Quote:
Originally Posted by dewilson58
Please share the math.  |
1. Typically, more expensive/luxury vehicles (Lexus, i.e.) have higher re-sale values (read that as higher residual value). The "use portion" (MSRP minus Residual) is lower.
2. When you lease, you are not amortizing the entire vehicle, you're only amortizing the portion of the vehicle you're using. (Go back to my analogy of the "ice cube". You're only paying for the melting + "interest only" on the balance.
In some respects it's like an "interest only mortgage" + the "use portion". You are never paying down the principal (beyond the difference between purchase price & residual value).
Toyota Camry is often about the cheapest car to lease. Why? They hold their value. MSRP minus Residual is small. Some manufacturers "cheat" the system, by buying "insurance" for an artificially high residual value. Those situations are usually a great lease deal. VW used to do it all the time, with Jettas. Chrysler often does it with their SUV's.
BMW is the fastest depreciating brand in the USA (I drive one, not so smart). They're expensive to lease, because MSRP - Residual, is high.