[MSMYYC]

Originally Posted by gippy87

its probably already been said in here but to answer your question there are a few things that factor into the cost of a lease.
1 is what they call a money factor. when it comes to leasing this is basically the interest rate. each leasing company will have their own money factors based off a variety of things.

2 is residual value. its not about how much a car cost its how well it holds its value by lease end.

Quick example of how a more exspensive car can cost less monthly than a cheaper car assuming both are for a 3 year lease agreement.

if you buy a 80,000 dollar BMW that has a residual value of 70,000 at the end of your 3 year lease than you're only responsible for paying for 10,000 plus interest and tax over the 3 years.
80,000 - 70,000 = 10,000
3 years multiplied by 12 months = 36 months of payments
10,000/36 = 277.78 (not including tax + interest)

If you buy a 40,000 Jeep that has a residual value of 27,000 after the 3 years you're responsible for paying 13,000 dollars over the 3 years.
40,000 - 27,000 = 13,000
13,000/36 = 361.11 (not including tax + interest)

Variables that will alter your monthly payment:
Yearly mileage - the less miles you agree to put on it the higher they will make the residual value which will lower your payment.
Down payment - the more you put down the less you will pay monthly. Though in most cases people avoid making large down payments on leases this is supposedly due to the fact that you could drop 10k down drive off the lot, total it and that money is gone.. I personally dont see how its any different than a non leased vehicle but im not a professional.

This was a good read!

[00 Trans Ram]

First, I address the "down payment vs no down payment" theory on a lease. The reason that most people try to put as much down on a car purchase, is so that they avoid as much interest as possible. If you buy a $50k car, with no money down, you pay interest on that whole $50k. But, if you put $10k down, you only pay interest on $40k. Over 5 years, that can be quite a chunk of change.

With a lease, since you aren't paying interest on the entire car, it doesn't make much sense to make that initial down payment. It's better to keep your money yourself, and just add it to the monthly payments. For instance, let's say you get $10k for your trade-in. With a new car, that $10k goes to your new car purchase immediately. But, with a lease, it's better to keep that $10k yourself, and spend $100 per month of that $10k on your car note. Incidentally, over a 4-year lease, you'll spend $4800 on car notes, which leaves you able to spread that $10k trade-in over 2 back-to-back 4-year leases. Effectively, what you've done is say, "I can afford a $400/month note. But, I can lease a $500/month car, because I have that extra $100 from the trade-in." Of course, after 8 years, that money will be gone. But, you have 8 years to figure out where to get another $100/month.

Second, taxes. With a new car purchase, you pay sales tax on the entire price of the car. Let's say taxes in your area are 10%. On a $50k car, you would pay $5000. And, since taxes are figured into the car loan amount, you also end up paying interest on that $5000. But, with a lease, you're not buying the car. You're just buying usage of it (another way to say "renting", but for taxation purposes, it's clearer to say "buying usage", since we always think of taxes applying to "buying" something). Therefore, you only pay taxes on your usage. If the car will have a residual value of $25k (on that $50k car), you only pay taxes on $25k. And, they're spread over the life of the lease. And . . . you don't pay interest on those taxes, since you're not getting a loan.

Now, I'm not even answering the OP's question. But, it's been answered (residual values, incentives, etc.). However, I thought this was still relevant because it sounds like he's new to the lease game. I've spent the past year amassing this information and research, putting together excel spreadsheets, etc. Thought it might be helpful.

[wavsine]

Do you enjoy having a left foot/leg? If so, go with the Camaro. In an offset frontal crash in the Challenger, the dummy was so mangled, they had to unbolt his leg to get him out of the car after the crash.

[SuperSound]

Originally Posted by 00 Trans Ram

First, I address the "down payment vs no down payment" theory on a lease. The reason that most people try to put as much down on a car purchase, is so that they avoid as much interest as possible. If you buy a $50k car, with no money down, you pay interest on that whole $50k. But, if you put $10k down, you only pay interest on $40k. Over 5 years, that can be quite a chunk of change.

With a lease, since you aren't paying interest on the entire car, it doesn't make much sense to make that initial down payment. It's better to keep your money yourself, and just add it to the monthly payments. For instance, let's say you get $10k for your trade-in. With a new car, that $10k goes to your new car purchase immediately. But, with a lease, it's better to keep that $10k yourself, and spend $100 per month of that $10k on your car note. Incidentally, over a 4-year lease, you'll spend $4800 on car notes, which leaves you able to spread that $10k trade-in over 2 back-to-back 4-year leases. Effectively, what you've done is say, "I can afford a $400/month note. But, I can lease a $500/month car, because I have that extra $100 from the trade-in." Of course, after 8 years, that money will be gone. But, you have 8 years to figure out where to get another $100/month.

