Quote:
Originally Posted by Andrae26
Example:
100k F80 M3 CS
BMW discounts to 80k
You lease it at 60% residual. Some would like that means 80*60% is what's due when the lease is up, but nooooo, it's 100*60%
If you were to purchase, you would have financed a total of 80k. So, moral of the story, if you get a good discount you're better off financing the car
|
Not really true.
Let's say you lease a $100k CS at 60% residual. RV is $60,000. But car is discounted 20%. That means you're only paying $20,000 over the lease ($80,000-$60,000RV)
plus interest and fees, which I'll disregard for simplicity's sake. If you choose to buy this car out after the lease, then you'll pay the RV, $60k. You've paid $80k ($20k lease plus $60k RV) in total for this car.
Let's say you're buying this same car from the start at the same 20% discount. Then you're simply buying it for the same $80k. This guy explains it perfectly so no need for me to.[/QUOTE]
Your example is a little misleading. The original post claimed that if you were to buy out a lease you end up paying the same amount of money you have it you purchased the car from the beginning. This of course is not true assuming you are talking overall cost and not simply the agreed upon sales price which of course is the same in any scenario (as you illustrated in your example). In the example you provided, yes the cost of the vehicle itself is $80k in either method lease vs purchase, but thats much too simplistic to look at it that way and you would be fooling yourself if you thought the overall cost is the same merely because the sales price is the same.
As stated by another poster, the acquisition cost and interest component is significantly higher in a lease vs purchase/finance, thus making the lease the more expensive proposition if you were to buy it out vs purchasing from the start.