Just thinking this through and would like some help/feedback. Considering true cost to own and subsequent maintenance/repairs on a 6-10 year old vehicle (for someone that cannot perform parts replacements themselves), it seems that you come out ahead by leasing unless you keep the car for longer than 10 years.
Take an example case, new car, Infiniti Q50.
- $45,000 car financed at 4.25% for 60 months with $5,000 down. $741/mo payment
- A 39 month lease for $413/mo with $3,000 initial payment. Option to purchase for $25,000 at end of lease.
After 39 Months
You will have paid $28,900 on the loan + $5,000 down = $33,900. You'd still owe $14,900 on the note and have a a car value of approx $26,000. Essentially you have a $11k asset after spending $34k
On the lease, you will have paid $16,100 + $3,000 = $19,100. If you invested the $2,000 saved on downpayment along with the $327/mo saved and returned 5%/year, you'd have $15,800 after spending $19m.
After 78 Months
Take it out to 78 months. In a loan you'd own the car outright, worth around $14m and have saved $10m over the lease payment for 18 months = $24m, after paying $48m to get there.
Or, you'd be through a second lease with approx $24m in hand, after paying approx $39m to get there.
After 117 months / approx 10 years
In the own case your car is worth around $5m and you have now saved approx $33m w/returns = $38m - but in addition to your $48m spent, you likely had $5m in repairs = $53m.
In the lease case, your invested sum has become approx $30m and you've spent approx $59m on lease costs.
Take an example case, new car, Infiniti Q50.
- $45,000 car financed at 4.25% for 60 months with $5,000 down. $741/mo payment
- A 39 month lease for $413/mo with $3,000 initial payment. Option to purchase for $25,000 at end of lease.
After 39 Months
You will have paid $28,900 on the loan + $5,000 down = $33,900. You'd still owe $14,900 on the note and have a a car value of approx $26,000. Essentially you have a $11k asset after spending $34k
On the lease, you will have paid $16,100 + $3,000 = $19,100. If you invested the $2,000 saved on downpayment along with the $327/mo saved and returned 5%/year, you'd have $15,800 after spending $19m.
After 78 Months
Take it out to 78 months. In a loan you'd own the car outright, worth around $14m and have saved $10m over the lease payment for 18 months = $24m, after paying $48m to get there.
Or, you'd be through a second lease with approx $24m in hand, after paying approx $39m to get there.
After 117 months / approx 10 years
In the own case your car is worth around $5m and you have now saved approx $33m w/returns = $38m - but in addition to your $48m spent, you likely had $5m in repairs = $53m.
In the lease case, your invested sum has become approx $30m and you've spent approx $59m on lease costs.