Date: Wed, 23 Feb 2000 21:35:35 GMT
From: Kalman Rubinson <kr4nopsamnyu.edu>
Subject: Re: leasing a saab


James H. E. Maugham <CaptJHEMnopsamam.waterw.com> wrote: > "Kalman Rubinson" <kr4nopsamnyu.edu> wrote in message > news:vLys4.11$nB.5011nopsamoon.nyu.edu... >> Actually, you are still financing $30K over 3 years but only amortising >> $15K. Does anyone think the bank is letting you 'borrow' the other half of the >> value without >> paying interest? > Not in a lease. You, the person leasing the car, are only concerned with > the difference pre-determined by the leasing company between what they paid > for the car and what it will be worth at the end of the lease. You cannot negotiate whether or not you pay this, so you may not wish to make it a consideration but you are paying interest on the entire $30k and amortising only $15k. If that were not so, the cost of leasing a $30K car and buying a $15K car would be the same (at the same interest rate). If you do a complete lease analysis, you will see that interest is charged on the residual. > There are many variables involved in leasing, from how much the car actually > costs, to the mileage allowed annually before punitive charges are levied. > Some leasing companies use the MSRP as the starting point for leases. Others > aggressively shop for the best price and base the lease on the actual price > paid, hoping to therefore offer a better lease rate. All true. > Your explanation pertains more to the leasing company or a vehicle purchase > than a person leasing a vehicle. It pertains to the person who pays for it. Kal

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