Quote:
Originally Posted by Swancoat
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.
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Residual sale price doesn't change the calculations at all. could be 10k, could be 20k- what matters is what the difference between leasing and buying would be at the end of that period. slightly higher for the leased car, of course, due to potentially less miles/mods.
I pulled the math from amortization calculators and used common lease terms, downpyaments, and figures. The illustration was chalkboard style for sure, but it gets the point across. If you want to show math to back up your claims then cool- but dealerships don't work that way. They just ask how much you can pay a month, for a lease, they don't get into interest rates, it's all invisible to you the buyer. (you ignored the vast majority of my math and attacked the single most worthless number to the value proposition, because if residual is so crazy low, you can still sell the car compared to lease buyout cost with a favorable outcome, pretty much gauranteed)
Anyways- no need to get angry. If you can't debate respectfully, don't debate at all.
