LEASING - can`t understand

[matros]

Hi all AMs

I`ve read some topics about leasing, but still confused and cant understand one important moment.
As I know, leasing undermeans posibility of buying lease object, and most often (in real life) leasing means that, for example, if I want a/c that cost 50M$, but I dont have such a heap, then I go to the bank and say: "Hey Bank, buy this a/c from manufacturer, and then lease it to me for 5M$/month on length of 10 months!"
Bank says OK, and here`s my new plane. I`ll pay for it 5M$ every month, and after 10 months a/c is mine till the end of time.
Thats what I thought when leased 737-200 for 12,5M on 1 month term.  :oops:

But! Now I`m affraid of that "POSSIBILITY of buying" - as it was written on this forum about a year ago, this feature didn`t work, when lease time ends, a/c`s are returned to leaser. What`s about this now? Will I loose my 737 (and 3M with it :cry: ), or will I owe >40M plane for just 12,5M?
Winner or loser?   :?:

Thanks in advance!

[munjalm]

You lose. Planes are returned at the end of the lease.

You get nothing at end.

[beirut785]

well basically when u leased the plane for 1 month it meant that u rented that aircraft to use it only for one month
leasing can be bad coz basically by the end of the month ur going to pay each month for the rent so basically its better to buy u can simply start with smaller aircraft then switch to bigger ones leasing can be good when ur in urgent need for an airplane u calculate how much ur gonna make profit with this plane -the leasing rate , and rent of gates

[dktc]

No leasing is leasing in AM. Pure leasing, not financing (which is what you described with the bank).

What you described is called financing, which essentially you are taking out a loan from the bank to pay for the plane, using the plane as collateral.

In AM, you pay for the lease. As long as you pay the lease you use the plane. You don't get to own it.

[matros]

In AM, you pay for the lease. As long as you pay the lease you use the plane. You don't get to own it.

Then what`s the difference between leasing and rent?

[dktc]

In AM, you pay for the lease. As long as you pay the lease you use the plane. You don't get to own it.

Then what`s the difference between leasing and rent?

Rent is for gate. Lease is for plane.
Technically, they are the same.

[ealvarez]

put it this way. when you rent a house, they make you sign a lease     :wink: same. only rent.

to add to the confusion, theres also lease to own / rent to own. some brokers here have said they will do that, how they do it would have to be worked out with them on your lease  

[MusicAIR]

In AM, you pay for the lease. As long as you pay the lease you use the plane. You don't get to own it.

Then what`s the difference between leasing and rent?

Rent is for gate. Lease is for plane.
Technically, they are the same.

Actually, not quite.  
Rent is what you *pay* - the lease is the type of arrangement you have.
When you "rent" an apartment, you usually have some form of "lease" with the landlord - whether it is month-to-month, 12 months, or a set term (10+ years, etc).  Again, the rent is what you pay (the "consideration"), the lease is the contract that's formed.

To matros - leasing is only helpful if you understand advanced finances.  You might consider only buying planes, not leasing them, if you don't understand the leasing market.

[dktc]

Actually, not quite.  
Rent is what you *pay* - the lease is the type of arrangement you have.
When you "rent" an apartment, you usually have some form of "lease" with the landlord - whether it is month-to-month, 12 months, or a set term (10+ years, etc).  Again, the rent is what you pay (the "consideration"), the lease is the contract that's formed.

Yes... in terms of real estate, that is true...

but do we really say "pay rent on planes"? :?

[zkvac]

Well generally, wouldn't something 'rented' be for a shorter time then leasing? Eg a rental car is for a few days/weeks , whereas my dad leased a car, and that was for 3 years. Renting is pretty much short-term lease in this context.

[MusicAIR]

Actually, not quite.  
Rent is what you *pay* - the lease is the type of arrangement you have.
When you "rent" an apartment, you usually have some form of "lease" with the landlord - whether it is month-to-month, 12 months, or a set term (10+ years, etc).  Again, the rent is what you pay (the "consideration"), the lease is the contract that's formed.

Yes... in terms of real estate, that is true...

but do we really say "pay rent on planes"? :?

Sure...if you wanted, it would be perfectly appropriate to say you "pay rent" on the planes you lease.  In the corporate world, it just sounds better to say you "lease" the office, the car, the plane, whatever...rather than "pay rent".

Well generally, wouldn't something 'rented' be for a shorter time then leasing? Eg a rental car is for a few days/weeks , whereas my dad leased a car, and that was for 3 years. Renting is pretty much short-term lease in this context.

Only in the sense of common usage of the word, not the actual meaning.  A rental car is actually "leased" on a day-to-day term (or can be "leased" on an hourly term).

If you haven't already, read up on beginner contract law, and you'll see it's all covered.

[Hot Drink]

After quite a few posts, the response is not talking about the leasing in AM now, but changes to be a English lesson. Talking about the difference of "rent" and "lease", should i set up a new post for it?

[zkvac]

After quite a few posts, the response is not talking about the leasing in AM now, but changes to be a English lesson. Talking about the difference of "rent" and "lease", should i set up a new post for it?

It was because there was confusion as to what lease/rent actually means.