Finance Guy
Well-Known Member
Hi John C,
A 30k residual on a 100k lease would be 30%; I have never seen a residual that high. If for some extra ordinary circumstance someone was in that position my advice would be to walk away from the machine. Being that the machine is only worth 20% of its original value after such a short time I would turn it in and get a different machine. Being that it is a true lease you have the option of returning the machine at the end of the term with no penalties. Now, if you really liked the machine you could buy it for the stated residual and own it but that would mean paying 30k for a machine that is only worth 20k... Not such a great idea. Also, if you had a true lease that had "Fair Market Value" at the end of term you could buy it for the 20k.
Did that help?
Todd
A 30k residual on a 100k lease would be 30%; I have never seen a residual that high. If for some extra ordinary circumstance someone was in that position my advice would be to walk away from the machine. Being that the machine is only worth 20% of its original value after such a short time I would turn it in and get a different machine. Being that it is a true lease you have the option of returning the machine at the end of the term with no penalties. Now, if you really liked the machine you could buy it for the stated residual and own it but that would mean paying 30k for a machine that is only worth 20k... Not such a great idea. Also, if you had a true lease that had "Fair Market Value" at the end of term you could buy it for the 20k.
Did that help?
Todd