I leased....
Once.
Probably won't ever do it again. It wasn't worth it for me. Of course, I also said I would never again throw away my money by buying a brand new car, and here I am with a brand new Pilot. I hope this thing retains more of its value than my past vehicles.
The vehicle I leased was a Jeep Gr Cherokee and while I payed less monthly, in retrospect, I would have graciously paid the extra given my review of the situation.
Here is a brief synopsis.
MSRP: ~$29,000.00
Lease:
Down Payment (Lease Buydown & other) ~$3,500
15,000 miles/year allowed
3 year lease
Payments: ~$393
Residual (amount I could Buy it for at end of Lease): ~$20,200
Fines/Fees at Lease turn in: ~$850 (which included fees for excessive mileage, interior damage - broken visor clip, broken plastic around 4 wheel drive gear selector, and scratches on center console, and external damage - some scratches on the hood (not to bare metal) and a single door ding on the rear passenger compartment). I flat refused the ~$850 and after much bickering, I told them to sue me or accept my counter offer to pay for the excessive mileage and a much smaller fee ($75) for the damage (I considered most of the damage as normal minor wear-and-tear, but they wanted it perfect). They accepted my counter and I paid them ~$550.
Loan (if I had done it):
If I had done a 5 year loan:
Financed: $25,500 @7% (assuming $3,500 down on 5 year loan)
Payment: $505
Loan Balance @ end of 3 years: ~$10,839.00
If I had done a 6 year loan:
Financed: $25,500 @7% (assuming $3,500 down on 6 year loan)
Payment: $435
Loan Balance @ end of 3 years: ~$13,728
Blue Book value of Jeep at time I turned it in: ~$19,500
If I had sold the Jeep for exactly Book value, I would have made
the following:
5 year loan: 8661
6 year loan: 5772
For the loans, I am assuming that I sold it at 3yrs.
Cost of lease: $3,500 + (36 * $393) + $550 = $18,198
Cost of 5 yr loan: $3,500 + (36 * $505) - $8,661 = $13,019
Cost of 6yr loan: $3,500 + (36 * 435) - $5,772 = $13,388
As a note, I bought my second Jeep Gr Cherokee used (2 model years old w/32,000 miles) and saved $13,000 over new MSRP. To me, that was the smarter move. Also, as I had put upwards of 49,000 miles on the lease vehicle and had to replace the tires earlier in the year and handed over the vehicle with only about 10,000 miles on the tires. So that was an additional $300 that was mostly thrown away (especially since the used Jeep I replaced it with needed tires within 6 months).
So, from my experience, you might fair better getting a 6 yr loan (lower payments) and then selling it at the same time you would have turned in your lease.
Of course, your mileage will vary. Expected Residuals and resale value all factor in to the equation, and Honda's are known to have better residual value. That may mean that the lease is more attractive. I would get some numbers and try work it out. The hard thing is that you never know what the vehicle is going to be worth at the end of the term. But if you assume it is going to be high, then you should have very low lease payments, and if you buy, you should be making back a lot of what you already paid in.
One big advantage with buying is that money that you get when you sell it. When I traded in my leased Jeep, I got $0 money back, and as I said, I actually had to pay ~$550. So when I went to buy my next one, I had to rely on money I had saved. It would have been really nice to have had that $5,772 to put down on the next one.
Now that I have done it, I can't really see where a lease would ever really be all that much better.
That's my $0.02. Man, I type too much.
- Rick H
} you can almost always do better buying AND when/if you do buy it also makes ALOT of sense to map out your costs of keeping vs trading in/selling. As the Pilot will likely have very good resale through 2004-5 (due to low probability of changes & high demand) that MAY be a good time to change to new Pilot or whatever else you want. While it may make sense for some folks to "drive in until it has to be towed away" I've seen many folks who would have been much happier by selling when their vehicle was still in demand. (Of course to really know this, you'd need to factor in repair/maintence costs and accurately predict the depreciation rate in addition to the lease vs loan calculation, and THAT gets very 'crystal ballish' because the are some troublefree vehicles at 150K miles and some that are trouble from day one that miraculously become troublefree after being in the shop for the first three years of ownership-- I guess you have to play the odds). 
