Leasing Unveiled: The Inside Scoop
Debunking Common Myths About Leasing a Car
Many folks shy away from leasing, believing they'll end up in a financial maze. Perhaps they think they rack up too many miles, assume leasing is more expensive in the long run, fear they're stuck with the contract, or dread hefty down payments. We're here to set the record straight.
Leasing isn't as mysterious as it seems. In essence, it's like buying a car with a retail finance loan, only with a twist. Picture this: lower monthly payments and a more modest down payment. Plus, when your lease journey nears its finale, you get to decide where it leads.
As you make your monthly payments, your capitalized cost shrinks. The finish line? The "residual value," a predetermined figure set when you start. When your lease is up, or even before, you have options. You can buy the car, or if its value surpasses what you owe, you can walk away or cash in some equity.
Money Factor Magic
Ever wondered about that "money factor"? Well, to turn it into something you can grasp – an APR – it's as easy as math gets. Multiply the money factor by 2400, and voilà , you've got your APR. Simple, right?
Lease vs. Purchase Showdown
Leasing
No Down Payment
- Capitalized Cost (MSRP): $30,000
- Residual Value (50% of MSRP): $15,000
- Lease Term: 36 months
- Money Factor: .00125
- Acquisition Fee: $695
- Monthly Lease Payment: $492.26
- Total Lease Payments (36 months × $492.26) = $17,721.36
- Residual Value = $15,000
- Total Cost = Total Lease Payments + Residual Value = $17,721.36 + $15,000 = $32,721.36
Buying
60 month loan at 7% APR with no down payment
- Selling Price (MSRP): $30,000
- Loan Amount: $30,000 (No Down Payment)
- Loan Term: 60 months
- Interest Rate (APR): 7%
- Monthly Loan Payment: $594.86
- Total Loan Payments (60 months × $594.86) = $35,691.60
The Verdict
Leasing followed by buying the vehicle comes out as the savvy financial move. You'll save some green while cruising in your dream machine.
So, if you've been hesitating on the lease highway, it's time to buckle up and join the ride. At Walser Auto Group, we're here to help you unlock the secrets of leasing and steer you towards a smarter way to hit the road in style. Don't miss out on this opportunity to drive your dream car for less!