Leasing vs. The Most Powerful Force in the Universe – II

**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.** In part 1 of this series we set the stage for why leasing is better than borrowing because the rent charge is simple interest while the finance charge on the loan is compound interest. Now, let's look at three cases: Great credit (3% APR), Good Credit (6% APR), and borderline Fair Credit (12% APR).  Obviously these are simply a single point within what are three good size ranges, but this example is best because we're doubling the APR each time.  Here's the deal, and we'll compare both financing and leasing: Now, let's look at the impact of the 3%, 6%, and 12% APR (and equivalent money factor) on the actual monthly payment, the finance/rent charge, and the equity position after 36 months: Notes about the table: The bolded figures represent the better deal for the consumer for the given credit profile. The "Net Payments...
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Leasing vs. The Most Powerful Force in the Universe

**This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.** Albert Einstein reportedly said compound interest is the most powerful force in the universe.  Of course, the earliest known written report of this statement was about 30 years after he died, so he wasn't in position to confirm or dispute saying it.  But given the genius of the statement, we hope Mr. Einstein would appreciate it being attributed to him. To understand why Einstein, or any genius, may utter this statement it may help to review the difference between compound interest and simple interest.  Simple interest is where the interest that accrues doesn't get added to the principal to determine the next period's interest accrual.  Basic example: the bank offers a deal where you deposit $1,000 on January 2nd and must come back each week and collect $1.  The principal never increases about $1,000, but at the end of the year you...
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Leasing an “Old” New Car

Is is Worth Leasing an "Old" New Car? **This post contains affiliate links and the publisher may be compensated if you make a purchase after clicking on these links.**   As we reach mid-June there are still more 2016 vehicles listed as new cars for sale than there are 2018 vehicles listed for sale.  Overall, there are about 103,000 new 2016 vehicles listed for sale nationwide, which is about 4% of the total new car inventory currently listed for sale*. All of these cars will eventually be sold, it's just a matter of when and at what price.  Lease Wizard doesn’t recommend for or against considering these vehicles for lease (or purchase) versus more conventional new cars – those with a 2017 or 2018 model year, but instead here are some things to consider that can help you make an informed choice: At some point in each year a manufacturer usually cuts off incentive support for these “old” new cars – the ones with...
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