...with the intention of buying it out?
For those familiar with my position, my Matrix was stolen. Next week, if it does not show up, I'll be getting a settlement from the insurance company. The vehicle I'm looking at is an X-Trail XE Auto AWD.
Though really, we need two cars. The wife needs a better commuter car as well, to replace an aging LeBaron convertible. So part 2 of our plan is to sell the LeBaron privately in the spring (best time for a convertible), and buy a 2003-2004 Corolla for her. We liked the Matrix, and the Corolla is even easier to drive. It's also our rental while we wait for news on our car.
Seeing as we need these two cars within the next three months, the plan is to but the Corolla and lease the X-Trail. Oh, did I mention we're buying a house this year. There is money aside for that, which doesn't enter into the car decision.
So, the X-Trail will be leased. The only thing is, I really think the X-Trail will be a keeper. That is, I can forsee buying it out at the end of the lease.
If that's the case, should I be looking at financing instead of leasing? Lease rate is 4%. Financing is 4.8%.
Taking numbers from Nissan's online calculator, let's use the XE AWD manual + freight and PDE, as that'll be close to actual purchase price. My wife qualifies for the grad rebate of $350 plus 0.25% off the lease or finance rate, which I've not included below.
Cash price is $28,298 + taxes = $33,693
Financed 36 months @ 3.8% = 36 * $957.89 = $34,484
Interest charges = $791
Financed 48 months @ 4.8% = 48 * $746.50 = $35,832
Interest charges = $2,139
36 month lease @ 4.0% = 36 * $532.12 = $19,156
Residual = $14,998 + taxes = $17,248
Total = $36,404
Interest charges = $2,711
48 month lease @ 4.0% = 48 * $455.59 = $21,868
Residual = $13,306 + taxes = $15,302
Total = $37,170
Interest charges = $3,477
(residuals are from an XE AWD auto)
I hate taking a hit on interest charges like that, but given our situation, and the fact that the interest rates here are close to mortgage prices, we may just be better off leasing for 48 months, with the option to buy it out. That way, if it doesn't hold up, we can just walk away. Then again, if we haven't use the allowed kilometres and we like the car, it's pretty easy to keep for $15K.
Is there anything I'm missing here, or have I got the math right? I'm not sure if there are any other fees in the buyout or elsewhere that I've missed.
When it comes time to do the deal, I'm thinking of using the APA member services (
www.apa.ca). Good idea for $65?