|
This is an attractive way to buy a car for the reasons stated--a car is a depreciating asset.
Leased vehicles are owned by the lender and will have a mileage component. In addition, a modified leased vehicle may be a problem at the end of the lease. The money factor of a lease would equate to an APR much higher than 4.25%. Get gap ($200) and you should be fine. The car will have a value when the balloon is due. Lenders use averages when computing the balloon amount, so the car should be worth the balloon amount, at least. You can sell the car when the balloon comes due and pay off the balloon with the proceeds.
In this scenario, as an owner, you can sell the vehicle at any time. Conversely, in a lease, you can buy your way out at any time, but it will cost you.
Like a lease, this is a pay-for-use method, except, as an owner, you have more options.
|