The Smart Choice!
Enter your registered email address to request a password reset link.
Many of us lease our cars. Leasing is better for most people, but not everyone. (Full disclosure: all things being equal, we would rather see a customer lease because owner loyalty is higher---lease customers pay less to drive a nicer, safer car that's under warranty, and their satisfaction is higher. The margins in auto retail are thin so we've built our business on the volume of repeat and referral business from happy lease customers.)
Examples of People Who Shouldn't Lease
Leasing Benefits for Everybody Else:
Why don't even more people lease?
The biggest objection most folks have to leasing is that they don't understand it. People tend to fear and avoid things they don't understand, especially when they are in an uncomfortable environment (such as a typical showroom). Here's a quick contrast example between financing and leasing a $20,000 Subaru for a 60-month loan and a 36-month lease:
$20,000 \ $20,000 \
| \ Bank collects all $20,000 | \ Bank collects $8,000
| \ from you over 60 months, $12,000 (residual) \ from you over 36 months,
| / plus interest. | / plus interest.
| / | /
$0 / $0 /
Monthly payment: $420 Monthly payment: $300
When you get a $20,000 loan, the bank pays us $20,000 for your car and keeps your title until you pay off the entire $20,000, plus interest. When you lease, the bank also pays us $20,000, and keeps the title. What's the difference? With a loan, the bank wants back 100% of the $20,000, plus interest. With a lease, the bank only wants you to pay back the difference between $20,000 and the residual of $12,000. The residual is a forecast of the value of your car after the lease term, and the bank stands behind that forecast.
Common Misconceptions about Leasing
For more information about leasing, Contact US!