Closed End Lease Attributes

Your initial inclination might be to equate a lease to a finance/purchase as a one-to-one comparison. It's normal, and it's what we have been trained to do from years of buying and selling cars. 

Purchases and leases are not equals.

Embrace the Structure

Leasing is a service inside of an advanced financing mechanism.  Its distinctive feature "lower monthly payments" frequently eclipse its real function: the ability to financially protect the client. Purchasing contracts do not contain such safeguards.

These benefits apply only to the American style, closed-end-lease contract.

Our Function

Leasing companies have what we need, but can be difficult to deal with at times due to language issues and cultural differences in expectations and service levels. We bridge that gap!

Can You Go It Alone?

Yes of course you can. Retail businesses prefer to deal with clients one-on-one. They encourage their commissioned sales staff to sell package leases containing higher profit margins, due to the structure of the insurance product itself.  This blurs the line and confuses the client.

Clients perceive they are getting more for their money when, in fact, they received less protection.

Absence of Buying and Selling - The buying process is not the real drawback it’s reasonably straightforward, it’s the selling process that causes concern; you will find it time consuming and very inconvenient.  It’s not uncommon for clients to ask if they can trade in their current cars on a lease, the answer is yes, they can.  Their inquiry is for one of 3 reasons.

  1. They are experiencing difficulties in selling
  2. They cannot devote the time and resources needed to complete the sell
  3. The vehicle is such bad repair they feel uneasy selling to an individual

Selling is no longer an issue in a closed end lease contract. 

Depreciation Protection – Cars in Israel depreciate rapidly and erratically, there is no sure thing when it comes to projecting your depreciation costs except within a lease contract.  See our blog on planned obsolescence

Can Never Experience Negative Equity - Unlike 60-month conventional finance contracts or 36-month balloon open end lease contracts where negative equity is the norm, it’s impossible to have negative equity in a closed lease.  

NOTE: It's possible to end up with small positive equity but worst-case scenario is a break even.   This is because you are only responsible for the down payment and the monthly payments and nothing more.

Obligo Rating – a closed end lease payment does not appear on your monthly payment obligation list.  Bank financing and open-end balloon note financing do appear in your obligo rating, thus limiting your borrowing ability for other needs.

Continuous Warranties - the only way to protect yourself from experiencing any repair costs, is to stay in a new car.  When purchasing it's financially next to impossible to trade regularly and not experience negative equity.

Next to lower monthly payments, continuous factory warranties are the most often stated reason persons opt for new car leasing. 

Lower Monthly Payments – lease payments are generally 16 to 45% less expensive than finance payments, and in those rare instances when they are the same as finance payments, the protection that the lease program offers makes it an invaluable tool.              

SIDE NOTE: To lower monthly payments many turn to used cars over new cars but fail to understand they are increasing their financing costs by 40% when financing a used car.

Conforms to Modern Ownership Patterns – fits like a glove matching the national average of automobile ownership turnover. 

Easy qualification – even if a new immigrant chances are you can be approved more easily for a lease than you can a finance, because, you are not borrowing money you are being given the ability to use a vehicle as your own for a short specific period of time.

 


We Offer What No Other Company in Israel Can
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