I have worked in the Leasing business a little bit---Here are my thoughts.
Lets say the Butler is 70k new.
The leasing company makes the bet. They believe if they buy the van, you rent/lease it for $28,800 ($799 per month) for three years.
The leasing company side.
The Leasco has interest on that 70k of probably less than 2% (they are pretty much a bank) for 3 years of $4200 (actually less because you are paying down the principle with each payment).
70,000 + 4200 -28,8000 = $45,400.
Butler might sell to the leasco for 5k less than they will sell to you. The leasco is their biggest customer. That brings the number to $40k to break even.
The lease company might have a guaranty from Butler to buy the van at the end of the lease for 50k.
The lease company also knows if you have been using a porty, a garage tm or an old worn out TM a new Butler will probably increase your productivity and work quality. It will easily increase your revenues by $800. No risk.
The leasing company is an expert on Butler TMs and know the used market for Butlers.
Butler likes the deal
They sell the machine to the leasing company and get paid, no muss no fuss.
They might have a couple of side deals with the leasing company--Butler might be able/required to buy back for a specific amount.
They know in 3 years you will have run with a pristine Butler and are quite likely to buy or lease another. And in 3 years you absolutely must buy something.
If they have a buyback guaranty with the leasco then Butler will have used machines they can sell to get people into Butlers for less than the price of new.
Why the deal is good for the Broke Dik
Much easier than going to a bank.
The lease company puts you on the hook for 29k. Whereas a bank would have to put you on the hook for 70k. It is easier to get Broke Diks approved for 29k over 3 years than 70k over 5,6,7,or 8 years.
In 3 years the new price of Butlers might be 80k and the value of the used one might be $10k higher also. Anywhere from 45 up is a win for the lease company. With the Standard Chevy van issue likely to be discontinued these units might be worth even more of a premium in 3 years.
If you finance at 70k 4.5% for 8 years your payment is $869 per month. You might get that rate if you have great credit.
This lease is possible now because of Low interest rates and also because of the very high residual value of 3 year old Butler TMs.
Lets say the Butler is 70k new.
The leasing company makes the bet. They believe if they buy the van, you rent/lease it for $28,800 ($799 per month) for three years.
The leasing company side.
The Leasco has interest on that 70k of probably less than 2% (they are pretty much a bank) for 3 years of $4200 (actually less because you are paying down the principle with each payment).
70,000 + 4200 -28,8000 = $45,400.
Butler might sell to the leasco for 5k less than they will sell to you. The leasco is their biggest customer. That brings the number to $40k to break even.
The lease company might have a guaranty from Butler to buy the van at the end of the lease for 50k.
The lease company also knows if you have been using a porty, a garage tm or an old worn out TM a new Butler will probably increase your productivity and work quality. It will easily increase your revenues by $800. No risk.
The leasing company is an expert on Butler TMs and know the used market for Butlers.
Butler likes the deal
They sell the machine to the leasing company and get paid, no muss no fuss.
They might have a couple of side deals with the leasing company--Butler might be able/required to buy back for a specific amount.
They know in 3 years you will have run with a pristine Butler and are quite likely to buy or lease another. And in 3 years you absolutely must buy something.
If they have a buyback guaranty with the leasco then Butler will have used machines they can sell to get people into Butlers for less than the price of new.
Why the deal is good for the Broke Dik
Much easier than going to a bank.
The lease company puts you on the hook for 29k. Whereas a bank would have to put you on the hook for 70k. It is easier to get Broke Diks approved for 29k over 3 years than 70k over 5,6,7,or 8 years.
In 3 years the new price of Butlers might be 80k and the value of the used one might be $10k higher also. Anywhere from 45 up is a win for the lease company. With the Standard Chevy van issue likely to be discontinued these units might be worth even more of a premium in 3 years.
If you finance at 70k 4.5% for 8 years your payment is $869 per month. You might get that rate if you have great credit.
This lease is possible now because of Low interest rates and also because of the very high residual value of 3 year old Butler TMs.
