Leasing a car better than buying or am I missing something?

[Brian W]

Originally Posted by SeeYaLater

You'd probably save a couple thousand $ by paying it off compared to making 60 payments of $700 or so.

Or you would, if the majority of leases in the FS forum weren't listed by individuals who paid MSRP+ tax+extended warranty for their AW/FR socal specials and then expect you to write them a check for their full downpayment amount.

[Ateam]

I tried to buy my last car as was miserable. I realized after 4 years I did not want it at all yet I was making payments still (financed it over 4 years). Then I had to sell it and exactly break even with the amount left on the loan. I had to buy an extended warranty after 3 years because I did not want to be out of warranty. Then had to do more maintence out of pocket and all for a relatively old car.

To me its just much more convenient to lease and you get a much cheaper monthly payment to boot. The ONLY way buying a car in general is better than leasing a car is if you plan to keep the car for probably 7 plus years or more. If you are buying outright it is always the best option but if you are looking at financing v. leasing than the only advantage of buying is realized once the car is paid off and you have no monthly payments, something that never happens in a lease.

I am glad I leased the m3 as I already am getting a bit bored and can't wait for the m5. Have 2 more years left so not like I do not have awhile to go but unless you have tons of money to buy/lease multiple cars, than leasing makes sense for a lot of people

[DBH]

Three reasons to lease vs buy:
1) Like a brand new car every 2-3 years,
2) get more car for less monthly payment,
3) can take business tax write-off.

[Ateam]

Originally Posted by Talk2meg00se

i don't really know if this helps, but will relate the details of my own experience:

i bought a used '08 in May of 2010 with 8,000 mi (in one of the few states that does not require taxes to be paid on a used car purchase) for $45k cash out the door.

i have since doubled the mileage so the car now stands at 16,000 mi - just guesstimating here, but i believe that i could **probably** sell it for 40k or so tomorrow.

so 5g depreciation, 20 months of usage ... 250 a month?

ball parked, of course, and subject to a number of variables (e.g. 45k was a low ball offer and it took the prior owner 13 weeks to come around, 8k mi is 20 months is not a lot and maybe inflates re-sale, etc.).

anyway, purely academic - someone will have to pry this thing away from my cold, dead fingers ...

i'll freely admit that owning a car is an awful, awful investment and 45k was a lot (for me) to sink into one, but it's nice holding title free and clear. no mileage restrictions, no return dates, no limit or concerns re: mods or track - it's mine. additionally, if you have to splurge on luxury auto, i'm not convinced that a lease is the best route provided that you have the capital lying around ...

This is retarded. You can't compare buying a used car with buying a new car as far as being able to compare it to a lease. You cannot lease a used car so there is no comparison. Obviously if the depreciation was taken by the first owner and you buy used than of course you save a signifigant amount of money. The topic here is buying NEW or leasing.

[Dave07997S]

Originally Posted by Ateam

This is retarded. You can't compare buying a used car with buying a new car as far as being able to compare it to a lease. You cannot lease a used car so there is no comparison. Obviously if the depreciation was taken by the first owner and you buy used than of course you save a signifigant amount of money. The topic here is buying NEW or leasing.

Actually you can lease a used car. US Bank offers leases for used vehicles, my partner leased a 3used yr. old Mercedes. Leasecompare.com also offers leases for used vehicles but it could be through US Bank as well.

[Ateam]

Originally Posted by Dave07997S

Actually you can lease a used car. US Bank offers leases for used vehicles, my partner leased a 3used yr. old Mercedes. Leasecompare.com also offers leases for used vehicles but it could be through us Bank ankle.

Well usually its ridiculously expensive to lease used and almost nobody does it so besides some random people this topic is about leasing v. buying NEW. Yes anything is possible in the world but stay on topic

[Hurricane]

There are no right or wrong answers to this question. Forget debating the financial implications of both. People who can lease and buy these cars do so for the performance and the look of the car. If we were concerned with financial responsibility we would be driving used Corollas. We don't need an M3, we want it.

When making your decision focus on what you want now and in the future. Assuming the car is within financial reach.

Ask yourself these questions: How often will you want a new car? If you buy a 2012 M3 now will you keep it a least seven years? Will you have car envy when the first F80 M3 appears on this site?

Chronic leasing is costly. However buying new and keeping the car for less than seven years is costly especially if it takes longer than four years to pay the car off. With a new model right around the corner it may make sense to lease given the unknown financial impact it could have on the E92 M3 resale. However, this is the last known V8. It's a wonderful car and worth buying.

