(Sales & Leasing Consultant at Powell Volvo/Mazda)
#1. It does not pay to own items that depreciate.
Why be saddled owning what will be worth less tomorrow than it is today?
#2. Pay for only the portion that you use.
Pay monthly only on the % of the car that you will use (smaller payments). Pay sales tax only on the monthly payments, not the whole car.
#3. Get a lower interest rate.
The “money factor” is __________ which equates to __________% APR.
#4. Update your cars every 2 to 3 years.
Stay current with the new advances (i.e. side impact protection, anti-lock brakes, etc.)
#5. Lower your total cost of ownership.
Never drive a car out of warranty with no extended warranty costs. Newer cars are more efficient and cost effective.
#6. The is no future value risk!
No trade in hassle. You may buy the car for the price agreed upon at the time of purchase, regardless of the market value of the car at lease end.
#7. You get free Gap Insurance.
Complete coverage for the “gap” between what you owe and the actual value (in case the car is totaled). Not available at any price on a purchase.
#8. Use someone else’s money, not yours.
You have the opportunity to earn a higher rate than the money factor.
#9. Retain maximum flexibility…all the options are yours.
You can buy, sell, trade, or simply walk away at lease end (and often before).
#10. You drive more car for the same dollar.
For example: with the same amount of cash up front, a car you can lease for $399 a month might cost you $680 a month to purchase.
Leasing does make good sense! My answers to the two most common objections to leasing:
“I’ll drive too many miles and I don’t want a mileage penalty at the end of the lease.”
Tomorrow’s dollar will be worth less than today’s, so why not pay it then?
You can use the mileage penalty as a negotiating tool at lease end.
You can spread the cost over time instead of a lump sum.
“I won’t have anything to show for all my payments at the end of the lease.”
You have the cash you didn’t need to spend on the down payment, monthly payments, maintenance, sales tax, etc. (large amount!)
In addition you have the possibility of equity in the car (depending on the market value).