Auto Leasing Newbie Needs Advice

Q.What's going to happen to the "financial genius" after 2-3 years -- when he has to come up with the scratch to start buying-back cars at those *guaranteed* inflated prices? Won't his boss be *really* pissed-off? When is this glut of late-model lease-turn-ins going to saturate the market and cause used car prices to plunge? Leases have been popular for a couple or three leasing cycles now -- and used car prices are higher than ever. .

A.First, he doesn't *HAVE* to buy those cars at inflated residual prices. If the residual are THAT inflated, they'll never sell on the open market. The manufacturer will KNOW this and he'll be able to bargain the purchase price of it if he wants to! Now, if he had PURCHASED that car up front, either he'd still be paying for that same car for several more years or his up front payments would have been a LOT higher. Leases are like clothes - they're not a one size fits all.. If used car prices get too high, market forces will drive them down - that the wonderful thing about a market economy. If the prices for these cars are good, then they'll be bought.

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