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      06-02-2010, 09:25 AM   #68
Second Lieutenant
nogard13's Avatar

Drives: 2006 325i
Join Date: Mar 2010
Location: Durham

iTrader: (0)

My previous car was a 2007 Acura TSX (w/nav). I leased it in April 2007 for $250 under dealer invoice ($28,000) at a Money Factor close to 0% due to them wanting to get rid of the 07s and make room for the 08s. The residual value was ~$17,800 and I put about $700 down (only for tax, title, and license) and financed the rest into the lease (no security deposit due to my great credit). I drove this car for 3 years and only paid about $10,000 to do so.

I took the $8300 that they gave me for my trade in and put it in a CD making 5.25% interest for 3 years, giving me $9700 at maturity (earning me $1500 in interest). At the end of the lease, I could've financed the remaining $9000 (residual minus down payment from the CD maturity) for 24 months, but I chose not to. At current interest rates for used cars (BofA currently is offering 3.15%), my payments would be really, really low. Comparing what I would've paid over 5 years had I purchased originally vs. leasing and purchasing at lease end, I would've saved almost $3000 by leasing for the first three years (granted, $1500 of those savings came from interest earned, but still). Even without the interest, if you can save $1500 a year, that's a big chunk of change. It's only $41 a month, but it really adds up.

My point is that if the right financial circumstances are present (high interest rates when you lease, low when you purchase at lease end), you can really make out like a bandit by leasing first.

I chose not to purchase the car and go for a BMW instead, but only because I found a 2006 325i that I really liked at a steal of a price. Had I not found my Beamer, I would've kept the TSX.