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      06-04-2005, 05:02 AM   #1
skimo
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Owner's Choice vs Lease

Hi,

Anyone know the cons/pros of Owner's Choice vs Leasing ? This question will probably only apply to people in TX or IL (states that charge full tax on car price rather than lease payments).

According to my dealer, with Leasing you get gap insurance that you dont get with OC. But with OC the car is registered to your name not BMWFS. Cost wise, shouldnt OC be cheaper ?

Any advice appreciated.

Thanks
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      06-05-2005, 01:04 AM   #2
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Originally Posted by skimo
Hi,

Anyone know the cons/pros of Owner's Choice vs Leasing ? This question will probably only apply to people in TX or IL (states that charge full tax on car price rather than lease payments).

According to my dealer, with Leasing you get gap insurance that you dont get with OC. But with OC the car is registered to your name not BMWFS. Cost wise, shouldnt OC be cheaper ?

Any advice appreciated.

Thanks
Skimo
This is a hard decision. Because you either want to own the car or just drive it for 3 yrs. Usually leasing then buy the car you will lose. It often very hard but $ is $. I am in NYC and leasing. The problem with leasing in NYC is that the acquistion fee which includes the GAP is always very high but I get taxed on the lease payments, not the entire price. Damn that sucks. Lease helps a lot of people afford cars they normally can not or do not want to keep the car after the warantee is over.
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      06-05-2005, 08:53 PM   #3
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Thanks fusionny,

I am not sure if you understood my question. OC and Leasing are the basically same thing in terms of payments, in OC you pay small monthly payments then you have a large balloon payment to pay at the end of the period ( 3 years..) . You can also decide to walk away if you dont want to purchase....just like a lease. However, the contract is slightly different. The reason OC got created is for those states were leasing is not favourable due to the tax requirements (TX for example).

since the contract is different, i was wandering if someone knows the cons/pros between them..

Thanks
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      06-05-2005, 09:09 PM   #4
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The main difference is the listed owner. With a lease, the bank owns the car and you are paying "rent". With Owners Choice, you are listed as the owner on the title, but you have a balloon payment with the option of turning in the car at the end of the term.

As far as cost goes, the owners choice option is typically more expensive as you are responsible for tax on the entire purchase price. With a lease, you are taxed on each monthly payment, which results in being taxed only on the depreciation plus money factor.

For a while, many companies stopped leasing in NY due to liability laws Essentially, the laws allowed people to sue the owner of the car even if they weren't the driver at the time of the accident. So, people started suing the banks.

Hope that helps.

Michael
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      06-05-2005, 09:17 PM   #5
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Originally Posted by skimo
Thanks fusionny,

I am not sure if you understood my question. OC and Leasing are the basically same thing in terms of payments, in OC you pay small monthly payments then you have a large balloon payment to pay at the end of the period ( 3 years..) . You can also decide to walk away if you dont want to purchase....just like a lease. However, the contract is slightly different. The reason OC got created is for those states were leasing is not favourable due to the tax requirements (TX for example).

since the contract is different, i was wandering if someone knows the cons/pros between them..

Thanks
Oh sorry I quicky read your post and misread it. I am leasing and I have to pay more in insurance because the "owner" wants a reduced chance of it going past insurance and to the leasing company. Extra $400 per year in insurance for my case.
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