Quote:
Originally Posted by Winsor_Pilates
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.
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actually:
550 x 48 months = 26,400
minus resale of 13,000 = 12,400
vs
12k + accumlated interest.
so on that front its identicle EXCEPT:
the person with the cash is liquid and growing
the person with the car has to sell it, at a expense possible and the longer they dont sell it the more it depreciates AND if it has a repair need after the warrenty is over, its value is even less.
if you shop right, there is no reason to not lease (with some exceptions of course)