Just leased a new 2024 Lexus TX. I went for 12k miles/year for 36 months, but checking the residual with Rate Finder going for 15k would have been almost the same price (1-2% change in residual). I think we might drive 12-15k, so eating an extra $0.25/mile seems ridiculous.
I also messed up my calculations comparing financing to leasing (I made my own calculator in Excel). I didn’t properly consider the difference in the value of the loan vs the buyout price, and it would essentially cost me an extra $6k to lease/buy then if I had just financed from the start (that includes the extra taxes I pay in Texas).
I really had no problem just financing this car, but thought I was getting almost as good of a deal plus flexibility with the lease. It made sense to only go with 12k miles with my broken calculator. Now, I feel like I dropped an extra 3k miles/year for nothing. And, if I buy the car out, it’s going to cost an extra $6k.
Basically, I’m a moron who ran bad numbers and thought leasing then buying would be almost the same price as financing from the start, and I was really wrong.
2% on RV can make a big difference in total lease cost.
If you end up averaging 13k per year, 39k total, your excess mileage charge will be
3,000 * 0.25 = $750.
Bumping the lease up to 15k miles a year, with the residual hit which is essentially prepaying for a large batch of extra miles, would have almost certainly been more expensive.
Next time, calculate the break even point for paying for miles at the beginning or at the end, and make a decision that way.
The difference in lease payment with a 2% residual difference is about $30/mo. So $360/yr.
At $0.25 miles, that’s roughly 1500 miles/yr. So, I guess my breakeven point is 13500 miles/yr. If I drive less, then I made the right choice. If I drive more, then I should have gone with the 15k.
I suppose it’s not too bad. I guess I’m more upset with my lease then buy vs finance calculation. I get roughly $6.5k extra cost to lease then buy ($2.5k is extra Texas taxes, and I figure in some gained opportunity from the lower lease payments).
Basically, at that premium I probably would have forgone the flexibility of leasing and just bought the car.
Thanks :). I tried really hard to understand everything and do all of the math, but I rushed and made a dumb mistake. I really should have posted on here and had someone else look over my analysis. The lesson is to slow down and double check with someone who has more experience.
OP ket me tell you the story of a young and stupid Boomba. I leased a $20K Honda Accord for $350 a month with something like $3000 down. Because I didn’t know any better and was totally taken advantage of.
It happens to the best of us. The key is to use this as a learning opportunity and educate yourself as much as possible so the next time around, you’ll lease it for 1/2 as much. Over the past 20 years I get joy out of getting amazing deals, negotiating every last cent out of a dealer. It’s my catharsis for what happened to me all those years ago.
We live n learn my friend. No point on being humiliated or shamed by a bunch of keyboard warriors. Now that you have found the website, next time just take your time here on learning the skills before you negotiate a deal.
For now, just enjoy the vehicle in great health
