Think before you lease

[starkraven]

Originally Posted by Sleeper519

Face it, most people lease because they can't afford to buy.

And there's the sucker punch! Ouch!

[BigHat]

Originally Posted by Sleeper519

Face it, most people lease because they can't afford to buy.

Really? You some sort of an expert? Does your expertise span the nation or just your region?

Wow thanks for the posting. Very insightful. I wasn't sure about this, but when you wrote "face it" I knew your opinion was, in fact, a universal truth.

By the way, I paid cash for my 2011, but I obviously understand the basic tenets of finance much better than you do, so it's hard for me not to weigh in when I read BS.

These threads where people assume their preferences are the only ones that make sense are so wearisome.

A couple of basic points to ponder that might help understand this a bit better.

1. The cost of money is the cost of money !!!

2. A car is worth what it's worth when you decide to part with it regardless of the way it was initially procured. Ever hear of someone offering to buy the used car for more because the owner paid cash vs financing/ leasing?

3. Keep the discussion at the "apples to apples" level. It's an irritating distraction in a lease vs buy debate to chime in a say "buy used and save the depreciation hit." Really? Wow, we hadn't thought of that.

4. If you understand all facets of leasing and can bargain well, at the end of three years the cost of a leased vs financed vehicle can be identical. In some cases, the absence of a downside (set residual) can mean the lease approach may have reduced total ownership costs.

5. As someone educated and working in finance I have also learned that what there are emotional aspects of a business transaction that often trump the cold hard facts. If one hates having a payment, or "not owning" the vehicle, these things can rightly push one to a different viewpoint, but that doesn't make right for those quite content with a payment, etc.

[BMWMFAN27]

I think leasing right now is the way to go over buying new most of the time. However, with some brands that don't really have any lease incentives it is not true. With some Porsches (at least in my experience) the cost to buy vs lease is so slim that you might as well own the car. With BMW you get the free maintenance (its not much, but something), you get the knowledge that any minor car door dings etc is covered under your lease, and like someone brought up if an accident happens the CarFax no longer is the big boogie man waiting to get you. Finally, I do not know 100% if this is true, but it would seem when BMW changes their models like they just did in the 5 series that if you owned the car a greater depreciation would hit than if you just leased since many are not going to want the "old version." I could be wrong this is just my personal hunch.

[starkraven]

I couldn't care less about how people pay for their cars with their money, and I bore easily when people start bickering about whether leasing or buying is the better option. (Well, that is until the bickering gets really nasty. ) I've leased, I've bought, and my reasons are my reasons.

My informal observation is that once you subtract the 17 year-olds who pay in cash , the majority of people on automotive forums lease their cars. A lot of them are vocal and defensive about the reason they leased, and they try to blow sunshine up everyone's asses about how leasing is the be-all-end-all and that people who buy are morons. To that minority, I'd point out that there is a reason that car manufacturers offer leases to customers, and it is not so they can make less money on the sale. Having that option lets them sell more new cars more frequently, and they get another chance to make a profit at the end of the lease. Finance guys miss calculating the residual to their favor sometimes, but it is only when a wide scale, unforeseeable economic event occurs.

[BigHat]

Originally Posted by BMWMFAN27

I think leasing right now is the way to go over buying new most of the time. However, with some brands that don't really have any lease incentives it is not true. With some Porsches (at least in my experience) the cost to buy vs lease is so slim that you might as well own the car. With BMW you get the free maintenance (its not much, but something), you get the knowledge that any minor car door dings etc is covered under your lease, and like someone brought up if an accident happens the CarFax no longer is the big boogie man waiting to get you. Finally, I do not know 100% if this is true, but it would seem when BMW changes their models like they just did in the 5 series that if you owned the car a greater depreciation would hit than if you just leased since many are not going to want the "old version." I could be wrong this is just my personal hunch.

All valid points, but remember that what the dealer/company is willing to put on the table in terms of lease incentives is just that an incentive, and if you're willing to bargain hard that's usually available on the purchase side as well. Leasing makes dealers more money then they lose, primarily because it's easier to obfuscate the true costs in a lease situation. If you take the time to study up though it's rarely anything more than a few bucks either side of a wash.
You are also right about diminished value, but you can sometimes have a battle on your hands during a lease turn-in, so again, fairly much a wash.

