Lease & then buy - ordering?

[mjonis]

OK, so I'm leaning towards the Ford edge vs. my other 2 vehicle choices (but no definite decision made yet as I still have to test drive the Kia and re-test drive the Santa Fe without the jabbering sales guy in the car this time).

 

However, due to my job, I am not wanting to purchase until I pass probation, Nov. 2nd. I want to be in the new car no later than 11/30/16 which is when the extended warranty expires on my POS chevy. And, last year, there were black friday deals the entire month of Nov, if I remember correctly, so that's also a factor.

 

Now, due to my bad luck with my POS Chevy, I'm very hesitant this go around, more with the Ford vs. Kia/Hyundai for a variety of reasons (2015 Edge problems with water leaks, etc. the seat backs don't cool, Ford's attitude over that and the buy-backs, etc.)

 

Although anyone can have a bad car (look at me).

 

So I'm seriously leaning towards leasing, and then if things are OK, purchase at the end of the lease. I've run the numbers, and without counting deals (basically I took the MSRP, 10% off and ran with that), it's *about* $1200-1500 more in the long run to lease and then buy outright vs. buy at 0% for 5-6 years. Maybe not the best financial sense, but I think I'd be more PO'd if I bought and got a lemon and then am stuck with it, vs. lease, get a lemon and then I can get something else (heck, maybe a used "competitor") if things go sideways.

 

That being said:

 

The Edge I would like is the Titanium AWD, 302A, with Driver's Package. I don't really want the 20" tires, but after test driving the one with the 19", I'm not keen on those either (to be honest, the SEL with 18" wheels seems a LOT smoother). So either way I'd probably switch out the wheels. (although leasing would probably have to keep the 20" around or whatever). The main issue seems to be in my area (Albany, NY), the dealers within 30' radius have never really stocked the Titanium AWD at all, let alone with the 302A (usually it's the base package), and I found ONE with 302A, but it's lacking the driver's package, and it's White (ugh).

 

Sooo:

Can you "order" one and lease it?

 

By "order" I don't know if that means the dealer searches other Ford dealers, or has to order custom-made from Ford. I imagine if they could order, say, one from Texas (I just picked some random state far away), there's probably like a $900 transportation charge, but I imagine IF another ford dealer has one in inventory it would be faster vs. ordering from ford and waiting 2-3 months (based upon how slow they delivered the 2015/2016 that people ordered). At least given my area, it seems our Ford dealers may be "low" on the totem pole for order status on that model.

 

Hope I spelled everything out in a non-confusing way. I don't mind getting a 2016 model year vs. 2017. At least, based on what I know so far, about the only "change" would be *maybe* addition of Fog lights on 2017, but Ford certainly won't be fixing the seat backs that don't cool.

 

Assuming you can order and lease/buy, I imagine you put down some form of a deposit. What about any deals? do you have to take delivery before the deal ends (by deals I mean like X cash back/rebate, X percentage financing, if I buy?).

 

Let's say you get the vehicle and want to confirm drive before taking delivery, and then you find something wrong with it, can you then refuse to take delivery and say, either give me my deposit back, or a diff. car? (one of the reasons I refuse to buy a car unseeen).

 

thanks in advance!

 

[WingNut]

yes you can special order a vehicle you want to Lease. But be aware you will only get the deals/specials/rates that are available at the time of delivery. I would check with a dealer to find out if you could order to Lease than just buy at time of delivery.

[akirby]

Some dealers are able to lock in the incentives at the time you order a vehicle. It's called the incentive protection program and i've never seen confirmation of which dealers can do this or if they can all do it, but it's worth asking.

 

And it doesn't matter how the vehicle is obtained - it can be leased.

 

You're right about incurring transport costs if the vehicle is far away. You also have the option of buying it from the remote dealer and driving it back.

 

I just checked the online dealer inventory where you can go out to 100 miles and there are over 100 AWD Titaniums available. The first one I clicked on was a red one at Jack Byrne Ford and it has 302A and the DA package. Have your local dealer do a search - I bet you can find one.

[mjonis]

Some dealers are able to lock in the incentives at the time you order a vehicle. It's called the incentive protection program and i've never seen confirmation of which dealers can do this or if they can all do it, but it's worth asking.

