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From: klodnick@topaz.RUTGERS.EDU (John Klodnicki)
Newsgroups: net.auto
Subject: To buy or to Lease: That is the question...
Message-ID: <4530@topaz.RUTGERS.EDU>
Date: Wed, 5-Mar-86 10:03:26 EST
Article-I.D.: topaz.4530
Posted: Wed Mar  5 10:03:26 1986
Date-Received: Thu, 6-Mar-86 21:46:35 EST
Distribution: na
Organization: Rutgers Univ., New Brunswick, N.J.
Lines: 29
Keywords: buy,lease

I  was always under   the impression that  the  advantages of  new car
leasing could only be enjoyed by a business, or someone owning his own
business, writing off the  lease payments  for  a  tax break. However,
some recent literature (Business  Week's  Guide to  Careers)  seems to
suggest that leasing might be a good idea for the recent college  grad
(which I'm soon to become).  They  seem to think  that eliminating the
necessity for a  large down-payment is a great  advantage  for leasing
vs.  buying. Also, lease payments can  typically be less  than  montly
installments on a  car   loan,  easing the financial  burden   of  the
not-too-long-ago-starving-college-student. But is this  a  good idea??
Intuitively, it seems like a sure way to lose money.

The way I understand it  (feel free  to correct me)   is that you  can
compute your net  cash outlay for use of  the car for  four   years as
follows:

lease_price = monthly_lease_payment * 48.
buy_price = car_price + interest_paid - depreciated price of car after 4 years.

So it seems that if one  can reasonably predict  the depreciated value
of a car, it is  possible to figure which  deal is better. However,  I
have NO experience in the  new car market,  and as the time approaches
for me to graduate and junk my '73 Chevy w/170,000 miles and almost as
many dents, I would greatly  appreciate any advice  from anyone  wiser
out there.  Thanks.

##############
John Klodnicki
{seismo,allegra}!topaz!klodnick