i would like a new truck but all i got to put down is my 98. 5 with 62000 miles they will give me about 16000 for it i owe 5100 on it so they say the best way is a lease with 15000miles ayear for three year the payment would be 370. 00 a month but in the end i will owe 18500 so i can turn it in or refinance it if i was to buy it my payments would be just crazy high like 600. 00 a month for 60 months i cant afford that plus the plate is more and insurence would be higher and if i do lease i need to put holes in the frame and box for my gooseneck trailer hitch how much of a problem is this? i plan on maybe more miles but i dont know it is the new 600 plus i heard the warrenty has got holes in it like it does not cover seals or clutch parts pump or rear end parts etc. should i just keep my 98. 5? i need help my 98. 5 has no warrenty and i heard they start failing at about 65000 to 75000 miles i just love the truck but a new one would be much better your help would be appreciated thanks
-
TDR Magazine subscribers receive more than the magazine! You also gain additional forum privileges!
Details here: TDR Privileges
Subscribe to TDR Magazine here: https://www.tdr-online.com/
to lease or buya new 04.5?
- Thread starter vaicase
- Start Date
Attention: TDR Forum Junkies To the point: Click this link and check out the Front Page News story(ies) where we are tracking the introduction of the 2025 Ram HD trucks.
Thanks, TDR Staff
- Status
I don't think you would want to lease in the long run, esspecially if you plan to buy it at the end of the lease. You'd probably pay through the nose if you go over on the mileage. If you want get a newer truck, a later 2nd. gen at this point money-wise, would probably be your best bet. With your low of miles, if it has reliable thus far, I would keep it. At least 'til you can set more aside for better down payment. You can make alot of repairs for what they want for new trucks.
I bought my Ram with a little over 139k. Have had to do very little to it. Mine has a fairly easy life, so that may have something to do with it too.
The new trucks, you really aren't supposed to drill holes in the frame. You need to get a hitch that clamps to the frame. One good thing with that, is that you only need to drill one hole to install the hitch.
Just my 2 cents.
I bought my Ram with a little over 139k. Have had to do very little to it. Mine has a fairly easy life, so that may have something to do with it too.
The new trucks, you really aren't supposed to drill holes in the frame. You need to get a hitch that clamps to the frame. One good thing with that, is that you only need to drill one hole to install the hitch.
Just my 2 cents.
If you do less than 15K miles a year and they are going to give you the difference back (16,000-5100) then $370 a month is a good deal. And at the end of the term you have your options: Pay it off to keep it or sell it, or turn it in and get a new truck. If you decide to keep it a lot of times the buyout price is negotiable because they have to deal with re-selling the vehicle. People will say that you are wasting away the $370 a month but look how much your 98. 5 has depreciated with only 62K miles.
If you like having a new truck every 3-4 years and you can keep your mileage down then leasing is the way to go.
If you like having a new truck every 3-4 years and you can keep your mileage down then leasing is the way to go.
IMHO, unless you can deduct the lease payments as part of your business expense, it is NEVER cost effective to lease.
Leasing is highly profitable for the dealer, more so than a purchase because the capitalized cost is somewhat hidden so that's why many dealers will "encourage" you to lease vs buy.
IF you do decide to lease, and I don't recommend it, make sure that you negotiate the cap cost as low as possible, just as you would negotiate the purchase price.
Do the math and I think that you will find that a purchase is the better option.
Also, if you plan on putting on a lot of miles, you can really get clobbered at the termination of the lease unless the mileage is figured in.
I have been in the business 30+ years and have rarely seen where leasing will be to YOUR benefit.
Hope this helps!
Mike
Leasing is highly profitable for the dealer, more so than a purchase because the capitalized cost is somewhat hidden so that's why many dealers will "encourage" you to lease vs buy.
IF you do decide to lease, and I don't recommend it, make sure that you negotiate the cap cost as low as possible, just as you would negotiate the purchase price.
Do the math and I think that you will find that a purchase is the better option.
Also, if you plan on putting on a lot of miles, you can really get clobbered at the termination of the lease unless the mileage is figured in.
