Quote:
Originally Posted by Alfisti
Let's assume the same price lease vs buy, taxes in.
LEASE:
1078*48 = 51,744
Buy out = $29,130*1.13 = 32,917
= $84,661
BUY:
68700*1.13 = 77,631
Interest @ 5 yrs and 2.5% is 1,378
= 79,009
He is more than $5K up and if the car holds value, as the Mach 1 likely will, he could offload it for $50K and spend $29K in 5 years instead of $52K in 3 years.
So to your point, let's say he does the buy out as the car is worth more, so he buys her out, 33K, sells at $50K, for a 17K delta. 52 less 17 is 35K. He has still spent 4K more in 3 years than he would have if he bought it over 5 years. Now i realise 5 vs 3 years is unfair but a) the loan cost would also be less and b) I am not even counting the extra 2 years of leasing he would need to do to get to 5 years of ownership.
It's madness.
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Dude your math is all wrong and everyone called you out on it.
The difference in those scenarios is about 2k and thats because the finance rate is lower (2.5 vs 4.5) - thats not always the case.
And you should be paying more for the lease, you get a built in put option to sell at fixed price.
If the car is worth less than buyout, finance option loses. If you got into an accident during the lease that could easily be the case.
Im not advocating one over the other but you clearly don't know how it works. Its only madness because you cant do the math.