Is leasing a Telluride a bad move??

[@gmail.com]

We were initially in the market for a Highlander. We have 2 kids (one infant) and are in the market for a second car, as our current Subaru Crosstrek is way too small.

And then we came across Telluride when we started expanding our options ( Subaru Ascent, Honda Pilot, Hyundai Palisade). Considering the relatively lower resale value of cars other than Honda, Toyota, or Subaru, we are now thinking of leasing. We've never leased a car before and not sure if that's a bad move. Here're some of the reasons we were considering leasing as opposed to buying:

- Young kids, the car will get dirty
- We just need a second car so limited mileage is not an issue
- Saves money now
- Heard crazy stories about Tellurides being sold way above MSRP

Would appreciate your thoughts!

Confused mom of two

 

[COUGAR56]

I'm new to this forum and we're waiting to get our 2022 White Telluride EX w/Nightfall package. I found this on youtube and the guy says to "buy" vs. leasing the Telluride. It makes a lot of sense but everyone's situation is different. We're going to buy ours.

 

[MG535]

Kia (the OEM) doesn’t really have any good lease programs for the Telluride. I took a quick look at Edmunds and it was something like .00235 MF and 67% RV for 36/10k for the EX trim and .00191/63% for SX (probably varies slightly by zip code).

The other half of the equation is what the dealer does. Any discount or markup is going to affect your lease too, it’s not immune from those dollar swings.

Happy to go further into detail if anyone has questions.

 

[Senator20]

better to buy than lease.

______________________________

 

[Digitalfirex]

With the current market, I'd lease. Just shop around for a decent dealer that's close to msrp. At the end of the lease, look at the condition of the car and the blue book value. If the market stays as it is right now... buy out the lease. The value of my 2020 LX with 22k miles is higher than its msrp right now.

 

[MrWednesday21]

A big question is if you think you may purchase the vehicle at the end of the lease vs trading it in or walking away. If you purchase at the end of it because it's held its value well and fits your need, you'll have to pay tax again on the vehicle which depending on your state may be pretty significant.

The issue with vehicles being sold at MSRP will affect your purchase or lease price so non issue. But there are plenty of dealerships that will order for you at MSRP if you search these forums.

I think leasing is a good option as it gives you some flexibility. I went ahead and financed mine. Bigger monthly payment, but I expect to get positive equity in this as I expect the chip shortage effect to last well thru 2022 and possibly put me into a position to upgrade to a higher trim.

 

[Tellmeride]

Lease all the way. If you can write it off that is.

 

[Senator20]

Never been a fan of leasing, never ending car payment. And when you buy your vehicle after your lease you end up paying more than if you just bought it from the beginning. Leasing is not right for me, but it may be right for you.

______________________________

 

[NCBill]

Lease only makes sense if you can write off the car (business). For personal use, not so much. For someone who puts lower miles on a car, that can make a great PURCHASE. It should have lots of life left at the end of your car loan. Paying off a car is one of the biggest raise you will ever get. Set aside car payment type money in a saving and investment account, and you are one step closer to buying your next car outright.

New car "fever" is one of those expensive ailments.

I would not count on current crazy used car pricing to continue well into the future. For the next year, probably. Three years from now should be a memory.

Buying and keeping a car for ten years or more for a WIN. Our two current cars are now 12 years old.

Leasing payments are lower, in part because you won't own the car. You are "borrowing it". There are a lot of ways to obfuscate what you are really paying.

 

[Digitalfirex]

A big question is if you think you may purchase the vehicle at the end of the lease vs trading it in or walking away. If you purchase at the end of it because it's held its value well and fits your need, you'll have to pay tax again on the vehicle which depending on your state may be pretty significant.

The issue with vehicles being sold at MSRP will affect your purchase or lease price so non issue. But there are plenty of dealerships that will order for you at MSRP if you search these forums.

I think leasing is a good option as it gives you some flexibility. I went ahead and financed mine. Bigger monthly payment, but I expect to get positive equity in this as I expect the chip shortage effect to last well thru 2022 and possibly put me into a position to upgrade to a higher trim.

I'm sorry. Perhaps it's different on a state by state basis but I have done this in the past... I did not pay sales tax twice on the same amount. When I leased a vehicle, I paid sales tax on the lease portion... in my case I paid 6.35% on 15k. When lease was due... my residual value was 23k. So on the buy out you pay tax on that. My msrp was 38k... (15k + 23k) so 6% percent tax on the indivial portions or together is the same amount.

Granted I'm no tax advisor so everyone should research their own situtation... but in my case and experience that statent just isn't true.

 

[SLPV]

If at the end of a lease and the value holds or is higher, doesn’t it mean you are paying above MSRP (lease payments plus residual value)? They are not going to give up any increased price due to supply and demand. People usually buy out lease because car depreciates.

 

[Digitalfirex]

If at the end of a lease and the value holds or is higher, doesn’t it mean you are paying above MSRP (lease payments plus residual value)? They are not going to give up any increased price due to supply and demand. People usually buy out lease because car depreciates.

The residual doesn't usually change. Its the amount still owed on the car if you wish to keep it (simple explanation) and it's given to you upfront (in the lease agreement). If at that time the value of the car has really dropped you can try to renegotiate it... like hey the car value is really low and offer less. Maybe they will take it... but usually it won't be changed. And again, when the time comes revalue your position. Car condition, blue book value ect... if its worth it. When you ask for lease info ask if they have a buy it out option... fees ect. Large dealerships will disclose all the info upfront.

______________________________

 

[SLPV]

The residual doesn't usually change. Its the amount still owed on the car if you wish to keep it (simple explanation) and it's given to you upfront (in the lease agreement). If at that time the value of the car has really dropped you can try to renegotiate it... like hey the car value is really low and offer less. Maybe they will take it... but usually it won't be changed. And again, when the time comes revalue your position. Car condition, blue book value ect... if its worth it. When you ask for lease info ask if they have a buy it out option... fees ect. Large dealerships will disclose all the info upfront.

My point is would the initial residual value include the higher market values of used cars in current market environment?

 

[Digitalfirex]

My point is would the initial residual value include the higher market values of used cars in current market environment?

Maybe... but that would be based on the msrp you lease / sign on. Like if you buy a Telly now at 10k above msrp that residual would probably be higher. That's why I said look at the math upfront before you sign. Every situation will be different.

 

[MrWednesday21]

I'm sorry. Perhaps it's different on a state by state basis but I have done this in the past... I did not pay sales tax twice on the same amount. When I leased a vehicle, I paid sales tax on the lease portion... in my case I paid 6.35% on 15k. When lease was due... my residual value was 23k. So on the buy out you pay tax on that. My msrp was 38k... (15k + 23k) so 6% percent tax on the indivial portions or together is the same amount.

Granted I'm no tax advisor so everyone should research their own situtation... but in my case and experience that statent just isn't true.

I did word that weirdly, you are absolutely correct that you are paying tax on the lease amount and then tax on residual if you buy it at the end of the lease. That's what I meant. What I was alluding to was more of the fact that you would have to pay the tax on the residual portion which can be a significant amount out of pocket which people may not expect or financially prepared for. And depending on state, you may not be able to finance that portion easily.