sdg1871

BMWFS lease terms are generally more favorable than terms offered by outside banks such as US bank.

swajames

Doesn't matter whether you pay cash in full, get a loan or lease. Depreciation is identical, and it is the biggest cost of ownership however you choose to pay for your car. Cash buyers and those with a loan note throw the depreciation down the toilet, buyers who lease finance depreciation. Whatever floats your boat, there's no one size fits all answer for everyone.

MiamiPhill

What I don't get is the modding of the leased car.

cleung

+1, this is one of the reasons why I chose to buy my car not lease because I had full intensions of modding. For those who mod there leases is it really worth while to strip your parts off after and sell?

doug_999

See, I don't fully agree with this. Take a $72K 550 with a 60% residual after 3 years and 30,000 miles - your residual is $43K and some change. Provided you leased it.

That SAME car at the end of three years, traded in, has a much lower residual - the main reason being that short of Auto, Sport, and Nav, not one option helps the trade-in value for black book pricing. So best case, your $72K car is considered a $65K car and then even at 60%, you get $39K - if you are really lucky. In my case it was more like $31K.....

Don't ask me how I know ....

swajames

I think you're maybe missing my point, Doug, which is that actual depreciation is what it is, and for any given car the actual rate of depreciation is not impacted by how that car was financed. What your finance company sets as the residual or buy out value and/or what may be offered on a trade in at lease end may not necessarily coincide, but it is depreciation that ultimately determines what your car is really worth after any given period of time.

In your example, the car's actual depreciation was simply greater than the prediction that the finance company used as the basis for your lease. What you described as a lower residual is of course just that actual depreciation at work. That can work out well for you if you were to return the car at lease end, it's not so great if you wanted to buy it outright or use your current car as a trade in on another vehicle.

In a nutshell, that 72K car would have been worth 31K whether you'd paid cash in full or leased it. It just happens that in this particular case it's BMWFS who took it in the shorts. A cash buyer would have borne all of the cost themselves. But the depreciation is the same in both examples. If BMWFS had got the depreciation number right at the outset, your lease payments would have been quite a bit higher.

IceyTys

Smart guy.....if I buy I do the same thing...try to get a 2 year lease return...that way its certified, still under warranty and the greatest percentage of value is lost up front. IF you must have a very brand new car, then leasing is the way to go..unless you dont care about loosing the money during depreciation or if you plan on keeping the car longer then 4 years.

sdg1871

You can buy extra miles over 15K miles per year from BMWFS upo front for 15 cents per mile. It does not affect the lease's residual or MF which is capped at 15K miles per year. I lease 18K miles a year so for a 36 month lease, I bought 9K miles at 15 cents per mile ($1350). If you do not use the extra miles, BMWFS refunds you the money at lease end.

flyingpuck

RUSS!!! What happened to your avatar????

CWS530

I think she turned around!