Confused by some of the hate on the lease option. Seems wise for those wanting Low Down and Lower Monthly Payments

[Chief1301]

What Trap? Just trying to help people understand they have choices at lease end. So the bank sets the residual too low. Buying or leasing, a used car is worth what it is worth. Lease "A" simply turns the car in at the end -walks way and thus overpays. Lease "B" sells at market price and recaptures the overpayment on the depreciation fee. What about the other part of the lease payment -the finance fee? With the Bronco money factor rates we are talking about $ 2.08 a month per $1000. So inaddition to a $4000 recapture you would also gain $8.32 month.
On the hand, it can go south for the bank. What's the residual against market on an Bronco if gas goes to $5.00 in 4 years?
In the ending, it is all about the selling price and money factor?

Unfortunately gas prices will most likely hit $5.00 a gallon before 4 years in some parts of the country under the new administration. Maybe $7.00 a gallon in California?

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[BR0NCO]

I could not pay $33,000 over 4 years and own nothing at the end

 

[PrepVet]

I don’t see how paying $5000 down and then $400 a month for a lease for a few years and having nothing at the end is in any way better than paying $15000 down and $400 a month for a longer term but owning something at the end.

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