[HaloEye]

I do not know much about leasing and would like to get a crash course. I would like to know the pros and cons of leasing. Some that I can think of is...

you are not completely committed to the car since the lease will end, you can keep it at the end or give it back and get something else

but can you customize a lease? i just mean physically not engine or other mechanical upgrades. For example, could i take model emblems off, such as 535i lettering?

also, does it mathematically/financially make sense to lease, do you end up saving money in the end?

i know, a lot of questions. and also if you could tell whether you leased or bought and why

[gatoman39]

IMO, if you are leasing for personal use it's pretty much a waste of money, unless you're Bill Gates, and you don't care about money. If you can write it off as a business expense then it makes more sense. Too much to write; check out these sites:

http://www.leaseguide.com/lease03.htm
or
http://www.carbuyingtips.com/lease.htm

[HaloEye]

thanks for those links it seems like leasing is more of a hassle and headache after reading.

[gatoman39]

Originally Posted by HaloEye

thanks for those links it seems like leasing is more of a hassle and headache after reading.

If you don't know what you're doing it seems like a major pain in the arse. If you've done it before and know the tricks, it's easy as pie. I have negotiated the last 5 leases all over the phone, and it was honestly easier than buying.

If you are talking about personal use here is a simple explanation as to why it makes no sense:
*If you lease a 328i for $500 a month for 36 months, no money down. (which is about what it costs), you would have spent 18 grand at the end of the lease terms.
* Now you return the car, you have to lease again. Say you do the same thing, 500 a month 36 months and get the same results. Well now it's 6 years later and you have spent 36k to lease two cars, and you still are left with no car, so you have to lease another one. Endless cycle....
*If you took that same 500 a month and financed a car, you would have it paid off after 6-7 years, effectively ending payments. Now you have the option of selling the car, and getting some money back or driving the car with no more payments. With the lease you have no option. It either lease again, or take the bus.

[dpwr]

Originally Posted by gatoman39

If you don't know what you're doing it seems like a major pain in the arse. If you've done it before and know the tricks, it's easy as pie. I have negotiated the last 5 leases all over the phone, and it was honestly easier than buying.

If you are talking about personal use here is a simple explanation as to why it makes no sense:
*If you lease a 328i for $500 a month for 36 months, no money down. (which is about what it costs), you would have spent 18 grand at the end of the lease terms.
* Now you return the car, you have to lease again. Say you do the same thing, 500 a month 36 months and get the same results. Well now it's 6 years later and you have spent 36k to lease two cars, and you still are left with no car, so you have to lease another one. Endless cycle....
*If you took that same 500 a month and financed a car, you would have it paid off after 6-7 years, effectively ending payments. Now you have the option of selling the car, and getting some money back or driving the car with no more payments. With the lease you have no option. It either lease again, or take the bus.

and that bought 328 would depreciate by the same amount you leased it for, then if you get into an accident it will depreciate even more... how much you think your 328 would cost after 6-7 years? don't forget out of warranty repairs and you still will be driving old car... it's never ending discussion, just do a search on this forum, you can't just say lease is a waste of money

[gatoman39]

Originally Posted by dpwr

and that bought 328 would depreciate by the same amount you leased it for, then if you get into an accident it will depreciate even more... how much you think your 328 would cost after 6-7 years? don't forget out of warranty repairs and you still will be driving old car... it's never ending discussion, just do a search on this forum, you can't just say lease is a waste of money

A 6 year old 325i average about 14k. I'm not saying it's a total waste of money. It really depends on your situation. I lease a car for work (not the bmw), and can offset the cost as a business expense, then it works. What I'm saying is that purely from a financial perspective, the personal lease, in the long run will end up costing you more then purchasing the same car. Whether you're willing to pay for the premium of driving a new car every 2-3 years, is up to you, but it's a huge premium.
The argument that repairs will cost you any where near the cost of the premium to lease isn't a strong one.

[HaloEye]

i think i would lean more towards buying over leasing. When i get my car i want to feel it is mine. if i was to lease i would feel like it is a rental, kind of what it really is, and would not want to change anything or customize it.

[gatoman39]

FWIW, I asked the salesperson, in his estimation what was the breakdown in leasing vs. buying for the core 3/5/7 models.
His opinion response was:
3 series - 30% buy 70% lease
5 series - 50/50%
7 series - 70% buy 30% lease.

[exAudiGuy]

As previous posters mentioned, there are a wide variety of opinions on lease vs. buy. IMHO, it really depends on how long you tend to keep cars. If you like a new car every 2-3 years, then leasing will probably be a little cheaper, and avoids the hassle of you having to sell the car yourself. For longer holding periods, buying makes more sense.

If you are able to resist the need for a new car every 3 years, more power to you...I tend to get the "itch" about then!

