Quote:
Originally Posted by blankall
On top of that leasing the vehicle lets you vet for lemons with no risk. I wrote off my lease payments then bought out afterwards. Absolutely no regrets.
My girlfriend purchased a car for 12k used. Put money into repairs. 3 years later, it's about to die.
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Plus if you have a massive accident and the car is repaired, the leasing company has to eat the depreciation.
Also if the car is written off, you have built in GAP protection if the payout is lower than the amount owed.
And... they are assumable if you need to bail quick and owe more than the buyout.
But wait there's more... If the car turns out to be the next Pontiac Aztec, and is virtually worthless at the end, the Lessor takes the hit on 'horrible car syndrome' not the lessee.
There is a reason almost every single employee at auto dealerships, and almost every single high net worth person leases a car. Virtually all the risk is absorbed by the leasing company, as long as it is a closed end lease. This is what I tell people that say... "but, but... I don't own the car, I want to finance instead!"
"Miss 3 loan payments and tell me if you still 'own' a car."
In either scenario the bank still registers a lien, the only difference with leasing, is both parties are registered as joint owners.
There are clients we deal with, that lease everything, or one pay lease, simply for the added protection, and interestingly enough, three notable ones I can think of, are very successful Investment advisors.
Caveat: NEVER, and I mean NEVER, sign an open ended lease. They are the reason leasing got a bad name, and I don't think one manufacturer is offering them anymore. Private leasing companies however, be very careful you do not fall into the Open ended lease trap with them. They are dangerous because the residual value is not guaranteed, it is only an estimate. Best analogy is this:
Open ended lease: Open your wallet at the end.
Closed end lease: You can keep it closed.