Leasing right for my situation?

Ask the Hackrs
1

Some background: Relatively recent college graduate moving to Illinois for graduate school.

Looking to lease a car myself. Depending on more specific research on the numbers, I am confident in being able to pay monthly leases. I only ever see people leasing luxury cars, so I am not sure if it’s just looked upon or financially stupid to lease a cheaper and budget-friendly car like a Honda Civic or Toyota Camry (to name a few examples).

I don’t mind doing the leg work and number crunching, just wanted to make sure whether or not leasing is a viable option for my situation.

Would be primarily looking for a 4 year lease <$200/month and 0 down. Preferably for a car with AWD too.

Why I am considering leasing

My main uses would be simple commuting between apartment and school, grocery shopping and whatever nearby and local outing places. So I do not reckon I will be going over 12k-15k year mileage limits and I like the fact that maintenance, warranties etc. are not coming from my pocket, aside from oil changes.

I’ll only be in that area for about 4 years so I am not necessarily looking to invest into a used car to have to go through the trouble and try to sell off since I don’t know where I will be going next after grad school.

My concerns

It seems the most common reason people lease is just to be able to try out new luxury cars every few years and that’s not really my intent. I don’t particularly care about the newest year model and its bells and whistles. If anything, I’d want to look for 1-2 year old models to lease since they should be cheaper(?). Again, I’m not sure if it’s just financially sound or not to lease non-luxury cars. I’d really only be looking at cars <$25k or so.

I also recognize it’s kind of a money sink where I’m paying the depreciation costs and I don’t get any return on investment like buying a car to own or even just selling a user car to recoup costs.

I read in another post that Texas and Illinois are both states that make leasing harder due to extra taxes and fees. I wanted to ask if there are people familiar with leasing in Illinois to maybe give their $0.02 on that as well?

I apologize for the wall of text, this is a pretty huge step for me to and I want to make sure I consider all possibilities. Any advice and insight would be appreciated on whether or not leasing could be right for my situation? I also realize I might be completely overthinking this, but I guess better safe than sorry.

2

Congrats on graduating and good luck with grad school. That being said, do not lease a vehicle for 4 years. Stay max at 36 months ideally, 24.
No car lease is looked down upon as long as its not an insane payment for a non luxury car. Lot of non luxury cars have the best deals. The reason you might be a little confused is because you probably see hackr deals for the price of what many people pay for regular cars. For example the Volvo S90 deal which people pay for an Accord. I can go on and on but lets just move forward.
Your budget is $200 with the least amount of drive offs. I would make sure about the mileage needed per year cause thats going to help your payment target as well. If you will be living close to school, you really dont need more than 10k miles per year.
There are many makes that offer 2 year maintenance included such as Toyota, buick (2visits) etc. But even if some dont, you can always get coupons from dealers on website for oil changes.
Leasing is not a money sink as long as, again, you have a great deal. The purpose is to only pay for the depriciation of the vehicle at a minimal intrest rate. So your not really flushing money down the toilet.
How much time do you have before you move? I would start by looking at previous Encore and Terrain threads from March and April. Check others such as Jetta and Hyundai threads as well. Also take a look at market place and see qhat deals are being offered in the rest of the country. Then pick out a car and start gathering information here of what others have gotten.
Keep us posted.

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To answer the question in the thread title, “no”, IMO. You would seem to be a better candidate to buy a recent used car, possibly CPO. Drive it for a few years, then sell it (selling it isn’t actually that difficult).

And remember that you don’t escape “maintenance” costs (you mention oil changes) with most leased cars. You have to return the car with decent tires, for example.

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Sorry for not reading the wall but what you will find is that we (LH’ers) come in many forms and you fit the bill. Search the forum find a deal do some homework and enjoy the perks of driving a new car minus the resposability post warranty.

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Since I didn’t see anyone respond to your Illinois question yet - that information is old. Illinois used to charge sales tax on full price of vehicle, but switched a year or two ago to only charging sales tax on the payment/depreciation.

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Thanks so much for the thoughtful comment. I agree that what I view is probably skewed based on popularity, and good deals for luxury cars will often attract more eyes than good deals for a regular old camry and such.

Grad school is going to be 4 years long if all works well, so the 36 months is not the best since it’s an awkward time frame for me. My concern with finding a 24 month lease is that month payments might cost more since it’s crunching the overall payments into a shorter period of time? Unless I’m thinking about it wrong and it’d just be taking into account the 2 years of depreciation instead for a 24 month lease as opposed to 3 years of depreciation with a 36 month lease.

I do intend to be living close to school, but my housing budget does have me living in about a 10-15 minute driving radius of school, so I do think the 10k miles/yr is probably more apt, I just don’t want to accidentally undershoot and end up having to pay for the extra miles.

“money sink” wasn’t the best choice of word in retrospect, i apologize for that. i really meant it in more of as an investment without any tangible reward at the end since the car gets returned.

I have about 2 months, but I’m going to be going back to the area of my grad school around mid-July to try and finalize my apartment and hopefully find a car within 1-2 weeks.

thanks so much again. i dont mind doing the legwork to number crunch, but just wanted to see whether or not leasing is a viable option.

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Thanks so much for the reply. If I had gotten a majority of “no”, I would have looked into buying a used car, specifically CPO cars like you mentioned.

I see, I guess I was misinformed regarding maintenance costs. I was under the assumption that with leases, the warranty would cover maintenance costs assuming i brought it back to the dealership for work to be done.

