[Dan203]

So right now I own an '08 135i that I bought brand new when they were first released. (year one of the one) I work from home and live in a small town so I put maybe 3-4k miles a year on the car. It's 7-1/2 years old now and has under 28k miles. However, because of it's age, it's starting to pick up annoying ticks and rattles which are making me consider trading it in. I wouldn't mind something a little bigger, with 4 doors and a few more bells and whistles, so I was thinking about getting a 340i this time around.

But I can't decide if I should lease or buy. I really wouldn't mind getting a new car more frequently, but I really hate the whole car buying process. Although a big part of why the car buying process sucks so bad is dealing with the trade, and I think leasing pretty much eliminates that, so maybe it's better?

What do you guys think? Is leasing a good idea for someone like me that drives very low miles and hates dealing with the car buying process? Do you still have to deal with all the negotiation and upsell when doing a lease? What about at the end of the lease is the trade in part easier then trading in a car you own?

The money part isn't really an issue either way unless there is a huge difference in one over the other. I'm willing to pay a little extra to save myself some time and effort if leasing actually provides that.

[dalto]

The process of leasing a car and buying a car is virtually identical.

At the end of the lease you just give the car back so that part is easier.

Given how few miles per year you drive your car I would probably just buy it unless the idea of getting a new car every three years is very interesting to you.

[Dan203]

Originally Posted by dalto

Given how few miles per year you drive your car I would probably just buy it unless the idea of getting a new car every three years is very interesting to you.

The idea of getting a new car every 3 years is great, the process of doing it not so much. I was hoping that leasing a car made the process easier somehow.

[tboooe]

Oh boy here we go...this will be almost as good as the automatic versus manual thread. opc orn:

Bottom line...do what you think is best for your finances and personal goals. There is no right or wrong answer.

[Dan203]

Financially it doesn't really matter to me. Unless there is a huge multi thousand dollar swing by doing one over the other I don't really care. I paid full price for my last car just to avoid the hassle of having to negotiate. I'm mainly looking for the simplest experience. The process of buying a car SUCKS and I thought that maybe doing a lease would make it easier. Doesn't sound like it really does, other then eliminating the trade.

Speaking of which... If I have a high value trade how does that effect a lease? According to KBB my car is still worth $18k. I doubt they'll give me that much but even if they give me $14k can I apply that to a lease? Is there any real benefit in doing that, other then lower payments? Would I be better off just doing the trade as a separate cash deal? (if they'll even do that)

One more question about leasing... do you get any positive credit for going under the allotted miles? I see the lowest option offered on BMWs website is 10k miles a year. As mentioned above I'll likely have about 1/3 of that when the lease is up. Will that benefit me in any way, or just them?

[Polo08816]

Originally Posted by Dan203

Financially it doesn't really matter to me. Unless there is a huge multi thousand dollar swing by doing one over the other I don't really care. I paid full price for my last car just to avoid the hassle of having to negotiate. I'm mainly looking for the simplest experience. The process of buying a car SUCKS and I thought that maybe doing a lease would make it easier. Doesn't sound like it really does, other then eliminating the trade.

Speaking of which... If I have a high value trade how does that effect a lease? According to KBB my car is still worth $18k. I doubt they'll give me that much but even if they give me $14k can I apply that to a lease? Is there any real benefit in doing that, other then lower payments? Would I be better off just doing the trade as a separate cash deal? (if they'll even do that)

One more question about leasing... do you get any positive credit for going under the allotted miles? I see the lowest option offered on BMWs website is 10k miles a year. As mentioned above I'll likely have about 1/3 of that when the lease is up. Will that benefit me in any way, or just them?

...how do you have over 1000 posts and ask such basic questions about leasing/buying?

[Dan203]

Originally Posted by Polo08816

...how do you have over 1000 posts and ask such basic questions about leasing/buying?

I was very active when I ordered my 135i. But mostly it was stuff about tracking the shipment and talking about a car no one actually had at the time.

I've only ever bought 3 new cars in my life and all were financed. I've never leased.

[BavarianFanatic]

With that mileage I recommend buying. Your lease cap is based on projected depreciation. You'll over pay over the term of the lease and the bank will make a killing when they sell it.

You can still turn it over every three years. It's very unlikely you'll ever be upside down.

[dalto]

Originally Posted by Dan203

Financially it doesn't really matter to me. Unless there is a huge multi thousand dollar swing by doing one over the other I don't really care. I paid full price for my last car just to avoid the hassle of having to negotiate. I'm mainly looking for the simplest experience. The process of buying a car SUCKS and I thought that maybe doing a lease would make it easier. Doesn't sound like it really does, other then eliminating the trade.