Good Luck. It's a tough decision.

[amglol]

Originally Posted by Ateam

This is retarded. You can't compare buying a used car with buying a new car as far as being able to compare it to a lease. You cannot lease a used car so there is no comparison. Obviously if the depreciation was taken by the first owner and you buy used than of course you save a signifigant amount of money. The topic here is buying NEW or leasing.

This made me laugh.

You might want to make a call to the dealership that I'm installing software for this week... The used car lease business is HOT right now.

[JulieDriving]

Originally Posted by Hurricane

There are no right or wrong answers to this question. Forget debating the financial implications of both. People who can lease and buy these cars do so for the performance and the look of the car. If we were concerned with financial responsibility we would be driving used Corollas. We don't need an M3, we want it.

When making your decision focus on what you want now and in the future. Assuming the car is within financial reach.

Ask yourself these questions: How often will you want a new car? If you buy a 2012 M3 now will you keep it a least seven years? Will you have car envy when the first F80 M3 appears on this site?

Chronic leasing is costly. However buying new and keeping the car for less than seven years is costly especially if it takes longer than four years to pay the car off. With a new model right around the corner it may make sense to lease given the unknown financial impact it could have on the E92 M3 resale. However, this is the last known V8. It's a wonderful car and worth buying.

Good Luck. It's a tough decision.

+ 1. Well said!

[OerdingE93]

Originally Posted by MMJ4mil

I drive ~2k miles a month I am only supposed to do ~1300 miles a month.

Before the lease ends I am just going to buy the miles at a discounted price.

same here

[desertfox73]

I haven't seen this mentioned here, so I'll jump in and say that there is also the "worry" factor - how much will you worry about going over on miles, dents in the car, or other damage that you'll be charged for when you return the lease. I am guessing this is a real concern for many M3 drivers because 5 minutes on this site will reveal a string of posts about people upset from a door ding, windshield chip, etc.

For me, the worry factor when I leased a 2000 323Ci got me to the point where I never wanted to do it again. Every time a ding happened I got out the silly tool to check if I was going to be charged for it. I worried too much about driving it, and I should have just enjoyed it more. I also found myself at odds - wanting to drive it a ton, but also knowing I'd get nailed for extra miles.

In that way, I found the lease limiting - it limited my joy. I'm not saying this is the case for you, or anyone else, but it's something to consider. How many people debate back and forth in the morning as to whether they should take the M3 or not because they are near or beyond their mileage limit?

I buy my cars now...gently used. I let the first owner take the first-year depreciation hit, then buy a nice, low-miles car. And with the residual value left on my previous car I can put down a nice big down payment and qualify for great rates (currently 2.25% on a 2010 M3 vert, bought used this past summer). That's a deal I can live with, and enjoy.

[Koy]

I like to lease, l like to gamble...I always bet that the 'person' guessing the 'residual value' is wrong.... In socal this has paid off each time where there is 'equity' left at end of term and the dealer has 'cut me a check/credit'.
But like posts above say, to get maximum advantage of a lease be able to write some off through business...it helps quite a bit.

[Dave07997S]

Originally Posted by Ateam

Well usually its ridiculously expensive to lease used and almost nobody does it so besides some random people this topic is about leasing v. buying NEW. Yes anything is possible in the world but stay on topic

You are telling me to stay on topic? I am just responding because you said you can't lease used. However, US Bank does offer pretty good leases for used vehicles.

I do agree though that you can't compare the two, between leasing used vs. new.

Dave

[Dave07997S]

Originally Posted by desertfox73

I haven't seen this mentioned here, so I'll jump in and say that there is also the "worry" factor - how much will you worry about going over on miles, dents in the car, or other damage that you'll be charged for when you return the lease. I am guessing this is a real concern for many M3 drivers because 5 minutes on this site will reveal a string of posts about people upset from a door ding, windshield chip, etc.

For me, the worry factor when I leased a 2000 323Ci got me to the point where I never wanted to do it again. Every time a ding happened I got out the silly tool to check if I was going to be charged for it. I worried too much about driving it, and I should have just enjoyed it more. I also found myself at odds - wanting to drive it a ton, but also knowing I'd get nailed for extra miles.

