Seven advantages to leasing a vehicle from the Thomas Automotive Family

1. Sales Tax Savings –

“The only thing better than a tax deduction is never having to pay the tax in the first place.”

The tax advantage of leasing is that you only pay tax on the monthly payments.

            i.e. You would pay 6% of 100% in a buy situation, OR you can pay 9% of 50% in a lease, based on the guaranteed future value determined on the lease.

2. Gap Protection – In the event of a total loss, the whole balance of the loan is paid off, regardless of the actual market value of the vehicle, which is all that your casualty insurance will pay.

3. High Mileage issue – with a lease, the more you drive, the more you save.

There is no mileage penalty on leasing. There is only a mileage usage charge over 15,000 miles

- mileage built into the lease is calculated at approximately .08 per mile.

- mileage calculated at the end of the lease is approximately .15 per mile.

- wholesale value on a trade-in adds up to about .25 to .30 per additional mile.

4. Limited liability – The owner of the vehicle has primary liability. In the case of a lease, the vehicle owner is the company that leases you the vehicle, not the driver. The leasing company carries an umbrella policy, which covers everything over your primary liability limit.

5. Help in borrowing – The entire debt does not show on a balance sheet; therefore, a leased car does not show up as a liability on a loan application.

6. Tax ramifications have changed to the benefit of a business owner - The bigger the lease payment, the bigger the deduction, provided that the vehicle is used more than 51% of the time for business.

7. No depreciation risk – The guaranteed future value of the vehicle is the amount deducted at the beginning of the lease. It is also the expected value of the vehicle at the end of the lease. You have the term of the lease to decide if you want to complete the purchase.

- If the guaranteed future value compared to the actual market value at the end of the lease favors you, you complete the purchase.

- If it doesn’t favor you, you simply turn the vehicle back to the leassor.

Common objections to leasing.

1.) “I won’t own it. I have no equity.”

That’s good – not bad! You won’t have any equity because you won’t pay for any equity. That’s why your payment is so low. In order to have equity in the vehicle, or own the vehicle, your payment would have been much higher. Instead of equity in the vehicle, you have cash. You can use this cash to buy the vehicle if you want, but you don’t have to decide until the end of the lease. Some assets are good to own, like a house or stocks, because they have the possibility of appreciating.

Vehicles do not appreciate; they depreciate.

“Would you pay $100,000 for a house if you thought it would be worth $75,000 in three years?”

2.) “I’ve had a bad experience with leasing” or “someone I know had a bad experience.”

It’s true. Some people have gotten burned in leasing. It’s because they were put into the wrong lease or it wasn’t fully explained to them. Many people were put into an open-end lease and didn’t realize they were guaranteeing the residual at the end. We don’t offer open-end leases; we offer closed end leases. In other cases, maybe they exceeded the 15,000-mile per year allowance or had a charge back for abnormal wear and tear. If they had purchased the same vehicle and drove the same number of miles, or traded it in the same condition, they would have experienced the same deductions.

We won’t let that happen to you. We tailor the lease specifically to your needs and let you know what your rights and obligations are up front.