Squiggy's 2012 DBP II Si Coupe

Nomar06

Nomar06

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squiggy said:
No problem. I have to explain it to people all the time.

It is better in the sense that when you lease, you are essentially taking a loan out on just the lease amount.

Finance/math time!

Let's assume full MSRP and nothing down at $23,000.
Assume the lease is for three years and guaranteed residual value is $13,000...effectively a $10,000 loan for three years.
Assume interest rate is 3%

On the loan, the first year's worth of interest paid is $630. Total interest over the life of the loan is $1,800

Total interest paid on the lease over three years is $610.

This also leads to a lower and more manageable payment.

This is somewhat of a simplification and total amount can be negligible at such low rates, but when you get back up into the 6% range, it starts to add up.

I usually lease a car for three years or so then buy it out. After I buy it out, I pay it off quickly.

Now assume I get a loan for the remaining $13,000 at 3% for three years (keeping the total payments at 60 months). Interest would be $470.
Total interest from the lease and loan would be $1,080 if one were to not pay the loan off early.

Of course there are other factors, but not too much to change things significantly unless interest rates rise drastically from the start of the lease to the time of taking out a loan.
Click to expand...

So essentially a $620 savings if you did not put anything down on the lease and also nothing down on the $13k loan to buyout the car. Also, not paying early on the $13k loan.

I think that is correct, right?
 
squiggy

squiggy

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'12 Civic Si
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DBP II Coupe
Nomar06 said:
So essentially a $620 savings if you did not put anything down on the lease and also nothing down on the $13k loan to buyout the car. Also, not paying early on the $13k loan.

I think that is correct, right?
Click to expand...
$720, but, otherwise, yes.
 
Nomar06

Nomar06

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squiggy said:
$720, but, otherwise, yes.
Click to expand...

lol...yeah....$720. Too much math already at work.

I looked at doing this but at the time I would had to put down $2000 or more on a lease and not real discounts on the actual car price. An the monthly lease payment was $280ish? Which is not that much lower than the current payment.

Didn't look like a huge savings since I got a low price on the car and a 1.9% rate. I believe I am paying a total of $1200 on interest but I am also paying a slightly higher payment amount do the total int would go down a bit.


In the end, it just all depends on the deals, rates going on at the time of purchase on top of how good a credit you have.
 
squiggy

squiggy

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'12 Civic Si
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Nomar06 said:
lol...yeah....$720. Too much math already at work.

I looked at doing this but at the time I would had to put down $2000 or more on a lease and not real discounts on the actual car price. An the monthly lease payment was $280ish? Which is not that much lower than the current payment.

Didn't look like a huge savings since I got a low price on the car and a 1.9% rate. I believe I am paying a total of $1200 on interest but I am also paying a slightly higher payment amount do the total int would go down a bit.


In the end, it just all depends on the deals, rates going on at the time of purchase on top of how good a credit you have.
Click to expand...

Yep. that is why I did a simplified calculation.
 
Nomar06

Nomar06

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Still, savings are savings......and not too much "work" to get some $ in your pocket.
 
squiggy

squiggy

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'12 Civic Si
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Nomar06 said:
Still, savings are savings......and not too much "work" to get some $ in your pocket.
Click to expand...

In my case, I will probably pay the loan off in 12-18 months which will result in quite a bit more in interest savings as well.
 
squiggy

squiggy

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Changed my wheel order. Getting these instead. Not as light unfortunately, but I decided to get something that would draw less attention and save a considerable amount.

 
Nix

Nix

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It's A Fast Pig!
If only he had that handlebar riser he could still reach them.....







Im JK. I bet that bike will be a blast to ride. Be careful though. People drive terribly as it is. Id hate for you to be injured or worse.
 
jrotax101

jrotax101

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What Nix isn't sharing, is he told that damn biker he'd push him out the way if he didn't move. Don't be that guy.


jk congrats! Weird to see mr finance spending money ;) lol
 
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