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Leasing while driving high mileage (self.askcarsales)

submitted by jamesconway61

I've been told by every salesman in a 500 mile radius and almost every sales manager that the seemingly proper way to lease is to:

  • Select the lowest mileage term possible, therefore locking in the best residual

  • Drive 30k miles annually

  • Trade it in before the maturity date, seemingly avoiding any negative equity or mileage overage fees

This is every brand too. Even when I considered their higher 15k or 18k terms, they steered me away from them, all in the name of lower monthly payments and fees I'll never pay.

Can somebody more experience please confirm the validity of this routine? I keep psyching myself up thinking I can afford all of these expensive luxury cars because the payments are all too low when they are only thought to be driven 10k miles annually.

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[–]RexRaiderSales Manager - Canadian Kia Dealership 11 ポイント12 ポイント

How in the world do you think that you would "seemingly avoiding any negative equity or mileage overage fees"? What dealer would want a 2.5 year old car with 75000miles on it? There's no way that car would be worth the the super high residual that they would need to buy the car out with. And if you can't find a dealer crazy enough to get you out of the lease with no penalties, then you'll be forced to take the car to term, where you'll need to pay the mileage yourself. this makes no sense, and I can't believe ANY sales manager gave you this advice with their BEST intentions at heart.

[–]deegeese 4 ポイント5 ポイント

While you'll dodge a mileage charge you could face substantial negative equity if the trade in value is not enough to cover the remaining 2 years of payments you're on the hook for.

Consider a hypothetical $50k luxury car with a really good residual which leases for $500/mo. After 1 year and 30k miles your lease buyout is $50k - (12*$500) = $44k. That same car might retail for $40k and have a trade in value of $37k. You have $7k of negative equity to make up on top of the $6k of lease payments you made. That car really cost you over $1000/mo.

[–]UncleFlip[🍰] 2 ポイント3 ポイント

NO!!!!

[–]Assgasket 2 ポイント3 ポイント

The technical term for this is "financial suicide."

[–]proROKexpatFord, Lincoln, Chrysler, Dodge, Jeep Sales 2 ポイント3 ポイント

Um...this is what I call a "buy" not a "lease" you do not lease if you drive that many years...You will pay out your ass in over mileage fees

[–]crimson117 0 ポイント1 ポイント

If it sounds too good to be true, it probably is.

When buying life insurance, for example, the agent needs to give you an "Illustration" which is a chart showing how the policy will progress over the years, given a few basic assumptions and 2 or 3 variations (eg markets do well, markets do poorly, markets do average). This gives you a pretty reliable ballpark of what to expect over the years.

I'd love to see a similar "Illustration" for a car lease, with various mileage/overage scenarios played out. I'm sure the accountants who price leases use these internally to find the right payment to offer. It'd be nice to see one made for consumers.

[–]MicosilverBMW Client Advisor/ISM 0 ポイント1 ポイント

No. You still can lease, but if you known for sure that you will be driving lot - get the right mileage allowance. Most companies will let you get up to 30k miles per year.

[–]Assgasket 1 ポイント2 ポイント

This. It's much, much cheaper to buy the mileage ahead of time, than at $0.20-$0.30 a mile afterwards.

[–]Antiquecollector -2 ポイント-1 ポイント

This is a great idea! Do it today!!!