[Hurricanoday]

Need some help understanding if this a decent lease deal. Please I would like to avoid the leasing is horrible and my credit sucks please buy a $500 civic posts. I was gonna buy a used volt but the new volt is obviously new and I like the changes. The extra range is huge with a 45 mile one way commute. Plus the lease payment isn't much more.

My credit isn't the greatest so not sure what "tier" lease I qualify for but I am trying to get the lowest payment possible. Also I think I will plan on buying the car as I will go over the mileage I'm sure. If I compare to what 3 year old Volts are going for now the 18k is a high, but the no sales tax helps.

2017 Volt LT with leather/comfort package and illuminated charge port

MSRP is 34k something
36 month 10k miles payment is 316.39 (no sales tax is washington state or would be 345)

$33512.25 (32279+ 488.25 +595 leas fee+ 150 rip off fee)
32279 Gross capitalized cost ( What I negotiated on the car)
5083.61 capitalized cost reduction (1k down and 4400 rebate (includes first 316.39 payment)
28428.64 adjusted cap cost
18196.80 residual

10,231.84 depreciation and any amortized amounts
1158.20 rent charge
11390.04 total of base scheduled payments

 

[viking79]

Be sure to call insurance and check price as that will impact monthly payment. Also figure out what overages would cost for mileage. Historically, with Gen 1 Volts, buyout at lease end might have been 50% more than what the used cars were worth so it made no sense to buy it lease end.

I assume you are looking at a Volt due to plug in aspect and EV range? If you are just worried cost, a Hyundai Ioniq hybrid might me cheaper long run, might be worth running some numbers on a few other vehicles. I assume Volt lease is to take advantage of the tax credits to bring it down some? It looks like you will be over 20k miles a year, anyway you can buy something instead, even if it means no Volt (or maybe certified used)?

 

[obermd]

Be careful on the allowed mileage. Your annual commute (assuming two weeks off) is 22,500 miles.

 

[DonC]

That's not a bad lease deal. However, I agree that given your annual mileage you might not want to be leasing. At $.25/mile, going 15K miles over your allowance would be an additional $100/month. Basically at the end of the lease you'll need to pony up $3600 for the overage. That may not be a deal breaker, but factor that into your analysis of the lease vs. buy decision. I don't have anything against leasing, but the best candidates for leasing drive 10K or miles less a year. At the very leas try geting the mileage raised to at least 12K or, even better, 15K. It's much cheaper to buy the miles up front.

 

[Hurricanoday]

I do understand about the mileage, but I plan on buying it when the lease is over (unless there is some major mechanical stuff which I doubt)

I just wanted to have a lower payment. I know most people will say well the car won't be worth 18k when I done and especially with that many miles. This is my first lease but wouldn't the same thing be true if I "bought" the car and had that many miles after 3 years? One top of probably paying 450+ for the payment.

One of my questions I wanted to ask, if my numbers are right and I buy the car after leasing won't I still be paying the same amount vs buying? Right around $28-29k?

 

[obermd]

I do understand about the mileage, but I plan on buying it when the lease is over (unless there is some major mechanical stuff which I doubt)

I just wanted to have a lower payment. I know most people will say well the car won't be worth 18k when I done and especially with that many miles. This is my first lease but wouldn't the same thing be true if I "bought" the car and had that many miles after 3 years? One top of probably paying 450+ for the payment.

One of my questions I wanted to ask, if my numbers are right and I buy the car after leasing won't I still be paying the same amount vs buying? Right around $28-29k?

I went down the lease followed by buyout path one time. My advise - don't. You'll end up paying almost twice what a longer term loan, even with bad or no credit will cost. I couldn't afford the car I wanted so I did the lease followed by a buyout, which sounds like what you're describing. My recommendation to my younger self - find a less expensive car. You may actually be able to talk the price down on a used EV or Hybrid because they aren't in demand due to low gas prices. Buy that car for the same amount as the lease payment and pay it off, thereby improving your credit score.

 

[JStrnad]

As Viking79 pointed out, that mileage is going to kill you on a lease. Your commute alone is going to put you around 30,000 miles over the typical lease. 30,000 miles x 25¢/mile is $7500 extra you'll owe at the end of the lease.

Does this matter if you're buying the car? Yes.

You may not be able to get a loan for $18,196.80 to buy the car as it likely won't be worth that much. You'll have to have several thousand in cash to cover the difference. Of course, you can offer a lower pay-out price. However....

