[Billfitz]

Originally Posted by Digital_83

Well how about taking your time with a car of your choice and using the first three years to make sure if you really enjoy it that much that you now want to keep it. Upon lease's end returning it, re-certificating it, and purchasing it as CPO with that proper discount, etc.

You get to pay the dealer markup twice, and the second time around it's a considerably higher percentage of the price than the first.

[pimp4cheddar]

Originally Posted by sspade

Lessors are suckers (most often). More so when dealing with expensive vehicles.

A lot of times... people are paying $20k plus to RENT a car (they cant afford) for 3 years when they could have purchased a vehicle (that they could afford) for the same $20k that will last MUCH LONGER THAN 3 YEARS.

I doubt we'll have many chime in about their awesome lease deals. Ill be waiting with my calculator...

Leases are just another example of car ownership (simply short-term). Leasing almost never has anything to do with affordability...and has more to do with convenience.

I've done both lease and buy...and both options have fit my lifestyle at the current times.


I leased my previous M235i and it was the best move ever as I was able to go fully bolt-on, lower the car and push it hard with ZERO risk of owning outside of warranty. The depreciation would have been insane had I financed it as I would have needed a 4-door car now as my wife is pregnant - I would have been upside down easily $5k based on what they are selling for.

Just turned that 2-series in 3 weeks ago for a 340i.


This thread is quite useless as it's all personal preference. 1 size does not fit all...and I now own my 340i as this was the right fit for me at this stage of my life.

[donkey]

Depends on the numbers and a lot of other factors. I bought my F30 but lease my wife's car - it just makes sense for us.

It gives me peace of mind knowing that she'll always have a warrantied, new, and trouble-free car with all the latest tech/safety features etc.

And, life is short. Variety is the spice of life.

I don't think there's an income threshold where leasing makes more sense financially, but there is one where it doesn't really matter.

[silvercas]

Originally Posted by MiguelM3

I am with you, have never been able to lease, my current car is a 2015 Gran Coupe Sports, I have the build sheet, over $54K, bought it off lease, pre-owned certify, 30K miles, still under factory warranty, paid $28K, the previous owner paid, over $26K for the lease, and drove it for 30K miles, I figure if I drive my car for another 50K miles, it will have 80K and probably still worth $10-$12K, which is the down payment for my next car.

You have a build sheet showing 54K. But did the lease actual base the value on 54k? I would venture to say it didn't. Depending on the month/year incentives can bring that car down to ~46-48. As your 2015 likely came out in 2014 and if you purchased it this year, the depreciation of 5k/year is not bad.

[donkey]

Originally Posted by silvercas

You have a build sheet showing 54K. But did the lease actual base the value on 54k? I would venture to say it didn't. Depending on the month/year incentives can bring that car down to ~46-48. As your 2015 likely came out in 2014 and if you purchased it this year, the depreciation of 5k/year is not bad.

BMWs depreciate way more than 5k a year. Mine stickered at 57k when it was built in June 2014, I bought it brand new (never moved off the lot) in May 2016 for 40k.

And that's without it ever been driven...

[jd_perspective]

Originally Posted by tuco44

One other factor in leasing (at least where I live) is that of sales tax.

If you buy, sales tax is due on closing in the full amount up front. In the case of a $75K car (say), that sales tax here would be $11,250.

If you lease the same car, sales tax is paid on the monthly payments, nothing up front.

This is not always true - i know you said "where you live" but just wanted to share. Example NY makes you pay tax on the sum of the lease payments, you can roll it into your payments if you don't pay this in cash but then you are financing sales tax.

[jd_perspective]

Originally Posted by sspade

Lessors are suckers (most often). More so when dealing with expensive vehicles.

A lot of times... people are paying $20k plus to RENT a car (they cant afford) for 3 years when they could have purchased a vehicle (that they could afford) for the same $20k that will last MUCH LONGER THAN 3 YEARS.

I doubt we'll have many chime in about their awesome lease deals. Ill be waiting with my calculator...

