Best Car Deal: Lease or Buy?
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Comparing 60 Month 0% Car Loans to a Cheap Car Lease
If you were to acquire a 60-Month-No-Interest-No-Money-Down-Car-Loan offer every 5 years, how would that compare to leasing that same car for every 3-5 years? At 0% interest for 60 months, common sense would make you believe that is a deal that is hard to beat. With so many car companies offering 60, and even 72-month loans at 0% APR, these are rare times indeed. In fact, you won't see any of the new, 2011 models yet being offered at 0% interest. That should serve as a hint that these 0% Car Loans won't be around forever. As it stakes now, even a good, cheap car lease, can't beat most of these 60-Month, No Interest Purchase Loans.
For the sake of interest, I have done a comparison study on 0% Car Loans vs. Car Leasing for the most popular car models. There are a few factors that need to be explained: Total cost of ownership is calculated by taking the total cost of all car payments less the equity or trade-in-value of the car after 5 years. The trade-in-value used here, is the residual value. Because car leasing is generally for 36-42 months, the total cost is based on how much you would pay to lease a car of equal value for 5 years. There is no equity assumed in the car lease at the end of the term and the initial cost of the down payment to acquire the lease is factored in a 2nd time. Since the original lease will be up after 3 years, it is assumed an equivalent down payment will be required to assume an equal lease payment on a new car in years 4 and 5. This is strong case for why should never pay money down on a lease. For leasing purposes, the Civic Hybrid is ahead of the pack after 5 years for total costs, since no down payment was required to make a car lease deal of equal value. Except for the Civic Hybrid, the 0%-60-month-no-money-down-car loans rule by an average of $2,000 - $3,000. Keep in mind, there will be some maintenance repairs in years 4 and 5, that will offset that margin a bit.
| MAZDA | Term | MSRP | PMT | DWN | Total Cost | Residual | 5YR Net Cost |
| 2010 Mazda 3 Sedan | 60 MO (0%) | $17,105.00 | $285.08 | $0.00 | $17,105.00 | $7,013.05 | $10,091.95 |
| LEASE | 36 MO (LSE) | $17,105.00 | $169.00 | $1,763.00 | $7,678.00 | $13,497.00 | |
| 2010 Mazda 3 5-DR | 60 MO (0%) | $20,485.00 | $341.42 | $0.00 | $20,485.00 | $8,603.70 | $11,881.30 |
| LEASE | 36 MO (LSE) | $20,485.00 | $209.00 | $1,803.00 | $9,118.00 | $15,937.00 | |
| NISSAN | TERM | MSRP | PMT | DWN | Total Cost | Residual | 5YR Net Cost |
| 2010 Nissan Sentra SR | 60 MO (0%) | $18,160.00 | $302.67 | $0.00 | $18,160.00 | $6,900.80 | $11,259.20 |
| LEASE | 39 MO (LSE) | $18,160.00 | $179.00 | $1,999.00 | $8,801.00 | $15,096.00 | |
| 2010 Altima 2.5S CVT | 60 MO (0%) | $22,900.00 | $199.00 | $0.00 | $22,900.00 | $8,702.00 | $14,198.00 |
| LEASE | 39 MO (LSE) | $22,900.00 | $199.00 | $2,999.00 | $10,561.00 | $18,336.00 | |
| TOYOTA | TERM | MSRP | PMT | DWN | Total Cost | Residual | 5YR Net Cost |
| 2010 Toyota Corolla LE | 60 MO (0%) | $18,328.00 | $305.47 | $0.00 | $18,328.00 | $6,964.64 | $11,363.36 |
| LEASE | 36 MO (LSE) | $18,328.00 | $169.00 | $1,599.00 | $7,514.00 | $13,169.00 | |
| 2010 Toyota Prius | 60 MO (0%) | $23,718.00 | $395.30 | $0.00 | $23,718.00 | $9,724.38 | $13,993.62 |
| LEASE | 36 MO (LSE) | $23,718.00 | $199.00 | $2,299.00 | $9,264.00 | $16,339.00 | |
| HONDA | TERM | MSRP | PMT | DWN | Total Cost | Residual | 5YR Net Cost |
| 2010 Civic Hybrid | 60 MO (.9%) | $24,550.00 | $419.65 | $0.00 | $24,550.00 | $8,592.50 | 15,957.50 |
| LEASE | 36 MO (LSE) | $24,550.00 | $270.00 | $270.00 | $9,720.00 | 16,470.00 | |
| 2010 Honda Accord LX | 60 MO (.9%) | $22,605.00 | $386.00 | $0.00 | $22,605.00 | $7,650.00 | 14,955.00 |
| LEASE | 36 MO (LSE) | $22,605.00 | $270.00 | $270.00 | $9,720.00 | 16,470.00 |
Tagged with: 60 Month No Interest • Best Car Deal • Cheap Car Lease
Filed under: Car Leasing • Lease Comparison
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