I have seen options for lease like loan in the past. I guess it is a balloon loan. Such that
after 3 years the prior calculated residual value is due. The amortization is only on the prior estimated depreciated value. So it is possible to get a lower rate because it is short term. I like to get a new car every two or three years. It certainly will make it easier selling to vroom and such. Does anyone know which banks offer such a loan? without having to join a credit union.
Thanks. Don
Ford offers this, otherwise it’s usually through credit unions. Penfed seems to get the most discussion.
Latest discussion on this.
Just join a CU. What’s the difference?
Every captive bank I have seen usually has a higher interest rate for balloons to make up for the lost fees (acquisition and disposition). Plus you pay sales tax on the full price of the car. Balloons only make sense if you are in a city or state where you are taxed on the full selling price compared to the amount of the lease or monthly payments.
Don’t forget that most balloon loans are NOT leases. At the end you owe the entire amount whether or not the value of the car at the time is that (aka , trying to sell it or trade it in). Ford’s Mach-e is one of the exceptions where it is a Balloon lease and Ford guarantee’s $0 buyback at the end.
At least in the German car world, all of the captive banks treat them as traditional leases that are closed ended. I would stay away from a balloon unless you really know what is going on or there is a tax benefit, such as in Chicago or Texas.
I guess the goal here is an easy sale to vroom/carvana or whoever. I accept what ever the value is at time of sale- although I plan on being calculating. Usually April seems best time to sell. I have had VW and Volvo and they(lease bank) did not make it easy. Yes I pay tax on full value of car- I usually get something around 30K + or - .So tax paid on 36 month lease about $800 vs $1800 purchase . Then I save $700 in back inception cost? so it cost me $300 extra in sales tax. So do you approve of my strategy ? I recently (last 3 years)purchased a jeep and Subaru vs lease and it was so easy to sell it. Thanks. Don
Lease a 4xe like everyone else here is flipping
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