[stle57]

My husband and I have a dilemma, and we need your advice. We know we probably won't keep the 335i coupe for more than 4 years because we might be starting a family. My husband is worried that we are spending money in something that is not an asset, so we are considering leasing. However, with the finance rates being so low, would it be better to finance instead of lease? All the online comparisons between leasing and financing(.09% rate), seem to show that the monthly payments are the same. The only difference is that we would put 5K down for a lease, and 10K for financing.

If we were leasing an '09 335i coupe, then it would probably be a clearer choice to lease the car. Also, we are VERY VERY new to leasing so we still fuzzy as to how to calculate things.

Any opinions/thoughts?

THANKS!

[RMA]

Being that BMW is offering 0.9% it is a "no brainer". If you ended up leasing you would most likely pay a conservative 5% interest or even higher and now they ahve this "multiple security" deposit down payment that buys down the interest rate (which you get back at the end of the lease). Just purchase (finance) the car and be done with it

[RMA]

That is what I did by the way when I picked up my car a few weeks back. $10k down $699 a month @ 60 months (0.9%). Could not be any happier

[kennyg]

I picked up on Monday. Did the math and even if you only want to keep the car for 3 years or so, still better to buy at 0.9% instead of lease, and then trade-in after 3 years. The gamble you take with the open market in three years shouldn't equate to the money you would surely drop on increased interest and low residuals on the '08, unless you are bad at selling cars or take the dealer's first trade-in offer. Let's say 3 years from now you want to trade-in - find out the residual number, add a precentage, and start talking trade-in. Even if the dealer bargains you down to residual, you did better than a lease because you saved a few thousand dollars in interest.

I bought for just the $500 deposit down, no additional money down, 0.9% for 60 months. I have excellent credit, 750+.

[gIzzE]

On 0.9% interest I would put down as small a deposit as allowed.

Just buy the car with no deposit, and do it over as long a term as allowed.

If you need to bung a grand or two into it when you sell then do it then, but don't tie your money up as a deposit when there is .9% interest on offer!!

[addy85]

if you lease, I wouldn't recommend putting down 5 grand

[awei130]

purchasing by the end of the month at 0.9% APR makes much more sense to me than leasing =p

[GregE92]

I usually get bored with whatever car I have within 2 years. To me, lease makes more sense because I have a guaranteed buy-back.
It's a nightmare to try and sell a car on my own, I end up getting screwed no matter what. (OK, that's partially because I have an eccentric taste for cars and happen to buy models that are not in demand.)
Greg

[Big Windy]

Originally Posted by GregE92

I usually get bored with whatever car I have within 2 years. To me, lease makes more sense because I have a guaranteed buy-back.
It's a nightmare to try and sell a car on my own, I end up getting screwed no matter what. (OK, that's partially because I have an eccentric taste for cars and happen to buy models that are not in demand.)
Greg

this is the only case where i would recommend a lease (where you want a new car every 2 years or something like that). if you are worried about something being an asset, tell your husband that in case of a finance, at least your money is going towards purchasing the car. with a lease, the money is going towards nothing...and you are going to pay a much higher %

[kennyg]

Originally Posted by GregE92

I usually get bored with whatever car I have within 2 years. To me, lease makes more sense because I have a guaranteed buy-back.
It's a nightmare to try and sell a car on my own, I end up getting screwed no matter what. (OK, that's partially because I have an eccentric taste for cars and happen to buy models that are not in demand.)
Greg

I see your point - but I'm guessing worst case scenario the dealer you buy the car from will give you a couple thousand under what the BMW lease residual would be - in that case you would break even on buy vs. lease even on a bad trade-in - plus you can deduct the cost of the trade-in from the sales tax you have to pay on the new car. I'm guessing a trade-in isn't much more hassle than a lease if you just accept their first trade-in offer - no haggle, no hassle, you lose some money but not likely more than the lease deal.

I think the 0.9% APR is just an amazing deal. Almost every savings account out there should earn a "minimum" of 2% interest right now, so if you put no money down and let it sit in your account for 60 months, the interest it earns in savings is greater than the interest charged on your loan - and you end up in a good situation.

Given that you may only keep it for 2 years, the difference in what you save in buy vs. lease may be roughly $1500 or so and you avoid the need to haggle in a trade-in. But even if you just accept the first trade-in offer, I'm guessing you would still come out on top buying when financing is set at 0.9%.

[goofygrin]

I've been contemplating the same thing for the last week or so.

I had a pretty good spreadsheet with everything calculated out, but it's on my wife's computer.

From what I remember off the top of my head, a 335i coupe (which has a lower residual and higher MF), using the 7 MSD program with 0 down, well optioned, was around $650-700 (including 6.25% tax in Texas). The multiple MSDs + acq fee would be ~$5000, but you'd get all of that back (minus the acq fee and any wear and tear on the car).

The 0.9% with no down payment and rolling the TT&L (as is standard in Texas) into the payment was something over $800/mo.

After 36 months, the outlay for the lease was ~$22k and the outlay for the purchase was $29k. However you had, in theory, built some equity in the purchase of anywhere from $20-10k depending on how you valued the car.

Honestly if you were going to keep the car 4 years, then I think the purchase way makes more sense right now. If you were going to keep it 3 years or less, then I think the lease is the way to go.

Or, if you are really glutton for punishment, go test drive a Mazdaspeed3 (ignore the look, it's actually a quite decent car) which you can buy for $23k -- which would be the same amount you'd put out for the lease on the 335i and less than the note payments on a purchase and you'd own it outright.

Sigh. We're still looking for the perfect 335i coupe and then we'll really have to figure out what we want to do.

[gIzzE]

Originally Posted by addy85

if you lease, I wouldn't recommend putting down 5 grand

If leasing I would always stick as small a deposit down as possible, unless it is a lease purchase. If it is a lease hire though, then why put a deposit in??

[BMW F22]

Usually if you will only keep the car for 2 or 3 years I would say lease it. I can't speak about 4 years because I don't know how much it will depreciate within that 1 year difference. However, my speculation is that when the economy picks back up the resale value on these cars will go back up (it dropped a few % or so) making it a better choice to finance (buy it).

[Houman21]

In this market 2 years or less = lease
2 years + = Finance (@.9%)