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      06-01-2010, 09:53 AM   #23
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Drives: 2006 330i 6mt
Join Date: Feb 2009
Location: Boonton Twp, NJ

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Originally Posted by Takashi View Post
Leasing is only good if your car has poor resale value (e.g., Hyundai, Kia...etc). It does not make financial sense if one has to make car payments for the rest of their lives.
This is wrong. If a car has poor resale value that means its residual is very low. Further, since during the lease you're paying for it's depreciation that means your payments are high to cover that depreciation. Instead, it would be better to lease a car with a better resale and residual since the price between new and used will be less of a difference.

For example, take two cars, the first a KIA at $25,000, and the second a Toyota at $35,000. After 3 years the KIA is worth only $10,000, the Toyota is worth $25,000.

KIA depreciation = $15,000
Toyota Depreciation = $10,000

Therefore, payments to cover depreciation only and excluding interest, tax, etc.
KIA payments= $15,000/36 = $417
Toyota payments = $10,000/36=$278

The most important line to read in an advertisement or lease deal is the Total Of Payments line. I bet that there are some better quality cars that have TOPs that are equal to lower quality cars with same mileage, terms, etc.
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