[Xeloj]

Let me put it simply because I know it's somewhat difficult for some people to picture it.

Lease: I just took this lease plan from someone who posted on the boards.

E90 Sedan 335i -
*Car/trim MSRP - $46,375
*36 months.
*10k Miles limit
*Leasing through BMW Financial
*$6,000 was due at signing
*$680 monthly payment for 36 months

Total paid: $30,480

Buy: Now I'll do the same car based on a 5 year financing term from what my credit union would offer me. Then we'll assume that like the leaser above, the buyer wants to sell his car at the 3 year mark and get a new one.

E90 Sedan 335i -
*Car/trim MSRP - $46,375
*36 months, financed.
*No mile limits(we own the car)
*Financing through credit union
*$6,000 down payment
*$720.26 Monthly payment for 36 months
*1 year remaining on warranty after 36 months

Total paid: $31,929.36
Still due: $14,445.64

Using these links as reference we'll calculate depreciation based on the CPO price of the car after 3 years, then we'll subtract another 5% of the value flat based on a private sale just to make it more releastic.
BMW 325i CPO Prices
More BMW 325i CPO Prices


Estimated value retained if CPO'd car: 91-92% (based on $33,000 CPO price on 325i above, from original MSRP of about $35,000 for that trim level). Let's subtract another 5% of value because we'll assume a private sale. This gives us an estimated private sale value for a $46,375 car of $39,882.

Let's even make it worse for the buyer by using the 18% depreciation statistic from BMW Magazine. That would give us an estimate private sale value of $38,027.

Now let's take what's still owed on the 5 year finance plan and subtract it from the depreciated cost of the car (this is assuming the person sells their car at the 36 month mark): $23,581 in your pocket!!.

Let's even make it much worse for the buyer and assume a 30% depreciation rate (maybe they put tons of miles on their car and got low balled): $18,017 after sale.

If you advertise that the car is still under warranty, and it has relatively low miles, it will be sold very quickly. My sister's husband sold all his BMWs through private sales without having to have the car for sale online or in the paper for more than 3 weeks.

That money, instead of going directly to BMW NA, goes straight into your pocket. It could go towards another car as a FAT down payment, or you could just buy a brand new car from another company, or just save it.

Leasing just doesn't make sense unless you can't afford to own the car.

[mrvuml]

Do we REALLY need another thread about this?
There is already this one...
http://www.e90post.com/forums/showthread.php?t=106716

[Xeloj]

That thread was more about what payments to expect, this is more about why leasing doesn't make sense.

I noticed you didn't address any of the points I made though. Very telling!

[smellthebeans]

Of course...thats why they offer leases...there is money to be made.

I think it only makes sense if you need a business right off for expenses

[BMW F22]

There is something wrong with your calculations. First of all, unless the person got ripped, it's ridiculous to pay $30,000 for a 3 year lease on a $46,000 car. The current residual for a 335 sedan is 64% after 3 years which is about $30,000. Thus the lessee should only pay $16,695 + tax (which should come out to about $20k or so for the 3 year lease). If you get a discount on it you will spend even less (the same is true for finance). However, with leases you only pay tax on the portion of the car that you use (depreciation).

Also, even if you financed for 5 years and then sell it back after 3, the residual value would still be the same (minus the difference in excess mileage). So Im a little bit confused by what you meant by "$23,581 in your pocket".

[mrvuml]

Originally Posted by Xeloj

That thread was more about what payments to expect, this is more about why leasing doesn't make sense.

I noticed you didn't address any of the points I made though. Very telling!

Leasing DOES make sense. This has been addressed in the OTHER thread where you posted the same thing. No need to rehash the same stuff again here. Seems like you are just too obstinate and self-absorbed to see other people's viewpoints.

[phantom330]

Originally Posted by Xeloj

Let me put it simply because I know it's somewhat difficult for some people to picture it.

Lease: I just took this lease plan from someone who posted on the boards.

E90 Sedan 335i -
*Car/trim MSRP - $46,375
*36 months.
*10k Miles limit
*Leasing through BMW Financial
*$6,000 was due at signing
*$680 monthly payment for 36 months

Total paid: $30,480

Buy: Now I'll do the same car based on a 5 year financing term from what my credit union would offer me. Then we'll assume that like the leaser above, the buyer wants to sell his car at the 3 year mark and get a new one.

