Question about the calculator

Ask the Hackrs
,
1

how the calculator gives the lease score is calculated against the MSRP, which mostly exceeds 6 years. however if we are purchasing the car with the selling price, (make the MSRP value equal to the selling price) usually this would bring back lease score back close to 6 years. so which means if i want to own the vehicle for more than 6 years i should purchase instead of leasing ? is my understanding correct ?

are the any other benefit i missed about leasing ?

some that i am aware of:

2

This post makes very little sense.

MSRP equal to selling price? What?

Why would you lease the same car for more than 6 years? Or why would you lease if you intend to own the vehicle for more than 6 years? I’m so confused.

You need to look at the total cost of ownership leasing vs financing and stop using an arbitrary ratio of monthly payment to MSRP.

1 Like
3

Or why would you lease if you intend to own the vehicle for more than 6 years?

Yes thats part of my question, i shouldn’t lease the vehicle if i intend to own it for more than 6 years right ?

4

The leasehackr score is basically saying how long would it take to pay off the car at the lease rate. It’s a metric that has to be based on something for comparison, and that’s as good as any. It’s not really a useful metric for comparing against purchasing the car. Doing a cash flow analysis there is a much better route, but is certainly not covered by the leasehackr calculator.

5

thanks, that make sense

6

No it’s not. It’s based on the MSRP, not the selling price. Has nothing to do with leasing vs financing.

It’s a meaningless score. But lately we’ve had a rash of users who don’t want to think any harder than “1% rule” and “leasehackr score”.

1 Like
7

so basically for me the options are:

a. lease a car using a broker here, and continue to lease a new car …
b. purchase a car all cash and own it > 6 yrs.

8

I’m so confused.

1 Like
9

You honestly are not making any sense. It is possible to negotiate a lease on your own, but you may not do well. In that case, use a broker, from here or elsewhere.

If you do decide to buy, you don’t have to pay all cash for it. Most people don’t have that kind of money on hand, anyway.

2 Likes
10

And even if they do, it might not make sense to tie up that much cash in a depreciating asset.

2 Likes
11

A lot of people on the forum seem to have money, and they definitely have more money than I do. I need a sugar daddy. Now accepting applications! :stuck_out_tongue:

3 Likes
12

forgive my slow brain, but which part made you confused ? i am here to learn :joy:

13

i mean, sure, finance is also fine, its not that much interests over few years anyway.

14

Nothing you said makes sense. Look at what I said above.

1 Like
15

aren’t we on the same page regarding leasing (find a broker) ?

for purchase, please correct me if i am wrong, your argument is whether if i want to finance and use the free cash flow saved to invest somewhere else and try to get a > 4% ROI ?

16

You’re still not making any sense. Do you think you must use a broker to lease a car?

17

for me, unfortunately yes… a broker saves me lots of time

18

Ok, I may be incorrect in my understanding of how it works. How is the score actually calculated if it isn’t taking the MSRP of the car divided by the effective payment?

19

It is.

You said that it calculates how long it would take to pay off. That’s not correct. It’s simply MSRP/sum of payments.

MSRP =\ financing selling price

Rent charge =\ finance cost

20

lhScore = (msrp*(1+tax))/(totalLeaseCost/totalMonth)/12
therefore lhScore = afterTax MSRP / your average total monthly payment / 12
therefore lhScore = how many years would it take you to pay to the MSRP(after tax) price of the vehicle with your current lease term.

1 Like