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No worries, I understand it was a lot to read, even to skim through. I dont mind doing the number crunching, just wanted to make sure my situation could potentially warrant leasing as an option. Thanks again.

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Thanks so much for the updated information. I don’t remember where I read it from, but I’m glad to know it has since changed.

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24x2=48 is the way to go. But yes, you will need to find a 24 months lease with similar or better payments than 36 months.
Some brands have maintenance included.

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Didn’t know I could quote. I apologize to anyone that got those 3 posts earlier, I could have condensed it into one.

Do you think it’s possible to find 24 months lease for <$200/month including fees and taxes?

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https://cars.usnews.com/cars-trucks/cheapest-lease-deals

Here’s a quick smattering of deals at about $200 per month. These examples all include “x due at signing”, but keep in mind you can always negotiate the overall price and get a quote for $0 due at signing or zero drive offs.

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Depends on the car. But the major expense item on a short lease, usually, is tires.

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Well, I just love this forum so I have to share my experience. My first lease was a Nissan Altima. I can’t remember what year. I got it right out of college. Then I moved to Chicago. I had to street park everywhere. It got towed a few times. Bumpers were pretty bad. It had dings everywhere. Blah blah blah. When I finally returned it, they sent me a bill, they said they sold it at an auction, and I owe them like $5000. I refused to pay it. It ruined my credit. But we did eventually settle at $1000.

After that I bought used cars. I got really good deals, but I just couldn’t find a mechanic I can trust. So then I would take it to the dealer, and they would always find $1000-$2000 worth of stuff that needed to be fixed. Every time, I told them I’ll take it somewhere else, and they would somehow adjust the priced to under $1000. So I would just get it done.

Then came youtube, and I began fixing everything myself - starter, alternator, radiator, brakes, etc. I could fix just about anything. Then came the kids. All of a sudden, I didn’t have time to do anything anymore, so I had to start taking the cars to the dealer again. Now they had “service advisers” which I think are like used car salesmen, but they sell you service that you don’t need. By then, I lived in the suburbs, and kept the cars in the garage. I started leasing again, and I love it. I wait for killer deals. I don’t really care what I lease, as long as I’m getting a deal. (My wife is a different story, but happy wife, happy life). I love not having to worry about dealing with service advisers. It’s like insurance. I just pay a monthly fee to drive a reliable (or at least warrantied) car. If it breaks, I just take it to the dealer, and they can just negotiate the warranty crap with the manufacturer. No worries for me. Anyways, sorry for such a long post, but just some things to think about when you lease or buy a used car.

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If i was you, I will buy a reliable used car, like Subaru or Honda, use it throughout the school, get a job, then consider any new car lease or purchase.

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Probably not for 24 months. I would hire a broker, could be well worth it.

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You missed out on last months Encore deals. Members from every state in the US had deals from $98 to $170 with only first month due at signing. 2 yr 10k mile leases and 12k miles were additional $12 bucks a month. 2 service visits included which would easily cover your maintenance. Tires are pretty good and doubt they would need to be changed after 24k miles as long as u rotated them on time which would be every 8k miles. Only thing would be the $495 dosposition cost at end but if you spread it between 24 months, thats about $21 bucks still well under your $200 budget.

If you have two months just jeep browsing through forums and see whats the next great sub $200 24 month lease.

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if you are going to a university in the city you most likely do not need a car. public transport there is very good, when I visited. also, parking is very bad, unless your school offers parking or you live in the suburbs.

a lot of people had buick encores and gmc terrain for dirt cheap. just get a base model with awd if you really need a car and are tight on money.

buying a used car will depend on how much money you have. if you only have 10k to outright spend, you will have to buy an old high mileage car, which has a much higher chance of costing a lot in maintenance. However, if you have 20k cash, you can buy a good used car. The problem with buying used with no cash is the interest rate is high, and I am personally always against paying interest.

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Thanks so much! I’m assuming those deals are compiled monthly? I’m doing research now, but I won’t be looking to buy until July.

Makes sense. Thanks for that. I remember reading somewhere that it was recommended to buy another set of tires to switch with the default car ones, and when it’s time to return the car, to put back on the original car tires. Does that still work?

Thanks so much! I actually really like hearing about personal experiences myself so it was really helpful. If leasing doesn’t work out to be the best option for me, I considered looking into buying CPO cars so that way I could avoid having to find a mechanic as well. Similarly, I’ll be moving to a completely new place, so I wouldn’t be able to find a mechanic I trust, so buying a CPO car would kind of be the middle ground/compromise.

Thanks so much! I’ll keep that in mind, it’s my plan B option if leasing doesnt work out.

Thanks for the insight. I’ll keep that in mind.

Dang how bittersweet! Thanks so much, I’ll be keeping that in mind. Sounds really great but even then I wasn’t planning on leasing until July as I haven’t moved to where my grad school is just yet. I’m still in my early stages of planning and research. I’m also trying to find a balance between getting a great deal for a car and finding a good car for my situation/needs.

Unfortunately it’s in the suburbs otherwise I wouldnt be having this conversation. I’ve looked up some dealerships around the area so I’ll be looking into both leasing prices and buying a used car and having to compare those. Thanks again.

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what about this: lease a very cheap small fwd sedan. You can get these easily for under $200 a month, all taxes and fees included. then, when there is a bad snowstorm, use taxi or uber to get to school. this will be the most economical decision. driving in snow after a snow storm is not bad at all; only during snowfall does it get bad for non-awd vehicles. however, a fwd with snow tires will be very very good.

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