So I’m helping a friend evaluate a deal. He’s pretty set on leasing, and generally I am too, but in this specific instance I wonder if it’s better to buy?
- Sale price already agreed
- On the lease side there is a $500 rebate and the acquisition fee
- On the buy side there is a $2k rebate and gap coverage fee $450. Penfed
- thanks to Texas he would be paying full sales tax either way
So he’s kind of $2k ahead thanks to higher rebate and lower gap fee, and theoretically the ability to trade the car in and get a sales tax break on next car.
Lease MF .00093, buy APR 1.99% for 72 mo.
After he ran the numbers, they’re basically $25 apart on monthly and after 3 years based on amortization schedule he would be about $3k lower balance vs what the residual on the lease end would be.
So, in this case, does it really boil down to simply protecting yourself through the lease in the event there is an accident?
Because then you could just walk away from the car at lease end vs potentially being stuck with a not as valuable car that’s harder to trade out of without being upside down? Again assuming a 3 year timeline.
From an interest rate perspective he would technically be saving some $$ there too.