ShokWaveRider
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
I guess it just depends on your situation and how you look at things. I can't imagine a situation where I would think it made economic sense to lease a car (I've looked at it, but it seemed to be very costly). But, we don't change cars every 3 years either.
I know, I get flak from all over the place about it, but it still works (for me). Without turning this into a car leasing thread, here is some of the logic. I use
Some givens are; a) It really only works if you do not plan on keeping the car till the year dot (<5 years), b) You like to drive a new luxury car, or a or car priced >$40 - $50k, c) You typically finance a car, but like to put a relatively large down payment on it, d) You do not typically drive more than 12k miles per year. (We average 6000miles per year and take 10k mile leases.
OK that said. Let us do an example this is one I have done myself:
, it is actually based on a car I owned a few years ago when interest rates were very competitive.
Total Car Value Retail: $65k
Negotiated Value (what you haggled for): $57k
Residual Value After a 27 months Lease: $44k
Interest Rate (Money Factor): 2.4% (Yes you can haggle that too)
Depreciation: $13k (you lose this regardless)
Rental Charge: $2,772
Monthly Lease Payment: $584
OK so the car actually costs you payment wise: $15,768 for 27 Months.
I pay my leases all in one Payment for the complete lease so I do not have to pay monthly, so it actually costs less overall ~$15k for 27 months.
In this example the car was NOT worth $44k it was worth $32k. So I saved $12k there. (Of course only if I sold it after the lease was over)
Remember the dealer just want to sell the car and negotiates on behalf of the leasing company. As long as he get what he needs out of it from the leasing company, he is happy.
If for some reason the car was damaged in an accident and repaired, (your fault or not) in today's day of CarFAX and other reports, you would NEVER be able to sell the car for a decent price, if at all. People are funny that way. Unless you manage to find a fool/buyer that does not check. Not likely to happen in this car's target audience.
With a Lease you simply give it back!!! worth EVERY penny in my books.
Not to mention, I only paid tax on the lease payments.
The difference in car value at the end of the lease vs Lease payment was tax free, I used $44k of the Leasing companies money Sales Tax Free!