View Poll Results: Do You Lease or Buy Your BMW?
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Poll: Do You Lease or Buy Your BMW?
12-17-2005, 01:16 PM
#21
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Originally Posted by pennetta' post='212522' date='Dec 17 2005, 10:50 AM
I did the same calculation, other than in NY you get a tax break with the lease as you only pay on what you use. I found that with the same disposition effort (a lease you hand back the car; a purchase you trade it in on your next car) that the lease came out better financially. If you spend time and money on advertising and letting strangers drive your car, you can get more value but then its not an apples-to-apples comparison. Also, with a lease you can release (usually at a monthly savings and no more tax paid in NY) you can buy it or just give it back.
So
Purchase a $70K car - I think the write-offs go something like $3,100, $4,100, $2,900,$ 2,900..... (might be lower)
So after three years, you have the thing on your books for about $60K. But it is only worth $42K or so. If you sell it outright, you get to take the $18K as a loss. If you trade it in, that $18K gets added to the value of your next car! So you can end up with a Kia on your books that is worth $100K if you did this for a period of time!
You can call this "yet, another reason to lease instead of buy through the business" - but like I said, the recommendation for me has come back to purchase instead of lease. So I might just keep this next one for longer than 3 years - judging by how people seem to hate their 545/550, it won't be hard
PS - you can of course just make the dealer buy the car off you (instead of a trade) and then get a new car from him - however, you do lose the sales tax advantage of the old car's price coming off the purchase price prior to sales tax (about a $3K hit here in IL on a $42K car).
12-17-2005, 01:25 PM
#22
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My Ride: 2005 525i Titanium Silver Metalic and 2003 325xi Jet Black with the Premium Package in both cars.
Mr Amigo......has nothing to do with BMW, my plight was I leased a jeep new, that at cost was $25,000.00 for 4 years. With the down payment and the cost of the lease for 4 years I paid $24,000.00. Since I liked the jeep I wanted to buy it. The leasing company told me it would cost me $11,000.00 to buy it outright. Now I ask you, why would I pay $35,000.00 for a 4 year old used jeep that cost $24,000.00 brand new.
See my point. I'll buy as oppose to leasing.
See my point. I'll buy as oppose to leasing.
12-17-2005, 02:36 PM
#23
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My Ride: 2008 535i: June 6th start build, complete June 17th, at NY Port July 5th, at dealer July 10th, took delivery Friday July 13- Plantimum Bronze/Natural Brown Leather/Light Poplar, Sport Package, Sport Auto, Active Steering, Premium Package, CWP & PDC. Dinan Performance Software 384hp & 421 ft/lbs.
I did the same calculation, other than in NY you get a tax break with the lease as you only pay on what you use. I found that with the same disposition effort (a lease you hand back the car; a purchase you trade it in on your next car) that the lease came out better financially. If you spend time and money on advertising and letting strangers drive your car, you can get more value but then its not an apples-to-apples comparison. Also, with a lease you can release (usually at a monthly savings and no more tax paid in NY) you can buy it or just give it back.
So
Purchase a $70K car - I think the write-offs go something like $3,100, $4,100, $2,900,$ 2,900..... (might be lower)
So after three years, you have the thing on your books for about $60K. But it is only worth $42K or so. If you sell it outright, you get to take the $18K as a loss. If you trade it in, that $18K gets added to the value of your next car! So you can end up with a Kia on your books that is worth $100K if you did this for a period of time!
You can call this "yet, another reason to lease instead of buy through the business" - but like I said, the recommendation for me has come back to purchase instead of lease. So I might just keep this next one for longer than 3 years - judging by how people seem to hate their 545/550, it won't be hard
PS - you can of course just make the dealer buy the car off you (instead of a trade) and then get a new car from him - however, you do lose the sales tax advantage of the old car's price coming off the purchase price prior to sales tax (about a $3K hit here in IL on a $42K car).
[/quote]
The IRS is very lax on capital gains for autos. This is how the SUV accelerated depreciation benefits you. You can write off almost the entire vehicle in 2-3 years, yielding a great tax break. If you sell your $80k SUV after three years for anything above $0.00, you will have a capital gain thus negating your previous benefit. In your scenario the dealer can list your $42k trade-in as $42k and show less of a break on the new car. I can't see why you would do it the other way anyway.
12-17-2005, 09:38 PM
#24
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Originally Posted by pennetta' post='212657' date='Dec 17 2005, 05:36 PM
The IRS is very lax on capital gains for autos. This is how the SUV accelerated depreciation benefits you. You can write off almost the entire vehicle in 2-3 years, yielding a great tax break. If you sell your $80k SUV after three years for anything above $0.00, you will have a capital gain thus negating your previous benefit. In your scenario the dealer can list your $42k trade-in as $42k and show less of a break on the new car. I can't see why you would do it the other way anyway.
