Quote:
Originally Posted by DementedReality
sure i can ... and using more accurate #'s from my real life experiance, sorry the earlier post was just off my head.
how do you not see that spending 25k on a car and is not more expensive than spending 14k on the same car.
i just leased a 2008 JEtta. Here are details:
1) i could have purchased. either give them 25k outright from my bank or $550 per month.
2) i could lease at 300 per month, 0 down.
Now who wants to OWN a VW without a warrenty? this is a 4 year proposition.
option 1 costs me between 25 and 26k and after 4 years I have a liability (not an asset because it continues to depreciate AND now i have no warrenty) worth say 13k at most.
option 2 costs me 14k and i can pocket the difference of about 250 per month. after 4 years i have 12k in cash built up and its liquid. in option 1, all that equity is not only tied up in metal in my parking lot, its going down every month.
i see no reason to not lease a new car every 4 years.
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If you're going to compare, you must do so fairly, and not remove the most important element of option 1. Resale
Keeping with a 4 year plan, option 1 you would resell the car after 4 years. This costs you 25-13 (12 K total) and you have 13K liquid when all said and done. (going by your numbers)
Total cost is $2000 less than lease, and cash in pocket after 4 years is $1000 more. Pretty simple
In most real life examples, the differences won't even be this close. Your total 4 year cost on a purchase will be much less then the lease. The VW your bought has exceptional lease rates right now that keep the differences close, but this is not the case with most cars.
Most dealers have much higher lease rates then finance rates and you pay much more interest by going lease.
There are advantages to leasing: new car every few years, don't have to go through the hastle of selling it, lower monthly payment (which could allow your to invest elsewhere), warrenty, tax benefit for some.
However, saving money overall is not an advantage to leasing.