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Old 03-05-2012, 06:57 PM   #206
Passed Driver's Ed
Drives: 2012 Candy White GTI - Sun & Nav
Join Date: Sep 2011
Location: Denver, CO
Posts: 7
Wow! I don't post very often, but this thread was very entertaining and I couldn't resist.

CL4 makes some valid points, the primary one being that if you keep your cars short-term, leasing is a very valid option. Another one is that lease terms are absolutely negotiable (particularly the "purchase" price).

However, I thought it started going south when he/she started puffing up his chest regarding his college degree, certification(s) and place of employment. I could be wrong, but that gives me the impression of a young professional, fresh into his/her career, giving much more weight to book smarts than is warranted. I applaud you on your education, degree and ability to land a job in a tough market, but it really gives you little advantage over anyone else on understanding leases (and many other financial matters).

And then there are the scenarios provided. I know where you're getting at conceptually, but the few errors really make a difference. The first one was already pointed out - you were essentially "double-counting" the monthly payment savings. I'm surprised the other one wasn't mentioned (unless I missed it) - in your original example that calculated lease payments of $323 (before tax), I think you ignored interest altogether. I believe you simply took the difference between your negotiated price and the stated residual, and divided by 36 months. I know you know there is interest on leases as well, so I'm sure it was an oversight, but certainly a lease with zero money factor is going to fare better compared to financing at 5%.

Leasing vehicles and purchasing vehicles both have their place, totally dependent on the buyer's intentions, financial situation, and countless other variables. Hopefully, the buyer is aware of all the terms in either scenario.
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