Quote:
Originally Posted by JDTX
For us, the lease is really more of a rental
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While leasing is similar to renting, in actuality you aren't paying just for use. You are paying depreciation, and the amount you pay is largely determined by the selling price minus residual value. In financing a car, residual value is determined by the market and the condition of the car at the time you wish to sell to an unknown party. A lease is essentially an agreed upon buyback from the dealer in which the amount, aka the residual value, is predetermined. Additionally, you have certain rights afforded in leasing that you do not have in renting. For instance you can buy the car out at anytime, there is no prepayment penalty, and you can benefit from a car that has not depreciated as expected—If the car is worth more than the buyback, you can take advantage and get some money back. When you rent a car from Hertz, for example, you can't sell the car if its worth more than predicted. You also can't transfer the rental agreement.