I ordered some new aircrafts last week and used a finance lease, I want the ownership of the aircrafts to be transferred to me after the lease is paid, is this done automatically or is there something that I need to do??
Used finance lease = ?
Finance = loan
lease = lease
no loan leases here.
Just a hint but i think he meant operational lease ;D
Isn't it obvious? ;)
I think he wants to suggest installment payment/hire purchase.
Quote from: kevinmh on October 04, 2009, 03:16:22 PM
I think he wants to suggest installment payment/hire purchase.
I think the term "Lease to Own" would probably apply here.
I have given that some thought, and in a shorter game I don't think it is worthwhile to buy larger aircraft, but may make sense with small or medium planes. I guess it depends on the situation.
In a longer game purchasing makes a great deal of sense, but where to get the money? A loan is an option, but "Lease to Own" may also be a good suggestion. You are paying interest and fees on the loan anyway, why not have a lease/purchase plan where as you have a longer lease then own have an option to buy at the end of the lease, with a percentage (10-25%) of the lease money you already spent be used towards an outright purchase?
The more I write about it, the more I like it.
So I lease a used 12-year-old Boeing 747SP with a price of $111,725,000 for $1,379,320/month. I lease it for a longer period then normal, say lock in a 3-year lease.
At the end of the lease I have the option to buy the plane outright, with some of my payments going toward the original purchase price. I paid $1,379,320/month for 36 months, totaling $49,655,520. If I get 25% back, that is $12,413,880 toward the purchase.
I can then apply that $12 million towards the $111 million and buy the plane. In the meantime I have hopefully spent that 3 years building a bank to make purchases like this.
Quote from: Lonesome_Phoenix on October 04, 2009, 12:33:28 PM
I ordered some new aircrafts last week and used a finance lease, I want the ownership of the aircrafts to be transferred to me after the lease is paid, is this done automatically or is there something that I need to do??
After the lease is paid you haven't paid for the aircraft yet. It's not a "lease-to-own" type deal. It's basically a Rental arrangement. In fact, if you wanted to buy the aircraft from the lessor after the term you'd pay WAY too much money for it. You're better off buying a new one from the manufacturer and just returning that one to the lessor.
ok obviously I got mixed up for some reason, but I do remember asking about the "lease-to-own" lease, AKA Finance Lease, and someone told me it is already in the game, anyway, it would be a nice add to the game since the aircraft you will lease is all new which is good for the image of your company.
http://en.wikipedia.org/wiki/Finance_lease (http://en.wikipedia.org/wiki/Finance_lease)
It was me that answered your previous requestion regarding finance leasing. And I didn't say it was in the game, I said that was "essentially" the arranagement that we have now in the game. And it is. What we have in the game now is a hybrid of varying leasing elements, but is far closer to a finance lease arrangement than any other but I also explained it's major difference in my post and the reasoning behind why we likely couldn't integrate a true capital leasing arrangement in AWS.
Here's the actual answer I provided back in August:
QuoteA Finance Lease is essentially what we have now. The only difference is that the Lessor is actually the Manufacturer -- you have the option at any time to terminate the lease or to buy the asset outright if you so wish. Or, in come cases, the Lessor may be a rich player who purchases the plane outright from the manufacturer and leases it out themselves.
I guess the one big difference between an actual Finance Lease and the system here is the value of the asset when it can be purchased at the end of the lease. In a real capital lease situation the lessee can purchase it for a pretty cheap sum as they've already paid a big chunk of the purchase price to the lessor. Here it's fairly high.
However, if we did that here it would be the only viable option. There would be little incentive to outright purchase planes. In reality there are huge tax differences between an operating lease, a capital lease, and an outright purchase. Here, in our game, there is none. As a result, capital leases that allowed minimal upfront costs and the ability to purchase cheaply in the future, would be the only logical way to go if it was an option.
But why is it that the cost to buy an aircraft during/after lease is far more expensive then buying it straight away? And is this also the case for aircrafts you lease directly from the manufacturer?
I do remember your answer, I tried to look for it but couldn't find it, I see your point now, thanks for the info.
Quote from: maya666 on October 05, 2009, 01:43:02 PM
But why is it that the cost to buy an aircraft during/after lease is far more expensive then buying it straight away? And is this also the case for aircrafts you lease directly from the manufacturer?
Because when you lease an aircraft, it doesn't go towards the balance of the aircraft's value. Your just renting it for a price.
The aircraft's value is little changed over the course of the leasing agreement. So when you go to buy it after your leasing agreement, your paying market value instead of (market value
minus money you spent leasing said aircraft)
Thus, buying an aircraft after a long lease is alot more expensive then buying it straight from the production line. Because you pay X yrs worth of leases + market value of the aircraft
over paying just the market value of said aircraft.
Talentz
And in a lease the risk is always at the company leasing it. I mean getting the plane back before contract ends, or getting a plane back after 7 years and nobody wants to buy it anymore etc... When selling the investment/capital "risk" is at the company buying it.