Quote:
Originally Posted by Sliver
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Let's take a look at a fairly typical dealer ad. It offers a popular new model for $13,998 with 1.9% financing or a four year lease with $1,000 down and monthly payments of $249.
Suppose he chooses to buy the car instead. He'll spend $13,508 over a 48 month period. That assumes a $1,000 down payment and the 1.9% financing. His monthly payment would be $281. Not much more than the lease.
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first off ... this math isnt right ... a car costing $14k, should have a lease payment of around 160/month ..
secondly, dont bother with the downpayment, its contrary to the point of leasing. it wont save you money, i would rather give you $1000 in 1/48 increments.
anyhow ... follow my math with the above example
OUT OF POCKET $$$
leasing ...
48 payments x 160 per month = $7,680.00 out of pocket
purchase
48 x 280 per month = $13,440 out of pocket
end of 48 months
leaser has $5500 in capital and growing, but not car
buyer has $7000 in a depreciating asset but no capital ... one can say he does have the 280 a month to invest, but of course he now also has no warrenty. a 4 year old car is a good time for a transmission or a ball joint or some other expensive repair
not only that, say he does have a $2500 repair, his $7000 asset is now worth $4000 if he doesnt put that $2500 into it!
and each year that $7000 asset become worth less and less ...and still a risk for more repairs.
in the meantime, the leaser is driving a new car, within their budget and continues to grow their capital with no risk of a sinkhole in a depreciating asset.
i guess it works for me ... to each his own. i dont want to ever own a car.
by the way, if leasing is so bad for the consumer, why did Chrysler discontinue it as an option?