Leasing: Going Beyond Auto Leases

Written by: CashAdvice Staff
08/12/2019

leasing-beyond-cars

By now, unless you just fell off the turnip truck, you’re familiar with auto leasing. Particularly if you’ve entered an auto dealership to look at new autos within the last few years. A common question the salesperson will ask is, “Are you interested in leasing rather than buying?”

You know the drill if you elect to lease. You make an agreement for perhaps 24 or 36 months, put down a down payment, drive the car under the maximum amount of miles permitted under the lease, and then at the end you either walk away from the lease, start up a new lease, or make a balloon payment and own the car. 

Leasing an auto can make good sense for a number of reasons, the most common of which is that you can drive a much more luxurious car for a lesser price.

But did you know, that leasing an auto is only the tip of the iceberg within the leasing sphere? Here are some examples of items you can lease, rather than buy:

Leasing a boat 

Unlike automobile dealerships, you can’t easily stroll into a boat dealership and negotiate a lease. There are a few manufacturer’s directly involved in the leasing process, but most are private lenders. And perhaps, potential boaters in Europe are more likely to find a lease than in the United States.

Never the less, there are a substantial subculture of leasing of boats within the United States, the major difference, being that you’ll typically pay more in monthly payments (maybe even up to twice as much) than if financing the purchase of a boat.

However, the advantage of leasing is that your commitment is much shorter (typically 24 months,) which allows you to really test out whether the boating life is for you.

Also, your down payment will be significantly less. For the purchase of a $100,000 boat for example, you may have to make a down payment of $20,000 or more. While with a lease, your down payment may be as low $1,000.

Leasing a plane 

Did you ever dream of the following scenario in your mind? You’re talking to a friend, a continent away, and you jest, “Why don’t I just hop on my private jet and meet you for lunch.”

Well, guess what, you don’t have to be a billionaire to lease a private jet. Particularly when you participate in an appropriated lease. 

An appropriated lease is like a time-share for vacation condominiums. Your lease
entitles you to a certain amount of flying hours, per month, or bi-monthly, as well
as a crew to fly you. And the leasing company maintains and stores the aircraft as
well. 

Typically, you can’t enter into a time-share agreement for anything smaller than a corporate jet, but the advantages of skipping the TSA security lines, flying to airports other than that which the major airlines fly to, and the sheer convenience of scheduling makes leasing a corporate jet a great alternative to booking First-class commercial airline seats. 

Various companies such as NetJets and PriorityOne Jets offer such leasing, and it’s possible to schedule a last-minute flight with as little as four hours notice.

Most jet leasing companies offer either dry leasing, where you provide your own private and crew, maintenance and insurance, or wet leasing, in which the company offers these services.

Leasing a corporate aircraft can be a great option for a company who is on the fence whether to purchase their own jet for corporate use.

Business and equipment leasing 

Companies such as RealLease, a Rochester New York area leasing specialist advises thatpractically any type of business equipment such as:

  • Medical Equipment for a Doctor’s Office
  • Construction equipment such as cranes, forklifts, tractors and dump trucks
  • Telephone and computer switching services
  • Office Furniture and Computers
  • Manufacturing equipment
  • And tractor trailers

can easily be leased. And not only does the leasing of such items fit the companies business needs, but it opens up flexibility.

For example, say a plastic surgery group or surgical optometrist buys several lasers in order to serve their patients. Not only does the equipment cost a lot of money, but at the rate these professions are advancing, chances are, the same lasers they purchase today, may be outdated within a year or two.

Leasing offers the ability to upgrade within a short period while outlaying limited capital at the onset of the lease. 

Leasing an 18-Wheeler 

At a cost of around $150,000, an 18-wheel semi is like a business on wheels. And to buy one is not often an easy task.

Unlike auto’s, the interest rate on buying a commercial semi can be high (sometimes as high as 30 percent) and generally, unless you’ve been a successful trucker for 5 years and have stellar credit, you’ll be expected to make a substantial down payment. It’s not unusual for financing companies to demand a 25% downpayment, which means that you could be expected to lay down as much as $30,000 to $40,000 for a down payment.

Newer truck drivers rarely have that amount. Quite often they are still learning the ropes, and leasing makes driving a semi-affordable. 

You’ll typically pay a higher monthly fee overall in leasing ( perhaps as much as $500 more per month,) but on the other hand, you will save substantial amounts of dollars on maintenance, as the leasing company picks up most of the bill for maintaining the truck.

Be sure, however, that you scrupulously pay attention to every element of your leasing contact such as mileage limitations, otherwise, you may get a nasty surprise at the end of your lease. 

 


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Leasing: Going Beyond Auto Leases

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