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strvgglecity t1_j9tjxmu wrote

Right now in Colorado a 25k auto loan with a $3k down payment and 60-month term at 7% would be $479/month, nearly double your "best guess".

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a_holzbaur t1_j9tru5x wrote

Not saying OP did any math of value, but they did state a lease vs the math you did for financing (“auto loan”), so you aren’t exactly comparing apples to apples here …

Currently the lease on a (just barely—$24,100) sub-$25k Corolla with $3k down for 39 months is $269/month direct from Toyota.

The same car financed for 60month/4.99%APR and 3k down would have a payment of $384.

All of that will be plus your local taxes and any fees of course …

Those numbers and offers are all direct from Toyota (and are going to be credit dependent of course).

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strvgglecity t1_j9u8gcu wrote

That's 800-850 credit score, yes. Average rates closer to 6-6.5%, but this isn't meaningful lol. We're discussing a car that doesn't exist

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hydro00 t1_j9u4mm3 wrote

He said a lease, you did a loan, but he’s wrong?? K.

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strvgglecity t1_j9u81ca wrote

Leasing would cost even more, roughly $580/month for 3 years Leasing is more expensive in total. So yes, I'm right twice.

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a_holzbaur t1_j9udmvx wrote

$269/month for 10k miles annually. $275/month for 12k miles annually. $286/month for 15k miles annually.

All lease prices for an ~$25k Corolla …

You are wrong twice. I showed you the math, for a $25k vehicle that exists for both leases and finance via Toyota. And leases are typically cheaper unless you are talking an outlier vehicle with seriously abnormal depreciation curves. So yeah, no. YOU are wrong. Twice.

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strvgglecity t1_j9uj0el wrote

Well edmunds.com is wrong then. Leases are more expensive because you don't earn the same equity, although you may pay a lower monthly bill, the total cost will be higher over the same time period. That's why they lease cars at all.

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a_holzbaur t1_j9umhis wrote

You know very little about leases. While you can typically choose to execute the purchase of a lease during or at the end of the lease period, the intent is not to build equity. It’s not a purchase. It’s a long term rental.

For a lease, you pay a combination of the estimated depreciation of the vehicle over the period of the contract + interest + taxes/fees. You will pay minimal regular maintenance. Most leases are short enough to avoid any major maintenance, and leases are notoriously poorly taken care of by owners as they just hand the vehicles back in a few years. And that is generally with very few consequences, short of anything major.

For a purchase, you are paying the entire value of the vehicle + interest + taxes/fees + full preventative maintenance, major maintenance and part replacement, etc.

The value of a lease is nearly entirely dependent on the money factor (interest) and the estimated depreciation curve the leasing entity is currently using. A $25k car that’s expected to lose 40% ($10k) in value over a 39 month lease is going to have a higher lease payment typically than a $30k car that’s expected to lose 30% ($9k) in value over the same period.

Leases are not always worse than purchasing. It really does come down to a vehicle by vehicle basis, and is entirely dependent on what the manufactures offers are currently. It’s the same as the math for rent vs buying a home. Not every vehicle, manufacture, or market is the same or even static.

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