Would u pay over $700 per month on a new GS350
07-03-07, 02:07 PM
#76
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Here's the flaws I found w/ this analysis:
1. Tax. In the U.S. it ranges from 0% to 8.25%. Much lower than 14%.
2. Interest Rate. Lease interest rates are not lower than Finance interest rates. They should be the same.
3. Residual. The residual is based off MSRP for leases. The "equivalent" buy is based off your negotiated price.
4. Net present value. For a NPV of 7.4% means you're earning taxable income at 12-14% (or cheating Uncle Sam) annually. If you know anyone that safely returns 12-14% and can verify this, please PM me.
1. Tax. In the U.S. it ranges from 0% to 8.25%. Much lower than 14%.
2. Interest Rate. Lease interest rates are not lower than Finance interest rates. They should be the same.
3. Residual. The residual is based off MSRP for leases. The "equivalent" buy is based off your negotiated price.
4. Net present value. For a NPV of 7.4% means you're earning taxable income at 12-14% (or cheating Uncle Sam) annually. If you know anyone that safely returns 12-14% and can verify this, please PM me.
07-03-07, 03:48 PM
#77
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"2. Interest Rate. Lease interest rates are not lower than Finance interest rates. They should be the same."
The fact of life is that interest rate a manufacturer offer for purchase and lease are different. It depend on their markeing effort. Current month GS lease money factor is about 4.8% for 3 yr lease. And if someone is willing to put 9 deposits down, the rate is reduced to about 2.6% or so. Do Lexus charge the same rate for financing purchase of GS this month?
"4. Net present value. For a NPV of 7.4% means you're earning taxable income at 12-14% (or cheating Uncle Sam) annually. If you know anyone that safely returns 12-14% and can verify this, please PM me. "
Paying off student loan, credit loan etc will get you higher than 7.4% return. However it is valid point that everyone has a different cost of money. Some would have a high cost if they can use the money to generate high income. Other put money in local bank and get 5% interest. So everyone is different in this regard.
The fact of life is that interest rate a manufacturer offer for purchase and lease are different. It depend on their markeing effort. Current month GS lease money factor is about 4.8% for 3 yr lease. And if someone is willing to put 9 deposits down, the rate is reduced to about 2.6% or so. Do Lexus charge the same rate for financing purchase of GS this month?
"4. Net present value. For a NPV of 7.4% means you're earning taxable income at 12-14% (or cheating Uncle Sam) annually. If you know anyone that safely returns 12-14% and can verify this, please PM me. "
Paying off student loan, credit loan etc will get you higher than 7.4% return. However it is valid point that everyone has a different cost of money. Some would have a high cost if they can use the money to generate high income. Other put money in local bank and get 5% interest. So everyone is different in this regard.
07-04-07, 06:46 AM
#78
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Yes, the residual is based on MSRP, but the amount amortized is the negotiated price less the residual.
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