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Author
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Topic: Any opinions about leasing a vehicle for personal use?
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Mosca
TUG MemberPosts: 495
From:
Registered: Apr 2001
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posted 05-24-2005 19:29
    
Nope, you're not wrong in stating that it's a little expensive for the benefit offered, but the customer it's intended for benefits greatly from avoiding that particular risk. If you and I were talking in the office, you would be one of the customers who decided to keep his money in his pocket; I'd thank you for listening, and we'd move on! Another thing to consider in your statistics is that I only started offering Gap in mid 2003. Until then it wasn't available in Pennsylvania. So the effect on the stats is twofold; the only claims so far have been the early ones (the highest), and there will be more claims on those contracts, the claim ratio hasn't stabilized yet (but it should be getting close). It's hard to offer advice to people who have made all contrary decisions up until the point where they've been offered such a product. All I can say is, there are definitely people out there, lots of them, who could pay the $8/mo but couldn't cover the gap if they had to. THAT'S who it's for. Tom Tom ------------------
FRA- GI- LE... Why, it must be Italian! IP: Logged |
Frank
TUG MemberPosts: 498
From: Houston
Registered: Dec 2000
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posted 05-24-2005 20:13
I work in news and we just write very concisely--I don't mean to come across curt--and I now think Hat is right.Here is a real world example I just did online: New BMW 530i with a cost of $58,000. No down payment, no trade in. We'll skip the extended warranty this time  and we won't buy gap insurance either. Two back to back Leases: 15k miles per year, 30 month term = $912 per month, or a total over five years of $54720. This assumes your second lease would be the same, of course. Owning: 5 year term at 5.53% = $1031. The key after five years is that while owning I've paid about $3200 more, I now have a free car which is probably worth about 20K. If you now have to lease for another three years instead of driving for free, you will pay out another 25k for that luxury. But you have driven three new cars and I have driven the same one...but that privelege has cost you a fortune! I think. [This message has been edited by Frank (edited 05-24-2005).] IP: Logged |
Hatrack79
TUG MemberPosts: 1912
From: Denver, CO
Registered: Oct 2001
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posted 05-25-2005 07:56
Wow Frank,
Thanks for finding another example. A whopping $16,800 saved in 5 years by driving a slightly older car. Much of it the depreciation....but a bunch in saved interest, no doubt. That's $280/month. And if a feller took this more frugal approach, that translates to $280/month for the rest of your life.Why you'd have more free cash for another timeshare; a nice one!. Thanks for your efforts.
Hat IP: Logged |
Mosca
TUG MemberPosts: 495
From:
Registered: Apr 2001
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posted 05-25-2005 08:10
Frank,Before you skip Gap check the depreciation schedule for the 530i; I don't know what it is, or I'd tell you; I'm at home until June 1st. An ALG will give a fair estimate. My Gap claim stats are for Chevrolets and vehicles less than $20k, in general. Gap has a fixed cost, independent of the amount financed. I'm not saying do it or don't do it, I'm saying get a full picture and then decide. Consult with your insurance agent, he/she might have the coverage for less money. Your agent can also help advise you of the value of the coverage for your specific instance.
Tom
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FRA- GI- LE... Why, it must be Italian! IP: Logged | |
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