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Date: Tue, 22 Feb 2000 16:24:59 GMT
From: Kalman Rubinson <kr4nopsamnyu.edu>
Subject: Re: leasing a saab


qqq <qqqnopsamcom> wrote: > I don't mean to jump into this discussion when I wasn't part of it, but I > just wanted to correct this leasing explanation. > Actually, what happens in a lease is the leasing company decides how much > the car will be worth in a given period of time. For example, you lease a > 30,000 (the capitalized cost) car for three years, they may decide that > after three years the car will be worth 15,000 (the residual value). > So, now you're responsible to pay 15,000 for your "rental" of the car, plus > interest (money factor in lease terms). So, you're essentially financing > 15,000 over three years, instead of say, 30,000 over five years. 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? Kal

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