Anyone use a lease broker before?

[MrH]

So the girlfriend needs a new car.  She has a 2012 Focus sedan with the powershit transmission.  97k miles, still in great shape, but it's starting to lurch again from a stop.

Apparently the warranty for the transmission was extended to 7 years, 100k miles.  We're out of that now by age.  Each time the clutch is replaced, it's warranted for 2 years, but the last one was in early 2019, so we're out of warranty on that too.  Whole situation sucks.  They never had a solution for it.  Instead, they just kept throwing labor and clutches at it until the cars eventually get out of warranty and can be scrapped.

Anyways, she just finished off her student loans and would like to get something better.  She really likes the CX-5, but there's a new model coming out next year (rumored for a fall 2022, MY2023).  She's afraid to get the current one, only to be disappointed when the new one comes out next year.

Considering doing a 2 or 3 year lease instead of buying.  Gives her a chance to try the car for awhile and either buy it at the end of the lease, or walk away and get the new model if she likes it that much more.  Looks like a loaded Grand Touring can be had for $350/month, which is cheap all things considered.

Anyone ever use a lease broker?  This seems like the easiest way to get the best deal.  Curious if anyone here has used one before.

[Payman]

So the girlfriend needs a new car.  She has a 2012 Focus sedan with the powershit transmission.  97k miles, still in great shape, but it's starting to lurch again from a stop.

Apparently the warranty for the transmission was extended to 7 years, 100k miles.  We're out of that now by age.  Each time the clutch is replaced, it's warranted for 2 years, but the last one was in early 2019, so we're out of warranty on that too.  Whole situation sucks.  They never had a solution for it.  Instead, they just kept throwing labor and clutches at it until the cars eventually get out of warranty and can be scrapped.

Anyways, she just finished off her student loans and would like to get something better.  She really likes the CX-5, but there's a new model coming out next year (rumored for a fall 2022, MY2023).  She's afraid to get the current one, only to be disappointed when the new one comes out next year.

Considering doing a 2 or 3 year lease instead of buying.  Gives her a chance to try the car for awhile and either buy it at the end of the lease, or walk away and get the new model if she likes it that much more.  Looks like a loaded Grand Touring can be had for $350/month, which is cheap all things considered.

Anyone ever use a lease broker?  This seems like the easiest way to get the best deal.  Curious if anyone here has used one before.

Seems like a waste of money, especially given your knowledge of vehicles and purchasing/leasing. A lease broker is for the automotive clueless, IMHO. Impress her with your lease negotiating skillz!

[Lebowski]

Buy a car and keep it til it's 9 years / 97k miles or more.  Leasing is stupid. 

[MrH]

It's $400-$500 for a lease broker, and the prices I'm seeing there would take me weeks of negotiating   They're willing to branch out to non-local dealerships and ship the car in.  I don't think I have the energy to try and match it.  I'll try I guess, but just seems like the juice isn't worth the squeeze.

Buy a car and keep it til it's 9 years / 97k miles or more.  Leasing is stupid. 

I agree for the most part.  I've never leased a car myself, but this is one of the few times it might make sense to pay more for the flexibility leasing provides.  There's a lot of uncertainty in the used car market, and even more uncertainty if she'll want to keep it, it's worth the small premium to lease over buy and skip the headache in 2-3 years if she decides she'd rather have the new model.

There's a whole world of people who live to game the leasing situation.  Pretty interesting how it all breaks down.  Typically, yes, it's always cheaper to buy, but you're essentially paying a fee to remove some risk if you know there's a good chance you're going to swap vehicles in a few years.  Usually that's not worth it, but it might in this case.

[SJ_GTI]

I am normally anti-lease, but now might be a good time. The residuals are a big driver of the price you pay monthly so if used car values are also elevated the lease should benefit. And of course if the bottom drops out of the used car market between now and when the lease ends you get to walk away from it.

[Lebowski]

I've never leased a car myself, but this is one of the few times it might make sense to pay more for the flexibility leasing provides.  There's a lot of uncertainty in the used car market, and even more uncertainty if she'll want to keep it, it's worth the small premium to lease over buy and skip the headache in 2-3 years if she decides she'd rather have the new model.

There's a whole world of people who live to game the leasing situation.  Pretty interesting how it all breaks down.  Typically, yes, it's always cheaper to buy, but you're essentially paying a fee to remove some risk if you know there's a good chance you're going to swap vehicles in a few years.  Usually that's not worth it, but it might in this case.