 

And it doesn't matter how the vehicle is obtained - it can be leased.

 

You're right about incurring transport costs if the vehicle is far away. You also have the option of buying it from the remote dealer and driving it back.

 

I just checked the online dealer inventory where you can go out to 100 miles and there are over 100 AWD Titaniums available. The first one I clicked on was a red one at Jack Byrne Ford and it has 302A and the DA package. Have your local dealer do a search - I bet you can find one.

 

Wow, thanks! I was using the Ford.com website and it's a bit tricky for what it shows (especially since you can't pick the packages, so you have to "guess" on the price if it has the 302A). But that sounds like a better idea to ask the dealers to search for me.

 

I feel better now. Well at least on this regard.

 

My butt is still hurting from my Lemonox. Blown head gaskets and drive shaft. $3,000. Extended warranty will cover all but $900 or thereabouts (they don't cover the machine shop charges, or diagnostic, deductible, spark plugs, etc.) Will be glad to be rid of it.

 

Driving my roomate's 2014 Hyundai Santa Fe sport. Not bad, but stiffer ride than what I'm used to. 4 cylinder engine feels anemic to me. I now realize I need to actually SIT in a test drive car for 30-60 minutes because I don't care for the seat in that Hyundai. But never noticed it before because I never drove it. I think that'll be more important (seat comfort) vs. cabin noise. I think one gets used to it in time.

 

haha

[junehhan]

Something I do is ask the dealer if you can spend a night with a demonstrator. If they see you as serious, they may agree to it as it will really give you an idea of how well you can live with it. Your problems mirror the problems an acquaintance of mine is having with her Equinox.

[Tjm623]

I can tell you if you were to lease a 2016 edge in 3 years you'd be looking at anywhere from 20-23k residual value. Anything under 50% after lease terms is consider a good leasing vehicle. The edge I tried leasing was around 56%. With that said the more value lost up front the cheaper it is at end of lease. So you could see a lower payment on the buyout portion.

 

If your gonna lease a ford it's in my opinion to stick with the big name models. The escapes, f150s and fusions lease very well. Incentives and what not. My eyes popped out of my head at what my lease number was for a '16 SEL AWD with $0 down

[WingNut]

I can tell you if you were to lease a 2016 edge in 3 years you'd be looking at anywhere from 20-23k residual value. Anything under 50% after lease terms is consider a good leasing vehicle. The edge I tried leasing was around 56%. With that said the more value lost up front the cheaper it is at end of lease. So you could see a lower payment on the buyout portion.

 

If your gonna lease a ford it's in my opinion to stick with the big name models. The escapes, f150s and fusions lease very well. Incentives and what not. My eyes popped out of my head at what my lease number was for a '16 SEL AWD with $0 down

 

50% of MSRP?

[Tjm623]

Yes,

 

This article section 1 explains more in detail for those wondering http://www.edmunds.com/car-leasing/four-ways-to-spot-a-good-lease.html

[mjonis]

Yes,

 

This article section 1 explains more in detail for those wondering http://www.edmunds.com/car-leasing/four-ways-to-spot-a-good-lease.html

 

A few problems with that article, as it's a bit outdated now.

 

1) The residual is determined by a third party company named something like ALG. At least with dealer lease companies. It's also based on geographic location. But in my area, the Titanium AWD Edge was 59% residual. The residual is ALWAYS based on the MSRP so you get screwed there as well. 60% of 48k (Kia for example) means your cost is about 29k, but the "sales" price maybe you got it for 40k.

 

2) Generally speaking: the lower the residual (while you are correct, that's "better" for you if you want to buy it), the lease company jacks up the monthly payments. In other words, you're going to pay for it somehow. Unless the company in #1 screwed up and mis-calculated their projected 3-year residual. However, that company's track record is something like 99% accurate. WAY back when the auto companies did their own numbers and there have been a handful of cases where they screwed up and you could get a better deal.

 

Edmunds does list how to calculate the lease payment, and from that formula (it's like 12 steps or something) you can calculate the total cost of the negotiated lease, plus the option to buy and compare that against buying outright.

 

What you absolutely cannot negotiate on the lease is the MF/APR. That's set in stone by the finance company and based on your credit score. Zero negotiating in that number.

