NY Times: Car Leases Can Be the Most Binding of Contracts

5093 Views 33 Replies 9 Participants Last post by Got volt?, Nov 22, 2016

kns

Discussion Starter · Nov 5, 2016

Must read for anyone planning to lease. NY Times has a tiered access policy. The first 10 articles each month are free: http://www.nytimes.com/2016/10/28/a...ses-can-be-the-most-binding-of-contracts.html

KNS

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What, another author who doesn't understand leasing? Finance a Volt, maybe you'll get lucky and even get 0%, then stop paying and let's see how "un-binding" the lender will be...lol

One thing to point out, GMF does now allow you swap a lease with someone...I've come out ahead of on every lease except for the Volt and only because the state of Cali makes you pay back the $1500 state incentive...I lost under a grand to get out of it and couldn't have been happier to do so...

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Bacardi

· #5 · Nov 5, 2016

danieljw said:
I'm curious - can you explain how you did this and how it worked out for you? Thanks.

No magic, simply buy cheap and sell high...

The Volt is one of the most heavily subsidized cars out there...In Cali one can be had for about $0 drive off and $199/mo (includes everything) and since GMF pays the first payment is X 35...It's all about resale value, my $36,2XX MSRP Volt was offered $25K-$26,500 from CarMax/Beepi/Trade In Solutions which guaranteed to beat CarMaxs offer by at least $250...If you could somehow find a private party buyer you could actually make more...

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Bacardi

· #6 · Nov 5, 2016

Oy, I'll just comment...So the gist of the story:

"After her doctor notified the California Department of Motor Vehicles last November that she should not be allowed to drive, and her license was subsequently suspended, leasing a Ford Edge at $347 a month became an unnecessary expense."

Girl lost her license and now FEELS their monthly payment is unnecessary...I could get a DUI, lose my license and feel the same! Mean old lender won't help poor license-less me...

Again, if you didn't lease, and financed the lender most likely wouldn't budge if you lost your license...If you truly develop a phobia of losing your license, do what lilninja would do, save up until you can afford it, buy it outright and deal with the depreciation in the event you sell due to losing your license...

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Bacardi

· #11 · Nov 6, 2016

llninja said:
Wow, now my name is getting dragged into a leasing thread... but my point is more than just an anti-leasing kick. It's also a "don't buy before you can afford it" kick. The entire car industry wants you to get new cars ALL the time because that's how they keep churning out vehicles. But if any event happens to cause you financial hardship, you can get yourself into a world of hurt (just ask anyone who lost their job during the financial crisis while up to their ears in debt). So for my example, i encourage people to pay cash for their cars. If you don't have the cash, that's a sign you can't afford it. Buy a cheaper car with cash you have on hand (this is temporary). With no car payments, you can always save more and upgrade cars along the way. If you lose your license, the paid-for car can sit, no skin off your back since it is paid for, your liability is $0 per month. If you decide to sell the car, you now have money in your pocket. No repo man is knocking at your door.

It's all a matter of risk. Leasing or borrowing adds risk. Paying 100% down minimizes risk.

Figured you'd comment anyways

Yup, you're anti-borrowing and often show up in leasing trends and tell people not to lease; sometimes people wrongfully ASSUME you favor financing...

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Bacardi

· #28 · Nov 15, 2016

bro1999 said:
Whelp, my swapalease listing is now live! 2017 Siren Red LT for anyone interested that is in MD.
http://www.swapalease.com/lease/details/2017-Chevrolet-Volt.aspx?salid=999559

I will be out of my "ironclad binding lease contract" by next January.

And you still have your license!!!

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Bacardi

· #33 · Nov 21, 2016

kns said:
Are you sure? It is my understanding is that if the person who takes over the lease fails to pay the monthly rental or for assessed damages at the end of the lease, then the leasing company will come knocking on your door pdq.

KNS

It's called a contingent liability...You can buy an additional third party insurance for the lenders that have that...List of all lenders here:

http://www.leasetrader.com/car/lease/info/help/leasing/terms/Leasing_Companies.aspx

It appears that a lot of lenders who used to have them no longer has them; but as you point out, if you think you'd ever be in a position that transferring makes sense, ensure you lender doesn't have a contingent liability...

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