Lease or Buy
03-29-2009, 06:21 PM
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I notice reading through the forums that most people lease there BMW'S. I paid mine up front as I hate paying interest payments. What are the advantages of leasing vs buying 
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03-29-2009, 06:24 PM
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Originally Posted by Robert530i' post='830133' date='Mar 29 2009, 07:21 PM
I notice reading through the forums that most people lease there BMW'S. I paid mine up front as I hate paying interest payments. What are the advantages of leasing vs buying [/font]
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03-29-2009, 06:43 PM
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Originally Posted by skeeter' post='830137' date='Mar 30 2009, 10:24 AM
On a lease you get a new car every couple of years and you dont have to worry about the cars value taking a dump, like it has lately....When you buy it, its yours after the loan is done...I bought my car, but now I'm thinking I will lease my next car....I really don't keep car long then a few years anyways...
I am thinking the same hence the post as I seem to be turning cars every few years but prefer to buy them 1 to 2 years old so to avoid the New car loss of 30-40% value as I drove it off the lot. Thanks for quick reply
03-29-2009, 07:07 PM
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The main advantage is the lower payment and the ability to walk away from the car once the lease term is over. Also, you pay tax on the payment amount (here in the states), not on the purchase value of the car. The real trick to leasing is picking a car that has a right residual value (value of the car at the end of the lease term) like a BMW. The economy the way it is, banks are being very cautions when determining the residual value. I leased my last BMW in 2002 and was given a 58% residual value. When I just looked at new cars, it was going to be in the mid 40's. That increases the monthly payment significantly.
And lets not forget about the penalty when you go over the miles, or when you bring back the car with more than "normal wear" whatever that means.
But at the end of the day, like skeeter said, if you want to drive a new car every few years, leasing is the way to go.
And lets not forget about the penalty when you go over the miles, or when you bring back the car with more than "normal wear" whatever that means.
But at the end of the day, like skeeter said, if you want to drive a new car every few years, leasing is the way to go.
03-29-2009, 07:08 PM
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Originally Posted by Robert530i' post='830156' date='Mar 29 2009, 10:43 PM
I am thinking the same hence the post as I seem to be turning cars every few years but prefer to buy them 1 to 2 years old so to avoid the New car loss of 30-40% value as I drove it off the lot. Thanks for quick reply
03-29-2009, 07:36 PM
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There are two main advantages to leasing
1. Guaranteed residual
2. Residual on your options
#1 - your car is going to be worth $x and BMW guarantees that (a smart buy available in some states does the same thing)
#2 - Many/Most BMW options do nothing to your trade in value. However BMW is kind enough to give us full residual on everything - including options like fold down rear seats that will get you ZERO on a trade, but will make the future owner very happy he/she has them.
The primary disadvantage with a lease is that you can't get out of it without forking over serious cash (same sort of thing happens with purchasing it, but with a lease it is even more painful).
Some will tell you that if you have a business, leasing is better - that is bunk. In the end, they work out basically the same (yes, leasing allows a consistent write-off per year vs. buying that allows less of a write-off in the beginning and a much higher write-off when you SELL the car - not trade it in).
Some will even tell you that smart money always pays for a car in cash. While this may be true, smart money does not buy BMWs - they buy used Camrys and Accords and even that is changing with some of these used cars going for more than new!
1. Guaranteed residual
2. Residual on your options
#1 - your car is going to be worth $x and BMW guarantees that (a smart buy available in some states does the same thing)
#2 - Many/Most BMW options do nothing to your trade in value. However BMW is kind enough to give us full residual on everything - including options like fold down rear seats that will get you ZERO on a trade, but will make the future owner very happy he/she has them.
The primary disadvantage with a lease is that you can't get out of it without forking over serious cash (same sort of thing happens with purchasing it, but with a lease it is even more painful).
Some will tell you that if you have a business, leasing is better - that is bunk. In the end, they work out basically the same (yes, leasing allows a consistent write-off per year vs. buying that allows less of a write-off in the beginning and a much higher write-off when you SELL the car - not trade it in).
Some will even tell you that smart money always pays for a car in cash. While this may be true, smart money does not buy BMWs - they buy used Camrys and Accords and even that is changing with some of these used cars going for more than new!
03-30-2009, 12:22 AM
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doug_999 is absolutely right! And even though I financed my car, I have regreted it twice in a year of ownership, bc I found deals on leases for my friends that were unbelievable... cut to the chase: I'm definitely gonna lease next time around. Unless, of course, I plan on never getting rid of the car, in which case, financing still makes a good sense to me - at least, if the rates are below 10% or so, bc I can do more with that money myself...
hope this helps, and good luck, dood!
hope this helps, and good luck, dood!
03-30-2009, 12:57 AM
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bought mine with cash but thats because im keeping it untill it dies lol
good thing about lease is (long as ur good) improves ur credit rating
good thing about lease is (long as ur good) improves ur credit rating
03-30-2009, 04:52 AM
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Originally Posted by 305bimmer' post='830179' date='Mar 29 2009, 10:07 PM
The main advantage is the lower payment and the ability to walk away from the car once the lease term is over. Also, you pay tax on the payment amount (here in the states), not on the purchase value of the car. The real trick to leasing is picking a car that has a right residual value (value of the car at the end of the lease term) like a BMW. The economy the way it is, banks are being very cautions when determining the residual value. I leased my last BMW in 2002 and was given a 58% residual value. When I just looked at new cars, it was going to be in the mid 40's. That increases the monthly payment significantly.
And lets not forget about the penalty when you go over the miles, or when you bring back the car with more than "normal wear" whatever that means.
But at the end of the day, like skeeter said, if you want to drive a new car every few years, leasing is the way to go.
And lets not forget about the penalty when you go over the miles, or when you bring back the car with more than "normal wear" whatever that means.
But at the end of the day, like skeeter said, if you want to drive a new car every few years, leasing is the way to go.
Leases are also way harder to get now than they used to be.
US bank is still the biggest name in banks that do leases from what I can tell.
03-30-2009, 04:54 AM
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Milage restrictions on leases can also be an issue for some, normal is 12k or 15k a year.
Some of these "great deals" for MB you see on TV have 8k or 10k a year milage restrictions and 30c a mile for overages..ouch
Some of these "great deals" for MB you see on TV have 8k or 10k a year milage restrictions and 30c a mile for overages..ouch