Just wondering if anyone out there is a leasee like me. It works for me because when (not if) I have to leave the country again I can give the X back. Downside: I have to be "somewhat" careful with it.
We have had only one lease and it was on the vehicle we traded in.
One of the worse decsions I've ever made. Of course I take full responsibility for not reading the papers properly, and not totally understanding everything. But it just wasn't right for us. Never again. In your case, it's probably better, if you don't want to make payments while deployed.
With a good lease, that is low lease factor, lenient mileage, low up front fee, low end of lease fees, optimally a high residual (assuming you aren't buying the vehicle at lease end), etc., leasing is financially no different than purchasing. To explain, remember that a lease is only financing the decrease in value of the vehicle over the term of the lease. In other words, if you pick a three year lease w/ a high residual value, then for 36 payments, you are paying the depreciation in the vehicle (plus the interest: ie the lease factor). So, if you finance a purchase for three years, add up 36 payments, add in the loss of interest you would have accrued on your down payment, sales tax, etc, etc. then subtract the value of the car after three years, you arrive at the cost of ownership for three years. Take your lease payment X 36, add the money down (and loss of interest), plus the return fees and you arrive at the cost of ownership for 3 years. With a good lease, these two figures are about the same. This was explained to me by my banker neighbor (and of course they make their money on loans), and these scenarios have been seriously number crunched. You have to realize that when you lease, the vehicle is actually sold to a leasing company, so at the end of lease they wholesale it at the value that was predetermined. Thus, they make their money on the so called lease factor (interest). The dealer makes a small profit on the sale to the leasing company.
I try to explain what you just wrote to people all the time. I appreciate the explanation. No matter which way you turn it, a vehicle is a financial liability wether its old and payed off (pay for parts and maintenace) new (pay for interest, tax and the loan itself) or leased (payment and interest). You will never get your money back for sure.
Imagine, Sextera syndicate, Muzikman, Pony Boy and me all showing up at the dealership at the end of a lease. That would be why I don't lease, even when I figured it when I owned a business, It didn't figure for me. MC
I think this pole is just about right. I would say leasing is the right way to go for 10-15% of people out there. Just like renting a house is sometimes better than buying one, contrary to what your banker might tell you.
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