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      01-11-2013, 07:38 PM   #1
mrunner
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lease vs purchase + options reasoning

How do you guys reason getting a lease vs a purchase?

And does adding options / features /packages factor in?

For me, it's my first BMW, and the first time I decided to lease. I leased to keep price lower, and my wife's leased car was replaced with this one, she liked to lease before. I got it with few options. Reasoning being that I'm giving the car back. I don't want to pay inflated pricing to get a bunch of options that I'm going to give back.

I think I will get another BMW after this. I will probably buy it instead. I will try to keep it for a longish time. So I will add many more options. Since I will have it longer, I will enjoy those options longer. At this point, paying more for the car, because of packages or options makes sense.

Makes sense in my brain.
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      01-11-2013, 07:44 PM   #2
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      01-11-2013, 08:01 PM   #3
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Leasing for me makes more sense since I'm a small business owner. No down, lower monthly, 100% tax deductible, much lower sales tax (rent tax is what I think they called it) and in the end I decided to keep it, I will only be charge with the higher sales tax which is after only on the residual price. Unless ofcourse I'm missing something here.
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      01-11-2013, 09:29 PM   #4
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My previous vehicle was leased because, at the time, I ran some calculations and it would be much cheaper to lease it. However, I negotiated the price as if I was going to buy it and then told the finance people to calculate it as a lease, with that price as the "purchase" price. Had I re-financed the residual value for 2 years, I would've saved over $2K over the life of the loan.

However, since I got my BMW used, I bought it. I decieded I didn't want to take any more depreciation hits. But, the options shouldn't factor into the decision to buy or lease. You're going to be taking advantage of those options for the life of the lease, so you should get whatever options you want.
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      01-11-2013, 09:43 PM   #5
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Quote:
Originally Posted by Boxtyp3 View Post
Leasing for me makes more sense since I'm a small business owner. No down, lower monthly, 100% tax deductible, much lower sales tax (rent tax is what I think they called it) and in the end I decided to keep it, I will only be charge with the higher sales tax which is after only on the residual price. Unless ofcourse I'm missing something here.
+1 basically lease if you are a business owner (self-employed). If not, it would be quite a bit cheaper to buy.

Unless you have a lot of money and like to change cars often, then the option will be open to you
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      01-11-2013, 09:57 PM   #6
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While I hate leasing, had I started it 10 years ago I could have save 1000s I spent on buying the cars I did and then keeping them for a year and trading....

If you plan on keeping it for a long time, it makes sense to buy. If you intend on having it 2 years, or 3 max, then leasing is a viable option.
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      01-11-2013, 10:00 PM   #7
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You should totally lease it!
Or get a zero down and 0% finance deal for 84 months. Its like they are giving you money!
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      01-12-2013, 07:12 AM   #8
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I have friends that do nothng but lease because they can get more car for les monthly payment. They are not looking long term. Finacing is the way to go. Finance for 5 years, at the end of the term you have something with value. You then trade that car in and finance again for 5 years with a lower monthly due to trade in. The more this is done, the less the monthly patment gets ! Simple math. Leaseing is OK for business owners only, even then I don't believe leaseing is a smart long term way to go.
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      01-12-2013, 07:30 AM   #9
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One factor to consider is lease promotions by automakers.

Leasing deals offered by automakers often vary depending on time of year, current supply/demand, model closeouts, etc. When automakers want to move lots of cars, they often structure very good leasing deals that substantially lower the effective cost of the car without lowering the sticker price of the car. These deals can be very attractive because they result in huge savings.

The trouble is that it is hard for most people to compare purchasing vs. leasing because most people don't fully under leasing.
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      01-12-2013, 08:24 AM   #10
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Quote:
Originally Posted by mrunner View Post
How do you guys reason getting a lease vs a purchase?

And does adding options / features /packages factor in?

For me, it's my first BMW, and the first time I decided to lease. I leased to keep price lower, and my wife's leased car was replaced with this one, she liked to lease before. I got it with few options. Reasoning being that I'm giving the car back. I don't want to pay inflated pricing to get a bunch of options that I'm going to give back.

I think I will get another BMW after this. I will probably buy it instead. I will try to keep it for a longish time. So I will add many more options. Since I will have it longer, I will enjoy those options longer. At this point, paying more for the car, because of packages or options makes sense.

Makes sense in my brain.
Apply this concept to the debate on whether to lease or not. If your thought is not to get expensive options because you'll just be "giving them back" then you realize the biggest option you are "giving back" is the car itself.

Just sayin'
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      01-12-2013, 08:51 AM   #11
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My personal financial opinion (and i could be wrong) but this is my view.

Buying New

Buying a BMW new is not worth it, So you buy a 2012 335i brand new for $45k
and I buy one used say 2009 335i for $25k w/30-40k miles in mint conditon

Essentially we have the same car only you paid 20k more when there both washed and waxed right next to each other im paying say 200-400 vs your 600+ a month.

Some people "want new" but there's really no diff, me and my buddy at work are in this same situation our cars are identical and we bought in the same month, except his car cost almost double mine.

