Mar 19, 2006 4:30:00 PM
- Silver Bullet
- Veteran
- Loc: Canada
- Posts: 1126, Gallery
- Registered on: Nov 24, 2004
- Reply to: Deven
Re:lease vs buy
Quote:
Deven said:
The main advantage to lease is to run it through your business. In that case compare pre-tax dollars. Also when comparing to buying, it is better to make the comparison when doing traditional financing (example 5 years). At 6% your 76000 car would cost 88140 over 5 years or 83232 over 3 years. So when you compare lease to buying the difference is not as much as you think (maybe 6K). I think the difference is even less when doing a 4 year lease (makes sense since the car has a 4 year warrentee). If you look at my note above, I had planned on keeping the car after the lease expires so I wanted to have the lowest residual possible. Factor in that I am leasing through my business, my 'out-of pocket' expenses for the Porsche is actually much less than the MRSP + finance charges (at the end of 4 years my out of pocket expense will be about 66% of MRSP+taxes). That means if I bought the car or financed it, vs leasing through business and then buying out car personally I will have payed 33% less for the car. (Think about it, a 100K car add taxes, financed charges etc, will cost me 80K or so 'out of pocket' at the end of 4 years, and I have a car that should be worth about 50K. That means if I sell the car privately, I had the privalege to drive a Porsche for about 600 dollars a month for 4 years for a 100K car).
Sorry Deven - can you explain this to me like I'm a 12 year old? I'm having problems following.