Second, taxes. With a new car purchase, you pay sales tax on the entire price of the car. Let's say taxes in your area are 10%. On a $50k car, you would pay $5000. And, since taxes are figured into the car loan amount, you also end up paying interest on that $5000. But, with a lease, you're not buying the car. You're just buying usage of it (another way to say "renting", but for taxation purposes, it's clearer to say "buying usage", since we always think of taxes applying to "buying" something). Therefore, you only pay taxes on your usage. If the car will have a residual value of $25k (on that $50k car), you only pay taxes on $25k. And, they're spread over the life of the lease. And . . . you don't pay interest on those taxes, since you're not getting a loan.

Now, I'm not even answering the OP's question. But, it's been answered (residual values, incentives, etc.). However, I thought this was still relevant because it sounds like he's new to the lease game. I've spent the past year amassing this information and research, putting together excel spreadsheets, etc. Thought it might be helpful.

Great post. I'll add some more info on the down payment with leases vs buying pitfalls.

1. On a lease your insurance company will only pay out if the event of total loss the remaining payments + the buyout on the car. Down payments on leasing are essentially paying some of the agreed upon "usage cost" up front. So all you have done is reduce the amount your insurance company has to pay if you total it off the lot. Thinking of it another way it's like paying 6 months of rent in advance on an apartment then deciding you are moving out the first month. You will not recoup that money in any shape or form with leasing. GAP insurance is also not the same (essentially only prevents you from owing more than the car is worth), which is a common tactic used by salesman to "ease people" who express this concern at the dealer.

2. When you purchase and make a down payment, it could still end up hurting of course if you total it immediately. The fees, taxes, etc... are all the costs of doing business and will not get paid back by your insurance (this goes for leasing as well). Like Trans Am pointed out, the advantage is lowering the amount of interest you will be paying. Another recent item is many insurance companies now offer "new car replacement". This essentially helps reduce the loss if you make a down payment and wreck the car immediately. Generally this is a pretty cheap addon for your policy but is really only useful for the first 1-2 years you own the car. After that you should be over the major depreciation hump and your down payment has helped ensure your car is worth more than you owe on it.

[313RS]

Thank you very much everyone! Cleared everything up for me! I am now considering financing if I go with the camaro...

[00 Trans Ram]

Do your homework with that, too. I made a spreadsheet where I debated lease vs buy. Here were my givens:

- 12-year time frame (equals three 4-year leases or two 6-year purchases)
- Assumed a first-year trade-in of $10k (if I buy, $10k down payment; if I lease, $4800 down payment, which would equal $100 month (just did it this way to make apples-to-apples comparison; I'm not actually putting money down on a lease))

What I found was that, most years (12-months of payments) it was cheaper to lease a car than buy. In fact, over 12 years, I would save almost $20k buy leasing vs buying ($19,904).

[SuperSound]

Originally Posted by 00 Trans Ram

Do your homework with that, too. I made a spreadsheet where I debated lease vs buy. Here were my givens:

- 12-year time frame (equals three 4-year leases or two 6-year purchases)
- Assumed a first-year trade-in of $10k (if I buy, $10k down payment; if I lease, $4800 down payment, which would equal $100 month (just did it this way to make apples-to-apples comparison; I'm not actually putting money down on a lease))

What I found was that, most years (12-months of payments) it was cheaper to lease a car than buy. In fact, over 12 years, I would save almost $20k buy leasing vs buying ($19,904).

With the caveat of course that it assumes you want to change cars that many times. If you are that type, leasing can definitely be a money saver. But all depends on the numbers as always.

[00 Trans Ram]

True, Super Sound.

I have a habit of modifying any car within reach. My G8 has a stock mirror, and that's about it (hahaha). My wife won't ride in it because it's too loud, low, and rough.

A lease forces me to keep the car relatively stock. And, I get 3 new cars in 12 years instead of 2. But, sadly, no mods.

[cellsafemode]

my stance is this.

Buy the car and drive it until it dies.

If that's not your goal then lease it.

Mass produced cars aren't good investments until most of them are junked and a bunch of old people are nostalgic for your 2017 camaro so banking on resale value is a bad idea. Especially since all those that Lease are going to flood the market in 3 years.

[Richard0nee]

Leasing is great if you tend to change cars.

My SS was a lease and it gives me options if I want to buy it out.

Terms from last year and GM Fin set the residual at 59% for 10k miles a year
MF - .0015(3%)
residual - 59%

As you can see, not the greatest numbers but not the worse either.

Buyout after 36 month is $22,650. If I do decide to buy it out, I'll finance it for 2 years so it will be 5 years total.

[Openroad346]

You have to watch for a good deal, leases are negotiable to a degree.
I'm 24 and I'm on my 3rd lease. Many people say leasing isn't for them for various reason and honestly I'm glad many people don't like leasing. If everyone leased, leasing cars would no longer be an option because there would be no one buying used cars.