Lease VS Buy a New BMW

[Quicksilver]

What are the pro's and cons?? Everybody chime in.

[JV]

After the lease term expires you can move on to the next cool car that you covet without having to sell/trade in/lose your arse.

JV

[UCrewX5]

With a purchase you are in control of if/when to sell it, you don't have to worry about going over your alotted number of miles, and it's all yours after you have completed your payments.

[TQ2K]

If you want a new car every 3-4 years then go lease... I think leasing (2yrs.) is also good for first year production cars then if you like it then just buy a new (most bugs already fixed) one after the lease term end.

[MD4.6]

I personally don't believe in financing things that depreciate but if you must I think buying is better if you plan to keep the car longer - lease if you only plan on keeping the car a couple years. jmo

[SARAFIL]

Originally Posted by Quicksilver

What are the pro's and cons?? Everybody chime in.

Lease:
-Lower monthly payments (usually)
-Keep reasonable payments without requiring larger cash outlay at time of purchase
-Reduced risk of future market value for people that like to get new cars every 2-3 years anyways
-You can drive more car on the same budget
-Great if you like to get "all the options"... these items usually return pennies on the dollar in terms of resale, but in a lease they are residualized and you pay a small percentage
-You might qualify for some tax benefits
-If something happens that sours your relationship with the car, you know you can walk away without risking resale value problems

but,

-Mileage limits with expensive penalities for excess mileage
-Excess Wear and Tear charges... you better take good care of the car!
-You'll pay lots of interest, unless the car has really cheap lease rates
-No ownership interest in the car
-You're paying payments forever (if you keep leasing) and have nothing to "show" for it in the end
----but, you could also convert your purchase price and upkeep on an owned vehicle into a monthly "cost to operate" expense and compare this to your continous lease monthly payments
-If you decide to keep the car at lease end, it will have cost more than to just buy it upfront

[UCrewX5]

Originally Posted by SARAFIL

Lease:
-Lower monthly payments (usually)
-Keep reasonable payments without requiring larger cash outlay at time of purchase
-Reduced risk of future market value for people that like to get new cars every 2-3 years anyways
-You can drive more car on the same budget
-Great if you like to get "all the options"... these items usually return pennies on the dollar in terms of resale, but in a lease they are residualized and you pay a small percentage
-You might qualify for some tax benefits
-If something happens that sours your relationship with the car, you know you can walk away without risking resale value problems

but,

-Mileage limits with expensive penalities for excess mileage
-Excess Wear and Tear charges... you better take good care of the car!
-You'll pay lots of interest, unless the car has really cheap lease rates
-No ownership interest in the car
-You're paying payments forever (if you keep leasing) and have nothing to "show" for it in the end
----but, you could also convert your purchase price and upkeep on an owned vehicle into a monthly "cost to operate" expense and compare this to your continous lease monthly payments
-If you decide to keep the car at lease end, it will have cost more than to just buy it upfront

Nice list

[SANguru]

Actually, there are quite a few caveats to what is stated below. As with all equations there are variables. As a clear example on my wife's old 3.0, we made out pretty well on it given that we got in .00015 money factor, min driveoff and a BMW's overly pessimistic residual value of 3 years at 59%.

Let's just say at year 2.5 (which is usually the best time to get rid of a leased car since this is right before the flood of 3 year leases end thereby causing a big depreciation if you decide to sell), the actual residual value was much lower then market value of the car. So bottom line is we paid off the car and pocket $6K.

it's all in how you play the number..

Originally Posted by SARAFIL

Lease:
-Lower monthly payments (usually)
-Keep reasonable payments without requiring larger cash outlay at time of purchase
-Reduced risk of future market value for people that like to get new cars every 2-3 years anyways
-You can drive more car on the same budget
-Great if you like to get "all the options"... these items usually return pennies on the dollar in terms of resale, but in a lease they are residualized and you pay a small percentage
-You might qualify for some tax benefits
-If something happens that sours your relationship with the car, you know you can walk away without risking resale value problems

but,

-Mileage limits with expensive penalities for excess mileage
-Excess Wear and Tear charges... you better take good care of the car!
-You'll pay lots of interest, unless the car has really cheap lease rates
-No ownership interest in the car
-You're paying payments forever (if you keep leasing) and have nothing to "show" for it in the end
----but, you could also convert your purchase price and upkeep on an owned vehicle into a monthly "cost to operate" expense and compare this to your continous lease monthly payments
-If you decide to keep the car at lease end, it will have cost more than to just buy it upfront

[Thunder22]

Originally Posted by SARAFIL

Lease:
-Lower monthly payments (usually)
-Keep reasonable payments without requiring larger cash outlay at time of purchase
-Reduced risk of future market value for people that like to get new cars every 2-3 years anyways
-You can drive more car on the same budget
-Great if you like to get "all the options"... these items usually return pennies on the dollar in terms of resale, but in a lease they are residualized and you pay a small percentage
-You might qualify for some tax benefits
-If something happens that sours your relationship with the car, you know you can walk away without risking resale value problems

but,

-Mileage limits with expensive penalities for excess mileage
-Excess Wear and Tear charges... you better take good care of the car!
-You'll pay lots of interest, unless the car has really cheap lease rates
-No ownership interest in the car
-You're paying payments forever (if you keep leasing) and have nothing to "show" for it in the end
----but, you could also convert your purchase price and upkeep on an owned vehicle into a monthly "cost to operate" expense and compare this to your continous lease monthly payments
-If you decide to keep the car at lease end, it will have cost more than to just buy it upfront

your cons are a little off

- extra miles cost .16 a mile, if you go over your alloted mileage it's not expensive to purchase the extra miles as long as you do it before the lease is up.
- lease rates are usually 1/2 of a finance rate. Current traditional finance rates are ~ 6%, lease rates are ~ 2%.
- i'm not sure what you mean by "ownership interest"...
- "you're paying payments forever" - i don't understand that one either. Sure if you ALWAYS lease, you'll have a payment, but those who get a new car every 3-4 years and fianance/trade in have the same issue.
- if you decide to keep the car it will cost more - that's not necessarily true, considering a lease rate is much lower than a traditional finance rate, and that a smart leasor will NEVER put any money down on a lease, this scenario is close to being a wash.


That being said, I think that the most important point that hasn't been made yet is that leasing is for someone who can predict their driving habits and life situation for the duration of the lease. Someone who is in the position of having their driving habits drastically altered during the course of a potential lease, well, leasing is not for you. Leasing is also not for someone who has the mod bug. Leasing is not for someone who does not take care of their vehicle.

Leasing IS for someone who wants a better car than they could/choose to comfortably buy through traditional financing. Leasing is for someone who flips cars every 2-3-4 years and is comfortable with having a monthly car payment every month. Leasing is for someone who owns a business and can take advantage of tax breaks. Leasing is for someone who wants to "test" a high end car before potentially buying one. Leasing is for someone who wants a lower monthly payment than they would realize compared to traditional financing.

[ChristopherM3]

and the biggest con of all..............


You can't MOD a leased X5 like a purchased X5.......