To those in a Mazda American Credit Lease....

[stillageek]

I'm on my second lease. My first was a 2005 Acura TSX from US Bank. It was a 3yr 45K mile lease. At 32 months in I traded it in (with just 33K miles) to lease a 2008 Mazda5 from Mazda American Credit. There were no issues as I was $800 positive in the Acura at trade in.

I'm 33 months into the Mazda5 lease. Last week I bought a Toyota Prius (couldn't pass up the deal at $2500 off MSRP + 0% interest!). Traded in my Mazda 5 I thought all was fine.

Rewind just a tad. I got an offer for the Mazda from Carmax for even money. Carmax backed out when they heard it was a lease from Mazda American Credit. Carmax stated they got burned when they had a car for a YEAR because Mazda would not accept payment.

My dealer said they could handle it so I traded my Mazda5 in with them. I got a call from the Toyota dealer. Mazda won't let them payoff my car! My dealer stated that I had to meet them at my Mazda dealer and they supplied a cashiers check "from me"(Mazda won't take a check from the dealer) for me to buy my old Mazda5. I then retraded in my Mazda5 for my Prius.

The Mazda dealer said there are several customers and dealers who are surprised by the loopholes. Mazda American Credit REQUIRES customers to return to the dealer to end a lease normally or early in hopes they will buy/lease another Mazda. I am glad this is done. If I lease another Mazda it will NOT be through Mazda American Credit.

My 5 was good to me. I only drove 21K miles in 33 months. We decided to downsize as it's only my wife and daughter and rarely need that much space. We already have a 2004 Prius that's been paid off for years and a good car. The 5 didn't hold it's value anywhere close to what I thought or even Mazda thought.

My residual with 36K miles after 36 months was $12,100. I traded it in for $12,000. The dealer had to replace the tires and is trying to sell it for $14,788
( http://toyota-dallas.com/Dallas-Texas/For-Sale/Used/Mazda/MAZDA5/2008--Black-Van/5596543/)

My Mazda dealer offered up only $10,200 stating there is no market for the car and they didn't want to get stuck with it. Funny they were all enthusiastic about it when I leased it!
If anyone in the DFW area wants a 2008 Mazda5 GT with low miles...here ya go

 

[SuperJETT]

Leasing is a bad deal most of the time anyway, so don't lease. Buy a car and sell it when you want to instead.

 

[stillageek]

Depends on how you negotiate the lease and deals at the time. Leased my Acura TSX w/Nav for $380 a month, 0 down, 15K per year. I used to get new cars every 3 years. Leasing was an easy way to support my habit and I drive very little so I never got close to mileage limits. Park my car in a garage every night. All looked near perfect when I traded them in.

For most people leasing makes no sense. They see the cheap payment and ignore mileage and condition requirements.

If I would have purchased the 5 and tried to trade it in at the same 33 months I would have paid much more out of pocket than leasing since the trade in value is so low. My 5 GT lease was 0 down, $390 a month, 12K per year. Negotiated purchase price was $21,100 back in March 08.

 

[DKaz]

I don't know about the US but in Canada, leasing makes sense if you own a company, you just write off the lease against your taxes along with all other auto expenses and that's it. If your company owns a vehicle, you have to calculate the depreciation and once the vehicle hits four years old you can't write off depreciation anymore. And no the car can't depreciate to 100% by year four. lol. It's complicated. Leasing is better... but if I didn't own a business, the only reason I would lease a car is to own a car that's great to drive brand new but you'd want to get rid of it after 80,000km, like a VW.

 

[SuperJETT]

I disagree. Dealers make money leasing, otherwise they wouldn't do it. They also buy/sell cars to make money as well. With a lease, the payments are calculated based on worst case scenario of you turning it right at the mileage limit, meaning you got your use out of it and they know how much the car will be worth at that point. Less miles on it when you turn it in? Great, it's worth more for them to resell.

Apply that same case to a car you buy---you negotiate a purchase price, drive it, then sell it and get what it's worth for the mileage on it.

Most people either go over their mileage and pay the price or they drive way less and they overpaid on the lease effectively.

 

[AO928]

If I would have purchased the 5 and tried to trade it in at the same 33 months I would have paid much more out of pocket than leasing since the trade in value is so low. My 5 GT lease was 0 down, $390 a month, 12K per year. Negotiated purchase price was $21,100 back in March 08.

I'm no accountant, but this is how my math works:

$390/mo. x 33 months = $12,870 cost over life of lease.

If you had purchased for $21,100 and traded it in for $12k, your net cost would have been $9,100. That's a savings of almest $3,800. Of course that doesn't include time value of money, but still, I think you would have come out way ahead.

Regardless, you're out of the 5 and now into an uninspiring vehicle. Have fun with that.

 

[flcruising]

I've never understood leasing (long term rental) of a vehicle that is for personal use. I understand that it all comes down to people wanting something new every years, and not hassle with age-related repairs, but economically it makes no sense to me that you pay so much money for a vehicle, and have to watch how many miles you put on it. Once my vehicles are paid for, all that money I'm saving per month is put into an interest-bearing account and saved up for another vehicle or repairs as necessary. I guess if you are an in-town commuter it's ok, but still...