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Old 09-14-2006, 02:33 PM
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schley schley is offline
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Originally Posted by enigma View Post
I don't really follow why people keep recommending to put down as little as possible. Maybe someone can help me out.

Here's my dilema. I keep buying new vehicles (mostly BMWs) ever 3 years or so. When I trade in, inevitably I get poor valuation on my old car. Now, I am seriously looking at leasing my next vehicle.

On the other hand, I also hate making monthly payments (and interest associated with them). According to the money factor posted above, the interest rate is about 5-7%. While it's not bad, I would rather avoid it all together.

My question is if I wanted to make a lump sum payment for my 3 year lease, would I just be paying for depreciation and sales/use tax? More specifically, will my one-time payment be (negotiated price x (1 - residual value))?

For example, if the negotiated price was 50k and the residual value is 50%, will my lump sum payment for this lease be 25k (50k x (1 - 0.5)) + sales/use tax + doc fees + security deposit?

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