Comments on: Why does the Auto Industry Lease Cars? http://www.myjourneytomillions.com/articles/why-does-the-auto-industry-lease-cars/ Elite Personal Finance and Estate Planning Information for Everyone Thu, 11 Mar 2010 18:06:11 +0000 hourly 1 By: My Journey http://www.myjourneytomillions.com/articles/why-does-the-auto-industry-lease-cars/comment-page-1/#comment-155 My Journey Thu, 06 Nov 2008 15:17:21 +0000 http://www.myjourneytomillions.com/?p=251#comment-155 Matt, While I would assume the resale market is increasing due to people's natural tendencies to tighten up (i.e. If I were in financial constraints, would I purchase a 2007 Altima with a few miles vs. a 2009 for 17K or so more?), I still don't get the leasing aspect in the past IF resales were historically lower today. Also, I didn't even get into the repair aspects of a car, which during that lease, that got into an accident! Yeah the car is fixed, but at what cost? Who the hell buys a 3 year old car that has been totally reconstructed for anywhere near the value that we were talking about? Matt,

While I would assume the resale market is increasing due to people’s natural tendencies to tighten up (i.e. If I were in financial constraints, would I purchase a 2007 Altima with a few miles vs. a 2009 for 17K or so more?), I still don’t get the leasing aspect in the past IF resales were historically lower today.

Also, I didn’t even get into the repair aspects of a car, which during that lease, that got into an accident! Yeah the car is fixed, but at what cost? Who the hell buys a 3 year old car that has been totally reconstructed for anywhere near the value that we were talking about?

]]> By: Matt @ Steadfast Finances http://www.myjourneytomillions.com/articles/why-does-the-auto-industry-lease-cars/comment-page-1/#comment-149 Matt @ Steadfast Finances Thu, 06 Nov 2008 05:24:27 +0000 http://www.myjourneytomillions.com/?p=251#comment-149 Without going into the numbers too much, I would say the decision not to lease any longer is due to the bottom falling out in the resale market. As you said, you wouldn't buy your car for 15k after 3 years, so why would the Big Three want millions of 3 year old cars after they only brought in 46% (11,540/25,000) of the original sale price when they can get it 100% MSRP through traditional financing, plus 7% interest if they're lucky. Without going into the numbers too much, I would say the decision not to lease any longer is due to the bottom falling out in the resale market.

As you said, you wouldn’t buy your car for 15k after 3 years, so why would the Big Three want millions of 3 year old cars after they only brought in 46% (11,540/25,000) of the original sale price when they can get it 100% MSRP through traditional financing, plus 7% interest if they’re lucky.

]]>