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Great example Funky Chicken. The lease savings is even more pronounced when the captive pushes leasing by supporting the residual value higher than real world value. Here is the example for my wife's 2018 QX60 from May:
MSRP: 51,510
Lease selling price: 41,803 (including all dealer incentives and Infiniti VPP - $1500)
Money factor: 0.00085 (2.04%), but bought down to 0.00005 (0.12%) using fully refundable security deposit ($3200)
Fees: $988 (includes $700 acq fee, $141 doc fee and $147 for registration)
39 month lease, 12K miles per year, Residual value = 57%, $29361
Monthly lease payment: $351, 3% tax included Total OOP, $4200 which includes 1st month. $3600 of that is refunded at end of lease.
At end of 39 mths, total payments are $13,938.
For a purchase instead of lease.
Selling price $41,803
Tax (3%): $1,254
Fees: $288
Total: $43,345
Total payments at 39 months: $24,297 + $8,669 = $32,966
Loan balance at month 39: $12,730
Equity (If RV is correct): $29,361 - $12,730 = $16,631
Total Cost: $32,966 - $16,631 = 16,335 (or $2397 more than leasing for that time period).
Plus as Funky Chicken mentioned, if vehicle is worth more than RV at time of turn in I can sell it to a dealer and pocket the difference. If its worth less than the RV, I just turn the vehicle in, whereas if I owned it and wanted to get out of it, 1) I would have to go through the hassle of selling and 2) the numbers would be tilted more in the favor of leasing because my equity position would be smaller.
You left out things like over mileage charges, excessive use charges, etc. Its easy to come up with dozens of scenarios in which the math for leasing doesn't work. Simply keeping the Acura in your example for a few more years as an example.
Anyway, the lunacy of having a lease payment $600 a month forever is way beyond my comprehension. Best of luck with that.
You left out things like over mileage charges, excessive use charges, etc. Its easy to come up with dozens of scenarios in which the math for leasing doesn't work. Simply keeping the Acura in your example for a few more years as an example.
Anyway, the lunacy of having a lease payment $600 a month forever is way beyond my comprehension. Best of luck with that.
Some people can afford a 600-dollar a month car payment just fine and they like nice cars.
Eh... I don't have a payment that high, but mine have averaged around 350-480 over the past decade or so.
Over mileage charges are something I never worry about. Most people know how much they drive and if you want to avoid the charge you can always trade in early on a lease and you never get charged it.
Excessive use? If you damage a car, you need to repair it anyway... it's not like it's less damaged if you own it.
And, some people don't want a car after it's no longer under warranty.
__________________
When in doubt, check it out: FAQ
Some people can afford a 600-dollar a month car payment just fine and they like nice cars.
Yes, some people can, but not many. And of those that can, most have more sense than to do that. And unfortunately, most who do it can't afford it.
Quote:
Originally Posted by RedZin
Over mileage charges are something I never worry about. Most people know how much they drive and if you want to avoid the charge you can always trade in early on a lease and you never get charged it.
Most people drive way more than 10-12,000 miles per year. And lots of people with leased cars have to pay mileage charges.
Quote:
Originally Posted by RedZin
Excessive use? If you damage a car, you need to repair it anyway... it's not like it's less damaged if you own it.
Except that if you own it, you can choose not to fix it. A minor ding is something I ignore.
You left out things like over mileage charges, excessive use charges, etc. Its easy to come up with dozens of scenarios in which the math for leasing doesn't work. Simply keeping the Acura in your example for a few more years as an example.
Anyway, the lunacy of having a lease payment $600 a month forever is way beyond my comprehension. Best of luck with that.
I left out those charges because they are the exception. As stated earlier, you must anticipate your mileage and take care of the car. If you can't or won't do those two things, don't lease. I've never paid a dime of charges for either of those two issues.
Yes, keeping the car longer negates the lease benefit. You seem to be unwilling to accept the fact that many people simply
1) Do not wish to do that
and
2) Can afford not to do that.
You are correct that it is easy to come up with "dozens of scenarios in which the math for leasing does not work". I presented to you in great detail a scenario where it works extremely well, as did another poster in this thread, and you want to reject them because it's "way beyond your comprehension".
Yes, some people can, but not many. And of those that can, most have more sense than to do that. And unfortunately, most who do it can't afford it.
Most people drive way more than 10-12,000 miles per year. And lots of people with leased cars have to pay mileage charges.
Except that if you own it, you can choose not to fix it. A minor ding is something I ignore.
Plenty of people can afford an 600-dollar a month car payment. Depends on what they want to do with that money. I know people who live in modest homes who drive really nice cars because they ENJOY those. I know people who live in less modest homes who drive economy cars. Because they ENJOY the nicer house and don't care much about cars.
It's really personal preference and I'm not about spending other people's money for them. Or assuming they cannot afford whatever they drive. I don't know them or their finances.
I know people who only drive locally and don't take many trips or the trips they do take tend to by by plane instead of road trips. Short commutes and local driving easily keep a person from going over 30-36k miles on a 3-year lease.
I've never gone over miles. Not once. And I wasn't even trying not to.
And, if it's a really minor ding, you can choose not to fix it on a leased car, too. They don't penalize you for tiny dings based on the several leases I've done so far.
__________________
When in doubt, check it out: FAQ
Yes, keeping the car longer negates the lease benefit. You seem to be unwilling to accept the fact that many people simply
1) Do not wish to do that
and
2) Can afford not to do that.
Actually, I have acknowledged that:
"Yes, some people can (afford a $600 a month lease payment)." Very, very few people can truly afford it, however.
Quote:
Originally Posted by Funky Chicken
You are correct that it is easy to come up with "dozens of scenarios in which the math for leasing does not work". I presented to you in great detail a scenario where it works extremely well, as did another poster in this thread, and you want to reject them because it's "way beyond your comprehension".
I'm not rejecting your scenario, I'm rejecting the idea that paying a $600 a month lease payment for decades is smart. If one invested $600 a month at 10% for 30 years, they'd have over $1.2 million. Thats expensive driving.
I'm not rejecting your scenario, I'm rejecting the idea that paying a $600 a month lease payment for decades is smart. If one invested $600 a month at 10% for 30 years, they'd have over $1.2 million. Thats expensive driving.
I'll suggest that it is entirely possible that someone can make that $600 lease payment while simultaneously saving at least $600 per month for retirement. It's all a question of scale.
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