mxp wrote:I have never leased before, so I am interested in these calculations.
In any given car lease, there is the finance component. What is the effective "loan" interest rate given the money factor and perhaps other applicable variables?
See this article. My calculation is based on that.
http://www.edmunds.com/advice/leasing/a ... ticle.html
I suppose the idea is if the effective "loan" interest rate in the Nissan lease offer comes up to say 8% per annum, why would someone go with the lease when you could easily get say 3.5% vehicle loans from any financial institution ?
Actually, current auto rates are around 6.5%.
I understand that in lease scenario, the "loan" dollar amount is only for the portion of the car (i.e. minus the residual) and in a full loan, it's for the full purchase price, but a full loan scenario wins out if the car is worth quite a lot more than the theorectical residual computed in the Nissan lease offer.
Not really. You are paying finance charges for the full price - afterall someone has to pay for the full car - and that won't be the auto manufacturer or leasing company. What you are not paying for is the full depreciation.
Please help me understand why the lease is still the best approach to owning the Leaf?
Lease is attractive since Leaf is a V1 product.
- In 3 years we can expect lot more options
- In 3 years we can expect better batteries with higher range
- You don't have to worry about the capacity degradation of batteries
But, when the full lease details come out - if I see that I'd have to pay a lot more for leasing vs buying, I'll buy instead of lease.