Leasing is something people make choices on, not something that "suckers" do. Anyone can be a sucker when getting a vehicle! I know plenty of people who tell me their "awesome sale price" on a new car and I see how much they get ripped off on something that is not worth it either.

Some people hate leasing and the thought of it but it's their own values...

For ME it's...

WHAT I WANT: I always want a new car, always under warranty, and the best that I can afford. So why would I ever buy a used car - that may or may not have a warranty - which options I may or may not want? I lease exactly what I want (ex ordering them with BMW) and always use a broker to find the best absolute price.

REDUCED RISK: I don't put any money down so my risk is $0. If I drive off the lot and it gets totaled... I walk back in and order a new one! If it was purchased, then I have to deal with loss of value and keeping a repaired car forever (or finally selling it for less money because it was damaged) On a lease, you just turn it in after the lease is over and it's not your problem.

COST: Let's say I build a $56K BMW. I negotiate it to $50K out the door and finance it. That payment is around $900 for 60 mo. If I lease the same exact thing, I'm paying a ton less! This is my current situation and I am paying $550/mo. $0 down. This is the highly controversial part, right? Yes that $900 is done in 60 months, but my lease payment will continue. But how many people truly keep their car after 5yrs? I just prefer to pay less monthly and then get a new car more often. If you think you'll keep it for 10 years, sure! Pay it off save the rest! This is all just how you want to handle your finances. [Side note: you can often write off car expenses for business, so lots of people lease because of this]

All just my 2c becauase leasing is always your own personal opinion of how it fits into your life.

[silvercas]

Originally Posted by donkey

BMWs depreciate way more than 5k a year. Mine stickered at 57k when it was built in June 2014, I bought it brand new (never moved off the lot) in May 2016 for 40k.

And that's without it ever been driven...

again your 57k sticker on a good day is 49-50 with incentives. Two years later and 5k a year is 40.

[donkey]

Originally Posted by silvercas

again your 57k sticker on a good day is 49-50 with incentives. Two years later and 5k a year is 40.

Where are you coming up with 7-8k worth of incentives?

If you order a car new, no way you're getting 8k off sticker.

[tuco44]

Originally Posted by donkey

BMWs depreciate way more than 5k a year. Mine stickered at 57k when it was built in June 2014, I bought it brand new (never moved off the lot) in May 2016 for 40k.

And that's without it ever been driven...

Agree - and the depreciation is the same whether leased or purchased.

[Pdxway]

I already own mine for 5 years. Plan to keep mine for 5 more years. I have driven average of 2 loaners per year for 5 years. The latest one was 2018 330i xdrive.

I missed my HUD when driving the loaner.
The loaner had no road feel from the steering at all. Mine is better.
The loaner felt sluggish in sport mode. Mine is better.
The loaner's brake feel was so so. My M Performance brake feels better.

So in 5 years so far, there was no new $50K BMW 3 series that was good enough to make me want to trade....

At least in my situation, I am glad I did not lease.

[kern417]

The reason I leased is because the G3x and G8x were around the corner and I wanted the ability to jump ship easily if I liked how the model looked and it had the options I wanted. But over time I've seen a lot of other reasons that make sense:

1. Your vehicle is always under warranty, so for more expensive cars this can negate some of the costs you'd experience with long term ownership
2. You have a set price for payments and "sale" at return, so you can easily plan your finances around those details vs trading in a purchase or trying to manage a private sale down the road
3. A lot of lease offerings end up costing less than the depreciation ends up being. So you might pay 20k on a 50k car, but at the end of 3 years the car only ends up being 25k. And people often cut these deals with dealership to negotiate a purchase price and get an additional discount to buy out at lease end.
4. A lot of aftermarket products are rolled into the lease, so if you get a lot of MPerformance mods from the factory you'll only pay 40-50% of the price

I used to look at it like OP but i think it's a viable option for a lot of reasons on top of the luxury of always having a new vehicle. It can be very practical based on your lifestyle. I'd never go through leases for years on end, but arguably someone that can pay for leases for decades in actuality can afford more car than the person that has to buy and keep it long term.

