no different than if you bought it outright from the beginning. In my case its a bit cheaper. You can give it back and get out of a potential bad deal. Or you can buy it out and sell it if its worth more than the buyout. I guess I cant use it as collateral but I don't need to. I am allowed far more mileage a year than I ever need. I am not making monthly payments. I still don't see any downside.
 

Hounddog409

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The way I see it is, you do have something to show for it. You have options. You can buy it out, which if you do its no different than if you bought it outright from the beginning. In my case its a bit cheaper. You can give it back and get out of a potential bad deal. Or you can buy it out and sell it if its worth more than the buyout. I guess I cant use it as collateral but I don't need to. I am allowed far more mileage a year than I ever need. I am not making monthly payments. I still don't see any downside.
how are you not making payments on a lease?
 

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Also are leases pretty much the same across dealerships or are they able to be negotiated as well
The key to a great lease is to negotiate the vehicle sale price, then covert it into a lease for the sale price. Most leases are at MSRP
 

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Yes with leasing you can get out of it after three years but so can anyone who bought. In fact it's easier to sell a vehicle that is owned as the buyer may pay off the loan. The buyer won't pay off a lease. So leasing has one stuck for three years with a possible bad vehicle. Buyers have exits all over the place. The interest rate seems to be much higher on a lease (becasue most people only look at payments and not the interest or rental fee).


The same resale will apply in either case. EXCEPT those who bought using a six-or seven-year note with little down. They will not be able to get out of their vehicles right side up for at least 4years. Leasors may have to pay ALL the interest plus the cost of the vehicle to get out.

Ford's residual is 62% after three years, (Tacoma is 67%) Not bad but the usual huge discounts will affect that, The almighty Tacomas will be affected as well on resale because they are selling 78K in a quarter. That's a lot of used trucks in a couple of years, Already seeing a ton of used Tacomas on the lots That does little to boost resale numbers going forward.

. Before you sign a lease check out the "cost of rental" And the associated Money Factor. I was going to lease but the overall cost was much higher than buying it outright or with a short term loan.

There are great leases out there. I had a $399 Payment on a $45K Lincoln with no down and cost of rental $1400. THAT was a great lease. Anyone who can lease a $45K vehicle for $399 a month with NO CAP REDUCTION DOWN is a great deal.

I suspect the Ranger should be close to that or better. But I discovered Ford's Money Factor was way to high as the cost of rental was near $4000. Not gonna blow $4k on interest. Especially on a lease!!

In my case, I put $30K down and financed the balance with Wells Fargo. I expect to pay off the Ranger by the end of this year. I HATE Interest. I would rather collect it than pay it..

Prepaying a lease is very bad if you total the vehicle.....
 
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RobF8GT

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how are you not making payments on a lease?
I paid three years up front. In doing that I paid $850 in interest for 3 years. The remainder of the money I would have spent if I had bought it outright I invested. Assuming the banks don't completely crash Ill make more than the $850 in interest, even after its taxed.
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