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BMW 3-Series (E90 E92) Forum > BMW E90/E92/E93 3-series General Forums > New & Preowned BMW Ordering / Pricing / Tracking Information Forum (including European Delivery) > Lease versus Buy?.........find out here....



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      03-11-2008, 06:45 PM   #1
SunnyBoo
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Lease versus Buy?.........find out here....

Since a lot of members here lease their cars, I thought this would be a great article to read on "Lease versus Buy" from Financial Guru Suze Orman................

http://biz.yahoo.com/pfg/e16buylease/index.html
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      03-11-2008, 06:56 PM   #2
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WOW! Talk about someone who got burned on a lease and has no clue. Woman Scorned? I guess she has never heard of Gap ins. which BMW finance includes on all of their leases and most other lease companies do too. If not, It is easy to get. I have lost any confidence in her advice now! She has been burned and is slinging crap!
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      03-11-2008, 06:59 PM   #3
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Yawn.. Another one sided argument. 90%+ of BMW's and Mercedes are leased and mostly by doctors and lawyers and other small business owners since leasing has tax benefits.

Last of all BMW and Mercedes residual values dont represent real market values and the majority of the leased cars are sent back to the manufacture since the residual stated in the lease is way higher than market value.

If you dont keep your cars long and want a new one every few years leasing is the way to go ^^^ again above its about the residual values. Over at porsche currently you can lease a caymen for 3 years cheaper than leasing it for 2 years since porsche set the residual for the 3rd year higher than the 2nd year.. Makes no sense but helps sell the car.

Leasing works great again if you own your own business and can take advantage of the tax write offs, if you like to change your cars up every few years. And if your plain smart to realize a BMW or Mercedes now days wont last longer than 4 years without having a lot of major issues.
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      03-11-2008, 07:00 PM   #4
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I totally agree with that article. Like she said, there are the die-hard lease people that think a lease is the only way to go...... that is if you don't have mula . jk about the last part
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      03-11-2008, 07:13 PM   #5
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Being in the car business, the only reasons that I would not lease would be if:

1. I needed a truck (and was going to use it like a truck)
2. if the money factor was too high and the residual was too low (not a good deal)
3. if I knew that I was going to put high miles or trash the vehicle.

Why "own" a depreciating asset. Buy real estate-lease cars.

Oh yeah....know the lease parameters before you sign the contract (miles, gap ins. etc.)
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      03-11-2008, 07:13 PM   #6
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There is nothing right or wrong about leasing. There are even some big issues about buying cars outright. To be honest anything but property and sounds investments are considered risks no matter how their paid for. This 2k laptop I'm typing on right now has an expired warranty. If it were to crap out I'd be out my 2k.

People will do what they want and they don't need a psycho Suzy Orman to tell them what to do. Half the stocks that crazy lady pushes on her show is a risk. She's just guessing like everyone else, she's just been able to dodge the big bullets so far.
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      03-11-2008, 07:15 PM   #7
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Talk about a jaundiced eye! I am 100% diametrically opposed to her viewpoint. She talks about the perils at the end of the lease. What? You know where I've gotten burned the worst? Buying! I don't keep cars for forever and almost every time (even after buying a used car and trading it in a couple of years later) I have had to kick and scream to get out of the car without being upside-down. Where does she address that in her diatribe? I lease because I'll never have the problem of being upside-down and because I have a warranty throughout the course of ownership. Does she place a value on being able to accurately predict your monthly car costs? Let's see: I know my lease payment, my insurance payment, my gas costs, and my maintenance costs ($0). Let's say I buy used as she advocates: I know my car payment, my insurance, payments, and my gas costs. My maintenance costs? Which will be more financially devastating? The possible penalties at lease-end? (If you abide by the terms of the lease, and I do, there is none.) Or the clutch you have to unexpectedly replace? (While still having a car payment no less. Want to unload it so you don't have to pay for the repair, you're upside-down. What do you do?)

I'm sorry, in my experience I've never regretted leasing a car. The only downside I've seen is if you want to get out of the car early. I can put up with a car for three years, even if I only think it's just OK.
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      03-11-2008, 07:16 PM   #8
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Quote:
Originally Posted by beefybmer View Post
Being in the car business, the only reasons that I would not lease would be if:

1. I needed a truck (and was going to use it like a truck)
2. if the money factor was too high and the residual was too low (not a good deal)
3. if I knew that I was going to put high miles or trash the vehicle.

Why "own" a depreciating asset. Buy real estate-lease cars.

Oh yeah....know the lease parameters before you sign the contract (miles, gap ins. etc.)
+1M I'd rather pay for what I use!
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      03-11-2008, 07:18 PM   #9
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Quote:
Originally Posted by SunnyBoo View Post
Since a lot of members here lease their cars, I thought this would be a great article to read on "Lease versus Buy" from Financial Guru Suze Orman................

http://biz.yahoo.com/pfg/e16buylease/index.html
Suze Orman is far from a "financial guru". My wife, with an MBA (emphasis Finance), Masters degree in Finance, and a Ph.d in Finance is a Finance guru. She thinks Suze Orman is an idiot. Same for that Dave Ramsey guy. Both give extremely simple minded advice. That should ruffle a few feathers.

Suze's premise in the article is people lease to get more car for less payment than they otherwise could if they were to buy. I'm sure that may be true for some, but that is foolish blanket statement to make. I (and I'm sure most here) can easily afford to buy a $50K dollar car. However, I like to drive a brand new car every couple of years, I don't rack up the miles, and I don't modify my car very much. Why would I buy a car if I'm just going to sell it in 24 months? I can keep my money and do other things with it than have it "invested" in a depreciating asset. If you are leasing because you want an expensive car, but you can't afford it otherwise, you're probably already in over your head in other aspects of your life too. It will all come crashing down eventually anyway for those people.
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      03-11-2008, 07:18 PM   #10
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Quote:
Originally Posted by beefybmer View Post
Being in the car business, the only reasons that I would not lease would be if:

1. I needed a truck (and was going to use it like a truck)
2. if the money factor was too high and the residual was too low (not a good deal)
3. if I knew that I was going to put high miles or trash the vehicle.

