[harrington]

I have never leased a car but I know many people who do. I just always heard it was a bad idea. Thoughts on leasing??

[stickypaws]

You plan on keeping the car out of warranty? Wanna get a new car in three years? Can you use your payments as a business tax write off?

Google "lease or buy." You'll get tons of info.

[ibimmer954]

I leased my E93. I leased it because I know I like getting new cars every 3 - 4 years anyway.

It's less cash up front and you don't need to worry about getting 'screwed' on your trade-in value later. Plus if you lease, a BMW is completely covered by the warranty and maintenance plan since the lease plans are not as long as the warranty periods. In this 'down economy' my lease residule is almost certainly going to be higher than the market price of the car at the end; now it's BMW's problem.

The bad? You are necessarily paying interest. The deal might not be as good if you were to buy the vehicle, keep the mileage low, and sell the vehicle to a private party at the end. Also, if you want to mod your car, it probably isn't a good idea to lease.

[ATSR]

If you plan to keep the car for a while or put a lot of miles on your car - BUY

If you change your car every 3 years or less and drive 15K miles or less - LEASE

There are a lot of other pros and cons to each one but that's a good baseline.

[Lassaxi]

Please You will be rewarded with many many threads that looks like these:

Leasing vs. Buying?

More info for those thinking about leasing

Leasing or Buying

There is a lot of information on this forum about how a lease works, what key parameters you need to negotiate, and what the risks of leasing are.

Also, bear in mind that many people have strong opinions about whether it is better to lease or buy, and most of those people with strong opinions have no idea what they're talking about. Anytime you see a post on this topic that starts with "You should NEVER EVER ________," you can be virtually certain that the poster is clueless.

The decision to lease or buy a car is a personal one. Sometimes it makes more sense to lease. Sometimes it makes more sense to buy. You are the only one who knows what your needs are, and what your financial situation is.

Good luck.

[kuvesh]

leasing limits the modding potential

[jlstyle]

I used to lease cars before this one and I modded quite a lot on the leased vehicles until I became to think it was just too annoying to bring the vehicle to stock form every so often. So modding wasn't a problem with me even cars were leased.

Reason I bought the car this time is just because finance rate and price was too attractive. With this finance rate and a BMW select payment option, I could get a lower monthly payment then lease with no money out of pocket OTD.
I just hope market goes up by the time I decide to sell the car so I could pay less monthly and drive more and hopefully do not take too much of hit, possibly what I would have to pay up front to make the same monthly payment as now with lease.

[nicknaz]

Originally Posted by stickypaws

You plan on keeping the car out of warranty? Wanna get a new car in three years? Can you use your payments as a business tax write off?

Google "lease or buy." You'll get tons of info.

+1

BMW out of warranty scares me ($$$$) but I wanted to try having one, so I'm leasing.

[kgb1637]

DO NOT LEASE JUST BECAUSE ITS CHEAPER FOR THE LOVE OF GOD!!!! If you can't afford the buy payments, then I'd stay away from the car. It could be a terrible financial decision for you and it could cost you more in the end if you attempt to get out of the lease. Lease because you plan on keeping the mileage low and will only keep 2-4 years anyway.

[mike-y]

if you are thinking about buying, you can also look into a CPO if you can deal with a car that might be 2-3 years old, but you'll pay a lot less. CPO = 100k mile warranty, which is pretty sweet.

[Barmats]

Leasing is no different from an expensive rental. Unless you buy the car for the residual value (and it's seldom a good deal), you've spent a bunch of $$ and have zero equity in the car. And, if you plan on getting rid of the car or upgrading before the lease term, the only "out" is to pay the balance of the lease payments and give the car back.

If you finance, then you own the car and can mod it, sell it, or do whatever you want to it. And if you're no upside-down on the loan, you will have some positive equity in it.

[noro]

Originally Posted by kgb1637

DO NOT LEASE JUST BECAUSE ITS CHEAPER FOR THE LOVE OF GOD!!!!

+1

Originally Posted by Barmats

Leasing is no different from an expensive rental.

If you finance, then you own the car and can mod it, sell it, or do whatever you want to it. And if you're no upside-down on the loan, you will have some positive equity in it.

Financing is an expensive rental as well. You saying "If you finance, then you own the car" it's an oxymoron. If you finance the car you do not own it. You own only its value minus your loan obligation, which is in most cases a negative number. By the time it is a positive number for many the car is a piece of crap that nobody wants, for some it isn't.