I have been in the business 30+ years and have rarely seen where leasing will be to YOUR benefit.
Hope this helps!
Mike
One of the reasons I bought a diesel was for the long life expectancy before rebuild. I did the math one day and figured that the diesel option didn't begin to pay for itself until I had 100,000 on the odometer. Up until that point, a gas 360/454/460 engine would have been equal in cost. If you gonna buy a diesel than keep it long enough to reap the cost savings of the more efficient engine.
My vote: Keep what you have, spend thos future payments on repairs IF they come. Payments last much longer even than payments for repair bills.
It's cheaper to keep what you have.
My vote: Keep what you have, spend thos future payments on repairs IF they come. Payments last much longer even than payments for repair bills.
It's cheaper to keep what you have.
lease/buy
I'm one of the "victims" of the lease programs - I fell for the low monthly payment crap, and believed the "high" return value that they said you'd have at the end. Now, I'm carrying a 42K balance on my current rig (purchase price was 33500) over 8 years just to be able to get back on even with my prior indiscretions. Luckily, we had low interest rates which are helping me get by. There is a reason the lenders fought so hard to not be required to show you the "math" behind how your payments are figured.
If you can deduct the payment (ie. , business expense) then a lease isnt bad. But other than that, they are rarely good for anything other than allowing people to get into a vehicle they really cant afford.
I'm one of the "victims" of the lease programs - I fell for the low monthly payment crap, and believed the "high" return value that they said you'd have at the end. Now, I'm carrying a 42K balance on my current rig (purchase price was 33500) over 8 years just to be able to get back on even with my prior indiscretions. Luckily, we had low interest rates which are helping me get by. There is a reason the lenders fought so hard to not be required to show you the "math" behind how your payments are figured.
If you can deduct the payment (ie. , business expense) then a lease isnt bad. But other than that, they are rarely good for anything other than allowing people to get into a vehicle they really cant afford.
Lease v. purchase
I have read every one of these responses and they are all good advice. DON'T LEASE UNLESS YOU CAN WRITE OFF THE PAYMENTS or, at a minimum, want or need a new vehicle every three or four years and don't care what it costs you.
I used to be in this business as a sideline representing the buyer. The cheapest way to own a vehicle is buy it at the lowest price, pay cash, maintain it and drive it until the wheels fall off.
You can figure other factors from there and the cost goes up each time. Here they are: paying too much, financing, (economics 101 says never finance a depreciable), ADDING GOODIES YOU CAN'T GET YOUR MONEY OUT OF, not maintaining it, leasing at too high a price, or leasing and going over the allowed number of miles.
On that topic, IF you can write off lease payments, you can structure excess miles into your payments and write them off too!
But given the options you have explained, I'd keep the truck you've got and forget buying a new one! Remember: a vehicle is good for one thing and one thing only, and that's getting you, your family or goods and material from one place to another as quickly and as safely as possible.
Why make it as expensive as possible?
I have read every one of these responses and they are all good advice. DON'T LEASE UNLESS YOU CAN WRITE OFF THE PAYMENTS or, at a minimum, want or need a new vehicle every three or four years and don't care what it costs you.
I used to be in this business as a sideline representing the buyer. The cheapest way to own a vehicle is buy it at the lowest price, pay cash, maintain it and drive it until the wheels fall off.
You can figure other factors from there and the cost goes up each time. Here they are: paying too much, financing, (economics 101 says never finance a depreciable), ADDING GOODIES YOU CAN'T GET YOUR MONEY OUT OF, not maintaining it, leasing at too high a price, or leasing and going over the allowed number of miles.
On that topic, IF you can write off lease payments, you can structure excess miles into your payments and write them off too!
But given the options you have explained, I'd keep the truck you've got and forget buying a new one! Remember: a vehicle is good for one thing and one thing only, and that's getting you, your family or goods and material from one place to another as quickly and as safely as possible.
Why make it as expensive as possible?
