Range Rovers Forum banner

Should i lease or Buy a range rover sport.

5K views 21 replies 10 participants last post by  Holeecow 
The best option is to lease a brand new one.
Agree to this IF you don't plan to keep the car beyond the term of the lease. Leasing is very convenient and good if you only want to use the car for the (short) lease term. It's not as good of you want to keep the car long term because you'll probably pay more leasing and then buying out the car then just getting a traditional auto loan.

Leasing has less money up front and lets people into nicer cars for the same money. But it's strictly a rental, there's no equity. But since cars are a depreciating asset equity is not really the point. With leasing you're strictly paying for the use of the car.

I like to think of it just as a long-term car rental. The terms (monthly costs) are agreed upon in advance and you know exactly what it will cost at the end of the term when you either want to walk away or purchase the vehicle. Expensive vehicles can be difficult to sell used on your own so I think leasing is easier and less risky than purchasing when it comes time to sell or trade-in. Leasing also gives you the extra safety net of walking away, e.g. If you get into a big accident, insurance pays for the repairs, but you don't want to keep the car after such a major rebuild.

What's not good with leasing is if you want, or need, to get out of the lease early because you'll probably be underwater, i.e. the car is worth less than what you owe. So that's the flip side of the trade-off vs. purchasing/traditional auto loan.

We've leased almost all of our recent vehicles and we like keeping them for a few years. I think leasing is good for us because of this frequency, even though we can't take advantage of any tax benefits (no business use). The few high end cars we've sold or traded in were not easy and could've gone much worse for us.

If you're in a position to flip into a new car in a few years then definitely check out leasing. Do ask what they money factor is so you know if the finance the are very poor (you can lookup online how to convert MF into something like an interest rate). Don't be swayed by just a low monthly payment. Don't pay extra money down (cap cost reduction) because it's simply prepayment against each monthly payment and doesn't reduce your finger overhead. If you watch for end of season deals then you can take advantage of very good lease offers when the manufacturer is trying to offload slow selling models just before the new year inventory arrives.


Sent from my iPhone using Tapatalk
 
Now, an electric car I would definitely lease, because when the lease is up, with advancements in technology, the battery will likely be much improved.
Absolutely agree. Electric technology is still in its infancy so long-term value is questionable and higher risk vs. conventional cars. Who knows what battery issues/costs there may be in the long-term and how much more attractive the latest electric car technology will be in the future? Therefore the advantages of leasing are more attractive for an electric car right now.

I feel like I dont really own the car, like it’s not really mine. And what if I got a small tear the seats, or a scratch on the bumper? Maybe I could live with it if it was my car, but I’d have to repair it with a lease.
Yes, leasing is the same as just saying "It's just a rental". I often use that exact phrase. The thing you need to answer for yourself is whether and why you want to "own" the car or just pay for the use of a nice car each month.

As for the tear or scratch, they do not expect the car to be in perfect condition when you return it after say 3 years, but they will for excessive wear. In my experience small scratches like less than a few inches are ignored. One of my BMW returns long ago used a circle that they covered any scratches, e.g., ones more than 7 inches were $500 and ones more than 3 inches were a bit less (I can't exactly remember but the point is scratches had to be long to really matter). If you lease another car of the same model, they often forgive even more and let you out of the lease early. Any small dents you can get fixed by those inexpensive "paintless dent" repair. In the worst case, you do an insurance claim and your comprehensive deductible should be cheap for non-collision body repairs. Also note that leasing is expensive if you exceed the agreed-upon mileage limits by a large amount so not good for people who regularly drive their cars long distances.

But remember, you can always purchase the car at the end of the lease for the "residual" and then none of those dents/tears/etc. matter. You now own the car and are in the same place where you would be had you purchased it to begin with. IMO leasing gives you more options but it is usually more expensive, not less, compared to traditional financing at the initial purchase time. Yes the monthly payments are less but your equity stake in ownership is less (even with leasing you're still incrementally "purchasing" more value of the car each month toward the purchase price vs. agreed-upon residual). So your total finance overhead is more if you buy out the lease for the residual vs. had just purchased the car in the first place. That is the trade-off you make when initially decide to lease vs. buy.
 
The problem i have with leasing is that i think when it comes to insurance, the vehicle has to have full coverage which is way too expensive for someone my age.
Sorry, our leased vehicles have always only been for personal use so I've never taken advantage of nor really know about the tax details. My limited understanding is there has to be some business-use component, e.g., you're a realtor or own your own business, so it doesn't sound like your situation qualifies for any leasing tax deduction. Furthermore, tax deductions work against income so if you're in school full-time then that limits their usefulness for your situation.

Frankly, I'm sorry to say it but if you're worried right now about the insurance costs then I think it's too early for you to lease an RR. Leasing is one of the car manufacturer ways of getting people into cars that they really cannot afford, via low monthly payments that seem cheap and easy -- You do not want to fall into that trap. Take advantage of the inexpensive lease rate deals offered for less inexpensive cars. You see them on TV, especially now when they want to move the 2018s when the 2019s are here or coming very soon so they offer very good money rates (i.e., financing terms or interest rate) and credits. The cheaper monthly payments will allow you to include the cost of full insurance, which is for everyone's protection and you should always have. Live within your means while you're still in pharmacy school (congrats, by the way) and then enjoy the benefits of these luxury cars once you graduate, get a nice-paying job, and are old enough that the auto insurance rates are not excessive.

You might also get into an inexpensive CPO used luxury car right now, if the financing price is right and you can afford the insurance payments because it's an older car. A lot of the insurance cost is for comprehensive repairs of the car's value, which drops almost 40%-50% in the first few years. So I hope even your insurance rates for a used luxury car will be much less than for a brand new car -- Check with your insurance agent, they can tell you what your rate will be for a particular make/model/year. And because you don't want any surprise maintenance costs, I'd recommend a used Lexus or one of the other maintenance-free brands. I've had a couple Lexus cars in the past and they're quite nice, even though a different kind of ride & style and maybe not as exciting for car aficionados.
 
Now, even if you have full coverage, you STILL want to ensure you have what is called GAP coverage. If you buy a new car for $80k and total it 6 months later, the value of it is probably $65k (its used and has maybe 10k miles, may be a model year older too). That is what you will be paid, but if paying maybe $1k per month in principal you will still owe $9k more than the insurance company will pay your bank. GAP coverage will cover this difference.
Very good advice. Other manufacturer finance companies automatically include gap insurance in their lease agreements, e.g., Audi and Mercedes, but it seems that Land Rover Financial does not do the same. it's a fairly small amount but you do need to ask for it explicitly from your insurance agent.

Finally, in TX, you pay sales tax on the full price of the car when leasing, up front ... Then, if you want to buy the car at lease-end, you pay sales tax AGAIN on the residual!!!
Ugh, that's unfortunate. Thanks for pointing that out and I will never lease in TX (unless I become a realtor)... :)
 
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top