IMO leasing gives you less flexibility not more flexibility.  If you hate the car and want to get out of the lease early, you get raped.  If your living situation changes such that you drive more or fewer miles than you assumed at time of lease, you get fucked.

If you buy a car and don't like it, turn around and sell it.  If you bought used, the bath will be fairly minimal.  If your miles are more or less than you predicted going in, no problem.  And if you end up liking the car (and it proves reliable), you save big money by having the option to keep driving it vs replace.

Leasing you are paying more to drive a new car every 2-3 years, that's it.  Flexbility is a con to leasing not a pro. 

I do agree to an extent that if you believe used car prices are temporarily inflated right now, leasing might make some sense, or at least more sense than it usually does.  But I imagine that is reflected in lease rates. 

[GoCougs]

Buy a car and keep it til it's 9 years / 97k miles or more.  Leasing is stupid.

My last three cars I've averaged ~7 years and ~160,000 miles each, and the last one I got ~9 years and 182,000 miles! Am I alpha.

Can you just go to the dealer and see what they offer to break the lease? I have to imagine there's a process as it seems many would want to do such a thing these days.

[SJ_GTI]

My last three cars I've averaged ~7 years and ~160,000 miles each, and the last one I got ~9 years and 182,000 miles! Am I alpha.

Can you just go to the dealer and see what they offer to break the lease? I have to imagine there's a process as it seems many would want to do such a thing these days.

Not an expert, but plenty of dealers offer deals to get out of your lease early (but of course only if you buy one of the cars they are trying to unload). I see them advertised occasionally, but since I don't lease that is about all I know. 

[MrH]

Comparing 3 years, NPV @ 8% discount rate between buying vs leasing, it's about $800 difference.

$10,823 vs $10,085.  Either way, it's not a ton of money.  Add in a $400 broker fee, and let's call it $1200.  I agree, more limited in that there's now a mileage limit that we wouldn't have if it was purchased, but it removes risk in the process if used car values take a dump.  There's also potential upside if the buy out is substantially cheaper than market value at the end.

Is it better financially to buy in this case?  Of course.  Is it a massive difference?  No.

[Lebowski]

I've never leased either so am definitely not an expert, you can certainly get out of them but you're asking to back out of a contract that you entered.  So you're in an incredibly weak negotiating position to start, you're not getting out without it being on terms advantageous to the dealer. 

[Lebowski]

Comparing 3 years, NPV @ 8% discount rate between buying vs leasing, it's about $800 difference.

$10,823 vs $10,085.  Either way, it's not a ton of money.  Add in a $400 broker fee, and let's call it $1200.  I agree, more limited in that there's now a mileage limit that we wouldn't have if it was purchased, but it removes risk in the process if used car values take a dump.  There's also potential upside if the buy out is substantially cheaper than market value at the end.

Is it better financially to buy in this case?  Of course.  Is it a massive difference?  No.

$1200 is ~12% of $10,085, that's fairly significant.  Not massive, but significant, actually more than I would have thought, I would assumed it would be pretty close to a wash. 

And the advantages to buying really accrue beyond the 3 yrs, or if you end up driving significantly more (or less) miles etc. 

[FoMoJo]

Comparing 3 years, NPV @ 8% discount rate between buying vs leasing, it's about $800 difference.

$10,823 vs $10,085.  Either way, it's not a ton of money.  Add in a $400 broker fee, and let's call it $1200.  I agree, more limited in that there's now a mileage limit that we wouldn't have if it was purchased, but it removes risk in the process if used car values take a dump.  There's also potential upside if the buy out is substantially cheaper than market value at the end.

Is it better financially to buy in this case?  Of course.  Is it a massive difference?  No.

This is true, but why use a broker?

If you're in a position where you can take it or leave it, you can grind the dealership down considerably, in most cases.

[MrH]

$1200 is ~12% of $10,085, that's fairly significant.  Not massive, but significant, actually more than I would have thought, I would assumed it would be pretty close to a wash. 

And the advantages to buying really accrue beyond the 3 yrs, or if you end up driving significantly more (or less) miles etc. 

Yep.  If you're fairly confident you're not keeping it all that long term, the differences shrink.  I drive too many miles, and sometimes keep longer, so I've never considered leasing myself, but for her it might make sense.

