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BMW 3-Series (E90 E92) Forum > BMW E90/E92/E93 3-series General Forums > General E90 Sedan / E91 Wagon / E92 Coupe / E93 Cabrio > Leasing vs. Purchasing -- I think I just switched to the leasing side...



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      05-31-2010, 09:53 PM   #1
Rando
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Leasing vs. Purchasing -- I think I just switched to the leasing side...

I had always thought it made more financial sense to buy instead of lease.

But now it's time for my extended warranty and a few advantages of leasing have occurred to me:

1. With leasing, you don't have to worry about actually selling your car. In practice, it's really hard to get the "right" trade-in value for the car... it seems like the dealer can always get you there.

2. With a lease, all items (like wear-and-tear) are accounted for, coz you get a new one.

3. Extended warranty is a significant hidden cost, and it also has asterisks about what is fully covered.

4. Maintenance. If you lease, you get full maintenance all the time, and don't have to worry about all those extra hidden costs later.

5. New technology. If you lease, obviously you get a new car and new tech every 3 years, with updated nav discs, safety features, engine tech, comfort features, etc...

So... seems like IF you can guarantee your mileage, it's sort of a no-brainer, no?

"Buy-to-own" folks... please tell me something that'll make me feel better.

I think I'll lease my next car, but for now I think it wouldn't be financially smart to switch. So just feeling better about the whole purchasing thing would be nice. And I know you guys are all out here to help everyone feel better...

Thanks!
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      05-31-2010, 09:56 PM   #2
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But you can't really mod a leased car because it's a waste and you might not be able to sell the parts afterward unless they fit on your new car..
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      05-31-2010, 10:01 PM   #3
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      05-31-2010, 10:02 PM   #4
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2. With a lease, all items (like wear-and-tear) are accounted for, coz you get a new one.

3. Extended warranty is a significant hidden cost, and it also has asterisks about what is fully covered.
2. Have you ever been through a lease inspection when you're returning the car? They inspect every millimeter of the car with a magnifying glass.

3. No such thing as a free lunch. The estimated price of warranty is already factored into the price of the car, regardless of it's a buy or lease.

With leasing, you're going to be making monthly payments forever. While with buying, one day the car will eventually be yours and the monthly payments will stop.

I personally can't lease a car now because of the mileage I put on. But there are cars out there I would consider leasing (would have to be a 2nd car for me and not a DD) as oppose to buying because the value would severely tank after several years.
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      05-31-2010, 10:03 PM   #5
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If you can do with the mile restrictions and you trade your car every couple years anyways then sure leasing makes sense. I would lease except for the fact I'm doing like 20k miles per year. Financially it makes sense to drive a paid for car.
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      05-31-2010, 10:04 PM   #6
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Originally Posted by d33v00n3h View Post
But you can't really mod a leased car because it's a waste and you might not be able to sell the parts afterward unless they fit on your new car..
A good number of members on here lease their cars and modify them.

What's the difference of parting out a leased car and a car you bought? It's the same thing. When you trade in a car or sell a car, you revert back to stock because the aftermarket stuff you have on are useless.

Parts will always be able to sell unless somehow every single E9x in the world are wiped out.
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      05-31-2010, 10:05 PM   #7
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Quote:
Originally Posted by dreamingat30fps View Post
If you can do with the mile restrictions and you trade your car every couple years anyways then sure leasing makes sense. I would lease except for the fact I'm doing like 20k miles per year. Financially it makes sense to drive a paid for car for more than three years.
FTFY.
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      05-31-2010, 10:34 PM   #8
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wj4: Actually what I meant is that you get all-new things, like engine, suspension, bushings, etc... all the little under-the-skin things that makes the cars great.

Also, I'm curious about the lease return inspections... do you have to pay for paint chips, interior wear, and that kind of thing? I'm guessing not...

Thanks!
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      05-31-2010, 10:38 PM   #9
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Quote:
Originally Posted by Rando View Post
I had always thought it made more financial sense to buy instead of lease.

But now it's time for my extended warranty and a few advantages of leasing have occurred to me:

1. With leasing, you don't have to worry about actually selling your car. In practice, it's really hard to get the "right" trade-in value for the car... it seems like the dealer can always get you there.

2. With a lease, all items (like wear-and-tear) are accounted for, coz you get a new one.

3. Extended warranty is a significant hidden cost, and it also has asterisks about what is fully covered.

4. Maintenance. If you lease, you get full maintenance all the time, and don't have to worry about all those extra hidden costs later.

5. New technology. If you lease, obviously you get a new car and new tech every 3 years, with updated nav discs, safety features, engine tech, comfort features, etc...

So... seems like IF you can guarantee your mileage, it's sort of a no-brainer, no?

"Buy-to-own" folks... please tell me something that'll make me feel better.

I think I'll lease my next car, but for now I think it wouldn't be financially smart to switch. So just feeling better about the whole purchasing thing would be nice. And I know you guys are all out here to help everyone feel better...

Thanks!
those are some good points, def agree with you even though I have never leased a car before (always bought)
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      05-31-2010, 10:43 PM   #10
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I think when all is said and done, there is this notion that a car cannot be kept more than 3 years. With the high cost of ownership and maintenance of BMWs, this notion or justification is exaggerated. Just think about how dumb it would be to lease a Prius. Why is it any different for a 750li or a S63 AMG? Because even a brain surgeon has to think twice about the cash flow when it comes to those big ticket cars. The #1 reason to lease is all about cash flow imho, no matter what anybody says.
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      05-31-2010, 10:48 PM   #11
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John 070: But you can really compare the TOTAL $ spent for the lease vs the TOTAL $ spent for the purchase, no? That's how I think, at least. Monthly payment is sort of a meaningless way of thinking to me. (But I realize it works well for some folks.)

