As the medical insurance/citizen insurance debates wind down, I am beginning to hear talking about reform for the auto insurance industry. With more and more Americans driving around without insurance, this is becoming a big problem. How can congress fix this issue is beyond me, but it will be interesting to see what they propose.
Until fairly recently, leasing was mostly limited to the new car market. We have seen a lot of interest lately from buy-here, pay-here dealers who are contemplating lease-here, pay-here as an alternative. The residuals issue is, I think, less of a problem in this market, and there can be some significant operational advantages as well, such as (in some states) the imposition of sales or use taxes on the monthly payments rather than up front. Anyone considering leasing needs to consult legal and accounting folks, though – it isn’t just another form of financing.