[retiredguy123]

Originally Posted by Bill14564

Depending on what you want at the end of the lease period, leasing could save money.

For a $50,000 vehicle (easy, round number)

Lease:
- $5,000 down (I have never leased but I assume you don't get this back)
- $500/month for 36 months = $18,000
- $23,000 total and you walk away from the car

Buy:
- $10,000 down
- $940/month (this is the pmt for a 48 month loan) -> $34,000 after 36 months
- $44,000 total but ...
--- $11,000 balance still needs to be paid
--- $23,000 trade-in value back into your pocket
- $32,000 total and you walk away from the car

Buy with cash: $50,000 cash - $23,000 trade-in = $27,000 total and you walk away.

Of course, different down payments, interest rates, and loan periods change the calculations.

This assumes you walk away from the vehicle at the end of 36 months. If on the other hand you keep the vehicle then eventually the loan is paid off, your monthly cost drops to $0, and buying is less expensive.

A new car every three years - leasing is cheaper
Keep a car for five years - buying is cheaper

A few assumptions that I don't agree with. First, you are assuming that the initial value of the vehicle is $50K for leasing or buying. But, as a cash buyer who is willing to walk out the door, I expect to get a better price than someone who is leasing. Also, I never trade in a vehicle when buying. If you maintain a vehicle in tip top condition, you can sell it to a private buyer for more money than the trade-in value. Also, what do you do when the dealer wants to discount the residual value of a leased vehicle due to nitpicking defects and charge you for them?