About to lease new Yukon XL Denali - advice needed

[rad-man]

My numbers are correct However, I had a large trade-in, so you proabably thought my taxes were off.

My MSRP was 77365, supplier pricing put me at $72,081.00
$49,500 trade-in.
so i only paid taxes on 22,500 = $1411.00
1.78% APR has be on payments of $1294 for 60 months.

The correct comparison would be to run the scenario with full taxes.

I still don't see how leasing is better (aside from the unknown tax benefits, which i can't use).

 

[lweisenb]

I can tell you why leasing this vehicle works for me, I do not plan to keep it long term. MSRP 77435, negotiated price $65345 (not including tax).

Monthly payment $825.35 @ 39month/15k miles a year, $888 out of pocket, money factor put my lease at 1.9% but I'm only paying tax on my portion of the lease.

The residual on my vehicle is $38000, which I highly doubt the vehicle will be worth on a trade in after 39 months (hate the hassle of selling vehicles private party).

To drive the vehicle I will have paid $33k and not have to worry about resale. purchase with the above number will be an out of pocket of $50,466 (admittedly you recoup most if not all of the $17466 difference if/when you sell the vehicle but that also does not take into account lost opportunity costs).

 

[yahtzee]

I can tell you why leasing this vehicle works for me, I do not plan to keep it long term. MSRP 77435, negotiated price $65345 (not including tax).

Monthly payment $825.35 @ 39month/15k miles a year, $888 out of pocket, money factor put my lease at 1.9% but I'm only paying tax on my portion of the lease.

The residual on my vehicle is $38000, which I highly doubt the vehicle will be worth on a trade in after 39 months (hate the hassle of selling vehicles private party).

To drive the vehicle I will have paid $33k and not have to worry about resale. purchase with the above number will be an out of pocket of $50,466 (admittedly you recoup most if not all of the $17466 difference if/when you sell the vehicle but that also does not take into account lost opportunity costs).

Same here...if I want out after 2 years, I can go the lease assumption route (which is a piece of cake) and be done.

 

[rad-man]

Same here...if I want out after 2 years, I can go the lease assumption route (which is a piece of cake) and be done.

So take my trade in as an example. Sticker on it was $65k, i bought it for $59, trade in was $49,500 after 17 months.

in my mind, there are 3 negatives to leasing. 1) they limit your miles 2) you pre-negotiate your residual value, and 3) you're always making payments - no equity

 

[yahtzee]

So take my trade in as an example. Sticker on it was $65k, i bought it for $59, trade in was $49,500 after 17 months.

in my mind, there are 3 negatives to leasing. 1) they limit your miles 2) you pre-negotiate your residual value, and 3) you're always making payments - no equity

My wife loves her 2013 4runner...she loves it so much that my BMW 550 was the one that had to go for the Yukon XL Denali. I have about 2 more years before it's paid off. For her, that is great...AFTER that two years, we won't have to worry about car payments for one vehicle in the house. BUT, it's declining in value every single month. So after 4-5 years we will own that car. We did the same with her Sienna...had it for 9 years...when we went to get rid of it for her 4runner it was only worth like 6k...not much equity there.

For me, I will most likely always have a monthly expense for cars - it's one of my vices. I have leased 6-7 cars and not one time have I turned them in and walked away...I have either sold it or put it up on leasetrader/swapalease/craigslist for a lease assumption. For the mileage thing, I know my mileage isn't going to fluctuate so much that I can't estimate it. I also go into a lease trying to set it up for an easy exit (moreso than just walking away at the end)...finding a mileage limit that isn't too much but also isn't too light (no one wants to assume a lease with 500 miles left on a lease per month).

The message - we all have options and one option isn't best for everyone.

 

[lweisenb]

So take my trade in as an example. Sticker on it was $65k, i bought it for $59, trade in was $49,500 after 17 months.

in my mind, there are 3 negatives to leasing. 1) they limit your miles 2) you pre-negotiate your residual value, and 3) you're always making payments - no equity

Your really overthinking it... The biggest thing to watch is the money factor, current money factor for the Yukon is equivalent to 1.9%. GM is also playing games with residuals to try to move the vehicle, there is no way a '15 Denali with 45k miles is going to be worth $38k in Jan of '19. Higher residuals is to your benefit, but even if the residual was lower than market you could buy out the vehicle and sell for the true market value.

The tax benefits to business owners are negligible, you can either deduct most of the lease or take the section 179 deduction (which in very specific cases may actually be significantly more beneficial).

 

[rad-man]

it's good to understand both sides of it. My old man used to lease cars, but it hasnt clicked for me yet.

The Denali is here to stay for a very very long time, but maybe i'll noodle over it when i replace my GS350...