[raleedy]

Unless you want to pay cash up front to buy, you will either (a) rent the car — through a lease — or (b) rent the money to buy the car. And you can even do a prepaid lease, which feels a lot like paying cash up front to buy.
BMW subsidizes leases a bit with high residuals. In other words, you may get away with less depreciation over the lease term than you would if you bought the car and resold it after the same amount of time. You may feel as if you don't own the car when you lease, but that's just a feeling: under the lease, you have all the financial responsibilities of an owner, and you have the choice of owning the car at the end of the lease if you want to keep it.
There is no inherent reason why either a lease or a purchase should be more costly than the other option. It all depends on the terms. Economically, a lease is like a loan with a balloon payment at the end: you make that payment either in cash or by turning in the car (in good condition, of course, and under the mileage limit — otherwise, you'll be laying out more cash). Like a balloon payment loan, a lease lets you hang on to more of your own money up front and through the loan or lease term, by paying more in interest charges.

[dpwr]

Originally Posted by HaloEye

i think i would lean more towards buying over leasing. When i get my car i want to feel it is mine. if i was to lease i would feel like it is a rental, kind of what it really is, and would not want to change anything or customize it.

unless you're buying whole thing in cash and not financing it, you're pretty much renting it from the bank instead of bmw

[gatoman39]

Originally Posted by dpwr

unless you're buying whole thing in cash and not financing it, you're pretty much renting it from the bank instead of bmw

This is true, but with the rates they have now, they're letting you spread the payments with little to no financing charges to get into the car more easily. BMW isn't even that good compared to other automakers. Heck GM will let you spread 0% down for 72 months or 6 years on an 80k Escalade. That's just giving you the keys.

for the F10:
Current offer for people with good credit:
At 0.9% for 2 years on 60k, that's only $282 in interest per year :
Principal borrowed: $60,000.00
Regular Payment amount: $2,523.50
*Total Repaid: $60,564.00
*Total Interest Paid: $564.00

You don't get any where near that rate on a lease. On a side note. The registration in CA (which is based on the value of your car) will continue to go down the longer you own it, it was $900 for the first year (ouch). Same story with the insurance.

[Lukeswarm]

I have leased my past 4 cars... go in pick car and drive... then after 4 years... go in with 4 years old car pick a new one and drive off in it... i always lease :-)

[dpwr]

Originally Posted by gatoman39

This is true, but with the rates they have now, they're letting you spread the payments with little to no financing charges to get into the car more easily. BMW isn't even that good compared to other automakers. Heck GM will let you spread 0% down for 72 months or 6 years on an 80k Escalade. That's just giving you the keys.

for the F10:
Current offer for people with good credit:
At 0.9% for 2 years on 60k, that's only $282 in interest per year :
Principal borrowed: $60,000.00
Regular Payment amount: $2,523.50
*Total Repaid: $60,564.00
*Total Interest Paid: $564.00

You don't get any where near that rate on a lease. On a side note. The registration in CA (which is based on the value of your car) will continue to go down the longer you own it, it was $900 for the first year (ouch). Same story with the insurance.

here in canada it's 5.9% finance (at 0.9 it might be worth doing), and don't forget tax when you buy, it adds a good amount

[lindros2]

I've leased three cars and purchased two cars in the past seven (7) years. In 2003, leasing was a great deal - I got an Acura TL for 20% less than the lease rate became only a year later (2004).

However, in 2010, leasing has become less "en vogue" as companies do not want to rent cars to people who cannot afford them. A lease rate of $950/month on a 535i made me sick to my stomach.

I'm purchasing my 535i (2/3 down, 1/3 finance), which appears to be the trend with my colleagues, friends, and family members.

The deals are far better.

[gatoman39]

Originally Posted by dpwr

here in canada it's 5.9% finance (at 0.9 it might be worth doing), and don't forget tax when you buy, it adds a good amount

At that rate buying the car would be much tougher to bear. Yes you pay taxes on the lease as well, but only on the depreciation, not the whole purchase price.

[LuvMyE92]

Some folks here make good points. Others, eh, not so good. Not fair to compare a three year lease with a six year purchase.

There are a few advantages to leasing not yet mentioned. Assuming of course, that you would normally trade your car after 3 years anyway, regardless of how it's financed.

- you are protected against unexpected depreciation (E60 M5 is a good example of this)
- often if you lease or purchase another BMW, BMW FS will give you special incentives as a former lease customer

My former accountant (who should now be in jail, but that's another thread) used to say "leasing is a poor man's financing". He didn't like it, obviously. But you can get into a more expensive car with less down and a smaller payment, if that's your thing.

HTH.

[pharding]

Originally Posted by gatoman39

At that rate buying the car would be much tougher to bear. Yes you pay taxes on the lease as well, but only on the depreciation, not the whole purchase price.

It varies by state. In Illinois when you lease you pay taxes on the full price of the car, not just the lease payments.

[pharding]

If you own a business there are tax benefits to leasing.

[Grizzles]

Originally Posted by pharding

If you own a business there are tax benefits to leasing.

what are the tax benefits of leasing if i own my own biz?

[ibimmer954]

You can write off the cost of the lease as a business expense (assuming you use the car primarily for business). When you buy, I think things get more complicated since you have to compute depreciation, etc.

[Grizzles]

Originally Posted by ibimmer346

You can write off the cost of the lease as a business expense (assuming you use the car primarily for business). When you buy, I think things get more complicated since you have to compute depreciation, etc.

i think it is a wash either way, unless you lease a pickup or a utility type vehicle