E90Post
 


E92-lighting
 
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...



Reply
 
Thread Tools Search this Thread
      06-02-2010, 04:23 AM   #67
Aija
Captain
 
Drives: 335Coupe 6-Speed!
Join Date: Jan 2006
Location: California, Bay Area

Posts: 687
iTrader: (0)

Quote:
Originally Posted by sf_loft View Post
I don't know if anyone can actually confirm this, but I heard that BMWFS is not a bank and they pretend to be one by charging interest. Most other manufacturers will use 3rd party financial institutions (U.S Bank, Wells Fargo, Citizens, etc) for leasing and financing whereas BMW simply uses their own money to lend out to consumers. This is the reason why they can pretty much set their own lease and finance rates regardless of market conditions. Regarding residual values, they come up with some attractive number to get you to lease / finance and simply make up for the imaginary residual value by collecting your interest. The consumer & BMW wins at the end, but in reality are they really the best when it comes to residual values?

Hmm... According to KBB. BMW was #2 and in 2009 it is #6. In 2010 they remain #6. As you can see, with the economic climate, even #1 has taken a hit by 4%.
Im surprised at these residual values..is this for 3years?
a 50k BMW is worth 22500 after 3years with 45% residual value?! I would have thought 50-55%
Aija is offline  
0
Reply With Quote
      06-02-2010, 08:25 AM   #68
nogard13
Second Lieutenant
 
nogard13's Avatar
 
Drives: 2006 325i
Join Date: Mar 2010
Location: Durham

Posts: 220
iTrader: (0)

My previous car was a 2007 Acura TSX (w/nav). I leased it in April 2007 for $250 under dealer invoice ($28,000) at a Money Factor close to 0% due to them wanting to get rid of the 07s and make room for the 08s. The residual value was ~$17,800 and I put about $700 down (only for tax, title, and license) and financed the rest into the lease (no security deposit due to my great credit). I drove this car for 3 years and only paid about $10,000 to do so.

I took the $8300 that they gave me for my trade in and put it in a CD making 5.25% interest for 3 years, giving me $9700 at maturity (earning me $1500 in interest). At the end of the lease, I could've financed the remaining $9000 (residual minus down payment from the CD maturity) for 24 months, but I chose not to. At current interest rates for used cars (BofA currently is offering 3.15%), my payments would be really, really low. Comparing what I would've paid over 5 years had I purchased originally vs. leasing and purchasing at lease end, I would've saved almost $3000 by leasing for the first three years (granted, $1500 of those savings came from interest earned, but still). Even without the interest, if you can save $1500 a year, that's a big chunk of change. It's only $41 a month, but it really adds up.

My point is that if the right financial circumstances are present (high interest rates when you lease, low when you purchase at lease end), you can really make out like a bandit by leasing first.

I chose not to purchase the car and go for a BMW instead, but only because I found a 2006 325i that I really liked at a steal of a price. Had I not found my Beamer, I would've kept the TSX.
nogard13 is offline  
0
Reply With Quote
      06-02-2010, 08:36 AM   #69
Chriztofor
Colonel
 
Chriztofor's Avatar
 
Drives: '06 325i Auto
Join Date: Feb 2010
Location: Chicago Burbs

Posts: 2,686
iTrader: (1)

Quote:
Originally Posted by nogard13 View Post
I chose not to purchase the car and go for a BMW instead, but only because I found a 2006 325i that I really liked at a steal of a price. Had I not found my Beamer, I would've kept the TSX.
You should have done this to begin with; buy used with some warranty remaining. I will never lease or buy new again.
Chriztofor is offline   United_States
0
Reply With Quote
      06-02-2010, 11:15 AM   #70
Angry3
All your 1 are belong to us!!!
 
Angry3's Avatar
 
Drives: '08 135i 'Vert
Join Date: Apr 2008
Location: Charlotte, NC

Posts: 641
iTrader: (0)

Quote:
Originally Posted by dmz View Post
Your point about not making payment after you pay off the car is the biggest myth on car car purchase. The truth is you will always pay for a car either from the continuing depreciation and the continuing repairs and maintenence on a older car you own. What good is to own a piece of dated machinery when it looses value on a daily basis and parts keeps wearing down and in need of replacement?

The other myth is that if you drive a lot you get killed on the mileage penalty. It's all about planning ahead. I drive a lot and my lease allows me to drive 15k miles a year and my payments did not go up too much. The extra mileage is on 16cent a mile. That is only $1600 for an extra 10k miles. Divide the amount through the life of a 3 year lease and we are talking about $45 more a month than the typical 12k miles a year lease. Yeah, that is a fortune alright!
Best post here. There's no such thing as a paid-for BMW.

