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I'm impressed that your math matches my spreadsheet calculators! (Most people just use funny math and make up $hit)
You are correct, the one value I didn't account for was the "saved" money from having the smaller payment with the lease. This should be accounted for appropriately as you suggest. (I added that to my fancy spreadsheet and it does change the comparisons a bit)
Here is one interesting difference that not many people know about leasing.
Even if you pay the entire loan of "depreciation" up front, you still have to pay some interest on the residual value of the car through the whole lease.
And the higher the residual value, the more interest is charged!
In our example, if you pay the entire 12K up front on the lease you will still get charged $1k in interest on the 10K residual.
If you have the cash to buy the car outright you can get ahead of the lease by saving on the interest charges. This is my plan...
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Jeff C
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