Originally Posted by **********

Hi Boxer,

I've leased and owned lots of cars. You're right there are good reasons for both, but some of yours are wrong:




This is not true. Your car company owns the car but you're driving it, so you're responsible for the wear and tear (tires, brakes, oil, collissions, etc). Then if the warranty runs out before the lease does, you're responsible for the rest too. And you can get into negative equity if you put too many miles on the car as you will end up having to pay the value of the difference when you return the car.




Not always. If your business owns the car you save a little bit of tax, however, there is something called Taxible bennifits: Because you bennefit from the use of the car, you are taxes on that bennefit. Generally, if you got $10,000 use out of a $50k car, you pay tax on that $10k.

(And if your car is worth more than $50k, it is considered a luxury car, and your tax goes up even more. Fucking Quebec government s.o.b's)

Plus, you have to keep a log of everywhere you went if you plan to write off your gas purchases. If you don't have a log, you may not be able to claim the gas, insurance, etc.

The best thing about leasing is the lower montly payments. Payments can be as much as 50% less which makes any car easier to afford to drive, just not to own.

There IS however, a way to make back quite a bit. Here's how:

First, when you lease your car, you will have what they call a risidual buyout value. Let's say for the sake of argument that on a $50k car, the buyout is $25k after 4 years at 80,000 Kilometers.. (This is adjustable at the time you are negotiating your monthly rates).

After the 3-4 years of your lease, if the car is in good condition and under its milage limit, you can return the car and walk away if your car is below 80k. Sounds fair enough, right?

Wrong!

If your car only has 70 or 60k, your car is worth MORE than the buyout. If you have only 50% or less, your car is worth quite a bit more.

You can't deal with the finance company on this so you must either give the car back to them, buy it out for the $25k, or do what I do, Sell the car myself.

I have done this EVERY time and it works like a dream. First, get the car fixed if anything is broken. Clean it up and polish it and make it look sexy. Double check the buyout value, then add 15%. This is the minimum a dealer will mark up the car for on the buyout value. Even more interesting, dealers sometimes buyout these cars for less because the finance company may sell for less just to unload the car.

In other words, whatever your lease buyout value is, it is worth much more to the end user / retail customer. If its a good car in good condition, ESPECIALLY if its SPRING TIME, you can get an extra 15-20% on your car by selling your leased car directly to the a new driver.