[BMWMFAN27]

True like the current recession. BMW is taking it in the pants on used cars now especially the old 5 series coming of leases and M5s with the new ones coming out. Many are not willing to spend as much as they used to on cars. I would say witht he M3 though demands generally maintains itself such that it does not depreciate nearly as much as a 5 or regular 3 series. (Sorry if i am being Captain Obvious with that last sentence).

[BMWMFAN27]

Originally Posted by BigHat

All valid points, but remember that what the dealer/company is willing to put on the table in terms of lease incentives is just that an incentive, and if you're willing to bargain hard that's usually available on the purchase side as well. Leasing makes dealers more money then they lose, primarily because it's easier to obfuscate the true costs in a lease situation. If you take the time to study up though it's rarely anything more than a few bucks either side of a wash.
You are also right about diminished value, but you can sometimes have a battle on your hands during a lease turn-in, so again, fairly much a wash.

You are right many of the points can go back and forth and I think each deal and situation can be unique. There is no right or wrong "General" answer. Just have to do what is best for you on that particular deal, car and and time frame depending on your own needs, likes and comfort zone. Sometimes leasing works out betters and others buying is the way to go, so I wouldn't make a blanket statement of "Omg one is always better than the other and if you do the other you are a moron." Just my 2 cents. Oh and not picking on anyone in particular.

[BigHat]

Originally Posted by starkraven

My informal observation is that once you subtract the 17 year-olds who pay in cash , the majority of people on automotive forums lease their cars. A lot of them are vocal and defensive about the reason they leased, and they try to blow sunshine up everyone's asses about how leasing is the be-all-end-all and that people who buy are morons.

My observation is the opposite, but since it's just that, a pulled from my ass observation of a small number of owners, I don't cite it. Of course, the bigger point is that 1% of the ownership of a particular gives a rat's ass about hanging out in a forum, so what do we learn drinking our own bath water. I say, the true enthusiast is as likely to own as lease, what traits do they possess that could lead one to think otherwise? I own my car and I leased the last one -- nothing else about me or my finances change in the interim. The very young some how finding a way to get into their dream car, may lease more frequently but that's only a portion of the members here.

By the way, I am NOT in favor of leasing, I'm just against citing straw men is an effort to demonize it. As I said, done well, the cost pretty much is going to cost what it costs regardless of method of procurement.

In Feb when I was figuring out what to do about my new car, BMW was seriously licking it's wounds. It was my opinion the rates and residuals were robbery and they were trying to get healthy off of new leases. As a consequence, the math led me to buy. Things have improved it appears based on some of the terms I've read about here.

I know myself when it comes to cars. Despite thoughts to the contrary on purchase, I pretty much want a new car in three years or so. I also like knowing the total history of MY car so don't feel like buying used -- especially an M car. Of course, buying used and driving it into the ground is the cheaper approach, but so is driving a 10 year Accord. . People that buy "transportation" don't even know this website exists. We all the draw the line differently. I laugh a little when someone shares they "economical" way to own a BMW and that all other approaches are "wasteful." 95% of America that can't dream of owning a BMW probably hold a dimmer view of their assessment of "economical."

[starkraven]

Originally Posted by BigHat

My observation is the opposite but since it's just that, a pulled from my ass observation, I don't cite it. Of course, the bigger point is that 1% of the ownership of a particular gives a rat's ass about hanging out in a forum, so what do we learn drinking our own bath water. I say, the true enthusiast is as likely to own as lease, what traits do they possess that could lead one to think otherwise? I own my car and I leased the last one -- nothing else about me or my finances change in the interim. The very young some how finding a way to get into their dream car, may lease more frequently but that's only a portion of the members here.

By the way, I am NOT in favor of leasing, I'm just against citing straw men is an effort to demonize it. As I said, done well, the cost pretty much is going to cost what it costs regardless of method of procurement.

I love that. In my profession, I have to cite sources with footnotes often, and I'd enjoy writing something in a document with the footnote: "Pulled from my ass, 2010".

[starkraven]

Originally Posted by BigHat

In Feb when I was figuring out what to do about my new car, BMW was seriously licking it's wounds. It was my opinion the rates and residuals were robbery and they were trying to get healthy off of new leases. As a consequence, the math led me to buy. Things have improved it appears based on some of the terms I've read about here.

