Should I sign a 12k lease (even if I might need more miles - not sure) to get the better deal. This way I break even if I turn in early because I bargained hard upfront.
Does it depend on the residual or the actual purchase price?
I ask because I had so much success getting a really good lease (from all the helpful tips from this community) that turning my lease in early (before going over miles) has resulted in a break even.
But now, I need a new lease and…should I get 15k and possibly turn in with extra. What could be the issue with going out of the warranty period 3yrs/36k??
You already know the answer. If you want to continue playing used vehicle value roulette expecting that every vehicle will be valued like a Honda during a global pandemic, go for the 10k while you’re at it. Don’t pick anything German, you’ll lose.
Calculate $/mi of 12k vs 15k. It’ll be a fraction of what the over mileage fee is.
Maybe I’m misunderstanding, but I would try to get a much better understanding of how leases are calculated before going down such a road.
The fact that a 12k lease has a lower payment than a 15k doesn’t mean you got a better deal, only that the bank has a higher RV for 12k vs. 15k; You are paying for less depreciation over the term and thus a lower payment.
Also, the fact that you were able to sell/trade/turn-in your current lease early and be breakeven has little to nothing to do with whether you initially did a 12k or 15k and everything to do with the state of the current used car market.
What’s your logic here? There’s no guarantee you can sell the car and break even, let alone get money back. Likewise, unless there is a pull ahead, which are rare anymore and no guarantee one will exist for you, you don’t get to turn in early and avoid remaining payments. You owe what you owe whether at 32 months or 36.
Yes, guess it is a game! One I do not like playing…that is for sure. I’ve had a couple quotes where paying for excess miles after is less expensive but then you also have to consider the wear and tear and any out of warranty issues.
I did think getting a good initial deal on my lease helped secure a decent early sale price (if needed/desired). I realize too that the used car market is good now and I can’t bank on that in the future. I imagine the combo helps.
So I’ll take my break even offer for purchase and probably go with the 15k on my next.
Yes, it’s just hopeful that you negotiate well and if you have to /want to turn in early or sell your lease you get out relatively unscathed. I’m learning.
Going with this example and assuming MF = 0 and tax rate = 0, the cost per mile (9k extra miles) = $0.088. Not sure what the mystery car is but I’ve never seen an over mileage penalty that low.
Although you’re paying for the additional depreciation via the lower residual, your rent charge will actually be reduced by going with higher miles due to the lower residual. Mind blowing I know.
Going with above example, and assume MF is 0.001 and cap cost is fixed at 40k:
60% RV, MF 0.001, 40k cap cost = rent charge is $64.00/mo
58% RV, MF 0.001, 40k cap cost = rent charge is $63.20/mo ($28.80 savings over 3 years woohoo)
Whenever the strategy going in is to run out of miles and bank on an early return / pull ahead, that’s a red flag. It’s already been covered, but better to pay a bit more upfront to be covered with miles.
Personally, I did go for too many miles on our lease, but I’d rather consider that extra $11/mo insurance against running out of miles. And if I buy it out at lease end (or earlier and sell to Vroom/Carvana/SHIFT), it’s more or less a wash anyway.
