With
all of the new safety, style and efficiency improvements that have and
will happen, Leasing allows you to stay current and up to date and also
allows you to plan as the costs are predetermined and fixed.
2. Gap Protection
In
the event of a total loss, the whole balance of the lease/residual is
paid off, regardless of the actual market value of the vehicle, which
is all that your casualty insurance will pay.
The
owner of the vehicle has primary liability. In the case of a lease, the
vehicle owner is the company that leases you the vehicle, not the
driver. The leasing company carries an umbrella policy, which covers
everything over your primary liability limit.
4. Help in borrowing
The entire debt does not show on a balance sheet; therefore, a leased car does not show up as a liability on a loan application.
5. Tax Ramifications Have Changed to the Benefit of a Business Owner
The
bigger the lease payment, the bigger the deduction, provided that the
vehicle is used more than 51% of the time for business.
6. No depreciation risk
The
guaranteed future value of the vehicle is the amount deducted at the
beginning of the lease. It is also the expected value of the vehicle at
the end of the lease. You have the term of the lease to decide if you
want to complete the purchase.
-
If the guaranteed future value compared to the actual market value at
the end of the lease favors you, you complete the purchase.
7. Sales Tax Savings
The only thing better than a tax deduction is never having to pay the tax in the first place.The tax advantage of leasing is that you only pay tax on the monthly payments. For
example, you would pay 8-10% of 100% in a buy situation, or you can pay
only the tax on 50% in a lease, based on the guaranteed future value.
Common Objections to Leasing
1. "I won't own it. I have no equity."
That's
good, not bad! You won't have any equity because you won't pay for any
equity. That's why your payment is so low. In order to have equity in
the vehicle, or own the vehicle, your payment would have been much
higher. Instead of equity in the vehicle, you have cash. You can use
this cash to buy the vehicle if you want, but you don't have to decide
until the end of the lease. Some assets are good to own, like a house or
stocks, because they have the possibility of appreciating.
Vehicles do not appreciate; they depreciate. Would you pay $100,000 for a house if you thought it would be worth $75,000 in three years?
2. "I've had a bad experience with leasing or someone I know had a bad experience."
It's
true. Some people have gotten burned in leasing. It's because they were
put into the wrong lease or it wasn't fully explained to them. Many
people were put into an open-end lease and didn't realize they were
guaranteeing the residual at the end. We don't offer open-end leases.
We offer closed end leases. In other cases, perhaps they exceeded the
15,000-mile per year allowance or had a charge back for abnormal wear
and tear. If they had purchased the same vehicle and drove the same
number of miles, or traded it in the same condition, they would have
experienced the same deductions.
We
won't let that happen to you. We tailor the lease specifically to your
needs and let you know what your rights and obligations are up front.
3. "I drive too many miles" or "I don't drive enough miles."
If
you drive more than 15,000 miles per year you are an ideal leasing
candidate. You can build the extra miles into the lease at .10 per mile
or pay .15 per mile at the end of the lease. Which would you prefer?
.10
per mile is quite a savings for you. If you buy the same vehicle and
drive the same number of miles, when you go to trade it in, they will
deduct .25 to .30 per mile, over 15,000 miles, to get the appraised
value. You can actually buy the miles you need cheaper in a lease than
you can from yourself!
4. "I don't understand leasing."
Don't
feel bad, very few people do. Worse yet, some think it is renting.
Leasing is probably the most misunderstood consumer transaction in
America.
Unfortunately, what has kept many people from leasing is the fear of the unknown.
According
to a survey by J.D. Power and Associates, once people have leasing
explained and they try it, 93% of them are so satisfied they lease their
next vehicle! We don't view leasing as just another way to buy a car.
We view it more as an insurance policy. It removes the risk of the
vehicle's depreciation. Leasing offers value; ownership does not.
Leasing
gives you the ability to pay for the part of the vehicle you use, and
give you a choice of "purchasing" after you have driven it for a few
years.
