Sedona Auto Dealer: Fritz Barnard
Professional Sales and Leasing Consultant presents...
Let's Look at Leasing Your Next Vehicle
I’ll just give you my view on leasing, a subject
on which there are hundreds of articles and opinions on. I’ve
leased vehicles myself, and will bring that into my perspective, also.
First, realize that most people go out, negotiate the best
price, and so forth on a vehicle, thinking they will keep it “forever,”
then are back within a 2-3 year period because they typically:
- Want something New –or-
- Need something different- their needs have changed
- Just don’t like it any more, or a myriad of other reasons.
A few main ideas about leasing which are important concepts:
- You only pay for the part of the vehicle that you will use (plus
rental)
- You generally sign a shorter-term contract.
- You are using the vehicle during the best years of its life-usually
it’s under
new warranty.
- There are seven mileage bands to choose from, so the flexibility
of mileage is there!
- It could make sense for you if you like a new vehicle every 2-3
years.
Under the Purchase contract, if you decide to trade the vehicle after
two years, say, on a 5-year term, you will have negative equity, since
you owe 36 months more payments. With a 24-month lease, your contract
is paid in full! These days, this is advantageous in MOST cases. The
only way not to have the negative equity is to shorten the term of
the loan, or put lots of cash down, or a combination of both. Most
people simply can’t afford to do this.
Over the past several decades the price of vehicles has risen (it’s
a shocker, I know!) to the point that where a 36 or 48-month payment
schedule provided an affordable payment 30 years ago, now 60-72-84
and 100 month terms are fairly common.
Since vehicles depreciate so rapidly, this doesn’t seem to
make sense financially. According to oil baron Paul Getty, “If
it appreciates, buy it. If it depreciates, lease it.” In my
opinion it doesn’t make much sense for many buyers to buy expensive
vehicles, and sign up for long-term loan, just to keep the payments
affordable.
At the end of your lease, you have three distinct options:
- Turn the vehicle in, and walk away with no further commitment.
- Replace it for a newer, safer, more economical model on full
warranty-the most popular option
- But it for a guaranteed “Lease end value” (determined
at the inception of your lease)
Ask your financial advisor, or look at the numbers your self. With
careful analysis, you will find that even if you lease, then purchase
(your own “used car”), your total investment may not be
that much different than if you just purchased it.
Finally, a personal experience:
In 2004, my wife and I leased a new vehicle- putting no cash out
of pocket (our choice), and at 12,000 miles per year (plenty for us),
the payment was around $425. To get to the same payment on a 5 year
purchase, we would have had to invest $8,000 or so to have the same
payment. For us, it was easier to sign a shorter contract, with NO
money down and the same payment…it turned out that our daughter
and her husband were able to make a “good buy” on the
vehicle as it came out of lease, (they still have it). My wife went
on to another, nicer vehicle, and so: win- win- win!
As your Professional Personal Consultant, I will always give you
several payment options. It is up to you. As a knowledgeable consultant,
who can answer your questions, about both leasing and financing, I
can make it clear for you. I have others who can be called upon for
information, also, so I’d invite you into the dealership and:
LET ME HELP YOU:
- Find the right vehicle for your needs
- Determine the right vehicle for your budget
- Answer all your other questions
- Give you options so you can decide which is best for you
- Shop for a vehicle without pressure. We’ll actually have
some fun!
- Get the most bang for your buck
- Keep your business local, and with a dealer you can count on.
(I do deliver
anywhere in Arizona, also!)
Thanks, and I'll see you "down the road!" I look
forward to the opportunity to meet you!