Leasing

Leasing is almost just as bad as buying brand new ( unless in a business ) You put $1-2K down, Then you make your payment of say $350-450 a month for 24 months.

In the end you spend around $12k and you have to hand the car back with nothing to show for it ( you could buy and keep it ) but that usually ends up not being the greatest deal as well.

IMHO the best way and what makes the most financial sense is CPO or a really good condition well taken care of used car!
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      01-12-2013, 09:17 AM   #12
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The reason why people lease.
1) if you get bored every 3 years, leasing is the perfect option since you dont need to worry about the depreciated value.
2) Some average joe wants a luxury car but cant afford to buy a car so he will lease it to have lower monthly payments.(really bad decision)
3) Sometime leasing the car and buying out the car at the end of the lease term saves you more money than buying a car upfront. (this would only work if your interest rate is financed below inflation rate) i wont go over detail since i cant provide my services for free
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      01-12-2013, 09:44 AM   #13
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Quote:
Originally Posted by cuiter23 View Post
+1 basically lease if you are a business owner (self-employed). If not, it would be quite a bit cheaper to buy.

Unless you have a lot of money and like to change cars often, then the option will be open to you
If you're a small business owner, you basically are the co., I.e. you have no shareholders. If you spend money, it comes out of your bottom line. It makes sense to lease equipment where you don't have cash flow to buy, when the equipment is used to generate revenue. IMHO it's not a no brainer to lease your car. The transit authority purchases hybrid buses, basing them on a twelve year life and running them twenty.
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      01-12-2013, 09:52 AM   #14
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You are in Quebec.

My E46 was leased and it made perfect sense then . 62% residual and 3.9% interest after 39mo / 78000km.

These days, Canadian BMW lease rates make no more sense. They can be insanely more of what is charged in the USA. A 335i M-sport is almost 1100$/mo in Canada but less than 700$ in the USA.

Also, BMW Canada rape their customers with unjustified costs. On top of the MSRP, they add 2800$ of fees.

The best IMO is to go slightly used, one year-old privately used, <12000 miles and -20% compared to out-of-the door cost of a new one. My 4000km E90 was 32750$ compared to 41895$C.
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      01-12-2013, 09:57 AM   #15
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Originally Posted by Saintor View Post
You are in Quebec.

My E46 was leased and it made perfect sense then . 62% residual and 3.9% interest after 39mo / 78000km.

These days, Canadian BMW lease rates make no more sense. They can be insanely more of what is charged in the USA. A 335i M-sport is almost 1100$/mo in Canada but less than 700$ in the USA.

Also, BMW Canada rape their customers with unjustified costs. On top of the MSRP, they add 2800$ of fees.

The best IMO is to go slightly used, one year-old privately used, <12000 miles and -20% compared to out-of-the door cost of a new one. My 4000km E90 was 32750$ compared to 41895$C.
Why not just buy from us and drive ofd?
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      01-12-2013, 10:27 AM   #16
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Why not just buy from us and drive ofd?
It is less appealing than it used to be. The gap has narrowed.

The least expensive F30 335i on cars.com is 43K$. We have to add a 6.1% taxes 9before our regulars taxes), plus other logistic fees. It is about 48K$, about the same as a Canadian used 335i. And at that price, Canadian or US, it is not low enough, IMO.
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      01-12-2013, 11:01 AM   #17
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I've done both a few times and have learned I like neither. The only way I will PERSONALLY buy a car now days is used with cash.
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      01-12-2013, 12:35 PM   #18
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Originally Posted by dreamingat30fps View Post
I've done both a few times and have learned I like neither. The only way I will PERSONALLY buy a car now days is used with cash.
This!!

Btw, I was being totally sarcastic in my earlier threads. Leasing is the most expensive form of financing. I'm of the opinion that if you can't afford to pay cash for a car then you really shouldn't buy it.
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      01-12-2013, 12:40 PM   #19
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Normaly 3 years into a 5 year finance you owe very close to what the car is worth. You then have an option to try and make a deal on a new one, or keep paying and built your equity!

I too believe a 1 year old car makes the best financial sense.
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      01-12-2013, 12:49 PM   #20
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Quote:
Originally Posted by dreamingat30fps View Post
I've done both a few times and have learned I like neither. The only way I will PERSONALLY buy a car now days is used with cash.
Why this reasoning cannot be faulted is it controls behavior. If you had an unexpected expenditure one month, then you would not buy the car that month. If BMW jacked the price of a 4 cyl. 3 Series to 47k, you may not buy the car. With a lease, there tends to be a mentality that "my lease is expiring so I have to get a new car in March." There is no regard to the financial situation in that case.

The justification for a lease is almost always that a person does not want to drive the same car more than x amount of time. That is a behavioral issue, that when modified, saves money.
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      01-12-2013, 02:42 PM   #21
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Thumbs up

The justification for a lease is almost always that a person does not want to drive the same car more than x amount of time. That is a behavioral issue, that when modified, saves money.[/quote]

This statement pretty much explains it all.
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      01-12-2013, 04:26 PM   #22
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I lease because I get to order a new car every 3 years.....
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