This doesn't take into account the fact that depreciation levels off (or should I say slows down) dramatically when you get into years 3, 4, 5, 6 etc. I have been buying 2 year old, just-off lease cars for years now and each time I end up having at least $8-11K of "equity" to put as a downpayment on the loan.

For example, I just did this early in 2007 with my 2005 touring roadster: The car was about $27K fully loaded and my trade (a 2001 miata which I held for a 5 year loan) was worth about $12K. I flip the 12K into the 350z and get a loan for the remainder. I pay about $400 a month for 60 months, and in five years, I will have paid the car off and will flip about $10K or so of whatthe car is worth (it will hold value around this level by this time) and then pick up a 2010 350Z by doing the same thing. If I leased, my payments would have been just about the same and I would have nothing to trade in for a new car at the end of the lease, thus being trapped into leasing forever. No thanks. Certified used with 20K on the clock = as good as new plus someone else already took the first two year hit of huge depreciation for you!