Quote:
Originally Posted by keylime503
Your post makes it sounds like 2.5% APR on a lease is so low that it makes it worth leasing an M2C despite the abhorrent residuals. Yet the financing APR for either 2020 or 2021 is lower than 2.5%. So I'm confused what your point is.
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In the northeast you are allowed to do a security deposit/MSD that is 100% returned to you at the end of the lease. It lowers your money factor/interest on the lease. In this case, if I max out the security deposit (~$5600 - $6000) then my interest on the lease drops to 1.5%. The difference in that monthly interest is ~$40 a month. You are paying less interest on the lease than finance.
Financing is still cheaper though, because for a lease you pay a $925 acquisition fee, and if you buyout the car you will still have more interest to pay. Based on my calculations its probably about $2K cheaper over the 5-6 year period to finance instead of lease. The biggest factors I cannot account for are:
1) if something happens to the car in the first 3 years, the lease absorbs it versus you as the owner of the car
2) If the retains its value, your lease buyout will be a steal