The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: Leland Charon who wrote (6122)	10/18/2002 4:45:20 PM
From: Gary L. Kepler	Read Replies (2) of 306849

OT car leasing About 15-20 years ago, one could lease a BMW for nothing down with a favorable imputed interest rate translating into reasonable monthly payments. At the end of the lease, one could sell the car out right and pick up about $1,500 more than the residual value as long as it was well maintained. Then one would roll into another nothing down lease and do it again. So it became pay as you go with sales tax added to the rent so that you paid tax only on the portion used. Keep in mind that you had to negotiate the proper lease terms for it to work. If you pay cash for a car every five to ten years, you are in for some serious sticker shock each time including much higher licensing and insurance costs as you step up to the new much higher value. One does not notice this impact as much when one leases and trades more often even though it may cost you much more in the long run. If you are paying, then pay cash to save money. If the company pays or it is used in business and can be written off, then it probably makes more sense to lease.

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