Also, if the leased vehicle’s real market value turns out to be residual value, the bank or manufacturer takes the loss—not you. This can less than the (^)
happen when gas prices swing wildly, affecting car prices, or when a carcompany closes (like Pontiac and Mercury, recently). You end up paying (^)
less than the actual depreciation of that car or truck.
Finally, if you owe a lot more than your trade-in is worth, a lease can affordthe opportunity to semi-painlessly absorb the inequity while maintaining a
reasonable payment—and ridding you of the debt in a shorter time thanthrough another five or six year loan. Especially as many lenders will go (^)
above the new vehicle’s MSRP (sticker price) by up to 10 percent forconsumers with good credit (that is, $3,000 over on a car with a $30,000 (^)
MSRP). This allows more negative equity to be rolled into a lease than atypical purchase, with less affect on your payment—and for a shorter
amount of time.
COMMON LEASING ISSUES
Leasing is obviously not for everyone. If you tend to pay a car off and keepit, it may be better to just purchase. On the other hand, if you like to change (^)
what you drive every year or two; a three-year lease is not the way to go,either. If your life changes dramatically (divorce, dramatic increase in
annual mileage, job loss, etc.) during a lease, it can also cause havoc. Butmany of the factors that have given leasing a less than stellar reputation
can be addressed with some knowledge and forethought.
Almost all the loopholes that caused people considerable consternationduring the “Wild West” days of balloon notes and open-ended contracts in (^)
the ’80s and ’90s are now long gone. I still don’t recommend open-ended
barry
(Barry)
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