I’ve been in the US for a few years and I’ve always leased my cars. It makes a lot of sense to me to always be in a car that is under warranty, has newest tech & safety things, upgraded features, etc. I’ve gotten pretty good at leasing, but I have never purchased anything.
I’m looking at a Sierra Denali with an MSRP of $72K. So far I’ve gotten them to go at MSRP, although being the end of the month and with 2023s right around the corner, I’ll try my luck and see if they can give me some kind of discount.
At MSRP, with $5K down I’m looking at payments of about 1,380 bucks a month for 60 months if I go with GMF’s 3.89% APR (which is the best I’ve found so far for 60 months).
Using an amortization calculator, it is saying that by the end of year 3 I will owe $31,745 on the loan. However, the truck will be worth a lot more, closer to $46-47K using current RVs on leases. This means that I can sell the truck at that time and get about $14K back (which is basically a year in loan payments). By year 4 it gets even more interesting, I will owe only $16K on the loan and can probably sell the truck for $38-40K-ish?
Is my math here accurate? Is this the right way to see it? I guess I want to double check this due to my lack of purchasing experience and also because this Denali looks so good, I want to make sure my mind isn’t trying to justify what is clearly a “I HAVE TO HAVE THIS” moment.
It’s hard to say for certain without seeing it but assuming you have everything plugged into the calculator correctly then your math is correct, and this is the correct way to look at a finance.
When doing a lease vs. buy analysis many people just look at the payment and don’t take the amortization into account and how much more equity you’ll usually have in a low interest finance at 24/36/48 months into the loan, etc.
Of course the real unknown is how much you can actually sell the truck for in 3 or 4 years time, but this will always be a guess and using the RV% is about as good as you can get.
If it helps, I just sold my 2020 Sierra 1500 Denali Duramax CarbonPro, which had an original MSRP of $72K, for $57K with 21K miles on the odometer. My lease buyout was $54K, so I cleared about $3K of equity off the sale, which was the same amount of my DAS. However, I also purchased the truck using the GM supplier discount, so I started out below MSRP. So, in fact I would count on this truck depreciation outperforming the RV.