 

Since the 3 vehicles I'm looking at, all companies are offering 0% financing for either 60 or 66 months (I think Hyundai is 0.9 % and then cash back which equals the interest payments of 0.9% for the 60 months so in essence it's 0%), and compared to the lease numbers (anticipated negotiated price of 10% off MSRP for all vehicles in question), it averages about $1200-1500 more over the long run for leasing vs. buying outright. For me anyway.

 

Although I'm not sure if I took into account Kia's $0 lease acquisition offer whereas Ford/Hyundai have the $595 or whatever lease acquisition fee. But that might be negotiable.

 

The Kia has the highest residual at 60% (3 year lease, 10.5k miles/year). Hyundai for some reason is at 54% residual.

 

Now, you could say that means the Hyundai is "better" in that regard. I also look at it to say that the Ford/Kia hold their values better than the Hyundai. But since I'm planning on keeping the thing for 12+ years that doesn't really matter because by that time, you'll have almost nothing left anyway (well maybe you will, I dunno).

 

I'm still leaning towards lease for 2 reasons:

1) lower monthly payments. Basically if I can get it for about $400-450/month, I can continue to pay that AND save another $200-300/month into my piggy bank for the car. I have 15k saved up already (another 7k if I really had to, but prefer not to touch that). In 3 years, that'll put me around 22-25k and then I can buy the car outright. This leaves me some wiggle room if Murphy comes to visit

 

2) If I get a lemon again, I just turn it in at the end of the lease.

 

 

However, for #2:

then I'm back to square one in terms of buying, although maybe then I can get a 2 year old one for 30k or something. But that assumes I can get one. Seems on the high end vehicles, you don't find them used after 2-3 years, and if you do, it's black or white in color (no way).

 

If I buy:

Monthly payments appear to be around $650 (for the most expensive - Kia/Ford) at 60 months. I'd basically dip into my 15k car fund to make up the monthly difference, so at the end of the 5 years it's all paid off. but if Murphy comes to visit, I'm kinda screwed (I do have an emergency fund for my 3-4 months of take home income, so it's probably closer to 5-6 months of actual expenses).

 

If I buy and it's a lemon, I have to sell it (assuming you can since by then everyone knows it's a bad model year), and continue to make payments because it won't be worth more than owed on it after say, 3 years. Or wait for 5 years with a lemon and then back to square one again. Trade in, the dealer will totally hose you (not really their fault, but they know they can't sell the lemons as easy and you'll be out at least 3-4k less than private party sale).

 

Decisions decisions.

[Waldo]

I don't know why you're even taking this "lemon" factor into consideration. The odds of getting a "lemon" are really minuscule, especially on a model that hasn't really changed for 2 years now. If you're willing to pay $1500 as a "lemon risk" tax, then I'd suggest forget the lease, just finance at 0% and buy $1500 worth of lottery tickets. Your chances of hitting on the tickets are far higher than the chances that you get a lemon.

[WingNut]

I don't know why you're even taking this "lemon" factor into consideration. The odds of getting a "lemon" are really minuscule, especially on a model that hasn't really changed for 2 years now. If you're willing to pay $1500 as a "lemon risk" tax, then I'd suggest forget the lease, just finance at 0% and buy $1500 worth of lottery tickets. Your chances of hitting on the tickets are far higher than the chances that you get a lemon.

 

I don't think he means a lemon like we are thinking about. I think he means a car that has a lot of little issues that seem to pop up but aren't putting it in to the category of 'lemon' by law. Or it goes through tires like crazy. Or squeaks and rattles pop up. And he is just not happy after 3 years. Then he can unload it without having to worry about losing $$ in trade-in or selling outright. Or he ends up in a car that everyone knows has these issues so they avoid buying them used.

 

Really it is just a way to mitigate the risk.

 

This is exactly why I leased this time around too. I wasn't sure if I'd want the Edge for a long period of time.....or if I even wanted a SUV. So i'll try it out for 3 years and at the end, make a decision. If I decide I want the Edge still, I'll then weigh my options. Buy outright based on pre-defined price, buy another used one at a better price, buy a new one, or lease a new one.

