Re: [DML] kicked in the you-know-where

["therealdmcvegas" <DMCVegas@xxxx>]

--- In dmcnews@xxxxxxxxxxxxxxx, "Jack Stiefel" <jack@xxxx> wrote:
<SNIP>
> If they were ALWAYS rip offs no one would ever lease and therefore auto
> makers would stop offering leases.
<SNIP>

Leasing a vehicle can has both it's advantages, and it's disadvantages
depending upon the vehicle, and it's intended use. The main
disadvantage of course is that when the lease is over, you have no
physical asset to show for the money that you've paid out.

However, there are two specific advantages to leasing a vehicle. The
first being that you can "afford" to drive a more expensive/luxurious
vehicle for less cash. And if the vehicle you've chosen is going to
take a nosedive when it comes to deappriciation, you can cut your
losses, so to speak when it comes time to dispose of the vehicle.
Rather than take a financial hit by beeing too far upside down on a
loan, you can just walk away from a vehicle, and get into another
without having to refi any costs from any previous financial obligations.

Is a lease a bad idea? Sometimes, yes. If it's a vehicle that you plan
on keeping for a long time, you plan on voiding the limitations of the
lease, or any other reason, then yes, leasing a vehicle is not a wise
choice. If you wish to purchase the vehicle at that point, it may cost
you more than it did initially.

Also, leasing too many cars can be a problem for many auto
manufacturers. In the 90's, Ford decided to push the option of leasing
cars heavily onto consumers. This was great for the manufacturing
division, that was cranking out cars left and right. But when the
overwhelming number of lease vehicles were simply returned, rather
than purchased as Ford Credit Division had hoped, they ended up with a
stockpile of used cars that eventually had to be sacrificed at
auctions to get rid of them. And that ended up eating a good chunk of
FoMoCo's profits. So leasing has both it's advantages, and it's
disadvantages for both parties involved.


> Now for the moderators, I wonder if DeLorean offered any leases when
new?

Nope, DMC had no financial services division. Which despite the
companies financial woes, and it's ups and downs could quite possibly
have saved it. I once worked with a guy who told me that he was the
finance manager at a dealership which sold DeLoreans. An eye-opening
revalation was that contrary to what history books say, DeLoreans were
not unpopular. All the dealership had to do was park one out at the
street, and people would naturally walk onto the lot, and chase down a
salesman to find out more about the car. And while some people were a
bit turned off by the price, many said that they still wanted the car.
The problem was when it came to financing. As was told to me, GMAC was
the primary finance company that dealt with financing of all vehicles
on the lot, new or used. When the DeLorean first hit the dealerships,
everyone paid cash for them. So financing wasn't a concern. Later on
as more cars became available, and more people needed financing, GMAC
was all business, and was happy to oblige. But a few months later,
they turned tail, and refused to finance ANY DeLoreans. The guy that
told me this story said that he was told this directly from a GMAC
loan officer over the phone when attempting to secure financing for
someone who obviously qualified credit wise. Soon after, many other
financal groups followed GMAC's lead, figuring that they must know
something that no one else did. After that, it was typicly the
responsability of the buyer to secure their own financing from their
bank, or credit union. Which impluse buyers would have lost interest,
and lazy people would not have been willing to do the footwork themselves.

So, with no financing available, that turned away buyers. And with no
buyers, cars began to pile up. Many reporters, and "experts" began to
view as the cars being "unpopular", and having build problems. Which
when you look at the over all picture, was actually quite the contrary.

-Robert
vin 6585 "X"