To sum it up.. do not just make blank statements like leasing is bad, or financing is bad for that matter. Each have their own pluses and every individual should be honest with themselves in identifying the right way to go.

At the end it all comes down to basic math and past behavioral patterns.

In 1999 I leased a E46 323 at 500/mo for 2 years my friend financed a similar car that year paying 780/mo for 5 years

In 2001 I leased an E46 330 at 570/mo for 3 years

In 2004 I leased another E46 330 at 575/mo for 3/years

In 2007 I leased E92 335i at 585/mo.

At this point as you figured my friend was done with financing his car

He has spent 46800 on financing.
I have spent 63750 on financing.

In the period of ownership he spent ~9K in various repairs/parts on now a 135K vehicle. The value of his vehicle now is ~3-4K.

Bottom line
63750 for me, 46800 + 9000 - 4000 for him. Grand total I overspent for my driving please ~11000 in the past decade (roughly).

All along I have been enjoying a new ride every 3 years at a nominal cost of extra 100/mo distributed through the times. This is an amount I am willing to pay for the satisfaction of having a new ride every 3 years.

Run this same basic math for yourself to determine what's better for you.

[Lassaxi]

Originally Posted by kgb1637

DO NOT LEASE JUST BECAUSE ITS CHEAPER FOR THE LOVE OF GOD!!!!

Thank you for proving my point.

Actually, it is usually a good idea to do something that is cheaper rather than something that is more expensive. The trick is to compare ALL the costs of leasing versus ALL the costs of buying, not just the monthly payments. That includes things like taxes, depreciation, and what return you could get by leasing and investing the money you would have spend on a downpayment.

Depending on your circumstances, leasing could be cheaper, or buying could be cheaper. You just have to add up all the numbers.

If you can't afford the buy payments, then I'd stay away from the car. It could be a terrible financial decision for you and it could cost you more in the end if you attempt to get out of the lease.

Yep, leasing could be a terrible financial decision. But so could buying. What happens if you get into an accident? Regardless of whether you lease or buy, your car is going to lose a lot of value after an accident. But if you lease, that depreciation will never affect you. You just turn in your repaired car at the end of the lease, and you're done. If you bought your car, and you try to sell it after an accident, you are going to take a big hit in depreciation.

We can come up with scenarios all day long that will make leasing look better than buying, or vice versa. This is why, as I said originally, there is no right or wrong answer. The indivudal making the decision has to do the math, and actually make the decision for himself.

[Barmats]

Originally Posted by noro

Financing is an expensive rental as well. You saying "If you finance, then you own the car" it's an oxymoron. If you finance the car you do not own it. You own only its value minus your loan obligation, which is in most cases a negative number. By the time it is a positive number for many the car is a piece of crap that nobody wants, for some it isn't.

Well, actually the point was to illustrate at least one of the differences between leasing and financing. It goes without saying that when you finance a car, you don't own the full vehicle until the loan is paid off. And I wouldn't necessarily agree that in most cases, you have negative equity in the vehicle -- it depends on your initial down payment, how much you've paid off, and the current value of the vehicle.

There are many pros and cons to each scenario, much of which is well outlined above. Remember that all vehicles depreciate in value by the same amount regardless of whether they are leased or financed.

[BK]

One of the most-often asked and heated questions on these forums.

Here is the bottom line: EITHER can be a good or a bad choice. In EITHER case, you pay for the depreciation of the car and an interest rate on the borrowed money over time. Some people don't seem to get that.

Whether one is better than the other depends on the specifics of the two deals.

[DenverJayhawk]

Originally Posted by noro

+1



Financing is an expensive rental as well. You saying "If you finance, then you own the car" it's an oxymoron. If you finance the car you do not own it. You own only its value minus your loan obligation, which is in most cases a negative number. By the time it is a positive number for many the car is a piece of crap that nobody wants, for some it isn't.

To sum it up.. do not just make blank statements like leasing is bad, or financing is bad for that matter. Each have their own pluses and every individual should be honest with themselves in identifying the right way to go.

At the end it all comes down to basic math and past behavioral patterns.

In 1999 I leased a E46 323 at 500/mo for 2 years my friend financed a similar car that year paying 780/mo for 5 years

In 2001 I leased an E46 330 at 570/mo for 3 years

In 2004 I leased another E46 330 at 575/mo for 3/years

In 2007 I leased E92 335i at 585/mo.