Originally Posted by donkey

Where are you coming up with 7-8k worth of incentives?

If you order a car new, no way you're getting 8k off sticker.

I got $6.5k just with dealer incentives and employee discounts. That ignores seasonal incentives, veteran incentives, etc. But that was a little over a year ago, I'm not sure how deals look like now.

[18340i]

Leasing made more sense to me. I get bored of cars. My lease payment is more than $300 less than if I financed it (even at 3%). I'd still probably get rid of the car after 3 years. With a lease, I can just get rid of the car without being concerned about negative equity in the loan payment.

I agree, leasing might not make sense if you're paying msrp, but who pays msrp? .

[Gamb1t]

Some people lease for accounting purposes (tax write off as a business car). Others it's cheaper way to drive an otherwise expensive car.

Car mfgs have perfected a way to make money out of leasing models. If you can make profit twice.... why not? A Sr. Sales exec once told me that leases account for more than 60% of BMW vehicles. That was many years ago, I am sure it is even higher now. And finally leasing means continual business for the car mfg. Do you get calls from your sales person 12-6 months prior to lease expiration?

[jmg]

Originally Posted by sspade

Lessors are suckers (most often). More so when dealing with expensive vehicles.

A lot of times... people are paying $20k plus to RENT a car (they cant afford) for 3 years when they could have purchased a vehicle (that they could afford) for the same $20k that will last MUCH LONGER THAN 3 YEARS.

I doubt we'll have many chime in about their awesome lease deals. Ill be waiting with my calculator...

You can call it renting if you want, but my ego isn't so fragile that calling it "renting" is enough to make me not consider the financial advantages of leasing. I don't call it renting, I call it a pre-negotiated selling price at a set term. That's one thing that a purchase CAN'T guarantee. It's a protection against volatility in the market and time and effort in finding a buyer. It's also advantageous since I am self-employed and can write off more on the monthly lease payment.

I currently own 2 cars and I lease 2 cars. If leasing doesn't work for you, that's fine, but I'm no "sucker", I see the advantages in both for different situations. Here's my real world current lease contracts compared to 3 year ownership on the same car with cost of ownership compared:

1) 2018 i3 REx:
MSRP: $53000
Purchased Price: $47500

Lease:
Monthly Payment: $199/mo including tax
Drive-off expenses after rebates was first month plus cap reduction and fees: $1,950.
Total cost on 3 year lease (I actually have a 30 month, but for simplicity lets just extrapolate to 36 months): ~$9,114

Purchase:
Incentives: $7500 fed, $2500 state
Tax: $4,275
Est Selling Price based on current 2015 used private party sales: $17500
Total cost on 3 year ownership: $47500+$4,275-$7500-$2500-17500=$24,275

Winner: i3 Lease by a large large margin. I would be a "sucker" to buy a new i3 REx.


2) 2016 M3
MSRP: $80,000
Purchased Price: $77,000

Lease:
Monthly Payment: $850/mo including tax
Drive-off expenses was first month plus cap reduction and fees: $2,100
Total cost 3 year lease: ~$32,700

Purchase:
Tax: $6,930 (9%)
Est Selling Price based on current 2015 used private party sales: $49,000
Total cost on 3 year ownership: $77,000+6900-$49,000=$34,930

Winner: M3 Lease

There's the math, these are real world numbers. Granted, ownership after 6 years becomes more and more advantageous over leasing. I have a Subaru I purchased new and plan to keep for at least 6-7 years because its fits that specific need.

Also, I work hard enough to afford myself a new car every 3 years that I can drive on weekends and take to the track because it makes me happy and it motivates me at work. With that in mind, a 3 year lease is cheaper than purchasing every 3 years, so I went that route for my M3. Note: I previously purchased a 340i thinking I wanted to drive it for 6 years because I loved it so much. I sold it not long afterwards because I wanted an M3. Go figure.

