Quote:
Originally Posted by Grock
Leasing cost is always going to be worse compared to financing. There is no need for any formulas.
Leasing means renting a car so you are paying for something that's not yours.
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IMO, I think that it's more complicated than that and you need to consider a couple of things, but most importantly your long term intention for the car.
If you only want to keep it for 3 years, your total cost of ownership (cash on cash) may be better with a lease. The OP's example only makes financing work better because he assumes equity in the financing scenario vs. no equity that he could realize in the lease.
Residual vs. expected market, money factor vs. interest rate, tolerance for uncertainty, miles driven per year, etc. all come into play.
If you intend to keep a car long term, financing (or paying cash assuming your cost of funds exceeds your expected rate of return on the funds) is generally the way to go.
I know there are people that would "never lease" or "never finance", but I've done both and fall into the depends on circumstances camp.