It's not that a car can't be kept after 3 years, but with fancy cars, no doubt more electronic gremlins start showing up... your shocks will be more worn, bushings, bearings, etc.. so, all things equal, you'd rather have a new one. And these days with nav and all, the improvements are pretty big! The 2007 nav versus the 2010 nav is a big jump! (Not to mention 2007 vs. 2004!)

Oh, and for me, modding is not something I want to do. (Though I understand many folks here do it. In my opinion, that's fine, I just don't like it when people are actually lying about it to the dealer, because of course they are bumping up against various tolerances and basically increasing costs for everyone else when they don't accept responsibility for their choices.)

Last edited by Rando; 05-31-2010 at 10:54 PM.
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      05-31-2010, 10:53 PM   #12
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Jean Paul Getty said: lease into the things that depreciate, and buy the things that appreciate. You figure that out.
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      06-01-2010, 12:21 AM   #13
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Always been leasing but purchased this time because of the low APR.
But after looking at all these crazy lease deals these days plus crazy resale value of 3er, I regret not leasing it again.
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      06-01-2010, 12:42 AM   #14
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I leased the 335i coupe which is about to up in a few months...

In the past I have financed but this time around i thought id try leasing with BMW. The base price for 08 335i coupe was 40,600 (or really close to this number with logic 7 standard), i was able to get 1k over invoice (for 08 model, alot of dealers wouldnt cut any deals below MSRP) making the lease payment very attractive.

Fast forward 2.5 years later, I am now thinking of buying my car out. One feeling I did love about when the car was under lease was that if it had gone to a major accident or was simply a lemon, i knew i could turn it in couple of years. I would lease again, but i dont see any affordable cars in the market that interest me except the M3 perhaps (and i dont feel like paying that much extra for an //M badge). The buyout is also set at 26k which doesnt seem to bad.

I noticed in general, that some people who leased 07/08 335 got lucky with the buyouts as well (1-2k below the buyout value).
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      06-01-2010, 03:21 AM   #15
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If you lease through your own company, it's a really good deal.
When most of the depreciation is done, you can buy it out.

Lower taxes and you get to do the payments with untaxed money.

Especially worth it if you crank up the payments from start and buy the car yourself when your company is done with it....
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      06-01-2010, 04:27 AM   #16
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How about an uncertain job market + need to get a car? Lease or buy...Even a cheaper car bought = that much less cash on hand in case things go pear-shaped, job-wise.
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      06-01-2010, 04:34 AM   #17
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Originally Posted by eatrach73 View Post
Jean Paul Getty said: lease into the things that depreciate, and buy the things that appreciate. You figure that out.
My former employer was Fortune 20. On capital equipment they paid cash--because they had it. There was an entire dept. crunching numbers and this is what they came up with (under the treasurer's helm), you better believe they could justify buy over lease.

When you haven't got the cash flow, in a business situation, but an item is needed to make $$$, you lease. When you have to drive a BMW and you need cash flow, you lease. How many people would be driving BMW's if leasing did not exist? We already know the numbers, BMW's would be about as common as they were in our grandpa's days, i.e. far less common.

p.s. I googled the above quote fully expecting it to show something about JP Getty. Instead, it turned up nothing. But when all is said and done, if a person says they MUST have a new car every 3 years, there can be a case made for leasing. But that is an emotional decision, not a rational one. It's like getting a new phone every 20 mos.--who came up with "20 mos.?" The wireless phone carrier.
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      06-01-2010, 05:11 AM   #18
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4. Maintenance. If you lease, you get full maintenance all the time, and don't have to worry about all those extra hidden costs later.
if you lease you don't have to pay for oil changes and regular maintenance? for never leased a car. sorry if this sounds obvious
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      06-01-2010, 08:15 AM   #19
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Another thing to think about when leasing.

"Although most states only charge sales tax on monthly payments (and down payment, if any), some states, such as Texas, New York, and Illinois, require the entire sales tax up front, based either on the sum of all lease payments or on the full sale price of the vehicle, depending on the state."
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      06-01-2010, 08:18 AM   #20
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Here is an interesting article.

http://www.leaseguide.com/lease03.htm
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      06-01-2010, 08:27 AM   #21
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Quote:
Originally Posted by Chriztofor View Post
Another thing to think about when leasing.

"Although most states only charge sales tax on monthly payments (and down payment, if any), some states, such as Texas, New York, and Illinois, require the entire sales tax up front, based either on the sum of all lease payments or on the full sale price of the vehicle, depending on the state."
Yes, that is true, and in Texas, you get assessed a "property tax" on leased vehicles. Also, at the end of the lease, your "security deposit" will likely get wiped out by charges for any damage, tire replacement (if needed), and other items. If you've had any accident damage, be prepared for "diminished value" charges.

Big thing to remember is the mileage restriction - it will eat up any savings if you go over it and get charged at lease end. If you can write off your lease for business purposes (like if you're a real-estate agent, etc.), then there can be an advantage, especially if you're self-employed or can otherwise lease the vehicle through your company.

I've done it both ways, and prefer purchasing CPO, letting someone else take the hit for depreciation and enjoying a practically new vehicle at a much-reduced price with better warranty (figured into the price, but worth it).
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      06-01-2010, 08:27 AM   #22
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if you lease you don't have to pay for oil changes and regular maintenance? for never leased a car. sorry if this sounds obvious
Well with BMW anyway. Since BMW comes with a 4 year maintenance program standard then it is covered. Unless you try to lease after 4 years 50,000 miles.
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