Why "own" a depreciating asset. Buy real estate-lease cars.

Oh yeah....know the lease parameters before you sign the contract (miles, gap ins. etc.)
Sorry, I forgot about the obvious.

4. If I modify the car! Ha HA
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      03-11-2008, 07:24 PM   #11
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      03-11-2008, 07:26 PM   #12
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Of what? Suze Orman?!? OK.
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      03-11-2008, 07:28 PM   #13
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Rules has changed since the last time. Residual is now 56%, was 60% in 2005.

So I bought, this time.
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      03-11-2008, 07:29 PM   #14
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One way to justify a lease--"I have to have a new car <= 36 mos., no matter what it costs me." That pretty much is end of story and a win for the leasing co.

Our bosses get a car allowance of $750/mo., again, why not lease? They cannot pocket the money, if they could, they would surely put down x to get their monthly payment down to $750, and have something to show at the end. If it's not your money, and it's use it or lose it, why not lease? For the rest of us, not good.
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      03-11-2008, 07:37 PM   #15
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I don't care one way or the other, however the one thing a lease can't do is make you feel like an owner. The things that I like about buying is that it's mine to do what i want with, a lease is only a loaner.

You have to hold a car for the life of the loan to make buying worth it, otherwise a lease s the better choice. I buy every 4-5 years and have never been burned on resale, in fact I get top dollar for my used cars. Where I work 3 of my old cars still are parked in the employee lot. All sold for above the market value for a excellent example at the time, I also had several people in line to buy each of them.
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      03-11-2008, 07:39 PM   #16
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Quote:
Originally Posted by calleballe View Post
So pointless. Did you just feel the need to post in this thread?
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      03-11-2008, 07:56 PM   #17
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Quote:
Originally Posted by The Cleaner View Post
I don't care one way or the other, however the one thing a lease can't do is make you feel like an owner. The things that I like about buying is that it's mine to do what i want with, a lease is only a loaner.

You have to hold a car for the life of the loan to make buying worth it, otherwise a lease s the better choice. I buy every 4-5 years and have never been burned on resale, in fact I get top dollar for my used cars. Where I work 3 of my old cars still are parked in the employee lot. All sold for above the market value for a excellent example at the time, I also had several people in line to buy each of them.
+1..............My friend leases a GS350 and is always afraid to take it anywhere (overmileage, wear and tear, dings & scratches etc......)..........Whenever we go out, most of the time it's me or my other friends driving...........and that is THE reason I buy rather than lease my car because I don't want to feel like I borrowed someone's car..........It's painful to write a $15K check for the down payment ($475 pmt for 60mos), but the feeling that the car is mine more than make up for it............just my 2 cents...........
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      03-11-2008, 08:06 PM   #18
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Quote:
Originally Posted by SunnyBoo View Post
+1..............My friend leases a GS350 and is always afraid to take it anywhere (overmileage, wear and tear, dings & scratches etc......)..........Whenever we go out, most of the time it's me or my other friends driving...........and that is THE reason I buy rather than lease my car because I don't want to feel like I borrowed someone's car..........It's painful to write a $15K check for the down payment ($475 pmt for 60mos), but the feeling that the car is mine more than make up for it............just my 2 cents...........
Like the person above you... your both confused.. You dont own the car either... The bank still does.. The only way you really "own" a car is if you fully paid it off with no loan or no monthly payment..

If like your house, you have a mortgage you dont own it until its payed off. And in some places in and some cases its better to rent than to own. You rent a house in most cases if you are going to have it less than 5 years and between 5-10 years of ownership you have to know the market to make the right decision. Leasing and financing a car are similar to rent or buy, you have to calculate both of them, if you dont then you are screwing yourself by only letting you see a one sided story. Generally if you drive less than 15k miles a year and only keep you cars for 3-4 years leasing is always better than buying, if you drive more and like to keep your cars longer than buying/financing is always better.

But as someone said "why put your money in a depreciating asset" I 100% agree with this and laugh at people for paying $30k cash for a car thats going to lose 25% of its value the 1st year and 10-20% the second year, rather than putting $1,500 down and investing the rest of that cash and earning at least a garunteed 6% and if you invest it in the market you are looking at 10% return a year at least.


And your lexus friend didnt do his homework...
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      03-11-2008, 08:14 PM   #19
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She says to keep your car for 9 years. Yeah, right. She is one of those people who looks at a car as an appliance, to get from a to b. I love cars and always will have a decent ride.
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      03-11-2008, 08:16 PM   #20
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Quote:
Originally Posted by xPaulBaiLeyx View Post
So pointless. Did you just feel the need to post in this thread?

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      03-11-2008, 08:28 PM   #21
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Quote:
Originally Posted by Icedog_16 View Post
Of what? Suze Orman?!? OK.
Great, In the red trunks in the left corner. S. Orman. And in the blue trunks in the right corner we have Mr. H. Onest

Let the fight begin. In the midst of it all, tempted consumers (Most living beyond their means, look at the U.S. deficit, this needs to be payed off someday, by US either from taxes or other fees on consumer goods, either indirect through corporations or direct by increased prices)
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      03-11-2008, 08:35 PM   #22
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Suze Orman is actually a quite small minded individual. She gained her popularity by preaching very well know facts in the beginning and as time went on she "thought" that she is in fact proposing advise that is unique and good. If you only goal in life is to save money she is probable the best adviser you can find.
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