And all this stuff about how the world ends if you run over your lease miles is crazy. How is paying $1600 to drive a $50,000+ car 10,000 miles during the prime of its useful life getting killed? I'm on pace to run over by 6-7000 miles on my lease and I could care less. The $800-900 I'll owe is a small price to pay for being able to take some trips and get some extra seat time in my 135 'vert.

In the end leasing vs. buying comes down to one's personal situation, what the individual values, and the math. Anyone arguing that leasing or buying is always is a bad idea just doesn't have a good understanding of the pros and cons of both approaches.
Angry3 is offline  
0
Reply With Quote
      06-02-2010, 11:27 AM   #71
MisterSkiMask
Lieutenant Colonel
 
Drives: I Can not say
Join Date: Nov 2005
Location: you must not know

Posts: 1,931
iTrader: (0)

I have leased one car and purchased my other cars...I like and dislike both.

Here is a way to think about it. No matter what you do (lease or buy, new or used) you have a monthly car expense, weahter you realize is every month or not (payment, depreciation, repair, etc). Decide what what you are comfortable paying per month and see what fits your budget.
MisterSkiMask is offline  
0
Reply With Quote
      06-02-2010, 11:41 AM   #72
John 070
Lieutenant General
 
Drives: 335i cpe
Join Date: Oct 2006
Location: ZSP/ZPP/ZCW

Posts: 11,394
iTrader: (0)

Quote:
Originally Posted by Angry3 View Post
Best post here. There's no such thing as a paid-for BMW.

And all this stuff about how the world ends if you run over your lease miles is crazy. How is paying $1600 to drive a $50,000+ car 10,000 miles during the prime of its useful life getting killed? I'm on pace to run over by 6-7000 miles on my lease and I could care less. The $800-900 I'll owe is a small price to pay for being able to take some trips and get some extra seat time in my 135 'vert.

In the end leasing vs. buying comes down to one's personal situation, what the individual values, and the math. Anyone arguing that leasing or buying is always is a bad idea just doesn't have a good understanding of the pros and cons of both approaches.
You know what isn't a myth? Looking back on a nearly 13 y.o. Nissan and saying, "What repairs have I had to pay for other than gas, oil, coolant, brake fluid, brakes, and tires?" Answer? cv joints and exhaust.

How stupid would one be to lease a new Nissan every 3 years? The whole unreliable car hidden cost extended warranty 3 years old is too old mentality goes completely out the window.
John 070 is offline  
0
Reply With Quote
      06-02-2010, 11:55 AM   #73
MisterSkiMask
Lieutenant Colonel
 
Drives: I Can not say
Join Date: Nov 2005
Location: you must not know

Posts: 1,931
iTrader: (0)

Quote:
Originally Posted by John 070 View Post
You know what isn't a myth? Looking back on a nearly 13 y.o. Nissan and saying, "What repairs have I had to pay for other than gas, oil, coolant, brake fluid, brakes, and tires?" Answer? cv joints and exhaust.
The only problem with that is you are dirving a 13 y.o. Nissan.
MisterSkiMask is offline  
0
Reply With Quote
      06-02-2010, 12:04 PM   #74
John 070
Lieutenant General
 
Drives: 335i cpe
Join Date: Oct 2006
Location: ZSP/ZPP/ZCW

Posts: 11,394
iTrader: (0)

Quote:
Originally Posted by MisterSkiMask View Post
The only problem with that is you are dirving a 13 y.o. Nissan.
Sure, many people think a 1998 somehow indicates a below avg. achievement, given the ease with which brand new BMWs are leased today. But that Nissan was 9 when I got the 335, and 12 when I paid-off the 335. The fact that I got around with the Nissan certainly helped to put the 335 in the garage.

In this thread I just read someone saying a car is not paid-off even when you think it is. Now that's an active imagination....
John 070 is offline  
0
Reply With Quote
      06-02-2010, 12:10 PM   #75
MisterSkiMask
Lieutenant Colonel
 
Drives: I Can not say
Join Date: Nov 2005
Location: you must not know

Posts: 1,931
iTrader: (0)

Quote:
Originally Posted by John 070 View Post
Sure, many people think a 1998 somehow indicates a below avg. achievement, given the ease with which brand new BMWs are leased today. But that Nissan was 9 when I got the 335, and 12 when I paid-off the 335. The fact that I got around with the Nissan certainly helped to put the 335 in the garage.

In this thread I just read someone saying a car is not paid-off even when you think it is. Now that's an active imagination....
I am just saying that there is a 'value' to driving something that you like to drive.

