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Car Leases

How to save energy through both societal and individual actions.

Car Leases

Unread postby vampyregirl » Wed 19 Mar 2008, 00:02:15

I have leased a Volvo for two years. Under terms of the lease i'm not allowed to drive it any more than 16k kilometers in a year. If i excede that limit i have to pay extra. I was wondering if more people leased vehicles instead of buying outright might that cut down on fuel consumption?
For me the 16k kilometer limit is no big deal cause i can ride my motorcycle in decent weather but could it could be a problem for others?
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Re: Car Leases

Unread postby BigTex » Wed 19 Mar 2008, 00:10:20

Given that the penalty for going over the limit is delayed, I suspect people drive as much as they want generally, and then just pay the penalty or the dealer uses it as a bargaining chip to get them into another lease when they turn their lease in.

It's kind of like with the rats and the pleasure lever. If you want them to stop hitting it, you have to shock them when they do it. You can't shock them in two years and expect them to learn anything.

I'm not suggesting you're a rat, BTW. You have obviously thought about this more than a lot of people.
:)
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Re: Car Leases

Unread postby TreeFarmer » Wed 19 Mar 2008, 10:12:55

Vampyregirl:

Is this your first fleece? Everything I've ever read and heard says that fleecing a car is the most expensive way to have transportation.

Would you mind sharing your experience with us as to cost?

Thanks;

TF
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Re: Car Leases

Unread postby max_in_wa » Sat 07 Jun 2008, 22:42:05

Vampyregirl: here's a long distance motorcycle wave in passing. ;-)

TreeFarmer wrote:...
Would you mind sharing your experience with us as to cost?
...


Leasing probably makes sense for some people and not others. I leased a car once and I think it wasn't a great idea. I traded in a crumby car + $1000 on an $18,000 car (this was 1995), so lets call that $3000 down.

The lease term was 4 years and the payment was $250/month. At the end of the term, I was kinda broke having just gotten out of grad school, so I decided to finance the remainder: 4 years at $200/month. In total, I paid $21,600 + $3000 for my $18k car.

I did learn a good lesson however. About a year before I had that car paid off, I got to thinking I could probably get a new car (my situation had improved a bit by then), but I just never got around to going to a dealer. Then one day, the title for my car came in the mail -- I realized I'd never make another payment on it again and suddenly I stopped viewing it as my "crumby old car" -- and started seeing it as MY car.

I loved that car for the first 30 days it was new, and I've loved that car since paying it off. I still drive it and it's been [s]four[/s] five years since I made a car payment. When it goes, I'll buy my next one cash. Having no payment feels great.
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Re: Car Leases

Unread postby oil4u » Sat 07 Jun 2008, 23:46:17

Let me wade in here. I'm the financial Services Manager for a Ford Dealership in the Toronto area. Yes, leasing makes sense for some and not for others. With a lease you are renting the car for the best part of it's life ...usually around 3 years, 75,000 km. Use it and drop it off at the end. The cost to you is a very small rental payment per month. Much less than a 5 year finance at 0% even.

There are a few problems with leasing though. Usually you get trapped in the constant "renewal" cycle. Ford makes it very attractive to renew or get out early. Ford loves this cycle! The second problem is that you have no asset or equity in the vehicle. I had a lady today who's lease was up. She went bankrupt during the lease and now Ford does not want to re-finance her. When she returns the lease. She now has NO Vehicle to get to work. They will not do another vehicle for her, even though it was paid well. Hopefully I can get her into a used vehicle at 20% interest.

If you get a car allowance from work, then by all means lease. There are a lot of tax incentives. If you really love to drive something new all the time, then by all means lease. Car are not an investment. It makes very little sense to buy them. Depreciation is huge. Some vehicles have great residuals and it makes sense to buy them at the end, others are ridiculous in todays climate.

Leasing is ok for some, but terrible for others.
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Re: Car Leases

Unread postby VMarcHart » Sun 08 Jun 2008, 12:00:15

I can't see how the financial instrument to afford a vehicle --cash, finance, lease-- impacts fuel consumption. Fuel consumption usually comes from horse-power/weigh, speedometer and odometer. Sure well-maintained vehicles, and generally also new vehicles, tend to consume less fuel.

If a person wants to consume less fuel, it ought to live within walking distance to work, school, entretainment, groceries, church, etc. Then own one small vehicle once a week for the other stuff.
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