[Burrcold]

Exactly what I am doing as well. This is my first domestic brand vehicle, and first Ford...and first SUV! Leasing made sense for me. If I end up hating it (getting delivery of a 2016 Sport AWD at the end of the month) I'll just count down the weeks until the lease is up and get chalk it up to a lesson learned. Although I highly doubt I'll feel this way.

[akirby]

There is no financial benefit to turning in a lease versus selling the vehicle or trading it in. Either way you're paying the depreciation on the vehicle. If you purchase it you can sell it any time you want without having to wait for the end of the lease. Of course selling a vehicle after 1 or 2 years will hit you hard on depreciation but no worse than if you leased it for the same period.

 

It is simply more convenient to turn it in after 2 or 3 years and walk away if you don't like the vehicle. You don't have to negotiate a sales price or trade-in allowance.

[Tjm623]

I traded in my truck (think they hold a little better value) for 1k less than I had paid for it to get into my edge. FWIW.

 

I think if you make it clear they aren't getting a sale unless u get the amount you want for traded car and they are willing to work (like end of month) you can get a deal on trade in. but I agree you typically will lose money on an earlier trade in like that. I wouldn't have traded my truck if that was the case

[WingNut]

There is no financial benefit to turning in a lease versus selling the vehicle or trading it in. Either way you're paying the depreciation on the vehicle. If you purchase it you can sell it any time you want without having to wait for the end of the lease. Of course selling a vehicle after 1 or 2 years will hit you hard on depreciation but no worse than if you leased it for the same period.

 

It is simply more convenient to turn it in after 2 or 3 years and walk away if you don't like the vehicle. You don't have to negotiate a sales price or trade-in allowance.

 

But there is no way to gauge depreciation and the used car market 3 years away. So buying with the possibility of trading it in or selling 3 years down the road is just rolling the dice that the depreciation hit will be less than the cost of a lease. Given your mileage meets the lease terms, etc.

[akirby]

How old was the truck? Did you buy it new or used? Was there a trade-in?

[Burrcold]

The one positive in Canada with leasing is that if you are ever in an accident, you don't have to worry about the diminished value (we don't have GAP insurance here or the ability to file a diminished value claim with the insurer). I learned that the hard way when someone rear ended my Subaru BRZ, which was financed. My only recourse would have been to sue the person but that would have been timely, costly, and not guaranteed.

[akirby]

 

But there is no way to gauge depreciation and the used car market 3 years away. So buying with the possibility of trading it in or selling 3 years down the road is just rolling the dice that the depreciation hit will be less than the cost of a lease. Given your mileage meets the lease terms, etc.

 

Huh? Leasing companies make their living by gauging depreciation 3 years away. There can always be an exception where a big market change takes place unexpectedly but that's rare. Of course it works both ways - some may end up with a higher residual value.

 

The only advantage with leasing is you have a written contract with a stated residual value so there is no negotiating. If you sell it yourself you can get retail price rather than wholesale price but it's obviously less convenient.

[mjonis]

 

I don't think he means a lemon like we are thinking about. I think he means a car that has a lot of little issues that seem to pop up but aren't putting it in to the category of 'lemon' by law. Or it goes through tires like crazy. Or squeaks and rattles pop up. And he is just not happy after 3 years. Then he can unload it without having to worry about losing $$ in trade-in or selling outright. Or he ends up in a car that everyone knows has these issues so they avoid buying them used.

 

Really it is just a way to mitigate the risk.

 

This is exactly why I leased this time around too. I wasn't sure if I'd want the Edge for a long period of time.....or if I even wanted a SUV. So i'll try it out for 3 years and at the end, make a decision. If I decide I want the Edge still, I'll then weigh my options. Buy outright based on pre-defined price, buy another used one at a better price, buy a new one, or lease a new one.

 

Yeah that's what I was trying to look out for when I say "lemon". Especially after the 2015 issues with water leaking and tail light condensation issues.

 

So far the only issues I've seen/heard ("big" ones anyway) on the 2016s are:

Seat back cooling issue (mitigated by like $300 aftermarket add-on that you have to install yourself)

Car suddenly dies/stalls (but this appears to have been fixed with TSB now)

Random noises/rattles/etc. with welding/sheet metal (that kinda disturbs me).

