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Old 02-13-2013, 10:38 PM
swajames swajames is offline
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Join Date: Jan 2005
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Mein Auto: Jaguar F-Type V8 S
Quote:
Originally Posted by K-A View Post
If you bought out a car that's attractive during its "Lease period" after the Lease is up, they'd "get you" on the buyout part. Using my own car as an example, which is a very good example of very attractive Lease pricing/terms due to artificially high residual (74% for two years on a $63,450 MSRP car):

My total payments, including drive off total to a little over or around $14,000 for two years (not including Tax each month, to keep things more easy to calculate, tax adds a little over $1K to the total). So if I return the car at Lease end, I "win" as I simply took advantage of a great deal. However, if I were initially planning to purchase one car for the next 6+ years, and chose Lease simply to keep cash in my bank to work for me with the intent to cancel out and even come hopefully far ahead of any losses incurred from not buying the car outright to begin with, choosing to have a "trial period" for a couple of years, also to extend my payment period for 7 years (instead of 5 like when you finance), etc., it gets more complicated.

My artificially high residual payment on a $63,450 car that was priced down to about $56.5 after discounts and incentives, is $46,900 after 24 months.

Therefore, if I chose to buy out this car (pretending that my initial plan again was to "buy one car for 6+ years", by way of Leasing for its extra benefits listed above, or outright buying), I'd be spending roughly $4-5K more over time as it would total me $60,900 to Lease then purchase my particular car.

So, basically, in my scenario, that $4K would have to be worth not only the luxury of "in case something happens within the first two years I can get out easily", but also being able to extend payments out on the car, therefore allowing me to use the $30+K I would have put down on it to make me even more money than $4K.

I hope that makes sense. Leasing is very complex when you start looking at how much it would cost you for 6 or so years, whether or not you buy the car or Lease multiples, when you start adding stuff up.
It all depends how long you plan to keep the car. Keep it for the lease period only and you'd probably have paid less than you'd have suffered in depreciation over the same period had you purchased. Once you start getting out to six to seven years, though, leasing makes far less sense and it would, more likely than not, be better to buy.
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