Re: Dealer Financing v. Bank Financing for X-Serie (archive)

You need more information to complete the analysis, that being the price of the vehicle under consideration to lease or buy, the term of the loan and amount of sales tax. So far, we know that the total out of pocket for the lease is $17,980.00, after which you can walk away assuming no exess mileage or wear. Also, (at least in New York) you pay sales tax on the leased value of the vehicle or the entire vehicle if you purchase.

Additionally if you lease, and later decide to purchase the vehicle, you will need to come up with the $17500 plus tax or to refinance this amount.

Regarding potential purchase, in addition to the term of the loan, how how much you intend to put down and how much you will borrow to make the analysis complete.

Finally, there are the intangible aspects of leasing vs buying: how many miles do you drive annually, how well do you treat your vehicles, how long do you usually keep vehicles, do you mind having a monthly payment all the time vs. not having to pay after a loan is paid off, obtaining some equity in a vehicle for trade in purposes.(By the way, cars are assets of diminishing equity. Do you want to own something that decreases in value as time goes by or do you just want to pay for the use of a vehicle for a limited period of time, and keep repeating this process over and over? You should think of this before you make a decision.)

The only way to come out "ahead" in the lease vs. purchase debate is to figure all this out before hand.

The residual value was quoted to me at $17,500.

Can you please tell me if that makes a difference?

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