I'm looking at getting a new car, and this Toyota Avalon lease deal seems like a better deal then buying. However, I've always heard that leases are not the smart way to go. When I do the math the lease seems like a better deal. Am I missing something?
http://www.toyota.com/deals/avalon/lease/
Lease $239 / month for 24 months, and then purchase it for $24,118 = $29,854
Or buy it for $32,000
Yes.
You did not notice the "$1,410 Customer Down Payment", the "$650 Acquisition Fee", the "$350 Disposition Fee" "due at lease termination", and the "$275 security deposit" for customers who do not have good enough credit. Also, "A dealer documentary service fee up to $150 may be added to the sale price or capitalized cost."
These charges might (or might not) add up to the dealer profit margin. You can negotiate the "Adjusted Capitalized Cost" of "$29,841", and the "documentary service fee". By doing so, you can reduce your up-front payment (and the dealer profit margin).
The price mentioned above "Includes destination charge, but excludes state and local taxes, tags, registration, title and insurance." Also, this is a "low mileage lease". If you choose to not purchase the vehicle at the end of the lease, you "may be charged for excessive wear based on Toyota Financial Services standards for normal use and for mileage in excess of 24,000 miles at the rate of $0.15 per mile".
Leasing is never a good idea. A car is a depreciating asset -- it loses money over time. Pay cash for your car and buy used ones until your net worth reaches at least $1M.
