Quote:
Originally Posted by Tainen
I think a lot of people here have hit it on the head- leasing is a big waste of money- but no one has proven it.
Here's some basic figures to think about.
Let's take a standard 3 year lease. 12k miles a year max, with insane overage charges (which btw, the vast majority of people go over on, and make these calculations even crazier)
let's say it's a fairly standard $250 a month, as with most cheap sporty cars.
OK, 250 a month for 36 months, without going over 12k miles a year. And we're talking base model car, because they don't lease fully optioned models without jacking up the price a ton. (and they don't give incentives or deals on those either).
Let's take a fairly standard $2300 downpayment on the lease.
$2300 downpayment (10%, average)
$9000 in payments over three years
$11,300 total. for 3 years. You just paid around 3800 a year just to have the ability to drive this car less than the national average (15k a year). Say the base model FR-S was 23 grand out the door. You just paid 11 grand to drive it for 3 years, and you give it back, and now you have nothing to show for it, and the car is still worth 18 grand or so (because it's low miles and unmodified).
OK, now let's do the math on financing the same exact car.
23 grand base price
same $2300 downpayment
let's say a 3.9% interest rate. You would be financing 20,700 and your payments would be:
$380 a month.
(I did not factor in tax- it varies by state)
So after 3 years, you've paid off 13,680 dollars on the car, plus your $2300 downpayment, and you owe $8,766.36 on the car. It has as many miles as you want on it, it's yours, and you can mod it.
The difference: With the purchase, you had an extra $130 a month in payments over 3 years, a total of $4,680. But you own the car, you only owe $8,800 on it, and you can sell it at that time for let's say 17 grand (less than what the lease buyout would be worth by far). you'd walk away with 3-5 grand MORE than the lease option, even after you subtract the extra 4700 you paid over the 3 years.
SO- the math on the lease doesn't make sense. Unless you are willing to walk away from a car that you invested 11 grand in after three years, and have nothing to show for it- and you can afford that. (and again, I did not factor in all of the fees they charge you when you return the lease. on average, over a thousand dollars for regular wear and tear, and mileage overages).
Please read and learn, and don't waste your money. The only reason dealerships offer leases, is because they make a lot of money on them.
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Honestly dude, you're dreaming here. You made a nice example with 'simple numbers' but it's completely unrealistic and shows that you REALLY don't know how the calculations work.
The problem with your leasing example is that you take a 23000 car and assume an 18000 residual after 3 years. As IF. Using your insane residual combined with your 'typical' payments, it implies you're borrowing money at about 11%. Yet in your purchase example you borrow money at 3.9%! So of course purchasing is a better deal in your example - you've rigged the game.
Here's how it works kids: IF the interest rate on the lease is the same as what you can get when purchasing (and it should be close), AND IF the residual is what that car will actually be worth at that time, then you should be INDIFFERENT between buying and leasing (net of fee differences, etc).
Now in reality, no one really knows if the residual is what the car's market value is at that time, (but the lease includes a free put option on that value), and convenience, ability to mod the car, etc is certainly worth something too, so it's still going to vary person to person.