OPEN END OR
CLOSED END LEASE ?
TYPES OF LEASES
THERE ARE 2 TYPES OF LEASES:
- OPEN-ENDED LEASE
- CLOSED-ENDED LEASE
A CLOSED-ENDED LEASE MAKES
THE BANK OR LEASING COMPANY
RESPONSIBLE FOR THE VEHICLES
VALUE AT THE END OF THE LEASE.
THIS IS GOOD FOR THE CONSUMER.
YOU DO NOT WANT AN
OPEN-ENDED LEASE
AN OPEN-ENDED LEASE
MAKES YOU RESPONSIBLE
FOR THE VEHICLES VALUE
AT THE END OF THE LEASE.
SMALL LEASING COMPANY
WILL OFFER AN OPEN-ENDED
LEASE AND THE DEAL WILL
SEEM FANTASTIC!
HOWEVER, YOU ARE
RESPONSIBLE FOR THE
VEHICLES VALUE AT LEASE END.
THIS IS NOT GOOD. YOU SHOULD
NEVER BE PUT IN THIS POSITION.
IF THE VEHICLE IS WORTH LESS
THAN THE PROPOSED BUY OUT
AND YOU DO NOT WANT TO
PURCHASE THE VEHICLE,
YOU MUST PAY THE DIFFERENCE
BETWEEN WHAT THE VEHICLE
IS WORTH WHOLESALE
VERSES THE PURCHASE OPTION
AND
STILL GIVE THE VEHICLE
BACK TO THE LEASING COMPANY
TO FULLY TERMINATE YOUR LEASE.
TALK ABOUT A BAD DEAL!
A REAL LIFE STORY
I WAS MANAGING A NISSAN
DEALERSHIP WHEN A GENTLEMAN
I KNEW CAME TO LEASE A MAXIMA.
HE IS A LOCAL RESTAURANT OWNER
AND A PREVIOUS CUSTOMER.
HE ALWAYS PAID CASH FOR HIS
VEHICLES, HE NEVER LEASED.
I ASSIGNED HIM TO ONE OF MY
TOP SALESPEOPLE TO SHOW
HIM THE VEHICLE AND EXPLAIN
ALL THE FEATURES AND
BENEFITS OF THE CAR.
THE SALESMAN CAME TO ME
FOR A LEASE PAYMENT AND I
QUOTED HIM A REALLY LOW
PAYMENT.
I WANTED MY PREVIOUS
CUSTOMER TO REALIZE I WAS
GIVING HIM A GREAT DEAL!
THE SALESMAN UNFORTUNATELY
LET THE CUSTOMER WALK OUT
BECAUSE THE CUSTOMER TOLD HIM
“I ALREADY BEAT YOUR DEAL
BY $110 PER MONTH”!
NOW I TOLD THE SALESMAN
$110 TIMES 36 MONTHS IS
$3960.00 DIFFERENCE.
IT IS NOT POSSIBLE FOR THERE
TO BE THAT BIG OF A DIFFERENCE.
THE NEXT TIME I WAS IN HIS
REATAURANT I ASKED HIM
WHERE HE LEASED THE VEHICLE
AND IF HE GOT IT FOR $110 PER
MONTH LESS. HE SAID YES, AND HE
LEASED IT FROM A SMALL LEASING
COMPANY.
I THEN ASKED HIM IF HE KNEW
WHETHER OR NOT HE HAD AN
OPEN-ENDED LEASE.
HE DID NOT KNOW.
I TOLD HIM I BELIEVED IT WAS
AN OPEN-ENDED LEASE AND THAT
HE WOULD BE RESPONSIBLE FOR
THE VEHICLES VALUE AT LEASE END.
HE DID NOT SEEM TO BELIEVE ME.
ABOUT 35 MONTHS LATER,
I WAS IN HIS RESTAURANT AND
HE SAID THAT HE INDEED
HAD AN OPEN-ENDED LEASE.
THE SMALL LEASING COMPANY
EXPLAINED TO HIM THAT HE WAS
CONTRACTUALLY OBLIGATED TO
EITHER BUY THE VEHICLE OR PAY
$8400.00 IN CASH TO MAKE UP THE
DIFFERENCE BETWEEN WHAT THE
CAR WAS WORTH AND THE
PURCHASE OPTION.
$8,400.00 LESS $110.00 X 36
EQUALS $4,440.00 MORE!
HE PAID $4,440.00 MORE
THEN WHAT I OFFERED HIM
35 MONTHS AGO.
HE ASKED ME TO HELP HIM
AS HE DID NOT HAVE THE CASH.
I EXPLAINED TO HIM THAT I WOULD
HAVE TO OVERCHARGE HIM BY
$8400.00 SO I COULD SEND A CHECK
TO THE SMALL LEASING COMPANY
IN ORDER TO BREAK THE LEASE,
AND GIVE THE CAR BACK.
I ALSO EXPLAINED I WOULD HAVE
TO RAISE HIS MONTHLY PAYMENTS
TO COVER THE $8400.00
NEEDLESS TO SAY THIS GENTLEMAN
HAS BEEN A LIFE LONG CUSTOMER
OF MINE AS WELL AS MANY OTHERS.