To lease or buy
The last three 3500 trucks I leased. I like to get a new model every 2 years. I also like the idea of not having to keep it, if it turns out to be a bad one and after two years. By then I know if that truck is any good or it is going to have a lot of problems.
Its nice to be able to just walk away from a truck thay has a lot of problems. The last one I had was that way the dealer wouldn't fix it so I said look you fix it now or you get it back that way when I turn it in. They fixed it the next day. Just because that engine is a Cummins the rest of that truck is Dodge junk.
( just my 2 cents worth )
The last three 3500 trucks I leased. I like to get a new model every 2 years. I also like the idea of not having to keep it, if it turns out to be a bad one and after two years. By then I know if that truck is any good or it is going to have a lot of problems.
Its nice to be able to just walk away from a truck thay has a lot of problems. The last one I had was that way the dealer wouldn't fix it so I said look you fix it now or you get it back that way when I turn it in. They fixed it the next day. Just because that engine is a Cummins the rest of that truck is Dodge junk.
( just my 2 cents worth )
Leasing is just a nicer word then RENTING. The only people that lease and come out on top are those that lease as a company vehicle. I have leased twice, and both times got to deduct my full lease payments for company related expenses. That is the only time I would ever recommend the leasing option.
Unfortunately most lease because they really can not afford the vehicle they want. If it means that much to you, and you are willing to pay the extra, when go for it. But it is exactly what the auto and finance people want you to do, they sell the truck and rent it to you, it's a win win for them. If you do lease, do not make modifications to the truck, that would be stupid to modify something you are renting, also it will cost you when the lease is up. Yes they can also charge you for the fifth wheel/goose neck type hitch installation, in there eyes you have de-faced the truck bed. Right now is about the lowest you will ever see loan rates, many offer 0% interest, which should be taken advantage of if at all possible. I would rather struggle through five or six years of high payments then lease for 3,4 or 5 years then re-finance for another 4-5 years. When i bought my truck the interest rates were very high, and I can remember those $721. 00 payment very well. End the end everyone will do what they need to do, just remember it is your money, and how hard you have to work to earn it.
Unfortunately most lease because they really can not afford the vehicle they want. If it means that much to you, and you are willing to pay the extra, when go for it. But it is exactly what the auto and finance people want you to do, they sell the truck and rent it to you, it's a win win for them. If you do lease, do not make modifications to the truck, that would be stupid to modify something you are renting, also it will cost you when the lease is up. Yes they can also charge you for the fifth wheel/goose neck type hitch installation, in there eyes you have de-faced the truck bed. Right now is about the lowest you will ever see loan rates, many offer 0% interest, which should be taken advantage of if at all possible. I would rather struggle through five or six years of high payments then lease for 3,4 or 5 years then re-finance for another 4-5 years. When i bought my truck the interest rates were very high, and I can remember those $721. 00 payment very well. End the end everyone will do what they need to do, just remember it is your money, and how hard you have to work to earn it.
You should not lease the truck - it will cost you a LOT more than the $600 purchase payment to lease.
You say you will possibly put more than the 15k/year allowed miles on the truck. That will cost you (on average) . 15 PER MILE.
You are going to put on a goose neck, which means holes in the bed (NOT the frame on the 3rd gens - the good hitches are no drill, which keeps Dodge happy). You will have to remove the hitch and repair the holes in the bed BEFORE you return the truck, or the leasing co. will charge you for "damage".
If you lease and buy the truck at the end of the term, you will pay a LOT more in the end than buying it.
The powertrain warranty covers "seals & gaskets for covered components", NO warranty covers the clutch past the first 12k miles. Pretty much standard language & coverage among the big 3.
You should hold on to your 98. 5 until you can BUY the truck you want - but with almost 11k in equity, you should be pretty close.
You say you will possibly put more than the 15k/year allowed miles on the truck. That will cost you (on average) . 15 PER MILE.
You are going to put on a goose neck, which means holes in the bed (NOT the frame on the 3rd gens - the good hitches are no drill, which keeps Dodge happy). You will have to remove the hitch and repair the holes in the bed BEFORE you return the truck, or the leasing co. will charge you for "damage".
