Leasing Used?

bigworm · #1 05-31-2006, 05:33 PM

Hi everyone, this is my first post.

I have a Ford Expedition that I want to get rid of and want to pick up a X5. Here's my dilemma, I am kinda cash strapped.

Has anyone thought about leasing a used X5 to keep the cost down? What are the advantages/disadvantages? In the OC through searching the local dealerships an 2002-2003 X5 with lower miles is in the low 30's.

This will be my first car purchase or lease, so I am new to the whole thing. I am just looking for additional options rather than having to put a huge down payment, I would like to save the $$ from the sale and put it into something else...

Can anyone out there give me any tips? Are there any years I should stay away from?

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cary · #2 05-31-2006, 07:25 PM

Don't lease, especially used. Assuming you have decent credit, you can finance 100% of the vehicle purchase so you don't need a cash down.

Before purchasing, you should ask yourself a few questions. Can you afford this car? I don't mean can you just make the payments, but can you afford maintence, repairs, insurance, gas, etc, or should you be looking for something less expensive. As a rough estimate, figure you are going to spend on average $150-200 per month in maintence/repairs for a 3.0. Also, the Ford should give you a decent chunk towards the down payment, or are you upside down in that car? Bottom line, don't buy a car you can't afford.

I am 33 years old, make 6 figures, and still have never bought a car that costs more than $21k. That money has instead gone to other little things like buying a house, saving for retirement, etc.. Remember the car will go down in value and get used up, so any money you spend on it goes down the drain over time. If you are young, don't go hawking yourself into debt to purchase a car.

bigworm · #3 05-31-2006, 07:52 PM

Thanks for the reply. I don't owe anything on the car, it's a 2000 with about 67,000 miles on it. I just want to get rid of it before I start having to pump money into it, I can see it coming. It's been a good car, just time for a change and it's getting older.

I do have great credit so getting a good loan shouldn't be a problem. Out of curiosity what kind of maintenance can I expect that would cost me $150-200 a month? If I get a certified bimmer with a warranty would I still have to worry about that?

Why wouldn't I want to lease if I can keep the payments low and then just get rid of it after 3 years? I would have the $$ that I would use on a down for something like a house or just have in a reserve interest bearing account.

The other car I would consider is a Toureg and they cost just about as much as the X and being tall, I fit better in in X.

DINANM3 · #4 05-31-2006, 07:57 PM

its cheaper to lease new.

nicolaasdb · #5 05-31-2006, 07:58 PM

lease a X3 they have great deals on them right now! 4K down and 160 per month...maintenance is free for the first 50K mls.

And leasing is the way to go...why do you want to own something that goes down in price...finance the trade-in part...have to deal with the hassle of trading it in...and drive an old model....a car cost money..a lot of money and is a bad investment!

I leased my X5 for 2 years paid 16K down and pay 230 a month (end up being about 22K total which is about 875 p/mnth) which is a very small amount to keep my wife happy!!
After 24 months I give the car back...pay $350 lease return fee...and I can go anywhere and get myself another car....remember the car is new 52K and why would you pay the interest over the 30K you are not using...so you can say you own it?? keep the owning part for a house!!

cary · #6 05-31-2006, 08:00 PM

First, congragulations on being a newbie that actually correctly referred to the car as a bimmer, most get it wrong and call it a beamer (motorcycle).

In years past it was not a good deal to lease used vehicles because they would set the residual values very low and have poor money factors. Maybe it has improved, but I doubt it. On new leases, the depreciation is easier to figure out.

Even if you purchase a CPO car, you are still going to have to pay for service and some items (like tires, wipers, and other items) that are not covered by the CPO warranty. Figure $100 a month.

If you want to do something close to leasing with a used X5, just buy with a 100% 6 year loan. After 3 years, the car will be worth about half as much and the loan will be about half paid off. You can then sell the car for approximately the loan amount while having minimized your out of pocket cash and cash flow during ownership.

