Rip

Hello all,
I just wanted to get some opinions from my fellow users regarding their thoughts about the lease vs buy question. Have you leased your bimmer or bought it, maybe include details of the lease or purchase and reasons why you made your decision.
Here's mine:
I leased for 36 months, 36,000 miles allowed. Sticker on my car was $68,475. $1500 down. payment is $1065/month (includes a wear & tear warrantly $20/month (basically protects me for up to $5000 in damages when I return the car)). Buyout at end of lease is $41,770...not sure if I wanna buy it yet....any comments?
Thanks,
Rip

ps I have a corporation which will assume the lease and I plan on claiming it as a company car.

1esquire

Since you asked for opinions, here's mine:

You are paying $39,840 to drive a $68,475 car for 3 years. If you buy it out at the end of your lease for your residual, you will end up paying a total of $81,617 for your 550.

If you had bought the car at the current new car rates over 5 years (assuming BMW did not have any incentives that month), and you put $1500 down, you would have paid a total of $81,033.

Thus, I would say that in your case, you are about $600 worse off by leasing, and you should have bought the car, if you knew from the beginning you were going to do so. As for what you do now, I think you should just lease another one or buy a newer CPO one. Paying $42k for a 3 year old non-CPO car with 36k miles is not a "must have" deal that you can't walk away from.

Personally, I have leased cars and bought cars (both new, used and CPO), and I like buying CPO cars with low miles the best, because you can get the most bang for your buck. (To each his own . . . and according to the size his wallet!)

Rip

Good point....but when I lease I have a couple of benefits...1. I can use it as a tax benefit...2. I dont have to assume the depreciation....3. I can get a newer model in three years, and dont have to wait the 5 years to depreciate the value of the car before I sell it. ..

pukka

Didn't see the last line on your original post so I edited my response.

If you can claim it as a business expense, then I'd definitely recommend a lease. Personally, I think this is the only way a lease can benefit a buyer.

The main attraction for leasing vs. buying is lower payments. A $1k monthy note w/12k annual mileage restriction seems quite high to me.

Heelsonwheels

I leased for a long time and it worked well for me. But I never bought the car at lease end.
If your plan is to buy it, then why not go for 15K lease and buy the extended warrantee up front to write more off and you'll have less to pay at the time of purchase. With the intro of CPO cars, you do get more bang for your $$.

lawguy

I'm 12 months into a 36 month lease - its the first car I have ever leased. It has been an interesting experience. I'm not sure I'm ahead or behind, and honestly, I suppose it really doesn't matter much.

I traded my last 2 cars (which I bought) after about 2 years each and took a pretty good lick on depreciation, so I wanted to lease a car to avoid that ass kicking to some extent. Also, I liked the idea of taking the ever difficult "trade" issue out of the next negotiation, since I would be returning this car at the end of the lease. While I have always liked the "freedom" of selling my other cars any time I wanted (without being punished on breaking a lease or buying it out) my thought was that with a 36 month lease, I figured it would help force me to keep the car a little longer than usual before something else caught my eye (I needed the tough love - i have a wandering eye when it comes to cars).

After neurotically debating my lease decision in my head for several months, I have no real qualms about the 36 month lease - I already feel myself getting anxious at the thought of having to give it back - I've grown to really love the car.

My law practice pays the lease with pre-tax dollars as a direct charge, so I do receive a tax savings for leasing. (At the end of the day, it does come out of my pocket, but at a pre-tax rate). And like one of the posters said above, its a much cheaper way to drive a nice car on a monthly basis. I was amazed by your lease rate - on an '07 550 with MSRP of $65k, I am paying $800/month with no money down- 12k miles a year, which I will slightly exceed. Paying $1,000 a month just seems high, although I realize you paid for more miles up front, and i will probably pay some of that difference in the end.

The residual on the car is $39k - which sounded low at first, but is actually probably rather high for what the car will be worth. I was window shopping at another BMW dealer last week for a CPO M3 convert that caught my eye, and the dealer told me my car would bring between $39k and $42k on trade now. [Yes, I understand the difference in trade and retail costs]. I cant imagine buying it at the end of the lease for $39k in 24 more months - I would think I could find a CPO car for less than that price in 2 years. Just for kicks, I called BMW Financial to find out what the "buy out" cost of my car would be to trade it to the dealer - its $52k now. Its funny that BMW would give me around $40k for it...another ass kicking. LOL.

Deep down, I'm truly conflicted at the idea of giving it back and not buying it, since its configured exactly the way I want and i know I have taken amazing care of the car (with the exception of driving it hard), versus knowing it would be a bad financial decision to do so. But, in retrospect, next time, I will most like go for a low mile CPO car. (Most likely a 7 series or S class M. My last car was a CPO 7 series, which I would still have today if the CPO hadn't been about to run out - and their isn't any way I would own a 7 series BMW without a warranty.

- Pete

PS - the post that calculated the cost of buying the 550i with interest at $81k was frightening...that's a lot of money for a 5 series. Interest is a bitch!

jmsod

Based on what is happening to me..... I would say lease. I would have gotten financially crushed had I purchased my car.

Heelsonwheels

You didn't say whether you planned any mods for the car, so I'm assuming you're not going to.
At the end of the day leasing is a rental with maintenance and bumper-bumper coverage; write the check and then in 3yrs give it back and get a new one(that's worth something). You are not tying up your money to drive the car( that's worth something too). The banks and leasing companies no longer negotiate buyout prices, so you're never gonna get over on them. So that's where the CPO's make good financial sense especially when BMW doesn't have a good program going.

Rip

hey thanks everyone for the responses...There is a difference in 'rate factor' between the 07 bimmers and the 08 bimmers...it also depends on when you buy/lease the car too...i got my 08 550 sport 1 week after it was introduced...now lets say you get an 07 in october or november then you get a better deal on the lease....dealers knew that the new sport model was gonna be HOT so they probably gav e you a deal knowing that demand for the 07s would drop...

anyways...i am happy with my lease...this was really my DREAM CAR! Actually it was the 98 540i sport!!!

In any case the dealer knocked $3k off the msrp for me and $1500 down means I can invest my down payment somewhere else....look at where rates are now! i would have been stuck with a higher rate had I bought it nad refinancing car loans is stupid!

Rip

CVTBenhogan

I leased my car and I'm pissed off I did. In Illinois, we pay the entire sales tax during the lease term. Then, if you opt for the buyout, your paying taxes again. Never again.