Certainly, a CPO car is the best bet. In fact I have a CPO car, but it's a Honda and maintenance is much cheaper than a Bimmer, so I went with that as my 4th beater car. The i3 is my daily btw.

There you have it. I don't think that blanket statements like leasing is for "suckers" does anyone any good. There are advantages to leasing that you might be depriving others and yourself from with these unfounded statements. As far as what I can afford: I afford what I can afford because I make informed decisions.

[upsidedownfunnel]

Originally Posted by tuco44

One other factor in leasing (at least where I live) is that of sales tax.

If you buy, sales tax is due on closing in the full amount up front. In the case of a $75K car (say), that sales tax here would be $11,250.

If you lease the same car, sales tax is paid on the monthly payments, nothing up front.

If you are getting a new vehicle every 3 or 4 years, sales taxes can be huge if buying each one.

In many states in the U.S. (not where I live though), you deduct the price of your trade-in off the new car when calculating sales tax. It doesn't always work though since that means you have to sell your car to the dealership that you're buying the new car from.

[tuco44]

Originally Posted by upsidedownfunnel

In many states in the U.S. (not where I live though), you deduct the price of your trade-in off the new car when calculating sales tax. It doesn't always work though since that means you have to sell your car to the dealership that you're buying the new car from.

Yes, same rule here. Occasionally in the past, I have been able to sell my trade-in privately, but with the proviso that the private sale be put thru the new car dealer's system, so I get the sales tax reduction. Sometimes the new car dealer would charge a nominal fee, but still worth it for me, The buyer of my trade-in vehicle has to pay sales tax on the price anyway, and I made it a condition of selling the car to him/her. Not all dealers will do that however.

[silvercas]

Originally Posted by donkey

Where are you coming up with 7-8k worth of incentives?

If you order a car new, no way you're getting 8k off sticker.

Invoice then incentives

[rak299]

I don't lease now. I am retired so I keep a car longer and there is no financial reason to lease. Before that, I ran a business and needed a car for business reasons. I kept a separate car for personal use and my business could make the lease payments. At the end of the lease period, I had an option to take the car back to the dealer and walk away. If it made sense, I could buy the car out of the lease and keep it for personal use or give it to my wife to use.

[ronanz]

Originally Posted by cfm56d7b

Leasing is just another option designed for the consumer market driving by consumption. Humans have a difficult time to resist having more by paying less - at least based on how humans see it.

Consumers: new car every year, fixed payments, no warranty expenses, can drive a car which supports my image plus all other intangible goals.

Businesses (manufacturers, dealers, finance companies): potential to make more money, creation of a repeatable and consistent market for used cars, new customer segment to monetize even further.

It's just a business response to match consumer demand with a profit motive. Leasing IS very profitable.

Humans?? As opposed to non humans?

.

[sikotic]

Here's how I see it.

Up until leasing, every time I would want to get rid of a car, it was because I felt it was
A) Getting old
B) Something was wrong with it
C) Something was going to be wrong with it soon

I feel like anytime you buy used, you are potentially buying someone else's old problem.

I have a leased BMW which has never given me any issues, on the other hand I also own a used Honda which has given me issues multiple times.

[jmg]

Originally Posted by sikotic

Here's how I see it.

Up until leasing, every time I would want to get rid of a car, it was because I felt it was
A) Getting old
B) Something was wrong with it
C) Something was going to be wrong with it soon

I feel like anytime you buy used, you are potentially buying someone else's old problem.

I have a leased BMW which has never given me any issues, on the other hand I also own a used Honda which has given me issues multiple times.

Before my 328i I owned an Audi S4. It was a blast to drive but the constant fear of toasting my engine made it very stressful. Warranty was gone and I had a potential $13k repair bill and I started to have a ridiculous amount of oil consumption, which was a bad sign for the 4.2L V8. Owning these cars, unless you are mechanically inclined or have a strong emotional attachment to them, is not all it's cracked up to be. I too own a Honda (and a Subaru). They both have their issues, but at the same time, they aren't as expensive to maintain as my Audis and Bimmers.