Whether you like a lease or not people need to realize that a lease is a form of bank financing. Bottom line if the cap cost of a lease and the sales price on a traditional financing contract are the same (which they should be) and the money factor converts to the same interest rate of a traditional financing contract (they should be about the same also) then at the end of the day the total amount out of pocket should be about the same. There will be small difference due to the timing of interest, the treatment of sales taxes and fees, but if the main factors as stated above (cap cost, purchase price, interest and money factor) are the same a lease is similar to a traditional financing deal. On a traditional financing purchase the dealer will get the purchase price from the finance company and on a lease the dealer will get the cap cost amout from the finance company. On a lease your monthly payments will be lower but you will have a "balloon" payment due at the end of the contract period. By a dealer offering a lease tells me that the dealers main goal in selling a bike is to sell a "monthly payment". One way to get the monthly payment lower is to discount the price of the bike or to offer a lease financing option. By offering a "lease" the dealer can lower a customers monthly payment without having to discount his bike. Is a lease a bad deal, well that depends, if the pruchase price (aka cap cost) and the money factor converts to the same interest rate as a traditional finance contract, things should be pretty much a wash. If the cap cost and money factor are more than a purchase price would be, then a lease is not a good deal. If the lease and purchase components are the same, then at the end of the lease period you have a residual, if the residual is more than the going price of a unit that age and condition you could just turn it in and consider the transaction a win. If you don't know how to compare the componants of a lease vs purchase transaction or you don't understand how a lease vs traditional financing works it's best not to look into a lease, you will loose that game every time. If you have mental hang up on a lease don't even consider one either, you'll never be happy with the transaction.

Unless you understand how a lease work, it's not fair to make a blanket statement that all leases are bad. It's also not fair to make a blanket statement that leases are a good thing either, you need to know the facts of a deal before you can make that conclusion.

I"m talking about leases on a new bike, you throw in a lease on a used bike into the equation and all bets are off.

I'm interested to see what the "residual" factor is on a Harley lease, that will give everyone an idea of what the brains of the finance industry thinks a new Harley will be worth in two years, I bet it's a whole lot lower than what most people in this forum think it will be.

EDIT: I will say if the only reason you are considering a lease is to get your monthly payment to an amount you can afford, then that's a bad idea. Not because it's a bad lease but it, or any other financing transation, could have a devistating impact on your financial security. ie, if you need a lease to get your payments lower you should reconsider your purchase, if you need a lower payment to fit into your monthly budget go with a less expensive purchase.

 

Whether its a loan or lease it comes down to the numbers and the rates if you think anything with wheels on it is an investment you probably have a credit problem. Why would you pay interest on money to pay tax, I know I already pay enough tax, if you have to worry about how much you spent on your bike thats not good because you really don't need a motorcycle its a toy, a luxury not worth stressing about... it won't feed your kids.