At this point as you figured my friend was done with financing his car

He has spent 46800 on financing.
I have spent 63750 on financing.

In the period of ownership he spent ~9K in various repairs/parts on now a 135K vehicle. The value of his vehicle now is ~3-4K.

Bottom line
63750 for me, 46800 + 9000 - 4000 for him. Grand total I overspent for my driving please ~11000 in the past decade (roughly).

All along I have been enjoying a new ride every 3 years at a nominal cost of extra 100/mo distributed through the times. This is an amount I am willing to pay for the satisfaction of having a new ride every 3 years.

Run this same basic math for yourself to determine what's better for you.

Actually, you do own the asset even when you take a loan out to aquire it. The lender just has a lien on the asset which entitles them to "foreclose" if the terms of the loan are in default. The same holds true for real estate or basically any other asset. This is why you are free to tear down a wall or repaint your house to your liking, provided that there aren't any covenent or HOA rules stating otherwise. This is one of the first things they teach you in real estate school.

The main difference between lease vs buy in IMO is that you have something to show for the money you spent...i.e. equity. Which ever you choose, cars are still one of the worst uses of money, economically, that one can possible think of....unless you are an enthuisast

[DenverJayhawk]

One other thought...For me personally, I value not having a car payment more than enjoying a nice, new car every three years. Each person's situation is different, however. I'm willing to enjoy a car for 10 years and use the money saved by not having a car payment for vacations, extra house payment, kid's college 529 plan, and an emergency backup fund should my wife or I lose our jobs.

[darkcloud]

Originally Posted by jlstyle

Reason I bought the car this time is just because finance rate and price was too attractive. With this finance rate and a BMW select payment option, I could get a lower monthly payment then lease with no money out of pocket OTD.

How is the BMW Select financing? I've always wondered about it but never heard of anyone that actually went that route.

I leased my ride. I wasn't sure where I would be in the near future but could have afforded leasing or financing if I chose. I had a downpayment saved but I chose to keep that invested, leased the car and used the DP buying and remodeling a house a year later. I'm within my milage, the lower payment was attractive, I've done some modding, and a city bus rear ended me about 3 months after getting the car. With all that added up leasing was perfect.

Now my new wife doesn't understand or agree with leasing. She doesn't want to even have a discussion about leasing another car. She's in for a little bit of sticker shock soon. Her only car buying experience was her $14k 2003 Chevy Cavalier her parents helped her purchase using her baptismal money. She thinks a car payment should never be more then $300. She doesn't really understand the cost of cars and how much money you would have to put down to have a payment that low on anything she would actually want. Oh and she only drives maybe 10k a year. She doesn't care about having a new car every 3 years but everything else is in her favor to lease. She's low mileage, she doesn't want to be hassled with maintenance fees, she won't want to come off $10-$20k for a DP. She'll see the light eventually.

[6speedGaren]

Harrington,

What will you be using your car for? How many miles do you drive a month/year?
What do you like about your car now that you would want in your next vehicle,
You have to ask these questions to yourself to see if leasing is for you.
Do you like to drive a new car every 3-4 years under warranty or do you keep your cars till death do us part ?
When you lease you pay for what you drive, when you buy you making a long term commitment.
Like the guys said may be bmw is not the right vehicle for you?

Thats all I could think of right now, hope that helps.
Lease what depreciates(which is everything these days) Buy what appreciates (I dont know what it is anymore) house?

I bought mine, I love modding!

Good luck to you!

[Barmats]

Many people are motivated or driven strictly by monthly payment, and keeping it as low as possible. Make sure you look at the total cost to own or lease the vehicle. It's common practice for a dealer to lower the monthly payment because they asked what you wanted your monthly payment to be (and you told them), but jack up the interest rate/money factor, payment term, and/or add something to the overall cost without completely disclosing what has changed. The only winner in this scenario is the dealer. It's the consumer's responsibility to know what you're signing, and once it's signed -- whether or not it was fully explained or disclosed -- you are bound by the terms of the contract. Doing the math over the full payment term for leasing and financing will show you the true costs involved.

[digivue]

Buy it if you can afford it. Leasing has many restrictions. If you have to lease try to find a dealer with a walkaway protection.

[digivue]

BTW, with the rock bottom financing rates, it seems to be the best time to buy rather than lease. Any CD will bring you more money than you spend.