In that way, I found the lease limiting - it limited my joy. I'm not saying this is the case for you, or anyone else, but it's something to consider. How many people debate back and forth in the morning as to whether they should take the M3 or not because they are near or beyond their mileage limit?

I buy my cars now...gently used. I let the first owner take the first-year depreciation hit, then buy a nice, low-miles car. And with the residual value left on my previous car I can put down a nice big down payment and qualify for great rates (currently 2.25% on a 2010 M3 vert, bought used this past summer). That's a deal I can live with, and enjoy.

Although everything you say is true, it also works both ways with purchasing. If you get into a major accident you and you own the car and it wasn't totalled, you have to live with that cars accelerated depreciated value. While in a lease its just 3 and flee and you have gap insurance.

Dave

[IFX]

I personally would never lease. Cash only.

[Ateam]

Originally Posted by IFX

I personally would never lease. Cash only.

You don't even have an m3 big baller. Paying cash for a regular 3 series is a lot different than an m3. Don't be a hater because you roll in a 335

[desertfox73]

Originally Posted by Dave07997S

Although everything you say is true, it also works both ways with purchasing. If you get into a major accident you and you own the car and it wasn't totalled, you have to live with that cars accelerated depreciated value. While in a lease its just 3 and flee and you have gap insurance.

Dave

Agreed...hence the large down-payment (at least $20k), so it's pretty hard to go upside-down.

[IFX]

Originally Posted by Ateam

You don't even have an m3 big baller. Paying cash for a regular 3 series is a lot different than an m3. Don't be a hater because you roll in a 335

What? Guess you can't read very well.

[Ateam]

Originally Posted by IFX

What? Guess you can't read very well.

sorry you don't have an e9x m3. Yes I could buy 2 e46m3s for cash. Why are you even posting what you would do regarding a car you do not even own? ballling

[dagolfpro]

Originally Posted by jnr

The current money factor, .00195, kind of sucks - it is the equivalent of a 4.68% interest rate. However, if you are a current leasee of bmw financed customer turning in your current car, you can get a MF reduction of .00030 for owner loyalty, plus the end of year "enhanced" loyalty reduction of .00075 (car must be taken for delivery by Jan 2), which brings your MF down to .00090, or the equivalent of 2.16% interest.

There are other options, such as putting down multiple security deposits, that can bring your rate down to the equivalent of less than 1% (although you do not get interest on your security deposit, but who is earning much money on their savings anyway at present).

Wow, that's a great MF with a loyalty & end of year "enhanced" loyalty reduction of .0003 & .00075. I bought my car in October and mine was .00185 and I paid a total of 7 security deposits to lower the MF to .00143 which gave me about 3.432%.

Had I waited longer, my E90 wouldn't have been around. So, small price to pay for exactly what I wanted. That's what I tell myself anyways.

[dagolfpro]

Originally Posted by Dave07997S

It depends on the situation of the buyer. If the only way you can afford the payment is by leasing, then I would not recommend leasing. Also, you have to be able to take advantage of the tax deduction of the lease. I lease as I write the car off as an expense as I am self employed. Sometimes a lease payment is very low due to the manafacturer subsidizing the residual but the money factor can be somewhat high. This isn't a good lease as you won't build any equity in the car and you just walk away at the end of the lease.

My current lease at BMWFS is the best of both worlds, it has a realistic residual that actually mimics what your payoff would be if you were to buy over 60 mos. with a low money factor. When I factor in the tax write off I actually come out ahead vs. buying. If you end up buying at the end of the lease and finance the residual then it now becomes more expensive to lease than buy.

Like I said it all depends on the indiviuals situation.

+1

Pros of Leasing:
Write off the lease payment via miles and usage of the car if self-employed.
Likes new cars every 3 years
Can't afford to pay cash or have nothing to put down to reduce monthly payments.

Cons of Leasing:
It'll cost you more to own if you decide to buy it at the end of the lease.
Can't think of anything else.

[AlterZgo]

Originally Posted by Hurricane

Chronic leasing is costly. However buying new and keeping the car for less than seven years is costly especially if it takes longer than four years to pay the car off.

This was my problem. I used to buy and keep cars for a long time. Then the last 2 cars I had, I paid cash but got bored of them after 2-3 yrs. In both cases, I would've saved money if I had just went with leases instead of buying them.

Now, for my current car, I leased it with the full knowledge that if I really like the car, I can pay it off at any point during the lease or just turn it in at the end of the lease w/o hassle.