Quote:
Originally Posted by firebug
You should really re-think this.
'A', 'B' and 'C' each buy an identical new car for exactly the same price ($25,300+gst) and maintain and drive them similarly for 4 years (64,000km).
'A' Leased with Zero down for 48 months at 3.9% and their monthly payments are $408 (incl. taxes). At the end of 48 Months they have put $19,584 into the vehicle and have the option to walk away or buy out for $11,502.
'B' Financed with Zero Down for 60 months at 2.9% paying $511/month. They have put $24,528 into the vehicle and have $12,264 in payments remaining.
'c' paid cash up front $28,517 including all taxes and fees.
After 48 months, all 3 Cars are now worth $12,500 each. Who is further ahead?
** All figures are from the Toyota.ca 'Build and Price" website for a base 2011 Camry
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Not everyone has an extra 30k in cash laying around.
If person A uses their vehicle for work, they can write off the lease payment. Person B and C can only write off interest and depreciation of the vehicle.
You also have to factor in the opportunity cost of paying 30k upfront. If I can invest that money in an investment that pays out more than 3.9 or 2.9% I can still come out ahead of the financed guys.
Person B and C can also run the risk of a major repair once the warranty expires.
Leasing is a better option if you can write off a decent sized portion of your payments.