Better to finance or lease when both are 0% rate?

Ask the Hackrs
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I have a situation where I could lease a car for 24 months at basically 0% MF or finance a car for 0% interest over 60 months. Monthly on the lease would be $540 with $540 DAS and monthly on the finance would be $707 with nothing down.

I am in Texas, so unless we get a tax credit we pay taxes on the selling price of the vehicle on finance and lease. No tax credit in this scenario unfortunately.

I don’t keep cars very long, 12-18 months is a good goal for me.

In this scenario would it just be better to pay the extra monthly and finance it? Or just take the cheaper monthly and keep leasing like normal?

Is this too vague of a question?

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Too vague of a question. What’s the make and model and trim of the vehicle? Since you’re not getting tax credits, I’m assuming no incentives on either finance or lease, dealer selling price is same regardless of option, and you’re getting 0% (how is this possible?) interest and money factor, then it really comes down to how the captive is applying the residual value to the car.

Difficult to predict how any car will perform in under 2 years, even more so when we don’t know the car it is.

Also, how are you getting 0% on anything right now, mind sharing that?

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Sure! Mazda CX-9 Touring Plus is the lease option, on 24/12 the MF is .00001. So basically 0. $42,850 MSRP - $3901 discount - $750 conquest (stacks with e-plan) = $41544 out the door price with $28709 residual.

Mazda CX-50 Meridian is the 0% 60 month option. $41730 MSRP - $2689 discount = $42439 out the door with taxes and fees rolled in.

E-plan pricing on both gives good enough discounts on each.

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My Hellcat was at 0% to finance this January when I took delivery because I locked in back in August 2022, I ended up leasing to save on taxes in the event I choose to sell. Your dilema really comes down to the vehicles in question and how it will hold in value in the next 12-18 months.

Edit: Since it is a Mazda I’d buy it.

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As always it boils down to TCO, you need to run the math for each scenario.

For the CX-9 lease, you would spending X over 24 months in lease payments and DAS, then most likely give it back.

For the CX-50, you’d be spending Y in finance payments and DAS over the first 24 months, at which point what would your loan payoff be, and how much potential equity would you have?

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Sometimes the brokers give more than EPlan, just an FYI.

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e-plan looks roughly in line with the brokers with the small delta offset by broker fees.

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Setting aside the scenario where you want to keep the vehicle at the end of the lease (as you note, duplicate sales tax will kill that deal)…

The lease will cost you an acquisition fee (perhaps worth it for a guaranteed out in 24 mos).

After that, it comes down to what you think the car will be worth in 24 months (factoring in the ‘cost’ of uncertainty) vs. the residual baked into the lease. Also, does the lease allow you to capture any potential positive equity at the end of the lease?

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There’s no point pretending to be rational when you’re doing something as irrational as paying full tax every 12-18 months.

All for the pleasure of driving a CX9?

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I had no realized you were talking about leasing one model and financing another. This changes the TCO consideration. You need to run the numbers and do a bit of research on market values on these cars after 18 months to see which one costs you less money. Bit of a pain in the but for a Mazda in my opinion, but if it works for you wallet.

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Is that for employees only? I don’t see such an option on the Mazda website.

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