Do not buy a toureg, they have been a nightmare in reliability (see consumer reports) and they depreciate like mad. If you want a small to medium SUV that holds its value well outside the X5, check out the Lexus RX 300 and 330.

nicolaasdb · #7 05-31-2006, 11:03 PM

wipers are actually in the maintenance contract! Go figure...where do you guys come up with 1200 bucks a year in maintenance?? Tires when driven normal last for at least 30K.....that is 2 years of driving....leasing a new car is the way to go...leasing a used car isn't...maybe you have to sit down with an accountant and let him calculate it all for you....and trying to sell someone who want a German car a Lexus??? Sorry but if you like BMW, MB, Porsche why the hell would you like a faceless, characterless car (a MB clone company...but without the class) like a Lexus?? Sorry for coming on a little strong....but isn't the reason for buying a German car..the legacy and 50 years of innovations?? I am probably going to get a lot of slack for "speaking" so bundly and I know Japanese cars are great and reliable etc....I just hardly (I would say never) see an older (10-20yrs) japanese car and think WOW...still looks great. But I can still appriciate an old MB, BMW, Corvette etc.

cary · #8 06-01-2006, 12:58 PM

Quote:

Originally Posted by nicolaasdb

wipers are actually in the maintenance contract! Go figure...where do you guys come up with 1200 bucks a year in maintenance?? Tires when driven normal last for at least 30K.....that is 2 years of driving....leasing a new car is the way to go...leasing a used car isn't...maybe you have to sit down with an accountant and let him calculate it all for you....and trying to sell someone who want a German car a Lexus??? Sorry but if you like BMW, MB, Porsche why the hell would you like a faceless, characterless car (a MB clone company...but without the class) like a Lexus?? Sorry for coming on a little strong....but isn't the reason for buying a German car..the legacy and 50 years of innovations?? I am probably going to get a lot of slack for "speaking" so bundly and I know Japanese cars are great and reliable etc....I just hardly (I would say never) see an older (10-20yrs) japanese car and think WOW...still looks great. But I can still appriciate an old MB, BMW, Corvette etc.

A few points:

1) We aren't talking about new car leases here, he asked about used. Most used BMW's are not going to include service.

2) Buying a German Car vs. a Lexus. Think again. There are a lot of loyal BMW owners that have defected to Toyota/Lexus products because of the declining quality of BMW products. I still prefer the driving dynamics of BMW's over the Japanese cars. People used to buy BMW and Mercedes products because they lasted forever (200,000+ miles), were reliable, and held their resale value well. Now most all Honda's and Toyota products will easily go 300,000+ miles (I know of a guy running an 87 accord for a courier service with 480k miles on the original engine), hold their resale value as well or better than the German Cars, and are more reliable.

Mercedes has fallen from grace, their new products stink when it comes to reliability. BMW has a lot of reliability issues, in part because of their move to long service intervals with free maintence to decrease the cost of ownership (which was done because of increased pressure from the Japanese).

German auto superiority is a myth. If you believe otherwise you are fooling yourself. The most popular car in germany now is the Honda Accord. Lest you think I am some type of German Car Hater, my BMW/Mercedes ownership experience starts more than 20+ years ago, between my wife and I we have had 5 BMW's and 2 mercedes, starting with a 1967 1600. BTW, I have defected, my SUV is a Toyota Landcruiser (I swore I would never buy a toyota), the X5 is my wifes.

LVGirl · #9 06-01-2006, 01:34 PM

You could also try Leasetrader.com or Swapalease.com. Sometimes they have decent deals to assume a lease on a vehicle that is still under warranty.... just a thought ...

bigworm · #10 06-01-2006, 02:49 PM

Why would doing a 3 year lease on a 03-04 model be a bad deal? Is it because the residual value will be so low and the car will have depreciated too much?

Would I be better off just purchasing a used car and using the money from my sale toward the purchase.

When to bimmers start to need more work done on them...ie brakes and general maintenance?

I don't want to spend $600 a month my payments.

Any other ideas out there?

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