|That statement is speculative and not completely true. You MAY come out ahead if you put more money down, as far as investing-wise. However, his point that your car would be paid off and you would be out that money if it were ever stolen is not satisfied by your statement. If you put more money down, and invested the difference from the lower payment, do you really think you would earn enough interest on that monthly difference in four years to replace the original cap cost reduction you put down when you leased the car, if the car were stolen or totalled? Not quite...
Then there is the question of what is the cost of the lease vs. the ROR on your investment? If your money factor is REALLY low, then it wouldn't make sense at ALL to put extra money on your lease. That would be just throwing away compound interest that you would have had, had you left that money in your investment vehicle.
If your Lease Money Factor is HIGH, then you may consider paying down cap cost so that you are paying less finance charges, but only if your investment vehicle isn't also giving you a hgh ROR. However, that still doesn't preclude the risk of losing all of that if the vehicle is totalled or stolen - your orignal cap investment would be lost when the gap insurance took over (built in to a lot of leases).
Besides, if your intention was to buy in the first place, you most likely wouldn't consider a lease. If you are going to get a lease with a low money factor, then you just as well could probably get a loan with a very low interest rate. Then, you are actually putting your down payment towards something (ownership), and you are saving interest. However, that still doesn't mean having a large down is better, especially with a very low interest rate (like some of the advertised 0% to 3.9% dealer incentive loans). If you have a good investment vehicle, somewhere in the 10%-12% range conservatively, then your interest would compound MUCH faster putting your money in the investment than saving the interest off of such a low interest rate loan... you just have to do the math (or have someone do it for you) before you decide to purchase/lease a vehicle to see what makes the most sense financially, and what your ultimate intentions with the vehicle will be. Hope that helps [IMG]http://**********************/smile/emthup.gif[/IMG]
Modified by SN2BDNGRZB55 at 10:10 PM 6-5-2004