As a percentage, sure, it's kind of high, but as a total dollar amount?  It's not a big deal.  I could easily get hosed on trade in values for that amount if we decide to get the new model when it comes out.  Giving her an easy out and not feel like she's going to get killed financially if she loves the new model and wants to get out of it in a few years...that peace of mind is worth $1200

There's an advantage the dealer has in being able to flip the returned lease for more than I could get in trade-in or private party.  So they're making more than $1200 in it, but it doesn't seem like an awful proposal.

The forum I've been following for a long time is lease-hackr.  The people on there are nuts.  It's a combination of really aggressive negotiation on sales price, incredibly high residual value, dealer incentives, remaining inventory, etc.  The deals some people get out of there are incredible.  You could probably do the similarly buying, but there are less levers to play with when it comes to buying.  The lease broker could also steer us to something else if we're able to get a better deal on a near-luxury crossover.  Some of the Volvo deals people are getting right now are pretty amazing.  Just want a nice stop gap for a couple of years until she's ready to buy something long term.

[Lebowski]

All of these "lease hackers" are still getting into a new vehicle every ~3yrs, which is the most expensive way to have a car.

[Lebowski]

How much would it to be to replace the clutch if it needs it?

[Payman]

The car to buy is an off lease one; 2-3 years old and someone else ate the depreciation.

[MrH]

All of these "lease hackers" are still getting into a new vehicle every ~3yrs, which is the most expensive way to have a car.

They are getting a new car every 3 years in the cheapest way they can

If you look at the crazy EVs in states with incentives, it's actually much cheaper than buying and keeping.  All the incentives are screwed up.

The car to buy is an off lease one; 2-3 years old and someone else ate the depreciation.

Typically, yes.  Used car prices are so wild right now, if you plan to keep for a couple of years, it's not dramatically different.  I compared a used 2019 vs a new 2021, and it was about $1800 NPV different between the two when looking at depreciation, but you can expect to claw back $1200 of it due to different in repairs and maintenance.  So it's <$1000 to get a car 2 years newer, updated infotainment, and that new car smell?  Worth it.

[JWC]

If the rules and lease options haven't changed, there are some tricks to getting around some of the problems with a lease. When I leased my truck, I bought extra miles upfront. Any miles not used at the end of the lease, have to be paid back. The most important part is picking a vehicle/brand/color etc., that will remain popular and in demand in three years. Grand Cherokees were so popular in the mid-90s that we were writing $1500 checks to people at the end of their leases.

I got out of my lease early, and without penalty, because the truck I leased was in demand unexpectedly. Two years into the three-year lease, I turned it in.

[MX793]

I honestly can't believe used prices right now.  Trade in value on my Mustang is 90% what I paid for it in 2015.

[SJ_GTI]

I honestly can't believe used prices right now.  Trade in value on my Mustang is 90% what I paid for it in 2015.

I am tempted to sell my car and buy a Subaru using employee pricing (via my brother).

[FoMoJo]

I honestly can't believe used prices right now.  Trade in value on my Mustang is 90% what I paid for it in 2015.

Time to trade it in for a GT500.

[MX793]

Time to trade it in for a GT500.

Mach1 is more my style.

[SJ_GTI]

If you do go with  broker I will be curious to hear your thoughts about how it went after the fact.

[FoMoJo]

Mach1 is more my style.

That would do as well.

[CaminoRacer]

If you're gonna get a new car in 2-3 years anyway, and drives less than the mileage limit, I'd be willing to look into a normal lease without a broker. I think you're smart enough and good enough at making deals that the broker won't be worth it.

If she keeps cars for a long time and isn't gonna want to switch to an EV or something in 2-3 years, then just buy it with 0% financing.

[AutobahnSHO]

The car to buy is an off lease one; 2-3 years old and someone else ate the depreciation.

THIIIIIIIIIIIIIIIIS

[veeman]

The one time I leased ( a Camry a few years back) I paid an extra $750 to the dealership to be able to turn the car in with up to $5000 worth of cosmetic damage.  It was so worth it.  Peace of mind that I wouldn't get dinged for minor stuff at lease end. 

[Galaxy]

Do you qualify for the repurchase agreement as part of the Ford lawsuit?

https://www.freep.com/story/money/cars/ford/2020/03/05/ford-fiesta-focus-owners-get-buybacks-cash-class-action-lawsuit/4937362002/

[MrH]

No, you need 4 hardware replacements within so many miles to qualify for a buy back.

[r0tor]

Ditching our PowerShit Focus on a trade was one of my happiest moments...sort of sad because otherwise it's a decent compact car