[Money2536]

Please check my work, but it seems clear to me that I'll be better off Financing than Leasing assuming the current 36 month offer and purchase at MSRP. Of course the big unknown is what a 36,000 mile 3 year-old version of the car I'm ordering would be worth.

Lease Option: For me the pro of the lease option is simple. I have a known value on what the car will be worth when it's time to turn the car in. I also tend to stress less about an accident. The big con of course is the rental argument with limits on mileage.

MSRP: $65,950
Residual Percentage at 12,000 Miles: 57%
Residual Value: $37,591.50
Percent off MSRP: 0.00%
Negotiated Price: $65,950
Down Payment: $0
Net Cap Cost (Neg. Price – Down Payment): $65,950
Depreciation: $28,358.50
Lease Term: 36 Months
Monthly Depreciation Payment: $787.74

Finance Cost = Net Cap Cost + Residual: 103,541.50
Interest Rate (APR): .00130 X 2400 = 1.944%
Money Factor: 0.00081
Monthly Finance Fee: $83.87

Monthly Payment: $871.61
Sales Tax: 6%: $52.30
Total Monthly Payment: $923.91

7 MSD: $950 X 7 = $6,650
Title, Registration, and Other Fees: ~$1,000
Incentives/Rebates: $0 (Assuming there are none.)

Drive-off (1st month’s payment + Fees + Maximum MSD): $8,573.91

3 Year Cost of Ownership: $1,000 + $33,260.76 = $34,260.76


Finance Option: The big pro to financing is open ended options. I can sell it when I want and drive it when I want. I take such good car of my cars that I never have a hard time selling them when I'm done. I can also reduce the cost of ownership on the next vehicle by trading the car and saving the future sales tax.

36,000 Miles 2.19% APR 72 Month Loan

Purchase Price: $65,950 MSRP
Tax: $4,017
Title, Registration, and Other Fees: ~$1,000
Total: $70,967

Monthly Payment: $1,052.73 including Tax

Payments Made: $37,898.28
Remaining Lien: $36,647.65 after 3 Years
Sale Price Estimate: $45,000
Net Positive Cash Flow After Sale: $45,000 - $36,647.65 = $8,352.35

Total Cash Outlay After 3 Years: $37,898.28 - $8352.35 = $29,645.93