Leasing vs Financing

 Leasing vs Financing

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There are many myths and misconceptions about leasing. 

AutoSave4U Founder served as a Leasing Sales Trainer for several dealerships. He has found that the reason people are leasing fewer cars is not because of the Leasing options that are available, it is because the majority of  sales personnel are lacking information. Without this information they are not able to properly explain to their customers what Leasing vs. Financing really means or even what the negative consequences are for paying cash for a vehicle.

AutoSave4U takes the time to inform all of their clients about the different options available to them for the acquisition of a new vehicle.  This way customers know the full implications of how a vehicle purchase can impact their lives. AutoSave4U will never “force feed” a program to anyone – information is provided for clients to be able to make this decision on their own.

The following topics regarding ways to step into a new vehicle will provide useful additional information for your next acquisition.

Fact: A higher credit score is needed to qualify for a lease than for traditional bank financing.

Why?

Because there are more options with a lease that protect you against the Laws of Depreciation.

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Leasing

Did you know that there are many advantages to leasing?

  • An individual who could not afford to finance a higher end car that they really wanted because of ridiculously high monthly payments can lease the same vehicle for a lower monthly payment. (What tends to happen without understanding how a lease works, is that the consumer starts stretching the term of financing to lower the monthly payment.) This is one way Auto Save Inc. can assist you – we negotiate the lease because we fully understand what options are available and can drive the price down for you.
  • A lease-to-own may very well fit you as it allows you to drive a new vehicle every 3-4 years – most times before the factory warranty expires
  • Lease-to-Own, that’s exactly what it is. Again this is hardly ever explained to a consumer while leasing the car. You have the option of owning the car at the end of the lease – only if you choose to. By having paid a lower monthly payment along with the depreciation of the vehicle, this allows you to purchase the car for much less money than if you had financed it from the beginning!!

The Pendulum Swing – Think of leasing a vehicle as a pendulum. Look at the current market conditions along with the value of your vehicle, by choosing to lease you are protected from the unavoidable Law of Depreciation. For example. If there is a buy-out at the end of your lease for $15,000.00, that becomes your option to buy. Now, lets say that the vehicle has a very poor resale value due to performance issues, recalls etc. and in the end it is only worth $12,000.00. The pendulum swung in your favor and you get to walk away from the vehicle, saving $12,000.00. If the vehicle is worth more than $15,000.00, the option to buy it for less than it is worth is available to you. You can, if you would like – finance the balance for another 3 years or so. You also have the option to pass it on to a family member or you can even sell it out right and make a profit. Remember, anything over the buy-out that is due to the bank is profit in your pocket. The banks only want for the loan to be satisfied and paid off. Selling the vehicle privately a few months before the lease ends is a wise idea because it provides time for you to sell it privately. This is the beauty of the Pendulum Swing!

The majority of dealerships will probably not disclose this information because they are hoping that you will bring the car back and lease a new one. This nondisclosure also helps the dealerships increase their used car inventory enabling them to make even more money off of that same car by selling it. This nondisclosure as was mentioned before, may well be the lack of training provided to the sales staff on how to properly explain a lease to the consumer. Again, there are many other scenarios to explore while taking advantage of a lease and we are great at negotiating this for our clients!

Financing & Cash Buyers

Financing

Our forefathers have taught us to: Always pay cash or don’t buy it at all. The dynamics have changed. Car prices are climbing faster than annual incomes can keep up with. The average car buyer shy’s away from buying a new car. With traditional bank financing, you buy it and you own it. Financing a vehicle for 6-7 years is risky because the vehicle may not last for the term of the loan. Try to imagine again the Pendulum Swing relating it to financing or paying cash – Which way will the pendulum swing? What if it swings to the left which is on the negative equity side?. People who finance a vehicle make the monthly payments so that they will own the vehicle when their payments end. The unknown part of the financing scenario always will be: “What will my car be worth?” No one knows the answer to that ahead of time.  Invariably, because of this – most people end up losing money because there were numerous recalls that effect the resale value and any number of other scenarios that involve the unforeseen. Remember, the financial institution who has financed your car has no interest in the future value of your car, they provide a loan to make money off of the interest!

Cash Buyers

We understand that people who pay cash don’t want to be burdened with monthly payments. We also understand that they own a vehicle that they can’t possibly know what the future value will be.What happens to cash buyers the very second that they drive off of the lot? The vehicle depreciates by thousands of dollars. It is like taking a match to a stack of hundred dollar bills and burning them right in front of the dealership. One of our famous founding fathers, J.P. Getty who is known for his wealth and success stated this. ‘ I always keep my money while using someone’s else’s”.   We wonder why so many people still pay cash for an item that will depreciate so drastically in a matter of seconds.

AutoSave4U can not claim that they are financial experts, however –  we can claim that we will help all of our clients save thousands of dollars when it comes to the process of acquiring their vehicle. It is AutoSave4U goal for their clients to be well informed of all of their options and know how those options fit into a better quality of life for them.