If you lease and buy the truck at the end of the term, you will pay a LOT more in the end than buying it.
The powertrain warranty covers "seals & gaskets for covered components", NO warranty covers the clutch past the first 12k miles. Pretty much standard language & coverage among the big 3.
You should hold on to your 98. 5 until you can BUY the truck you want - but with almost 11k in equity, you should be pretty close.
I may have misunderstood one thing, is that $370/mo payment with you "giving" them your '98? If so, STAY AWAY!!! Don't give them your truck, and then "rent" the new one. However, if $370/mo is without your old truck, then $370/mo for 36 months is $13,320. This, plus $18,500 is $31,820. If this is a four wheel drive Quad Cab SLT, then it's not a bad deal. But, leases are pits!
Now, if you trade in your '98, and they give you $16K for it, you have ~$11K equity. If you buy a $40,000 truck, you'll finance $29K. 48 months, 0 interest, you're payments will be $833. 33 on $40,000, and $604. 17 on $29,000. This is the way to go to get it payed of the quickest. And it's "free" money. If you can afford this, do it.
If you stretch it out, you'll pay more in interest, but monthly you'll be better off. $40k @6. 75%, payments are $784/60 months, and $677/72 months. $29k @ 6. 75%, payments are $570. 82 and $490. 95. Interest rates will vary. You'll pay anywhere from $5,246. 00 for $29k @6. 75%/60 months to $8756. 00 @6. 75% and $40k.
I would keep your '98 if the only reason you are getting a new one is maintenance. Pay yourself $500. mo and use that money for repairs. You'll be way ahead. Or, sell your truck for as much as you can, and use your equity to get a smaller loan on the new one. Shop for the best interest rates. Banks are happy to finance less money on expensive trucks, ie $29,000 for a $40,000 truck! And remember, Shop around for a good deal. If you pay more than $36,000 (for an SLT), keep looking.
SOLER
Now, if you trade in your '98, and they give you $16K for it, you have ~$11K equity. If you buy a $40,000 truck, you'll finance $29K. 48 months, 0 interest, you're payments will be $833. 33 on $40,000, and $604. 17 on $29,000. This is the way to go to get it payed of the quickest. And it's "free" money. If you can afford this, do it.
If you stretch it out, you'll pay more in interest, but monthly you'll be better off. $40k @6. 75%, payments are $784/60 months, and $677/72 months. $29k @ 6. 75%, payments are $570. 82 and $490. 95. Interest rates will vary. You'll pay anywhere from $5,246. 00 for $29k @6. 75%/60 months to $8756. 00 @6. 75% and $40k.
I would keep your '98 if the only reason you are getting a new one is maintenance. Pay yourself $500. mo and use that money for repairs. You'll be way ahead. Or, sell your truck for as much as you can, and use your equity to get a smaller loan on the new one. Shop for the best interest rates. Banks are happy to finance less money on expensive trucks, ie $29,000 for a $40,000 truck! And remember, Shop around for a good deal. If you pay more than $36,000 (for an SLT), keep looking.
SOLER
I always buy my vehicles and pay cash for them since I can't deduct the lease payments. In fact, I paid off my mortgage many years ago and don't use credit for anything other than convenience - I'll charge something on a credit card every now and then, but the bill is paid in full each month. Why should I pay to use someone else's money?
My sister has to have a new car every 2-3 years and has fallen into the lease trap. At the end of the lease, she has no equity built up to put down to buy a vehicle, so she either has to look at financing the 2-3 year old vehicle she's turning in or subject herself to another lease cycle. My point is, leasing has just trapped her into a position where, unless she bites the bullet and buys one of her leased vehicles, she will be making car payments the rest of her life. Not a good thing!
If you have to have the new truck, take advantage of the cash back and 0% interest rate. At least it will be yours at the end of the 60 months.
