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The points about mileage are very important with leases. But also, is this truck for personal use or business use?

Businesses prefer leases for a number of reasons (even if they exceed the mileage) - it takes less cashflow than a loan payment, you generally can expense the entire lease payment while you can only deduct the "interest portion" of the loan payment. Also, sometimes there is a limit on the value you recognize for a purchased vehicles depreciation (if the value is exceeds a certain amount).

Finally, for a business, leases generally do not have to be listed as an "obligation" like a loan, which can affect possible covenants with your bank. Leases make the Finanical Statement look better to the bank.
 

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There are a few misconceptions about leasing. I managed a huge leasing portfolio for many years, and consider myself a car guy. But that was many years ago so I'm not up on all terms, etc. presently.

But let's face it: The average John Doe cannot afford to drive a F150 4x4 Lariat, pay for a house, have a car for his wife and cover food for his 2.3 children on a normal salary. You could pay $10,000 down and still have $950 monthly payments (60 months.) Regular people just don't have that much money which is forcing them into leasing their automobiles.

I could write you a book on this subject, but I'm going to keep it short. Many retail buyers know how to purchase trucks and cars and how to negotiate on prices, etc. But very few people know how to lease a vehicle. Dealers just love to get hold of lease customers because they are most often getting full MSRP for those leases. And that's what they're quoting lease payments off of--excessive profit. Then the F&I guy will go after you for Gap Insurance and who knows what. Don't forget that the payment they're quoting can be negotiated down dramatically.

The lease payment is based on the difference between the Acquisition Charge (selling price) and the Lease End Value. The Lease End Value comes from the finance source as a % of the list price (MSRP). They can also add to that any price discounts shown on the window sticker. For example, if the vehicle has a 302A package AND a 2.7 engine, you'll probably get a sales incentive that makes the Lease End Value higher. The smaller the spread, the lower the payments. So look for vehicles that Ford's giving back freebees or big discounts on.

They also consider your projected mileage in the Lease End Value. If you live in a huge city, like Atlanta, and drive 30 miles or more to work every day, leasing is going to be difficult because buying extra miles on front end can get expensive. I'm retired and don't drive so much so a lease would do me fine. 15,000 miles a year is normal mileage.

But a couple of big positives to leasing is (1) you don't have to bet on the used car market in 3 years. You walk away from the car owing nothing. (2) You don't have to worry about selling the vehicle at the lease end. (3) Turn the vehicle in, and get yourself another. (4) Most states have large sales taxes on vehicles, and 6% sales taxes on a $50-60k vehicle are $3000-$3600. Taxes vary state to state, but most sales taxes on leases are paid on the Lease Payment monthly. Taxes are not charged on the full selling price usually. (5) Initial Cash Outlay on a purchase can normally be in the $3,000 range. You can get into a lease for the monthly payment and a refundable Security Deposit which is usually the lease payment rounded off to the nearest $25. There's a big, big difference on front end money being paid.

Don't forget that you're not buying the car/truck. You're interested in the monthly payment and the initial cash outlay. What you're paying is for the use of the vehicle. Get out there and negotiate payments.
 

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Don't forget that you're not buying the car/truck. You're interested in the monthly payment and the initial cash outlay. What you're paying is for the use of the vehicle. Get out there and negotiate payments.
I really like this idea, however, in the world/area I live in, negotiations are hard to do. It seems everyone is either getting a truck, or wanting a truck, and the dealers aren't hurting for sales. When you have zero bargaining chips on your side and the dealer can afford to let you walk, what do you negotiate with? Your good looks? :)

Not to mention there are dealers on every corner. I even tried playing "brands" off each other because I could get GM employee pricing at the time, and even that didn't matter. In fact GM was so far away on features and ability's of the truck vs ford, they couldn't do anything.

Yet day after day I pick up the local freebie newspaper and see, XLT screw 4x4, $199 / month, Silverado crew cab 4x4., $259/ month, but when you inquire about them they instantly jump $200 a month in price.

I'll admit, I'm not as slick a negotiator as I was in the past. Simply don't have the time. By the time I am at this decision I can't afford to go to dealer after dealer after dealer. I guess I'll have to do better when this lease is up, or just buy it at that point. Even if I buy it at lease end I'm looking at $450/month best case. Unless I can find someone to finance the truck out another 7 years....but what would that buy me? $50 a month payment?

Sorry for the rant, guess I'm having a moment. I'd love to hear more on how to negotiate though, still a year off, but maybe if I start now I can get somewhere at the end.
 
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