CHAPTER 8 - LEASING

’m a proponent of leasing—for the right customer, and if the lease isstructured right. Having developed customized, in-house leases for law (^)
enforcement and set up most every kind of manufacturer-, bank-, orcredit union-backed lease imaginable, I feel I have a good handle on (^)
when they are advantageous, and for whom. In this chapter, I’ll go throughthe pros and cons of leasing, so you can see if leasing is for you. And if so, (^)
that you structure it properly, helping insure you save money and futurehassles. What I’ll discuss below applies only to closed-end leases (the vast (^)
majority these days), not open-ended ones, also called “balloon notes.”

I

OVERVIEW AND POSITIVES

The upsides of leasing are numerous. Lease payments usually run 25 to 35percent lower than the purchase payment. Why should you pay an extra
$100-$200 per month for the same vehicle?
The most oft-heard objection to this is: “I don’t want to own it.” But since the average consumer keeps a new vehicle for about rent it—I want to
three and a half years (42 months), and the average new auto loan is now 72 months, buyers rarely have any equity when they decide to trade in.
These folk don’t really own their vehicle—the bank or credit union does.
Aren’t there better things a consumer can do with that money? Or, perhapsthey can get a nicer car for the same payment. Beyond that is the simple

fact that, while cars are more reliable than ever, when they do break, itcosts a lot more to fix them today than in the past. And if a lease is properly (^)