Best Car Deal

Best Car deal
What is the Best Car Deal

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.

What is the best car deal? Should you lease or buy? 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

The Best Car Deal isn’t a question of leasing or buying. It’s choosing the lowest payment option that makes the most sense for your own situation. If you are going to be driving lots of miles, it makes sense to buy a car on a 0% loan over leasing a car for 3 years and having to look at trading it in and paying mileage costs.

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