If you have a beater that you drive to work basically for free so you can have a car that you like and enjoy at home (or if you don't care about cars at all) that is great. For me it would be depressing to have to drive a car that I don't like.
MisterSkiMask is offline  
0
Reply With Quote
      06-02-2010, 12:17 PM   #76
John 070
Lieutenant General
 
Drives: 335i cpe
Join Date: Oct 2006
Location: ZSP/ZPP/ZCW

Posts: 11,394
iTrader: (0)

Quote:
Originally Posted by MisterSkiMask View Post
I am just saying that there is a 'value' to driving something that you like to drive.

If you have a beater that you drive to work basically for free so you can have a car that you like and enjoy at home (or if you don't care about cars at all) that is great. For me it would be depressing to have to drive a car that I don't like.
I hear you, but to illustrate, in my situation, I could have leased about what, 5--NO JOKE, 5 Nissans from 1998 to today. So, instead of having a 335 and a vq Nissan, I'd have, what, nothing but a brand new Nissan, not owned by me. The same could happen to someone who leases 3's. Maybe they could have bought one 3, and 12 years later, buy a 5 and keep the 3. Or, lease 5 3's. See what I mean?
John 070 is offline  
0
Reply With Quote
      06-02-2010, 12:25 PM   #77
MisterSkiMask
Lieutenant Colonel
 
Drives: I Can not say
Join Date: Nov 2005
Location: you must not know

Posts: 1,931
iTrader: (0)

Quote:
Originally Posted by John 070 View Post
I hear you, but to illustrate, in my situation, I could have leased about what, 5--NO JOKE, 5 Nissans from 1998 to today. So, instead of having a 335 and a vq Nissan, I'd have, what, nothing but a brand new Nissan, not owned by me. The same could happen to someone who leases 3's. Maybe they could have bought one 3, and 12 years later, buy a 5 and keep the 3. Or, lease 5 3's. See what I mean?
Absolutely.
MisterSkiMask is offline  
0
Reply With Quote
      06-02-2010, 12:31 PM   #78
nogard13
Second Lieutenant
 
nogard13's Avatar
 
Drives: 2006 325i
Join Date: Mar 2010
Location: Durham

Posts: 220
iTrader: (0)

Quote:
Originally Posted by Chriztofor View Post
You should have done this to begin with; buy used with some warranty remaining. I will never lease or buy new again.
I was willing to pay for a new car because it was exactly what I wanted and it has just been through a mid-cycle refresh. If you are willing to pay for what you want, then there is no right or wrong answer.

I chose to purchase a used car with 3.5 years of use on it for a discount (less than half of what the car's original MSRP was). While this is a great price and a bargain in most people's eyes, it still has the "unknowns" of having been someone else's car for over 3 years and you can never bee 100% certain that it was taken care of the way that you would've done had you purchased it new.

Having said that, I think my next car will be a 2008 535i
nogard13 is offline  
0
Reply With Quote
      05-22-2011, 12:41 PM   #79
dfwsig
Registered
 
Drives: 135i cabrio
Join Date: May 2011
Location: Dallas

Posts: 1
iTrader: (0)

Unless you lease in Texas where you pay sales tax on the total price of the car, not the lease!
dfwsig is offline   United_States
0
Reply With Quote
      05-22-2011, 05:11 PM   #80
hpowders
911/328i Fanatic
 
hpowders's Avatar
 
Drives: BMW 328i
Join Date: Nov 2009
Location: USA

Posts: 965
iTrader: (0)

I really think leasing is best. Cures the boredom and potential problems of long-term ownership. Not a lot of money down. I will be leasing exclusively in the future.

Just walk away and forget about it. I like that.

Last edited by hpowders; 05-22-2011 at 11:01 PM.
hpowders is offline  
0
Reply With Quote
      05-22-2011, 07:58 PM   #81
DaveL
Banned
 
Drives: 2010 335 coupe msport
Join Date: May 2010
Location: Darien CT.