E90 Sedan 335i -
*Car/trim MSRP - $46,375
*36 months, financed.
*No mile limits(we own the car)
*Financing through credit union
*$6,000 down payment
*$720.26 Monthly payment for 36 months
*1 year remaining on warranty after 36 months

Total paid: $31,929.36
Still due: $14,445.64

Using these links as reference we'll calculate depreciation based on the CPO price of the car after 3 years, then we'll subtract another 5% of the value flat based on a private sale just to make it more releastic.
BMW 325i CPO Prices
More BMW 325i CPO Prices


Estimated value retained if CPO'd car: 91-92% (based on $33,000 CPO price on 325i above, from original MSRP of about $35,000 for that trim level). Let's subtract another 5% of value because we'll assume a private sale. This gives us an estimated private sale value for a $46,375 car of $39,882.

Let's even make it worse for the buyer by using the 18% depreciation statistic from BMW Magazine. That would give us an estimate private sale value of $38,027.

Now let's take what's still owed on the 5 year finance plan and subtract it from the depreciated cost of the car (this is assuming the person sells their car at the 36 month mark): $23,581 in your pocket!!.

Let's even make it much worse for the buyer and assume a 30% depreciation rate (maybe they put tons of miles on their car and got low balled): $18,017 after sale.

If you advertise that the car is still under warranty, and it has relatively low miles, it will be sold very quickly. My sister's husband sold all his BMWs through private sales without having to have the car for sale online or in the paper for more than 3 weeks.

That money, instead of going directly to BMW NA, goes straight into your pocket. It could go towards another car as a FAT down payment, or you could just buy a brand new car from another company, or just save it.

Leasing just doesn't make sense unless you can't afford to own the car.

what about tons of loans where people are completely upside down? Loans work good for some people, leases are better for others. Really isn't a "right" answer.

[Kerosene Hat]

What interest rate are you using on the loan? At 6.5%, I get a monthly payment of $789 and change. Not much of a difference, but borrower creditworthiness (or access to good rates) makes a difference, too.

On that note, I am a proponent of purchasing unless you have a car allowance or something similar from the office...

[mrvuml]

Originally Posted by tomwid

Dude, I think you need to take a common sense class.

No body in their right mind would pay that lease. You're trying to compare something that has infinite permutations.

Buying or leasing can both be benificial, depending on the situation. Don't sit there and try to do an apples to apples comparision.

The truth is, do your research, do the math 100x on solid deals that you've negotiated BEFOREHAND. You can't sit there and make up shit and make up numbers w/o looking at the whole picture.

This isn't a forum for you to bash people that you don't agree with.

I agree, Thats an insane lease. Perhaps he doesn't really understand how to negotiate a good price on a car and not to pay max markups on lease rates. I'm paying well under $600 for a 335i Sedan with $0 down. Its easy to skew numbers to reinforce your own viewpoint. I'm sure we could all take the time to invent scenarios that benefit our side of the arguments. But thats not necessary because its an individual chice based on many factors.
I still don't understand why this thread was created unless its for Xeloj to try and stroke his own ego and provide yet another venue for him to clash with others.

[KanosWRX]

It is true it varies greatly person to person. Some people can't get good loan rates, some don't like going through the trouble of selling cars, some don't like investing their money. Some people just don't care at all about money (I wish that was me )

The thing is you have to compare both methods for yourself in your own situation. Everyones will be different. At first I thought I was going to Lease the car, then I did more research and talked to the dealer more and found purchasing would be better for me. I found in the end I would probably save a few thousand dollars. This is all assuming I sell the car after 3 years.

Of course I would be paying roughly 200 dollars more a month, but in the end I would come out ahead and thats all that mattered to me.

In the end just do the numbers and pick whichever fits your lifestyle. It only take a few hours to go over it all. And if you feel you don't have the time or skills to do that I am sure your dealer could help, although just make sure you worked out the purchase price before hand.

[Xeloj]

Originally Posted by phantom330

what about tons of loans where people are completely upside down? Loans work good for some people, leases are better for others. Really isn't a "right" answer.

That's a different situation. People who can't afford their financing usually have something happen to them during the loan term that changes their flow of money (medical, child coming) or else they wouldn't have gotten approved in the first place. Even then they can sell off their car and pay off the loan difference, BMWs hold value very well.

If that same person was leasing, they would have to find someone to assume their lease, which is much harder than just outright selling their car.

[Xeloj]

Originally Posted by Kenny@JleviSW

There is something wrong with your calculations. First of all, unless the person got ripped, it's ridiculous to pay $30,000 for a 3 year lease on a $46,000 car. The current residual for a 335 sedan is 64% after 3 years which is about $30,000. Thus the lessee should only pay $16,695 + tax (which should come out to about $20k or so for the 3 year lease). If you get a discount on it you will spend even less (the same is true for finance). However, with leases you only pay tax on the portion of the car that you use (depreciation).