Exactly, not easier. In fact, if you really dislike negotiating than a lease is probably more complicated because you have to deal with money factors. They essentially are the same as interest rates but it is a little less obvious.

My advice regardless of lease or buy is to do the whole deal over email. I find it makes the car buying experience much less painful.

Originally Posted by Dan203

Speaking of which... If I have a high value trade how does that effect a lease? According to KBB my car is still worth $18k. I doubt they'll give me that much but even if they give me $14k can I apply that to a lease? Is there any real benefit in doing that, other then lower payments? Would I be better off just doing the trade as a separate cash deal? (if they'll even do that)

It will just lower your payments, a lot. In most states you would be better off just selling your car outright if you are going into a lease. You might come out better from a tax perspective financing if you are in a trade difference state.

Originally Posted by Dan203

One more question about leasing... do you get any positive credit for going under the allotted miles? I see the lowest option offered on BMWs website is 10k miles a year. As mentioned above I'll likely have about 1/3 of that when the lease is up. Will that benefit me in any way, or just them?

You get a credit from BMW for being under miles but it is tiny. I think it maxes out at $200 or $300.

[bovino]

I tire of vehicles after a few years and so leasing allows me to have a new car more frequently. Cars lose value quickly, so you have to assess for yourself what makes financial sense and balance it with what you enjoy. For us, continual payments with new cars every 3 years has more value to us.



Good luck!

[Buzzo]

Originally Posted by Dan203

Financially it doesn't really matter to me. Unless there is a huge multi thousand dollar swing by doing one over the other I don't really care. I paid full price for my last car just to avoid the hassle of having to negotiate. I'm mainly looking for the simplest experience. The process of buying a car SUCKS and I thought that maybe doing a lease would make it easier. Doesn't sound like it really does, other then eliminating the trade.

Speaking of which... If I have a high value trade how does that effect a lease? According to KBB my car is still worth $18k. I doubt they'll give me that much but even if they give me $14k can I apply that to a lease? Is there any real benefit in doing that, other then lower payments? Would I be better off just doing the trade as a separate cash deal? (if they'll even do that)

One more question about leasing... do you get any positive credit for going under the allotted miles? I see the lowest option offered on BMWs website is 10k miles a year. As mentioned above I'll likely have about 1/3 of that when the lease is up. Will that benefit me in any way, or just them?

If you simply don't want to negotiate at all the dealer is going to make thousands regardless of whether you buy or lease.
That said, finding out market value of the car you want to buy/lease and the one you're trading in is not too difficult.
My usual process: Edmunds/truecar/this forum will give you the new car value, a visit to a (friendly) bodyshop (with a tip in hand) to pull your VIN will give you wholesale and retail value of your car. In my experience KBB's 'Excellent Private Party Value' is just below wholesale value, which is near the bottom of what I would accept for trade in.
Determine the maximum you are willing to pay for the new car and the minimum you are willing to take for your trade.
Craft an email specifying the car you want to buy/order asking for a price relative to the invoice.
Find all dealerships within a radius of how far you are willing to travel. Call their sales department to introduce yourself and announce the imminent arrival of your email and solely communicate by email after to keep a paper trail and minimize the pressure (stalling tactics, two vs. one etc). Once you have come to an agreement on purchase price, mention the trade in. You will have to go there for an appraisal, but again no need to negotiate in person.

[spuntyb]

If you plan to keep beyond 3 years and/or 50k miles, financing might make more sense. But honestly, they are both just big pies. One might be apple, one might be peach, but you can slice them up to look essentially identical. Just depends on the offers you're getting and what your goals are. New car in 3 years, or want to keep for 5+ years?

I've personally never been able to make financing new to make sense for my purposes, but that's just me. YMMV

[BavarianFanatic]

One thing to consider as well is your state's sales tax programs. Here in PA, a lease is considered a rental which is charged a sales tax rate that's 50% higher than the standard sales tax.

Another thing to consider, assuming it's relevant, is the way each is reflected on your credit report. For a loan, the entire loan balance is shown as an obligation whereas a lease only shows the depreciation amount that you're paying over the term of the lease.

[S4NoMore]

Originally Posted by Dan203

Unless there is a huge multi thousand dollar swing by doing one over the other I don't really care.

With such low miles I would only point out that you could probably get thousands more for your car by selling privately. Likewise that would be +1 for the "buy" option, if the trend continues with the next car.

If you don't care, the money is no issue and you're just trying to avoid hassle, then perhaps leasing is better.

[paul e]

Wow. You pay thousands more than necessary because you don't like to bargain? I guess you enjoy paying for that privilege.

I went to my BMW dealer after checking prices online. There are many places that show dealer cost, Edmunds.com, nada.com, others.

