Calgarypuck Forums - The Unofficial Calgary Flames Fan Community - View Single Post - Cash Purchase vs. Finnance and how does Leasing come into play?

kevman · 07-23-2009, 03:59 PM

I'm looking at buying a new truck and I'm a little hung up on how to pay for it. For simplicity the truck I'm looking at is $40,000.

Option A: 0% Financing over 60 months
For Option A I've set up some NPV calculations using a discount of 3% and come up with a cost in today's dollars of ~$37,000.
Option B: $5,500 in Cash incentives
After subtracting the Incentives, putting down some cash and borrowing the rest from my LOC I end up with a cost in today's dollars of ~$35,000
Option C: 48month lease at 4.9%
I'm lost...

So my crude NPV calculations tell me taking the cash is the best way to go but then leasing comes in to play. Can someone better explain how leasing works and it's pros/cons. I know there is some information in the car salesman thread but I'm looking for a more direct comparison to some of the pretty aggressive incentives they have available today. Also could there be something I'm missing in my NPV calculations that may have skewed the results?

07-23-2009, 03:59 PM	#1
kevman #1 Goaltender Join Date: Apr 2004 Exp:	Cash Purchase vs. Finnance and how does Leasing come into play? I'm looking at buying a new truck and I'm a little hung up on how to pay for it. For simplicity the truck I'm looking at is $40,000. Option A: 0% Financing over 60 months For Option A I've set up some NPV calculations using a discount of 3% and come up with a cost in today's dollars of ~$37,000. Option B: $5,500 in Cash incentives After subtracting the Incentives, putting down some cash and borrowing the rest from my LOC I end up with a cost in today's dollars of ~$35,000 Option C: 48month lease at 4.9% I'm lost... So my crude NPV calculations tell me taking the cash is the best way to go but then leasing comes in to play. Can someone better explain how leasing works and it's pros/cons. I know there is some information in the car salesman thread but I'm looking for a more direct comparison to some of the pretty aggressive incentives they have available today. Also could there be something I'm missing in my NPV calculations that may have skewed the results?