Also, even if you financed for 5 years and then sell it back after 3, the residual value would still be the same (minus the difference in excess mileage). So Im a little bit confused by what you meant by "$23,581 in your pocket".

That lease is pretty average if you look around different forums. Maybe you guys are super duper deal makers, but I've seen even worse lease terms.

Also it doesn't matter about the residual value, no one is going to pay you the residuals in CASH for a lease, you just give the car back Big difference. If you own it, that money goes straight into your pocket. Not sure how that doesn't make sense.

[mrvuml]

Originally Posted by Xeloj

That's a different situation. People who can't afford their financing usually have something happen to them during the loan term that changes their flow of money (medical, child coming). Even then they can sell off their car and pay off the loan difference, BMWs hold value very well.

If that same person was leasing, they would have to find someone to assume their lease, which is much harder than just outright selling their car.

You don't necessarily have to find someone to assume the lease, you can sell the car and use the proceeds to pay off the lease balance.

[Xeloj]

Originally Posted by mrvuml

You don't necessarily have to find someone to assume the lease, you can sell the car and use the proceeds to pay off the lease balance.

Yeah, but on your CarFax report it will say "LEASE" in big bold letters. Cars with the lease tag on their car reports are usually harder to sell. Most smart buyers will ask for one, especially for a private sell. You simply don't know much about reselling.

[Doc E]

Originally Posted by Xeloj

Yeah, but on your CarFax report it will say "LEASE" in big bold letters. Cars with the lease tag on their car reports are usually harder to sell. Most smart buyers will ask for one, especially for a private sell.

dude, ok you got a problem with leases and people who lease.
This is what i could gather from a few of your threads.

post something positive or go to finance forums.

[mrvuml]

Originally Posted by Xeloj

Yeah, but on your CarFax report it will say "LEASE" in big bold letters. Cars with the lease tag on their car reports are usually harder to sell. Most smart buyers will ask for one, especially for a private sell. You simply don't know much about reselling.

I don't claim to. Like I said, I prefer to lease for the reasons previously stated, in particular that I don't want the hassle of reselling. Anyway, its become pretty obvious that you don't seem to know much about leasing.

Originally Posted by Bimmbo

dude, ok you got a problem with leases and people who lease.
This is what i could gather from a few of your threads.

post something positive or go to finance forums.

He seems to have a lot of problems with a lot of people about a lot of things.

[BMW F22]

Originally Posted by Xeloj

That lease is pretty average if you look around different forums. Maybe you guys are super duper deal makers, but I've seen even worse lease terms.

Also it doesn't matter about the residual value, no one is going to pay you the residuals in CASH for a lease, you just give the car back Big difference. If you own it, that money goes straight into your pocket. Not sure how that doesn't make sense.

With $6000 down and monthly payments of $680, you're probably thinking about the coupe, not the sedan. I just went to leaseguide.com and calculated a payment and it came out to be $430.72 with buy rate, $700 over invoice, and 64% residual.

As for your second point- when you finance, you pay the entire cost of the car. So when you sell it back you're just getting back part of the money that you've paid for it. It's not free money or profit that you make on the car.

[LENELSA]

Anyone who puts down $6000 for a lease is a f*%kin idiot........

[PoweredByRICE]

To be honest each has its advantages. I trade every 2 years but I only purchase..why?

Because I do not want to be restricted in miles..even though I never put more then 12k miles on in a year I just feel restricted in the one lease I had, rather then "paying to own it".

I should probably lease, but I'm a wierdo like that.

[PoweredByRICE]

Originally Posted by LENELSA

Anyone who puts down $6000 for a lease is a f*%kin idiot........

Thats another thing why I do not lease, I ALWAYS put down $6k+ in cash.

[Joonsup]

Xeloj, i suggest you read the numerous amounts of threads on lease vs buy on these forums. They really helped me in making my decision. The more you try to stick by your points, the more you'll get shot down because there's a lot of people with a great amount of knowledge when it comes down to lease vs buy and vice versa. Good luck though.

[mrvuml]

Originally Posted by LENELSA

Anyone who puts down $6000 for a lease is a f*%kin idiot........

Yup! Not that I would advocate doing so but putting a $6000 downpayment (CCR) into a lease drops the monthly payment by about $200 so if you take that $6000 downpayment out the OP's example you end up with a monthly payment of close to $900/mo which is insane for a $46K 335i Sedan. If I had put $6000 downpayment into my lease ($45K 335i Sedan) the payment would under $400/mo.