I added up dealer cost for the car and options I wanted. I then added $1000 because the dealer has to make some money. And that offer was accepted. Total "bargaining" time at the dealers, about 20 minutes. I saved $2550 in that time.

[tex2670]

Originally Posted by Dan203

Financially it doesn't really matter to me. Unless there is a huge multi thousand dollar swing by doing one over the other I don't really care. I paid full price for my last car just to avoid the hassle of having to negotiate. I'm mainly looking for the simplest experience. The process of buying a car SUCKS and I thought that maybe doing a lease would make it easier. Doesn't sound like it really does, other then eliminating the trade.

Speaking of which... If I have a high value trade how does that effect a lease? According to KBB my car is still worth $18k. I doubt they'll give me that much but even if they give me $14k can I apply that to a lease? Is there any real benefit in doing that, other then lower payments? Would I be better off just doing the trade as a separate cash deal? (if they'll even do that)

One more question about leasing... do you get any positive credit for going under the allotted miles? I see the lowest option offered on BMWs website is 10k miles a year. As mentioned above I'll likely have about 1/3 of that when the lease is up. Will that benefit me in any way, or just them?

If financially it doesn't make any difference, then do what's best for you. Learn about all the pros and cons, and make the decision on your own. People lease or buy for many different reasons, and they don't always apply across the board.

If you lease a car and are way under your miles, you may benefit by buying out the lease at the end of the term because the re-sale value is better than the residual value buyout in the lease.

[Polo08816]

Originally Posted by paul e

Wow. You pay thousands more than necessary because you don't like to bargain? I guess you enjoy paying for that privilege.

I went to my BMW dealer after checking prices online. There are many places that show dealer cost, Edmunds.com, nada.com, others.

I added up dealer cost for the car and options I wanted. I then added $1000 because the dealer has to make some money. And that offer was accepted. Total "bargaining" time at the dealers, about 20 minutes. I saved $2550 in that time.

Yeah I lol'd when I read that as well.

[tex2670]

Originally Posted by Dan203

I paid full price for my last car just to avoid the hassle of having to negotiate. I'm mainly looking for the simplest experience. The process of buying a car SUCKS and I thought that maybe doing a lease would make it easier. Doesn't sound like it really does, other then eliminating the trade.

As someone else pointed out, you don't need to make it complex.

I have a neighbor who pinches every penny, and agonizes over every decision and purchase he makes. But he also hate the car buying process. When he goes, he gets the Edmunds True Market Value, offers that price to the dealership closest to his house, gets it almost immediately because there's usually a lot more room, and he's done. He probably leaves a lot more $$ on the table, but he can't stomach the process.

I'd recommend this for you rather than pay MSRP.

[floydarogers]

Join Costco and use their pre-negotiated prices. It's something like 3% over invoice (rather than 7%-10% for MSRP). There are other options.

Leasing is always - ALWAYS - more expensive in terms of economics. This is explained best in the Consumer Reports car buying books.

Personally, I'd keep what you have (but then I've run all our cars to 150K - 200K miles, and am still driving a 20 year old/135K pickup truck); it's the most economical thing to do. Of course, it sounds like the nits are bugging you, and your needs may have changed a bit.

[tex2670]

Originally Posted by floydarogers

Join Costco and use their pre-negotiated prices. It's something like 3% over invoice (rather than 7%-10% for MSRP). There are other options.

Don't waste the $55 annual fee by joining Costco. TrueCar got me better prices than Costco did; and one of the Costco dealers I dealt with wouldn't give pricing on the phone--I had to physically come into the dealership.

[Polo08816]

Originally Posted by tex2670

Don't waste the $55 annual fee by joining Costco. TrueCar got me better prices than Costco did; and one of the Costco dealers I dealt with wouldn't give pricing on the phone--I had to physically come into the dealership.

When you drive 30-35k miles per year like me, you'll end up filling up twice a week. Costco premium gas is about $0.20/gallon lower than the lowest gas station around the area.

I average two 12 gallon refuels a week so the math:

52 weeks per year * 24 gallons per week * $0.20 savings per gallon ~ $250/year.

[tex2670]

Originally Posted by Polo08816

When you drive 30-35k miles per year like me, you'll end up filling up twice a week. Costco premium gas is about $0.20/gallon lower than the lowest gas station around the area.

I average two 12 gallon refuels a week so the math:

52 weeks per year * 24 gallons per week * $0.20 savings per gallon ~ $250/year.

Yes--that's why I belong to Sam's Club around the corner from me (which must be one of the most miserable stores to shop in); the gas savings pays for the membership. Costco is awesome, I wish there was one closer to me (but not every Costco has a gas station).

But it's not worth it to join just for the new car discount, was my point.