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Old 01-24-2012, 07:41 PM
LS2 MN6 LS2 MN6 is offline
Automotive Supplier
Location: Metro Detroit
 
Join Date: Feb 2007
Posts: 288
Mein Auto: 2008 Corvette & 2006 GTO
Quote:
Originally Posted by Robert A View Post
Perhaps a lot of folks lease because they like the payment.

That said, for long-term buyers, it also makes sense to lease with an eventual plan to purchase. There are two reasons behind this logic: 1) If the car turns out to be a dud or you wreak it, you can unload it at the end of the lease and 2) if the car is worth less than the residual, you can often negotiate a lower buyout price -- effectively giving you another bite at the apple. The downside to the lease is that the cost of money (the effective APR) is often a little higher.
Some leasing companies (in my experience GMAC now Ally) won't let you renegotiate the price of a "Buy" at the end of your lease. You either pay what's on the contract or the dealer collects the car and it goes to Auction.

Now once at Auction you can track it down and try to get it back for less than your original "Buy" amount. This was done mostly because leasing was heavily subsidized by some leasing companies thru inflated residuals (that's one of the main reasons GMAC needed so much Gov money and why Chrysler Financial effectively went Bankrupt).