There isnt a whole lot of action in the buying/leasing section so feel free to move this if you want.

Would it make sense to lease a vehicle with no residual payment, just first month and tax, tags and title for a 2 or 3 year lease and then buy it outright after the lease is over? Im just not liking the $600 payment with a full outright purchase and im thinking of ways to cut down on costs. yes im cheap...no smart *** comments please.

 

Yes this would make good sense. The key is, if you want to keep the car at lease end, you should buy it outright with cash by paying in full. Do not finance it, otherwise combined with what you paid on the lease, it would be just like you bought it from the beginning and financed it far too long such as 5-6yrs.

You should have the car completely paid by 36-42 months. So when the lease is up, either pay cash for it and keep it and enjoy it, or give it back. If you cannot afford to do the former, you need to give it back.

The beauty of leasing is, you can purchase the car over three years yet give yourself until the very last day of the lease to make up your mind. Perhaps the car tanks in the market and the residual was far too aggressive. Then you give it back. If it outpaces residual, buy it out and keep your equity, (or sell it quickly for the difference and pocket the money).

Assuming you wanted to finance a car for 2-3yrs though, leasing is not a bad option to keep payments low while you decide over the lease whether you like the car or not. Your lifestyle may change, you may add some trolls, etc, and that car may be of little use to you by lease end. The luxury of being able to keep both options available -- buy it out or walk away -- is something financing from the start doesnt offer -- at least in the straightforward conventional sense. As long as the car is completely paid for after 3yrs, you should be fine as youll stay ahead of depreciation. It will not matter whether you pay $1200/mth every month, or $500/mth for 3yrs then a $20,000 check on the last day. Its all coming from the same pocket. But one advantage of the lease is you keep more money in your pocket to actually earn money for you as its not tied up in the car.

But if you plan to finance 5-6yrs or lease 3-4yrs then finance 2yrs to own it, you are just getting yourself into way too much car.

 

thank you...that was exactly what i was curious about. problem solved.