Open-ended vs. Closed-ended Leases

Open-ended vs. Closed-ended Leases

**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.** You may see a lease referred to an "open-ended" or "closed-ended", if you do it's likely to be in the fine print, legalese, or wherever the dealer/manufacturer/lessor has put some important but confusing details they hope you won't read.  Even worse, maybe the advertiser won't put it in the fine print but puts "open-ended lease" or "closed-ended lease" in big print next to some out of this world offer - how do you know whether it's a good deal or not? What's the Difference Between Open-ended and Closed-ended leases? In short, in an open-ended lease the lessee is the one on the hook if the actual value at the end of the lease is below the residual value set at lease inception, and in a closed-ended lease it is the lessor.  Usually, your contract will be a close-ended lease, but it’s still...
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The Penske File

**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.** Several months ago I was in market for a new car - I tend to buy new but also tend to own the car for 5-6 years, so not exactly running it into the ground, but also I do enjoy owning it for 1 or 2 years with no payments at all.  I had owned my car for just about six years at that point, and while it still runs great it was also getting to a mileage and age point where it will get a little harder to sell, because it will get a little tougher to finance.  So it was time to go car shopping! I was looking for a vehicle with the MSRP in the $35-40k range, potentially a coupe, but also open to a sporty/performance-focused sedan.  In time I had narrowed my list to the Cadillac ATS,...
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Summer Car Buying Season is Here

Summer Car Buying Season is Here

**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.**   It is once again the unofficial start of summer upon us: Memorial Day Weekend!  As we discussed in the article about holiday weekend shopping last year, holiday weekends tend to be a great time to buy a car for a variety of reasons.  Of course, if you're going to go car shopping over a holiday weekend you don't want to spend your extra day off at the dealership.  So get prepared in advance. Among the holiday weekends Memorial Day weekend is one of the best ones for car buyers for a couple of reasons: The model year traditionally starts in the fall, so dealers use the summer to clear inventory of the outgoing model year.  Memorial Day weekend is a great time to promote the clearance deals that will make room for the new models coming in from the factories. Memorial...
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Leasing a Final Model

Leasing a Final Model

**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.**   On April 24 the Ford Motor Company (Stock Info:) announced that it will be ending production of all its existing cars (so not including its trucks, SUVs, or crossovers) in North America with the exception of the Mustang by 2020.  Armchair strategists and analysts can talk all day about whether this is the right move for Ford and how other automakers will react (and many have), but we'll use this opportunity to focus on whether it makes sense to consider leasing a vehicle that won't have a new version for sale by the time your lease expires. First Things First: Follow the Money It's important to consider the most basic reason why Ford made this decision to do away with making and selling sedans in the North American market - they weren't generating sufficient profit on these vehicles.  This news release itself...
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Understanding Lease Ad Mailers

Understanding Lease Ad Mailers

**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.**   With the spring thaw finally upon us (more or less), the automotive world is gearing up for another summer sales season.  While everyone assumes that direct mail is out as a marketing strategy, there are still a lot of mailers sent out, both by dealers and by manufacturers, as a way to present and promote vehicles.  And again, as we described in our first article on auto ads (which focused on online ads), presenting a lease deal is particularly advantageous in the small space available, because lease deals require relatively few numbers and text to present the offer to the largest audience. Recap: What the ad will and won't show Any lease ad, regardless of the medium used (online, mail, newspaper/magazine, television, radio, billboard, etc.) will always show a few things to define what is being offered: The monthly payment The term The amount...
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‘Tis The Season

**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.**   As we come to the last few weeks of the year the automotive industry's sales and marketing engine is revving close to the red line.  Obviously, anyone trying to get attention in the retail business in December needs to do a lot of marketing, and also needs to be ready to make a deal - and car dealers are definitely ready to make a deal this month. A lot of the manufacturers build off a recurring theme that they pull out of storage as the weather cools and the days get short the way people go find the wreath and holiday lights for a month or so of display.  That's why people know "A December to Remember", "Season's Best Event", "The Winter Event", and of course, "Toyotathon" - which didn't even start as a year-end event (the first one was in...
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Going to an Auto Show

Going to an Auto Show

**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.** The Los Angeles Auto Show is going on now (through December 10th), and despite it being one of the last of the calendar year, it is considered the kick-off event among the major auto shows worldwide, mainly because the model year for vehicles starts in the last few months of the calendar year.  For the second time the organizers hosted an event in the days before the auto show opened to the general public called AutoMobility LA, which I mentioned briefly in the wrap-up to the innovation series, and will cover a bit below.  But the focus today will be on what benefit you can get from going to the auto show in your metropolitan area, even if you don't plan to be in market for a vehicle for 2-3 years. You Can Kick the Tires (But Please Don't) First and foremost,...
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Avoid Tricks, Make the Deal a Treat

**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.**   The auto buying experience has come along way; although it is still way behind other retail transactions of any size, and also slower and less convenient than other sizable transactions - in a lot of places the process of buying real estate, with a mortgage, still takes less time than a trip to the dealership where you show up knowing the vehicle you want and are paying cash.  The most amazing thing is that while there's been substantial improvement in much of the process, the reputation of car dealers/car salespeople is still among the lowest of any profession in the United States, as well as similar nations like Canada, the United Kingdom, and Australia.* It is baffling that people would be willing to do business with people they think are going to trick them. However, the results never seem to change:...
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Leasing a New Model

Leasing a New Model

**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.**   Autumn has arrived: the air is a little cooler (or should be), the sun sets earlier, the leaves change colors, and the auto manufacturers roll out the next model year's edition of their entire vehicle lineup.  If the vehicle is a mainstay in the brand's lineup, then it will have a major overhaul every 3-5 years, and otherwise not change much from one model year to the next.  But each manufacturer also likes to introduce 1 or 2 brand new models each year, to much fanfare, while more quietly retiring those models that don't seem to be as popular any more.  In either case - the overhauled (their lingo is often "redesigned"), or model or the brand new model, there's some things to keep in mind to make sure you get a great deal - whether you're buying or leasing. The...
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Leasing in a World of Uncertainty

**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.** Last time we quoted the Ancient Greeks here was on the page "Know Your Credit", and we will give a brief update about that, but this week's theme is about the Ancient Greek's classical elements: Earth, Fire, Water, Air, and the Void, and how they have each been kicking North America's behind over the past few weeks, especially this week! Earth - an extremely strong, and unfortunately deadly, earthquake, with an 8.1 magnitude, struck off the coast of southern Mexico on the evening of September 7th, and toppled hundreds of buildings. Fire - many of the western states of the U.S. as well as British Columbia, Canada have been dealing with wildfires, that have been substantially worse than predicted based on the cold wet winter that the area had, and it has caused some evacuations, with many more possible if the...
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