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Thread: Lease Payment....One time payment or Monthly

  1. #1
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    Default Lease Payment....One time payment or Monthly

    I was trying to figure out the advantages or disadvantages of making a

    1 time lease payment

    vs

    monthly payments?

    Besides the obvious of paying monthly
    are there any benefits to making a 1 time payment?

  2. #2
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    You save the cost of interest if you make a one time payment.

  3. #3
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    If you saved monthly while making your payments.

    I'll use an example because I am not great with words:

    Say your buy out is $10,000 after a 3 year lease



    Option 1.)
    You invest $256 a month for the 36 months you have the car into an investment that gives 4% return.

    You have your $10,000 for your buyout.

    In the end your $10,000 costs you $9240.00

    Also you own your car after 3 years




    Option 2.)
    You take a loan at 6% (which I think is low for a used car loan) on the $10,000 and you spread it out over the 3 years again.

    It costs you $304.22 a month, meaning in the end you pay $10,951.92

    and you own your car after 6 years



    You save $1711.92 if you invest it now instead of waiting to take a loan out on it. Plus you are done a whole 3 years earlier paying off your car.
    Cos...

  4. #4
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    ^ problem is most people that lease have a lease payment that doesn't leave them with anything left to save so option 2 isn't even an option.

  5. #5
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    Originally posted by blownz
    ^ problem is most people that lease have a lease payment that doesn't leave them with anything left to save so option 2 isn't even an option.
    Yeah I know. I leased because I was making less money in BC and it was all I could afford. But now with my new job I can afford to save for my buyout.

    So that is what I am doing.

    I know option two isn't usually feasable (because people would usually just finance then) but that was just more a mental exercise for the OP
    Cos...

  6. #6
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    Yeah, there are definitely a lot of variables and everyones situation is different. No single answer is right for everyone all of the time.

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