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This an image the spreadsheet I used to decide whether to lease or buy. The APR of the lease is 6.211% because this is a commercial lease. I used a co-op incentive of $5200.00 which required this to be a fleet purchase and a commercial lease. I could use my 2009 F150 as a trade or outright sale for $17000.00.
I decided to lease because I felt having the $17000.00 as cash to invest was more valuable to me than having it stuck in the new vehicle. After 5 years (1 full lease, and two-thirds of another) I would be in a two year old pickup instead of 5 year old. Yes, the 5 year old pickup will probably be worth about $19,800.00 compared to the $17000.00 but I will actually have spent about $11000.00 less on the lease.
The money saved on the lease only works if you don't keep your pickup past the 5 year time frame. Yes, paying cash (not a loan) is probably best in most circumstances. Comparing lease to loan; I prefer to have cash in hand instead of the equivalent value in the pickup.
Duke
Try doing it again but this time no loans, no payments for 5 years.
No offense taken, lease vs. buy always brings out a lively debate. ha I remember ages ago at work our CEO told the entire company that anyone who was over the age of 30 and didn't pay cash for their vehicle was stupid. Pissed off pretty much everyone at work, myself included. But over the years I learned that while how he said it was abrasive, the underlying idea was financially smart. A lot of people just constantly expect to pay every month for a vehicle and when it is paid off, they jump into another one. It can be a vicious circle with no escape. But I realized that if you pay off the car, then start investing the cash you were paying, within a few years you can pay cash. Or heck, keep the money invested and get a uber cheap loan and make the payments from the pile of money they saved. Doesn't work for everyone, a lot of people enjoy new rides and there is nothing wrong with that.
And honestly, if it was all about maximizing money I would have bought a leftover '14 model. But the '15s were just too amazing to pass up!
Preach it brotha! If you can't pay cash you shouldn't buy the damn vehicle. Lease or not doesn't matter.
Purchasing with cash outright (no loan or lease) and using the $17000.00 as down payment will save you $1440.64 compared to the 5 year loan ($24735.98 at 2.25% for 60 months). This assumes that you would not invest any money used to make the cash purchase at a great enough rate to earn more than $1440.64.
Usually paying cash will save money, but it can depend on the individual circumstances. My spreadsheet only compares loan to lease and with the variables listed.
My personal opinion is that just because you can pay cash does not always mean that you should pay cash. If you can get a loan for 1-2% why not take out the loan and invest the cash into something else that makes money. Most people are probably not sitting around with $60k in the bank to buy a vehicle they have it invested (if smart) into something that will give a better return.
Either way you look at it though vehicles are necessity for work usually and typically not good investments.
Purchasing with cash outright (no loan or lease) and using the $17000.00 as down payment will save you $1440.64 compared to the 5 year loan ($24735.98 at 2.25% for 60 months). This assumes that you would not invest any money used to make the cash purchase at a great enough rate to earn more than $1440.64.
Usually paying cash will save money, but it can depend on the individual circumstances. My spreadsheet only compares loan to lease and with the variables listed.
Duke
You're still making huge payments to something you don't own. Of course a lease has cheaper payments than purchasing. That's the only way Ford can get some people into their new vehicles with no risk to them. At least with a payment you have some control, but with a lease, even though you park it in your garage, its not yours. They determine how many miles you can drive, they determine, whats going to be fixed, they tell YOU to keep up the maintenance, your insurance rates go up because its brand new and a lease, you really are enslaved to something that's not worth it. I mean 50000 to 60000 for a pickup truck? Is it that good you're willing to RENT for 500 dollars a month? No amount of aluminum is worth that. Save for a couple of years, save the money you would be renting for the truck, and pay cash for a used 2015. You'll probably be able to get a better model than the one you're looking at now.
i would lease most cars but not these trucks. they hold there value extremely well considering the discounts you can receive at purchse. the advantage to leasing is lower payments and you dont have to worry about being upside down if you trade often. the disadvantage is you have zero to show for it at the end of the lease. yes you can purchase it then but why not just do that to begin with these trucks hold their value so well you could finance it for 84 months to keep payments down and in 36 months you will still have equity in it as long as you negotiate a fair deal to begin with. i had $6,000 dollars in equity in my 11 after 3.5 years and used that as a down payment for my 14 when i bought that. 3.5 years and 58,000 miles cost me around $13,000 dollars when it was all said and done. that is about $310.00 dollars a month!!! now my payments were much more than that but i got it back in equity when i traded. with a lease you walk away with nothing. if mileage is over you come out of pocket even more. if you use only 1/3 of allowed mileage you get nothing back. not many advantages in my opinion.
The more you post John316, the more I get the idea you don't know what you're talking about. Have you read Ford's detail on what is considered normal wear and tear and is not considered an issue to be fixed by the customer? It's very reasonable, and anyone who takes good care of their property will likely not exceed it outside of accidents beyond their control, which you're responsible for anyway if you own the car.
There is a reason they offer a $15/mo WearCare insurance... it isn't because they lose money on covering repairs. If you intend to treat your car like crap, then maybe I could agree with you.
At the end of the day, they make money off you no matter if you lease or buy. One choice is not grandly superior to the other, especially over time if you're buying new vehicles every 2-3 years. There are other benefits that are not monetary.
It's interesting you don't see the leasing group ridiculing the buying group, only the other way around. Possibly the leasing group respects people's choices?
You're still making huge payments to something you don't own. Of course a lease has cheaper payments than purchasing. That's the only way Ford can get some people into their new vehicles with no risk to them. At least with a payment you have some control, but with a lease, even though you park it in your garage, its not yours.
Sorry but there is so much wrong here.
Lease or finance there is no difference. You are making payments on a large purchase that you dont own. With a loan the bank has tge title until it is paid off. You can get out of a lease just as easy as a financed purchase. You say they decide what gets fixed, no your warranty does in both cases, they require you to maintain the car, I would think if you invested in a $50k truck you would want to maintain it, the insurance is higher?? BS. If the insurance is higher it's because it's a new car, lease has nothing to do with it. would someone really buy an expensive vehicle and only carry liability on it?
The only real difference is the mileage limitations but if you lease you know that going into it. If you know over the last 2 years you put an average of 20k/yr. on a vehicle, then sign a lease that only gives you 10k a year who is to blame for that??
i would lease most cars but not these trucks. they hold there value extremely well considering the discounts you can receive at purchse. the advantage to leasing is lower payments and you dont have to worry about being upside down if you trade often. the disadvantage is you have zero to show for it at the end of the lease. yes you can purchase it then but why not just do that to begin with these trucks hold their value so well you could finance it for 84 months to keep payments down and in 36 months you will still have equity in it as long as you negotiate a fair deal to begin with. i had $6,000 dollars in equity in my 11 after 3.5 years and used that as a down payment for my 14 when i bought that. 3.5 years and 58,000 miles cost me around $13,000 dollars when it was all said and done. that is about $310.00 dollars a month!!! now my payments were much more than that but i got it back in equity when i traded. with a lease you walk away with nothing. if mileage is over you come out of pocket even more. if you use only 1/3 of allowed mileage you get nothing back. not many advantages in my opinion.
No offense, but that is what a residual percent is for.
I still have the issue that it's not mine. I have no control. I can't sell it if I get in a jam. I have to pay for the lease agreement or get sucked into another binding contract if I get bored and want something else. Even with a car payment you have options. People who lease are stuck. People like throwing away money. You might as well throw hundreds out the window as you drive. I know dealers who sell cars that would never ever lease, but it yields the biggest profit for them so they make it seem like a good thing.
05-14-2015, 02:08 PM
