Love my CX-5 and already plan on keeping it 10+ years (fingers crossed), and with interest rates on the rise I'm considering an early lease buyout to lock in a low rate. This is somewhat complex as I'm trying to compare an early lease buyout vs letting it run its term then buying it at the contracted residual.
Original lease term = 36 months
Payments remaining = 14 @ $412.78 = $5,778.92
Residual value = $21,712.95
RI Sales Tax @ 7% = $1,519.91
Total lease-end buyout = $23,232.86
Assuming $5,000.00 down and a loan term of 48 months @ 2.99% = $18,232.86 financed = $403.49 / month.
Total cost = $5,778.92 + $5,000.00 + ($403.49 x 48) = $30,146.44
Paid off July 2022
Current buyout quote = $27,112.75
RI Sales Tax @ 7% = $1,897.89
Total buyout = $29,010.64
Assuming $5,000.00 down and a loan term of 60 months @ 2.99% = $24,010.64 financed = $431.33 / month.
Total cost = $5,000.00 + ($431.33 x 60) = $30,879.80
Paid off May 2022
On the face of it, it appears that it would cost me $733.36 more in total to buy the car now than it would to wait. That's because the money factor on the lease is an absurdly low 0.00013 which equates to 0.312% APR. On the other hand, interest rates are on the rise and I'm not entirely convinced that 2.99% on a used car / lease buyout loan will be available by July 2018.
Interest rate quandry aside, am I missing something in the math?
Original lease term = 36 months
Payments remaining = 14 @ $412.78 = $5,778.92
Residual value = $21,712.95
RI Sales Tax @ 7% = $1,519.91
Total lease-end buyout = $23,232.86
Assuming $5,000.00 down and a loan term of 48 months @ 2.99% = $18,232.86 financed = $403.49 / month.
Total cost = $5,778.92 + $5,000.00 + ($403.49 x 48) = $30,146.44
Paid off July 2022
Current buyout quote = $27,112.75
RI Sales Tax @ 7% = $1,897.89
Total buyout = $29,010.64
Assuming $5,000.00 down and a loan term of 60 months @ 2.99% = $24,010.64 financed = $431.33 / month.
Total cost = $5,000.00 + ($431.33 x 60) = $30,879.80
Paid off May 2022
On the face of it, it appears that it would cost me $733.36 more in total to buy the car now than it would to wait. That's because the money factor on the lease is an absurdly low 0.00013 which equates to 0.312% APR. On the other hand, interest rates are on the rise and I'm not entirely convinced that 2.99% on a used car / lease buyout loan will be available by July 2018.
Interest rate quandry aside, am I missing something in the math?