Posts: 970
iTrader: (0)

Love leasing. Never a repair bill,get a new one every 3 years(Inspection very lenient when re-leasing.Remember that when you "buy" you don't own it till it's paid in full till then bank owns it.When it's paid off in say 4-5 years then come the repair bills.As for miles weather you own it or not you still pay.I.e. 60 thousand miles on a car that you own after three years makes it almost impossible to trade or sell at fair market. Excessive miles either way suck. Like i said i love it besides and if you don't then after three years just go back to purchasing but I never did.Good luck here.
DaveL is offline  
0
Reply With Quote
      05-23-2011, 05:30 AM   #82
nwvalleyjock
New Member
 
Drives: 2011 535i
Join Date: Jul 2009
Location: Southeastern PA

Posts: 5
iTrader: (0)

Unhappy Why I may lease next time

Here's my two cents. based on my recent experience. I'm interested in trading up to an X3 from my loaded 2007 328xi in excellent condition with only 32K miles on it. I was shocked at the low trade-in value that the dealer quoted (around $20K) for a vehicle I paid $45K for, has low mileage, and is in mint condition. So much for the "high resale value" that was sold to me along with the car! Doing the math, I've had the car 54 months and lost $25K in value, equating to $463/month. The leases I've seen advertised over the past couple of years for a 3-series were about $100/month cheaper than that. I would think it should be more expensive to lease than buy, but it sure worked the opposite way in my case! I knew when I started seeing 3's all over the place a couple of years ago that it seemed BMW was just cranking them out like crazy, devaluing my car ...
nwvalleyjock is offline   United_States
0
Reply With Quote
      05-23-2011, 05:56 AM   #83
pony_trekker
Second Lieutenant
 
pony_trekker's Avatar
 
Drives: 535 x drive
Join Date: Jul 2005
Location: NY

Posts: 275
iTrader: (0)

Quote:
Originally Posted by nwvalleyjock View Post
Here's my two cents. based on my recent experience. I'm interested in trading up to an X3 from my loaded 2007 328xi in excellent condition with only 32K miles on it. I was shocked at the low trade-in value that the dealer quoted (around $20K) for a vehicle I paid $45K for, has low mileage, and is in mint condition. So much for the "high resale value" that was sold to me along with the car! Doing the math, I've had the car 54 months and lost $25K in value, equating to $463/month. The leases I've seen advertised over the past couple of years for a 3-series were about $100/month cheaper than that. I would think it should be more expensive to lease than buy, but it sure worked the opposite way in my case! I knew when I started seeing 3's all over the place a couple of years ago that it seemed BMW was just cranking them out like crazy, devaluing my car ...
My opinion: there are two ways to go. (1) Lease or (2) buy and drive 'til it goes no more and when you trade it in, you're happy they're paying you for it.
pony_trekker is offline  
0
Reply With Quote
      05-23-2011, 12:49 PM   #84
Rekla
Hug the road... Carpe Asphalt
 
Rekla's Avatar
 
Drives: 2007 ///M Coupe
Join Date: Sep 2006
Location: Greater Seattle area - WA

Posts: 588
iTrader: (18)

Quote:
Originally Posted by nwvalleyjock View Post
Here's my two cents. based on my recent experience. I'm interested in trading up to an X3 from my loaded 2007 328xi in excellent condition with only 32K miles on it. I was shocked at the low trade-in value that the dealer quoted (around $20K) for a vehicle I paid $45K for, has low mileage, and is in mint condition. So much for the "high resale value" that was sold to me along with the car! Doing the math, I've had the car 54 months and lost $25K in value, equating to $463/month. The leases I've seen advertised over the past couple of years for a 3-series were about $100/month cheaper than that. I would think it should be more expensive to lease than buy, but it sure worked the opposite way in my case! I knew when I started seeing 3's all over the place a couple of years ago that it seemed BMW was just cranking them out like crazy, devaluing my car ...
Same mindset here Bought my car in 2006 and handed the dealer a $46,000 check. Current value of the car is say ~$18,000. The write-off is $28,000 in 55 months of ownership; this is $509/month. Under the assumptions that:

-I want (and would still like) a new BMW and not a CPO (Yes a CPO is a smarter purchase, but a different discussion)

- BMW keeps being my choice for owning and driving (and not Honda, Toyota, or any other brand)

In my mind, leasing is in favor of purchase for the following reasons:

-Looking back its about the same monthly payment (owners depreciation versus lease amount), with less worries, I would have had a new car by now (36 months vs 55), I would not have taken care of it as much as I babied mine (hand wash only, apply wax and Zaino regularly), I would not have modded at all, I would probably have done ED on a 335d by now.

-A good mutual fund returns 7-8% average on annual basis, this result is doubling you investment every 10 years. Invest $46k in 10 years, this becomes $92k timing the marker permitted without being a day trader. Car value after 10 years: 8k? This is a depreciation of $38,000 or $316/month. Even worse, the 2009 stock market was an opportunity of a life time to invest, but I had no money for it.

