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Old 09-28-2009, 02:23 PM
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tturedraider tturedraider is offline
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Originally Posted by jhu321 View Post
the 14,600 rent is very stiff even for financing the entire sum.... @ 4% over 5 years the entire sum would probably net about a 6~7k total interest paid...
Here's a balloon note calculator you can use. Just on the lease the interest/rent is going to be over $7k, based on the numbers you provided.

One benefit to leasing as opposed to a simple interest balloon note is that with the lease the interest/rent is applied to the payoff equally each month, which may reduce the payoff faster than with a simple interest balloon would after about the first half of the lease. Another possible benefit to leasing is that if market rates for the car are significantly lower than the contracted residual, it may be possible to buy the car for less than the contracted residual. But this is a relatively rare situation and should not be counted on.

Here's a good lease calculator.

You should also read the sticky in this forum about Multiple Security Deposits, which bring down the money factor and you get back at the end.

The base MF for your deal would be 0.00255, which equates to a little over 6%. This is the "buy rate" and the dealer can mark it up .0004, which equates to almost 1%.

Lease Payment Calculation Formula:
(Cap Cost Residual Value) / Term = Depreciation
(Cap Cost + Residual Value) X Base Rate = Interest
Depreciation + Interest = Base Monthly Payment

Terms Used in Lease Formula:
CAP COST = Vehicle Purchase Price (amount financed)
RESIDUAL VALUE = MSRP (window sticker) X Residual %
TERM = Length of Lease in Months (3 years = 36 months)
BASE RATE = Dealer's Buy Rate (dealer can mark this up for profit)

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Last edited by tturedraider; 09-28-2009 at 07:10 PM.
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