 

Although my car has enough noises (although not really that many) but it's almost 12 years old so that's to be expected.

 

My Lemonox within the first 4 years:

3 trips to the dealer for Audio hiss, turned out to be a "working as designed" over-powered amp that GM put in the vehicle only solvable by removing factory HU and putting in aftermarket kit at my cost of about $500 plus 2 days worth of time.

 

Battery died (my Ford went like 6 years before battery needed replacing). Chevy died at 3.5 years.

 

Repeated (twice) water leaks into the spare time compartment due to poor sealing of rubber gasket around lift gate. 5 trips to the dealer to fix (sigh).

 

Then of course, we have the repeated head gasket failures, struts went out at 65k, tie rods, sway bars, carrier bearing, some spring (coil spring?), axle, water pump, AC condensor thingy (have to look at the receipt), drive shaft all needing replacement at under 75k. Tires, muffler I can understand. I don't off-road with this thing either.

 

But that's related to this particular model (not just model year). Google Chevy Equinox head gasket or Chevy Equinox carrier bearing and you'll see what i mean.

 

Good news is so far I'm seeing very few complaints about the 2016 Edge (not so much the 2015).

[Tjm623]

How old was the truck? Did you buy it new or used? Was there a trade-in?

The truck was a brand new 2014 I bought end of model year when 15s came out(1/19/15 purchase date)

I had 21k miles on it and traded it back to the same dealer I bought it off then, 2 weeks ago. They gave me 1000 less than I paid for it. No trade in. Now I did use that as a trade in for my edge

[akirby]

Wow. That's a great deal.

[mjonis]

The truck was a brand new 2014 I bought end of model year when 15s came out(1/19/15 purchase date)

I had 21k miles on it and traded it back to the same dealer I bought it off then, 2 weeks ago. They gave me 1000 less than I paid for it. No trade in. Now I did use that as a trade in for my edge

 

Wow, sounds like a good deal to me.

[Tjm623]

Wow. That's a great deal.

I won't lie I think a lot of that had to due with it was last day of July. I was also straight forward with the guy (who is already bought the truck off so he knows how I operate, I don't come to dealer unless I'm serious), I was looking to buy two vehicles and if I didn't get what I wanted on the truck I wasn't buying either.

 

Wife's care took a turn for the worse (recalls, and just could sense it was gonna start getting expensive). I realized we could afford both but my monthly payment needed to come down to bring hers up, so said good bye to the truck and she got an escape.

 

I have been very lucky with trade ins and this dealership. Third vehicle I've traded in have gotten over kbb every time and even with owing in the cars I usually get back about 3-4K. Truck was obviously a different story. Due to that trade in I actually only paid $464 in taxes for the edge .

 

I don't wanna hijack anymore than I have. At the end of the day whatever works best for your situation go with that. We originally were looking to lease one and ended up buying two! For me, it was not being able to justify $30 less than I was paying to own an f150 to lease an edge. It just felt wrong to me

[junehhan]

What you experienced is why it is always great to build a relationship with a dealer instead of trying to start a bidding war with every dealer within a 50 mile radius just to save an extra $300-500 each time you buy a car. I also exclusively utilize a single dealership that I have built a relationship with over the years. They are straight forward, no hassle, and don't force me to haggle as they make an initial offer that is very reasonable. A dealer you have a relationship with will also be more likely to do everything they can to assist you should you have a problem.

[Tjm623]

What you experienced is why it is always great to build a relationship with a dealer instead of trying to start a bidding war with every dealer within a 50 mile radius just to save an extra $300-500 each time you buy a car. I also exclusively utilize a single dealership that I have built a relationship with over the years. They are straight forward, no hassle, and don't force me to haggle as they make an initial offer that is very reasonable. A dealer you have a relationship with will also be more likely to do everything they can to assist you should you have a problem.

Agreed, unfortunately this will probably be my last time as the guy said he'd like to retire within three years. It was funny because he had another guy helping because of buying two vehicles and that guy was trying to play hardball and stand firm. I called his bluff and my guy said wait here I'll get the number we need. Took the other guy aside and sure enough number was what I wanted and other guy changed his attitude.