JM2CW
Rusty
My sister has to have a new car every 2-3 years and has fallen into the lease trap. At the end of the lease, she has no equity built up to put down to buy a vehicle, so she either has to look at financing the 2-3 year old vehicle she's turning in or subject herself to another lease cycle. My point is, leasing has just trapped her into a position where, unless she bites the bullet and buys one of her leased vehicles, she will be making car payments the rest of her life. Not a good thing!
If you have to have the new truck, take advantage of the cash back and 0% interest rate. At least it will be yours at the end of the 60 months.
JM2CW
Rusty
LEASES SUCK..... as previously stated,unless you can write it off... even then you're alweys driving someone elses truck... . insurance requirements of higher limits may be required to satisfy the lease... ... consider this,I bought mine at end of model year. Had shopped for some time through August and September and knew all the features I wanted. I became aware of what was on the lots at several dealerships IN and OUT of the area(some offering invoice pricing online)... . had just about convinced myself I didn't NEED it ,just WANTED it..... then Oct 1 DC doubled the rebate on remaining '03s in stock... . I knew right where to go... ... has 98% of options I wanted and a few I may not(i. e. snow plow prep)..... 40,000 MSRP... ... dealer knew I was serious... . struck a deal that day OFF INVOICE and paid 30,000 and some change... there were not twenty to choose from and Resale RED was not my first choice but after 5 and half months of pure fun driving and knowing I bought it for around what GM gasser would run,with a slower depriciation... ... . I LOVE my new FIRETRUCK 
... . point is if you want it bad enough and are willing to be patient ,DO THE HOMEWORK(know the invoice price on the options-know current and maybe anticipated rebates),take the emotion (impulse)out of it ,you should be able with CASH EQUITY in hand (current truck sold privatly)
,make a schrewd deal even the old lady would be proud of :--) Oo. Oo. Oo. Oo. Oo. Oo.
... . point is if you want it bad enough and are willing to be patient ,DO THE HOMEWORK(know the invoice price on the options-know current and maybe anticipated rebates),take the emotion (impulse)out of it ,you should be able with CASH EQUITY in hand (current truck sold privatly) ,make a schrewd deal even the old lady would be proud of :--) Oo. Oo. Oo. Oo. Oo. Oo.Hello everyone, this is the first time I have posted but have enjoyed reading the threads. (My wife thinks I am nuts). I just wanted to put my 2 cents worth on this subject. I have to start out and say that leasing is not for everybody. If you are going to own your truck for more than 8 years or if you drive a tremendous amount of miles. As you can tell I leased my truck. Here is my reasoning. First of all I got my $43000 dollar truck for $33200. If I bought my truck with no money down it would had cost me $662. 51 a month. (Total payments of $39750. 60 , 5 years, 4. 9%) I leased my truck for 63 months with a payment of 380 a month, with a payoff of $16000 at the end. If I end up buying at $16000 and pay another 5 years and add taxes with 5. 5% my payments would be $324. Do some math and with this scenario I would pay $43380 for my truck in ten years. (About $4000 more than if I bought straight out and also a slight increase in insurance). What I have not told you was that I was going to put down $4000 on the new truck. I leased, no money down and put the $4000 in the stock market. (Risky but I bought Nortel Systems at 4 dollars and it is around 8 now so my $4000 that I was going to sink in my truck is now $8000). Also the extra I was going to pay in payments is going to my etrade account collecting interest and buying when I find a good deal. It’s a risk but isn’t life full of risk. Also what a lot of people do not know you can negotiate with (some) banks at the end of the lease and that $16000 might be $14000 or $15000. And one thing that amazes me that it is human nature to want a newer truck after a few years, look at all the people buying the new 3rd gen. At the end of my lease I can either buy it (or buy then sale, $16000 for a five year old diesel with low miles does not sound that bad) or trade it in on that new dodge 3500 with a “true” crew cab and with 800 ft-lbs of Cummins torque and I will have a nice goose egg in my etrade account for a nice down payment for another lease truck or a purchased truck. Sorry for such a long post but I do not think leasing is a bad alternative for the right situation. Also with a side note I like my warranty and do not intend to BOMB. If you BOMB you might not want to lease. Like I said, it is not for everybody but for some I think it is the right way to go.