12-17-2005, 11:27 PM
#25
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My Ride: In a place where the Mercedes density is the highest in the world (no. of MB per square kilometer) I choose a Bimmer, why? because of one thing "The Ultimate Driving Experience"
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523i Steptronic, Silver Grey Exterior, Black Interior with Black Dakota Leather and Maple Wood Trim. Chrome Grill, Style 123 rim, Airbags everywhere, PDC, Rain sensor, Auto lights, Moveable front armrest, Advance Climate Control, Glass Sunroof, Auto dimming interior and exterior mirror with foldable functions, Extended Lights package, 6 CD changer in glove box, Power seats with memory, Power adjustable steering wheel, Power rear sunblinds.
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Originally Posted by amigo525' post='212625' date='Dec 18 2005, 05:56 AM
bad experience leasing?
12-18-2005, 06:45 AM
#26
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My Ride: 2014 X5 xDrive 5.0 M Package Carbon Black Metallic/2008 M Roadster Imola Red
You pay money every month for your car and you don't own it at the end
[/quote]Right, that's why leasing is a potential loser at least for ordinary consumers unless you save the differences in the purchase versus lease payments and invest the differences. Then, leasing will be at least slightly better under a very wide range of reasonable assumptions. But, not being able to spend the difference in the payments is a bummer for many--when they realize that there is a problem if they do. You just can't get something for nothing.
I don't think that "easy" bolt-on mods are a problem when leasing. There are easy solutions to the issues raised. Lowering? That's a tougher one to deal with, IMO.
[/quote]Right, that's why leasing is a potential loser at least for ordinary consumers unless you save the differences in the purchase versus lease payments and invest the differences. Then, leasing will be at least slightly better under a very wide range of reasonable assumptions. But, not being able to spend the difference in the payments is a bummer for many--when they realize that there is a problem if they do. You just can't get something for nothing.
Originally Posted by Mr 5er' post='212602' date='Dec 17 2005, 04:02 PM
I have 2 BMW'S and own both of them. Had a bad experience with leasing, will never do it again. By owning both cars I can do whatever I want, make any mods I want. Its only my opinion.
That's a tougher one to deal with, IMO.
12-18-2005, 08:58 AM
#27
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My Ride: 2008 535i: June 6th start build, complete June 17th, at NY Port July 5th, at dealer July 10th, took delivery Friday July 13- Plantimum Bronze/Natural Brown Leather/Light Poplar, Sport Package, Sport Auto, Active Steering, Premium Package, CWP & PDC. Dinan Performance Software 384hp & 421 ft/lbs.
The IRS is very lax on capital gains for autos. This is how the SUV accelerated depreciation benefits you. You can write off almost the entire vehicle in 2-3 years, yielding a great tax break. If you sell your $80k SUV after three years for anything above $0.00, you will have a capital gain thus negating your previous benefit. In your scenario the dealer can list your $42k trade-in as $42k and show less of a break on the new car. I can't see why you would do it the other way anyway.
[/quote]
I'm not following you. You are speaking of depreciation; captial gains is appreciation. The book value is your value after depreciation, if you sell the car for more than your book value the difference between book and the price you got is appreciation or capital gains.
Are you saying if you buy a new $70k car, and your existing trade-in is worth $42k you are making payments on $112k? Are you rolling in the remaining loan balance on your original car into the new deal?
12-18-2005, 12:34 PM
#28
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My Ride: Ordered 550i ED on 9/24/05. Titanium silver, priority one seating (black), steptronic, sports package, premium sound system, active steering, comfort access, power rear sunshades, navigation, head up display, rear door air bag
[/quote]
I am with you 100%. Do I need a BMW 550i? -- absolutely not. Do I want a BMW 550i? Of course, who wouldn't. Money is only important when you don't have enough to pay for the things you truly need. I waited until I had all the money for my car before I made the cash purchase. For me, that is the only way to pay for a luxury toy like BMW. I make a lot less money than the majority of people on this site and I watch my expenses very closely. But this purchase while not economically sound is one I do not regret.
My two cents' worth.
12-18-2005, 12:36 PM
#29
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My Ride: 2005 545i (SMG)
Titanium Gray
Black Interior, Anthracite Trim
M-tech kit
Sport Package
Premium Sound
Satellite Radio
Active Cruise
Comfort Seats
Navigation
Folding rear seats
I paid cash.
I drive too many miles to lease.
1 year old, and 22,000 miles already.
I drive too many miles to lease.
1 year old, and 22,000 miles already.
12-18-2005, 01:36 PM
#30
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Never will buy a BMW...
after 36 months the warranty is over..I would never owm a BMW without it! ...with a lease ...residual value is guaranteed ..just return the keys..no wheeling dealing...no maintenance cost..and they're always promo's on interest % on leases anyway!
I say lease and get a new one every 3 years
...If you can't afford it...downgrade..you are living over your means! And the other thing I invest my money instead..i can get better returns AFTER taxes...
after 36 months the warranty is over..I would never owm a BMW without it! ...with a lease ...residual value is guaranteed ..just return the keys..no wheeling dealing...no maintenance cost..and they're always promo's on interest % on leases anyway!
I say lease and get a new one every 3 years
...If you can't afford it...downgrade..you are living over your means! And the other thing I invest my money instead..i can get better returns AFTER taxes...