-After 4 years Im out of warranty and free maintenance. Im on the verge of maintaining my car per BMW recommended maintenance (a bit cheaper but more expensive repairs later) versus doing it the old school way, meaning more preventive maintenance to prevent expensive repairs. Either way, I currently reserve $100/month for maintenance and repairs after 4 years of ownership. This could be deducted from a new lease

-Paid $46k for the car and assume I keep it for 10 years: Depreciation is $38,000 + 6 years of paid maintenance and repair budget (6 x $1,200) = $45,200 total ($376/month). The same amount a $46k investment would have returned at 7-8%, but this is on the + side of the balance versus (negative) side for the car.

-Assume to lease new BMW's for a 10 year period: Even at $550/month: this is $66,000 over a 10 year period. Far less ($92k-$66K = $26k) than what the investment would have netted but $20k more than keeping the same car for 10 years assuming the car holds up that long (no major repairs or accidents).

-Looking back - I would have opted for a lease. From where I am now (my 2006 330i is a great car, low miles (38k), not a ding, dent or peep), Im probably a long term owner since I purchased and I dont want to face the write-off.

On a side note: Texas is very lease unfriendly - sales tax applies to the entire purchase price (@ 6.25%) so I dont know what that would do to the monthly payments that I see being posted in this forum ($2,875 on a $46k sale price).

I keep having discussions with a coworker telling me I did the right thing but based on the above Im not convinced. Leasers may look at this from a diffenent angle though...
__________________
2013 X5-35d - Platinum Grey / Oyster; Premium - Sport
2007 BMW ///M Coupe
RETIRED 2006 TiAg E90 330i - Black leather - Alu Trim - Prem - Sport - NAV - Step - CA - Heated Seats
Rekla is offline   United_States
0
Reply With Quote
      05-23-2011, 12:51 PM   #85
Never-Enough
Banned
 
Drives: 2007 335xi E90
Join Date: Feb 2011
Location: PA

Posts: 1,038
iTrader: (19)

Quote:
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..
False. I modded both my leased car (one even had nitrous) I simply removed the crap I put on. Not hard when you don't do anything you can't take off.
Never-Enough is offline   United_States
0
Reply With Quote
      05-23-2011, 12:52 PM   #86
Never-Enough
Banned
 
Drives: 2007 335xi E90
Join Date: Feb 2011
Location: PA

Posts: 1,038
iTrader: (19)

Quote:
Originally Posted by hpowders View Post
I really think leasing is best. Cures the boredom and potential problems of long-term ownership. Not a lot of money down. I will be leasing exclusively in the future.

Just walk away and forget about it. I like that.
Not a lot down? Depends on the car you are after. I tried to lease a new 335 & they all wanted over $7k down. That makes leasing that car a stupid idea.
Never-Enough is offline   United_States
0
Reply With Quote
      05-23-2011, 01:46 PM   #87
lesha
Lieutenant
 
lesha's Avatar
 
Drives: 2009 - 335 coupe
Join Date: Jun 2009
Location: Alexandria, VA

Posts: 399
iTrader: (1)

it comes down to practicality vs. ballin,, lol, who doesn't want to drive a brand new 50K+ car and replace it with a new one every 3 years

but if you get a few year used, finance, pay it off, then you are saving big $, or putting it towards other thing that might be more important than a car (house, travel, kids, etc)
lesha is offline  
0
Reply With Quote
      05-23-2011, 02:29 PM   #88
Wild Squid
Banned
 
Drives: 2011 BMW 335i coupe Msport AW
Join Date: Mar 2011
Location: Nor Cal

Posts: 628
iTrader: (0)

I almost leased my current 2011 335i. I was at the dealership when my car arrived from Germany deciding whether to buy or lease. In the end, I bought because I just didn't think the lease deal I was getting was very good. Leasing is quite complicated for those who don't understand it, and even if you do you have to be damn certain its right for you to take advantage of it. You can easily go wrong by leasing. I decided I wasn't Playboy enough to be leasing a new car every 3 years. Maybe in the future, but for now I'm happy with buying and knowing I can put however many miles on my car as I want. Also, I wasn't too comfortable with the idea that after paying $27K+ to lease a car for 3 years I give it back and have nothing in my hands to show for it. Buying at least I have the car as something to show for what I paid money on. It's simply about your perspective on how you look at it.
Wild Squid is offline  
0
Reply With Quote
Reply

Bookmarks

Tags
buy, lease, purchase

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump


All times are GMT -5. The time now is 03:57 AM.




e90post
Powered by vBulletin® Version 3.7.0
Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.
1Addicts.com, BIMMERPOST.com, E90Post.com, F30Post.com, M3Post.com, ZPost.com, 5Post.com, 6Post.com, 7Post.com, XBimmers.com logo and trademark are properties of BIMMERPOST