donot lease, unless you have a business period. In my situation I can write off about 12500$ a year in vehicle expenses if I had bought I would only be able to write off about 6000$ a year, Over 4 years this saves me over 3k in taxes. my buyout on my truck is 16k if I had bought my truck playing with amortization I would owe around 12 k for my truck after 4 years. So you see even me I need to negoitate my buyout down at least 1k to make it wash out. The guy that sold my dad his truck is confident he can get 2k knocked off my buyout when the lease is up, so I will sell the truck privately and hopefully have some money left over to put down on a new truck. If I had to do it over again, I would take the zero % deals being offered and bite the bullet and get the truck paid off in 4 years. as for your truck never ever trade in a diesel truck, always sell it privately, they only offered me 3k for my first gen on trade, well it sold it for 6k myself, your truck depending on options my bring close to 20k privatly. Also in regards to a diesel not paying for it self in 100 k miles, this isn't true, I pull a trailer around town and spend about 280$ a month in fuel, if i was using a gasser you could double that amount. over 4 years I am saving at least $13,340 on fuel alone figuring I drive about 90k miles in that 4 years, plus when I go to sell the truck it will bring about 4k more than a gasser at least in my area, so you see in my scenerio I will have "saved" 12k over 4 years by driving a diesel and still driving less that 100k miles
Sales taxes
This thread is getting kinda long and wordy but I will try to be brief. The final consideration as far as trade-in is concerned is to make sure the sales tax you pay makes whatever you're doing worthwhile. For instance:
1. You will pay sales tax on the purchase or lease price of the vehicle you get.
2. If you trade in a vehicle, you pay sales tax on the DIFFERENCE between the two.
3. If you sell outright, make sure you get enough cash for your old vehicle to make paying the additional sales taxes on the new vehicle worthwhile.
4. And finally, remember that in real dollars a dealer will almost NEVER give you more than wholesale price for a trade-in. After all, he's gotta sell it and make a profit on that deal too, right?
That's why it's important to forget list price (MSRP, etc. ) and compare dollars-to-dollars. What will the new truck cost? What are you getting for your trade-in? Only then are you ready to deal.
This thread is getting kinda long and wordy but I will try to be brief. The final consideration as far as trade-in is concerned is to make sure the sales tax you pay makes whatever you're doing worthwhile. For instance:
1. You will pay sales tax on the purchase or lease price of the vehicle you get.
2. If you trade in a vehicle, you pay sales tax on the DIFFERENCE between the two.
3. If you sell outright, make sure you get enough cash for your old vehicle to make paying the additional sales taxes on the new vehicle worthwhile.
4. And finally, remember that in real dollars a dealer will almost NEVER give you more than wholesale price for a trade-in. After all, he's gotta sell it and make a profit on that deal too, right?
That's why it's important to forget list price (MSRP, etc. ) and compare dollars-to-dollars. What will the new truck cost? What are you getting for your trade-in? Only then are you ready to deal.
- Status
Issue 128 – Digital Version
Digital Magazines
FREE!
TDR Test Drive - Digital Edition
Renew
Subscribe
Gift Subscriptions
Back Issues
Subscription Status
Address Change Form
Buyer's Guides
Ram Diagnostic Trouble Codes
The Perfect Collection
The Perfect Collection Vol. II
TSB Updates
Dodge/Cummins Historical Overview
Cameron Collection
What Makes Us Tick?
Product Showcase
Advertising
Turbo Diesel Register
Issue 128 – Digital Version
Digital Magazines
FREE!
TDR Test Drive - Digital Edition
Renew
Subscribe
Gift Subscriptions
Back Issues
Subscription Status
Address Change Form
Buyer's Guides
Ram Diagnostic Trouble Codes
The Perfect Collection
The Perfect Collection Vol. II
TSB Updates
Dodge/Cummins Historical Overview
Cameron Collection
What Makes Us Tick?
Product Showcase
Advertising
