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Discussion Starter #1
Went down to the local dealership this afternoon and it looks like if we want to get into a Pilot ASAP, we would have to do a lease. I have never leased a vehicle before so I need some expert advice on the pros and cons of leasing. Of course, monthly payment is a pro. But, at the end of the lease, if we decide to keep the Pilot, we would have to finance the residual value to purchase it, a con.

I also ran some quick numbers based on our current monthly payment and fuel cost of the Expedition versus same for the Pilot. I came out with about an $800 annual savings to lease the Pilot just based on these two factors.

Thank you for your opinions and experiences.
 

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Reply - Lease vs. Purchase

I used to have a Ford Expedition - got rid of it for the PILOT - That and I sued Ford under the lemon law because the Expy was a piece of crap.

Secondly, I would never lease a HONDA, because of their history of long term reliability, people tend to want to keep them much longer than whatever lease term you could get into. So, long term, it will be less expensive to purchase the PILOT than lease.

But, if you know you're going to replace the PILOT in two years, and don't mind the continued car payments, then a lease is your way to go.

I have leased vehicles since 1990 (six vehicles over that time) and I now won't lease again.

Plus, if you run into Lemon Law issues, the law is clear when it comes to a purchase. If you get a Lemon with a lease, you will have to jump thru significanly more hoops to get out of your leased vehicle.
 

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A big con for me leasing would be the mileage issue. You're limited to 12-15K miles per year. What? I can't drive where I want when I want without costing me? I don't think so...:headshak:
 

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leasing

There are a number of good articles on leasing, consumer has done a few.
It is generally the most expensive way to own a car. The problem is the "residual" or "fair market value" at the term. Usually this is unknown because markets fluctuate and the dealer doesn't want to get caught.
Let's say you lease for 3 yrs at $500/mo. At the term you would have poured in 18K. At that time the dealer may offer it to you for sale for $20- 22K or some figure like that. It definitely would not be 30K-18K. This is why dealers push leasing, it is very profitable.
Check out Consumers, if you don't have it all libraries carry it
 

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Leasing is very much like financing, i.e. monthly payments, service still req'd, etc....... Here are some differences, Leasing offers a shorter term, less money monthly, and less money due up front. Leasing also provides people who thought financing was the better route, to trade out with large amounts of inequity. If your in an accident, or 20/20 comes out and says that you own the worse vehicle for roll-overs (thank you Ford for my '99 Explorer) then you give the keys back at the end and walk away. If you financed and trade or sold your vehicle with an accident history or 20/20's recommendation, your stuck like chuck!

Unless you keep your vehicle for 6+ years, then leasing is what you do anyway. The average American keeps a vehicle for 36-42 months. If you fall in that category, then why would you finance? Unless you can afford a 36-42 month payment. Let's be real, people did not start financing 60 months (five years) because they planned to keep it that long, they do it because a 36 or 48 month term is too expensive for the car they want.

As for the residual, American Honda and many other manufacturer banks (Ford credit, etc....) have set residuals. You know in the beginning before you sign what you can buy the vehicle for. Although, there are some banks that work as explained in the earlier thread, the "buy out" is based on current market value. I can tell you with conviction that my '03 Pilot EXL-DVD MSRP $32+ lease has a 48 month residual of $18g's (and change). If the Pilot holds like the Odyssey, I will be selling it myself and pocketing the difference.

There is one main reason why a dealership likes the customer to lease. It means you will be back in a shorter period to purchase/lease another car. i.e. REPEAT business, something a reputable dealership wants. Of course, good service both from the sales staff and service department play a large part in a customers return. That is why good service, not just the sale itself, but the whole term is imperative!
 

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Its all about rates

In lease terms, they talk about "money factor" rather than "interest rate" in loan lingo, but it's the same thing. However, buyers and sellers of leases don't seem as willing to negotiate rates as buyers and sellers of loans.


Also watch out for leases with terms (27 months, 30 months) that push your resale into the next model year, when used values have a significant dip.

Bottom line - a fair lease is a great idea if you don't want to keep a vehicle past the end of your lease term.
 
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