They'll use that $7500 extra mileage fee against you if you try to negotiate a lower pay-out. The leverage you have is that you can turn the car in if you don't like the pay-out deal. If turning it in costs you $7500, they won't be so generous with the pay-out reduction.

If you turn the car in, the leasing company is likely going to sell it at auction. Let's say it's worth $12,000. They could sell it to you for that much or at some other discounted price, or they could dig in their heels, demand $18,196.80, get the car back, pocket your $7500 in extra mileage fees and STILL sell it at auction for $12,000.

I'm not going to advise you to buy a $500 Civic, but what you'll save by BUYING a used Volt that you can pay off in three years will more than cover the cost of extra gas, by a lot.

 

[norcalkrautnit]

Listen to what all of these smart folks have been advising you: DO NOT lease the Volt if you're planning to drive 30k over your 3-year allotment with your commutes alone (and then whatever extra you do on weekends). You will owe a fortune at least turn-in and the leasing company will absolutely hold that over your head like a sword if you even think about trying to negotiate a lower lease buyout!!! On top of the mileage fee, they'll hit you with excessive "wear and tear", the lease return fee, new tires, and whatever else they can conjure up to extract maximum $$$ from you. Leases are for folks that drive very little (10-12k/year or less), baby their cars, intend to trade every 2-3 years for whatever's trendy and new, and don't care that they're tossing good money in the waste bin. Based on your roughly 100-mile daily round-trip commute, your best bet is probably an off-lease 2014 or 2015 Volt. These can be had in Premier trim for $15-$18k, and will have less than 36k miles on them (many will have significantly less than that). A slightly older off-lease 2013 can be had for even less! With 48-month financing, your payment will be in the ballpark of what the lease would cost you, but you get to drive it as far as you like, there's no turn-in penalties of any sort, someone else (the bank, GM, ...) has already taken the HUGE 1st/2nd year depreciation, etc. And after 48 months, your credit will have been rebuilt to some degree and you will own the Volt outright, instead of owning absolutely ZILCH on the lease!

Bottom line on this - check cars.com or autotrader.com or edmunds.com or kbb.com or any of the other online car shopping "lots" to get a great deal on a used Volt. Heck, you might even be able to pick up a 2016 Gen 2 for not much more than a lease payment if you shop around and are willing to drive a little to save a lot

Best of luck to you with your Volt search - I have a 2015 Premier myself and prefer it over all of my other vehicles (including my convertible Corvette, my new Equinox, and everything else I own!).

 

[stdogbert]

Should be at least $7500 off the cap cost because of the tax credit that will just go to the bank. Also shouldn't put any money down on lease at most paying the taxes and fess and first month payment at most.

With the amount you are driving a 10K lease is a bad idea, a really bad idea. If the car payment is out of your budget you just need to look at a cheaper car, even used.

 

[DonC]

One of my questions I wanted to ask, if my numbers are right and I buy the car after leasing won't I still be paying the same amount vs buying? Right around $28-29k?

If you plan on buying at the end of the lease then you will lose a portion of the tax credit and you'll pay an additional $500 or so as an acquisition fee. So it rather depends on your situation. If you won't qualify for the credit for whatever reason then leasing is better since you'll get at least a portion of the credit. If you will qualify for the full credit then it's cheaper to buy.

As far as payments are concerned, you need to consider the rebates and credits. For example, the credit will give you $7500 in the first year. From a cash flow perspective that's $625/month -- nothing to sneeze at. Even over 36 months it's $208/month. When making your monthly payment comparisons, subtract $200 from your purchase payment and see how that compares to your lease deal (the lease should be lower but not by as much as you might first think).

 

[ackattacker]

I don't mean to pile on but I agree with DonC above, if you plan to keep the car long-term I would look long and hard at purchasing options, you may be able to get the cash flow situation into the same ballpark if you consider spreading out the tax credit over time. For example you can adust your tax withholding anticipating the credit next year and that gives you more cash flow right away. You may qualify for 0% interest from GM as well. The reason the lease seems like a good deal is *only* because the bank is taking the $7500 tax credit for themselves. If you figure that when you purchase you get the tax credit you will see that purchasing is a better deal overall. The lease is a lower payment initially perhaps but come the 3 year mark you are going to be faced with some difficult financial choices.