StephenK
Stunt Coordinator
- Joined
- Jun 1, 1999
- Messages
- 226
Tony,
re: Leases, you are, in a way, purchasing and financing the vehicle. What you are paying for, through the lease payments, is the depreciation of the vehicle during the life of the lease. You are also financing this vehicle at the rate called the "money factor".
Let's say a car costs 40,000 brand new. The Manufacturer decides the value of the car after 3 years (36 payments) is $15,000. You are "buying" that $25,000 as well as financing that payment at the rate of the Money Factor, (to convert a Money Factor to a rate, I think you multiply it by 2400 or 24, I forget which). So to answer your original question, either the 2 cars you mentioned, while having the same initial cost, have vastly different residual values at the end of the lease, or they are being financed at vastly different rates. You should easily be able to find out which by asking.
Hope this makes sense.
re: Leases, you are, in a way, purchasing and financing the vehicle. What you are paying for, through the lease payments, is the depreciation of the vehicle during the life of the lease. You are also financing this vehicle at the rate called the "money factor".
Let's say a car costs 40,000 brand new. The Manufacturer decides the value of the car after 3 years (36 payments) is $15,000. You are "buying" that $25,000 as well as financing that payment at the rate of the Money Factor, (to convert a Money Factor to a rate, I think you multiply it by 2400 or 24, I forget which). So to answer your original question, either the 2 cars you mentioned, while having the same initial cost, have vastly different residual values at the end of the lease, or they are being financed at vastly different rates. You should easily be able to find out which by asking.
Hope this makes sense.