Actually, I decided to go on leasetrader.com and that proved to be interesting to consider.
After I swore I wouldn't own a Honda Oddysey, I plugged in that and saw someone who wanted out of a lease of about $350/month. It was a close-ended lease and the buyout was $9000 and I would have spent $11,000 in lease payments over about 3 years, a little less if I recall.
I considered the advantages of this:
1. No tax to pay until the buyout.
2. It's like making the downpayment last since the original leasee probably put monty down first. That is, I don't have to put any money down until later.
3. Sometimes, what you are going to pay is fair market value anyway, as this was.
4. A partial to full writeoff for the business.
For instance, for the 2005 Honda Oddysey, with 26K, Kelly Blue Book quoted about $20,000 for a private party sell.
So, in effect I am getting to keep my money upfront, let it earn interest and then put down the $9000 downpayment later while I stuff it in high interest savings or a balanced fund. That's "opportunity savings" as I would call it. And really, it was a 0% lease.
The problem was this person was in TX and I am in NJ.
Boy, you look at some of those leases that people sign and they would have to pay me to assume them. I saw a Grand Caravan for like $600/month and a buy-out of $28,000. The only way I would do that if the lease had like maybe 2 or 3 months left and I just wanted to see if I liked the car.
What were these people thinking?
|