Quote:
Originally Posted by BrianL99
Which is exactly why they are generally cheap to lease.
I'll try it another way.
If you BUY an automobile, you buy the entire car and you own what's left of it, when you're done with it. You have some amount of equity, but you paid for it.
If you LEASE an automobile, you only "buy" what you're going to use. When you're done with it, it belongs to someone else. You have no equity, because you didn't pay for it.
If an automobile has a particularly high resale value (residual), you can often lease that car for a lower monthly payment than it would cost to buy it.
I could show you the math, but if you don't understand the basics concepts between "leasing" vs "buying", the math won't help.
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These are cut & paste statements.
Facts: You "buy" the entire car with a lease (as with a purchase). Part of the lease financing costs are behind the scenes, not disclosed and is carried by the lessor.....
but still paid by the lessee.
Net, net, net............the residual value for a leased auto is less than the resale value of the auto because the lessor include costs, including costs to get rid of the leased auto.............another undisclosed lease cost.
From a macro view, someone else (lessor) is not going to incur costs for the benefit of a lessee to use the auto. The lessor is making money on the lease a/k/a making money on the lessee. Non-disclosures and marketing makes lessee feel good, and people fall for it.
But, some enjoy the lease.