Leasing Is DEAD & It's NEVER Coming Back

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To the benefit of absolutely no one but automakers, car leasing is dead (or at least dying). How the heck did this happen? Ray and Zach lament this occurrence and give you the rundown on why this is bad for the car-buying public.

[fatmanchew]

Leasing was my favorite thing to do because I only had to pay taxes on what I used instead of paying everything up front. Also every lease came with free GAP insurance. If I liked the vehicle I could just pay the difference at the end otherwise I would take it to Carmax or Carvana (before the new rule changes) and break even and get a new lease. If I'm too upside down I just return it when it's done. I only drive around 6k a year and never have to worry about maintaince or out of warranty issues.

[TJK]

I have 18 months left on my current lease. I’ve been leasing for 20 years now. I love it. a brand new car every 3 years. I can’t see myself ever buying out a lease .

[Incomudro]

I like leasing, or the idea of leasing - because sometimes I don't know if I want the car for more than three years.
What if the car proves to be unreliable?
I'd rather lease it for three years, drive it while it's warrantied - then ditch it.

[JC-blbo]

Woa woa! I lease every 3 years and quite like it. I don't want that to go away. I get a brand new vehicle before I'm truly bored of the old one and at half the monthly payment.

[martyi]

When automakers need to start moving cars again I predict leasing will become a useful tool once more, leasing brings back good condition (generally) low mileage dealer certified used cars with warranty (and/or they can still offer an extended warranty) these vehicles are more affordable for a lot of folks to purchase rather than brand new ones, we bought a used certified Honda 8 years ago which was previously leased for 36 months, it had only 19, 000 miles with factory warranty remaining and was $7500 less than a new example, it was a great deal and we’re still driving it today!

[shawnpetty]

Your dad gets it. Leasing requires a stable and predictable market to function. We do not have that right now meaning leasing companies need to bake in lower residuals to CYA. It will take 3-5 years to stabilize and leasing will be a good option again.

[msci]

Thank you guys so much!!! I actually negotiated my new car for just under 1000 under Msrp and it just hit the lot. You are the best!

[randsipe]

This makes sense. If you leased a car a couple of years ago the buy out is is less than the residual value. The dealer wants your car back because they can sell it for a lot more than the buy out.

[Dash]

I just happened to hit my first lease ever right before the pandemic. Worked out very well for me and my car is worth 10k more than the payoff. I will likely lease again this time around if I can find something good.

[jaa]

One more point on the dealer mindset: not only does leasing put a consumer back in the market in half the time, but it virtually guarantees that they'll interact with your dealership or at least the same manufacturer. Buyers can take their cars to any dealer anywhere. There's little to no incentive to return to your dealership. I'll be surprised if consumer leasing doesn't come back strong in a few years when markets and supply chains settle.

[dcdc]

Nope. Car prices are intentionally being driven up to make it so expensive that it will eventually be turned into a monthly “transportation fee”; they want to keep people from owning cars and driving “for free” when they pay off the loan. They’ll do that through leases or making the loan extend until the tech is old or the car is starting to show it’s age.


Just like investors buying up all the real estate; keep everyone renting from cradle to grave.

[jongrant]

I tried to lease a new Chevy and found out that the cost of leasing was higher than the cost of buying (in terms of monthly payments). They wanted me to put down a rather hefty down payment to lease. I am in my upper 60s and do not want a long-term payment plan so I can buy. I was rather torqued as I was very clear I did not want to buy. I think what you are saying is accurate.

[sameersiddiqui]

'you lease depreciating things and acquire things that appreciate' - the paraphrased words of a financially intelligent person

[peggiunderwood]

I am retired on a fixed income, and leasing has been the only way for me to have or afford to have a vehicle. I do not qualify because my income level is too low. Subaru has always treated me well. When I turned in my 2018 outback premium back in 2021, I knew that they needed inventory, and I also knew that the used car value had increased by almost 40%. I also knew that the new cars were valued less. So I asked them to cut me a deal having this knowledge, and I think they did, but you are the experts; let me know what you think? I am always happy to learn. They put me in a 2022 outback premium, with a $500 return customer credit, zero down, and no payments for 6 months. My payment came down to $390. a month.

[jasonzhang]

You miss the biggest point. This is simple leverage. For the same 60% residual value, if you get 10% off msrp (90%), then you pay 30% depreciation. If you pay 10% over msrp (110%), you pay 50% depreciation. The cost of leasing goes up 67% when car price change from 90% msrp to 110% msrp. Leasing will return when the incentives and discounts are back.

[sammyboy]

I had leased 3 F150’s in a row with what I considered very favorable terms. I tried to lease my current F150 and it was cheaper to buy it outright on a monthly basis than to lease it. Quite disappointing. I love getting a new truck every 3 years. Not planning to do that now.

[carsend]

It was definitely bananas when I bought my lease car in 2021 for $12k and then turned around and sold it for $18k

[egrace]

I know that I just did my last lease. It’s not the great deal that it used to be when I first started leasing in the early 90’s-

[jeffreyzabawski]

I've always purchased Used but the Market being so crazy I decided to purchase New this time. The Payments with the no Interest were right around the same for a Used after you add up the Interest on a Used Car Payment to go along with a Warranty that I would need with a Used. I finaced mine for the amount of time my manufacture warranty runs as well so I'm covered, and then saved another $3, 000 with my Stellantis Discount which is only on New, So you can see why it made much more sense to just go New this time around.

[donteadoss]

Always love watching you guys’ channel. I hope manufacturers implement something as an equitable alternative to leasing, if leasing does cease. I didn’t want to enter this crazy market right now but had to do so and just signed my first lease ever on a ‘23 Sonata N-Line, considering I’ve always financed my vehicles for 5 years or less, and the 72/84/96 month loan idea I read years ago to be a thing, is bananas to me.

The rate I got a week ago @ $517/mo with the $4k down payment (the exact amount I got from selling my Infiniti G35S) I desired was much more attractive than the $700-$850 rate I was quoted for a Kia K5GT that was marked up to $50k. As well, my fiancé is preparing to lease a GV70, and I want to lease a G80 in the future. As such, I’m hoping to continue doing something else rather than financing to get out from under vehicles, especially with potential & impending warranty issues.

Thanks for all the great work you all do! 🔥