A New Spin On Leasing?
Ahhh… the age old question, and one I’ve tried to tackle many times for clients. The short answer is, everybody’s needs are different. What works for one buyer would be an awful quagmire for another!
However, while talking to a colleague they suggested that in a rough way, the lease or purchase decision can be equated to dating or marrying a significant other, and while not perfect… I felt made a ton of sense!
Now, most of us have dating horror stories, where you just look back and say “what was I thinking?!” Or “…glad I dodged that bullet!”, but even for the situations where it just didn’t work out, this is where the lease comes in handy. You can just break it off and walk away without any legal mess or hassle.
A lease is usually advertised in # of terms x monthly payment. (36 months for $499/mo for example). This makes the lease look VERY enticing, because all the shopper sees is a low payment. This CAN be a major benefit of a lease, but it can lead to some big pitfalls if you aren’t careful.
One of the big complaints with leasing is that big buyout cost if you decide you want to keep the car… now here’s where the metaphor comes in. When you lease a car, you and the manufacturer agree that you are going to use a set amount of that car (thus the mileage restriction), and in tern, the manufacturer can speculate what the vehicle will be worth once you’re done with it. This would be considered that dating period… things are new and fun and casual. You have a fancy new car and a nice low payment, but don’t get too excited, you’re just dating. Once you make that commitment to keep the car for life, you need to pay for the rest of the car. THIS is where that buyout cost comes from.
The metaphor sort of falls apart when you try to apply it to purchasing a new vehicle, but it was fun while it lasted, right?
Anyways, I could bore you for hours on the advantages and disadvantages of leasing, but then there’d be no fun in our one on one buyer’s consultations!
To get started and see what’s right for you, send me a message!