Why Lease?

THE MYTH OF OWNERSHIP
Many people are leasing right now, they just call it owning. Do you have clear title to your automobile or does the bank own your car? If you dispose of your automobile prior to paying it off and taking clear title to it, then you merely have the use of the vehicle for a portion of its useful life. Even if you do become an owner, long- term automobile retention has its disadvantages. You now have an automobile worth a fraction of its original value that may not be as safe and reliable as it once was. In addition, the inevitable repairs can be costly, time-consuming and inconvenient. So, do you drive the old vehicle that you own and hope it does not break down, or do you acquire a new automobile and another monthly payment?

WHAT IS LEASING?
Leasing is an alternative way of paying for the use of a vehicle. Leasing is a way to drive a new vehicle as often as possible with as little money changing hands as possible. No wonder this simple concept is becoming so popular! There are many misconceptions of leasing i.e., leasing is for business use only...leasing is for low mileage drivers...there is no equity in a lease...leasing is the same as renting...leasing requires a large payment at the end...you cannot trade in your vehicle on a lease, to name a few. The leasing industry is exploding because with lifestyle changes, tax law changes, inflation, and a more service-oriented society more and more people are realizing the benefits of leasing.

CASH FLOW BENEFIT (MONEY)
The cash flow benefits from leasing are-lower monthly payments and no down payment. Since you only pay for the depreciation that occurs during the lease term, your monthly payments tend to be lower. Lessees that meet strict financial requirements will not be required to make a down payment. Often times lessees choose to structure their lease with a cash reduction, perhaps from the equity of a trade-in, to further reduce the monthly payment. The beauty of leasing is the opportunity to invest your cash flow savings in appreciating assets while driving the automobile of your choice! Perhaps the worst "investment" you can make is your automobile.

CONVENIENCE OF LEASING (TIME)
Convenience may be the major reason for leasing's phenomenal growth in recent years. Shopping for a new vehicle and for disposing of the old one can be frustrating, time consuming, and costly. LeaseAdvice will find the vehicle you want, with the options you choose, and deliver it to you-sometimes the same day! Working with a professional transportation service company can save you time, money, and needless hassle.

TAX CONSIDERATIONS
"If you use your leased vehicle for business (50% or more), the deduction for income tax purposes is simplified. For example, if you use your vehicle 80% in business, the deduction is 80% of the lease payment plus 80% of all other operating costs. A personal use lease is not deductible. Since the passage of The Tax Reform Act of 1986 (TRA '86), the sales tax deduction has been eliminated and the consumer interest deduction has been phased out for conventional automobile loans. TRA '86 also eliminated the investment tax credit (ITC) and extended depreciation from three to five years. Additionally, ownership payments are viewed as preference payments under the alternative minimum tax (AMI). For details on your particular tax situation, please consult your CPA or tax advisor. "The new tax act has convinced many members of my profession that leasing is a better alternative to finance purchasing a vehicle."~ Paul Doyle, CPA, Vehicle Leasing Today magazine.

LEASING VERSUS BUYING
Typically, leasing is ideal for someone who changes vehicles often enough to always have a monthly payment. Buying is more suitable for someone who retains a vehicle for many years. So, the magical question is: "How long do you keep an automobile?" If there are no tax considerations, the financial comparison is virtually a toss up. If you use the vehicle for business, the comparison will almost always weigh on the side of leasing.

LEASE STRUCTURING
A well-written lease should be for the proper term and based on an honest assessment of the lessee's annual mileage, wear and tear, and trade cycle. Everyone likes low payments, but it is important that your payments reflect your actual usage. The majority of the leases we write are closed-end/purchase option leases. This type of lease allows the lessee to "walk away" at the end provided the vehicle is within mileage and wear and tear limitations. If the vehicle happens to be worth more than the purchase option at the end, the lessee can still buy the vehicle for the purchase option and pocket any profit. On the other hand, an open-end lease (business use only) transfers all residual (end) value risk to the lessee. The most common abuse in lease structuring (by the leasing agent) is false verbal statements such as promising early termination with no financial risk; or failure (by the lessee) to be honest with themselves when evaluating their usage.

LEASING THE RIGHT VEHICLE
LeaseAdvice can give you objective advice in choosing the right automobile to lease because we are an independent leasing company. We believe that getting a new vehicle should be fun! We will provide you with a stress- free, information rich environment in which to make a decision. All questions are good questions. In addition to helping you evaluate which vehicle will fit your needs, we will make sure that any questions you have will be answered by a knowledgeable professional.