I agree wholeheartedly. When I bought this year, the difference between buying and leasing was $7/month.

Originally Posted by BigHat

I know myself when it comes to cars. Despite thoughts to the contrary on purchase, I pretty much want a new car in three years or so. I also like knowing the total history of MY car so don't feel like buying used -- especially an M car. Of course, buying used and driving it into the ground is the cheaper approach, but so is driving a 10 year Accord. . People that buy "transportation" don't even know this website exists. We all the draw the line differently. I laugh a little when someone shares they "economical" way to own a BMW and that all other approaches are "wasteful." 95% of America that can't dream of owning a BMW probably hold a dimmer view of their assessment of "economical."

+1
Well said.

[BigHat]

Originally Posted by starkraven

I love that. In my profession, I have to cite sources with footnotes often, and I'd enjoy writing something in a document with the footnote: "Pulled from my ass, 2010".

Roger.

[starkraven]

Originally Posted by BigHat

Apparently reading comprehension is also one of your shortfalls. But thanks for chiming in. You really added to the debate.

Wow, I am baffled. I agreed with everything you said. I admitted my observation was informal, you used a catchier phrase about yours. I gave you kudos for using the phrase. What are you talking about?

[BigHat]

Originally Posted by starkraven

Wow, I am baffled. I agreed with everything you said. I admitted my observation was informal, you used a catchier phrase about yours. I gave you kudos for using the phrase. What are you talking about?

I'm sorry. I corrected it after I saw it was you. My failure to pick up on the true nature of your point.

[starkraven]

Originally Posted by BigHat

I'm sorry. I corrected it after I saw it was you. My failure to pick up on the true nature of your point.

No worries! :beer:

[BMWMFAN27]

Originally Posted by starkraven

I love that. In my profession, I have to cite sources with footnotes often, and I'd enjoy writing something in a document with the footnote: "Pulled from my ass, 2010".

Brings back fond memories of blue booking in law school ha ha.

[BigHat]

Originally Posted by starkraven

No worries! :beer:

Well, chalk up another successful attempt by the gang to pole vault over the lease vs buy mouse turd.

Gotta run, another thread starting on why the E93 isn't really an M3.

[DadzM4]

Personally, I think if you are someone who likes to modify their cars extensively I think it makes sense to buy it. Many will argue that they lease them, modify them, take the parts off, turn the car in and sell the parts. When you factor the money spent on labor to install and remove, and the loss you take on the parts when you sell, you would come very close to the same amount of money lost if you were to sell your car after 3 years with all your mods. I lease one of our BMW's and bought my M3. I only bought it because it was an 09' with 645 miles on it and got $20k off the sticker, I was in the market to lease a new one, but this was a good deal so I took it. My useless $.02

[BMWMFAN27]

Originally Posted by DadzM3

Personally, I think if you are someone who likes to modify their cars extensively I think it makes sense to buy it. Many will argue that they lease them, modify them, take the parts off, turn the car in and sell the parts. When you factor the money spent on labor to install and remove, and the loss you take on the parts when you sell, you would come very close to the same amount of money lost if you were to sell your car after 3 years with all your mods. I lease one of our BMW's and bought my M3. I only bought it because it was an 09' with 645 miles on it and got $20k off the sticker, I was in the market to lease a new one, but this was a good deal so I took it. My useless $.02

Taking off the parts I would think would be a pain. If you are going to modify that extensively then you would probably be better off buying.

[Malek@MRF]

Is this really anything to even argue about? If you want to lease, lease it. if not, then buy it, finance it, BMW select, whatever else.

I've leased, and I have bought, and I doubt I will lease another car unless its going to be for "daily beater" type use.

[Hunter399]

Originally Posted by Sleeper519

Best is buy used with cash = no interest or finance; dodge the steep initial depreciation curve. When you lease, you will ALWAYS and forever have a monthly car payment (which I hate!).

Face it, most people lease because they can't afford to buy.

Exactly.

[chmura]

Originally Posted by Sleeper519

Best is buy used with cash = no interest or finance; dodge the steep initial depreciation curve. When you lease, you will ALWAYS and forever have a monthly car payment (which I hate!).

Face it, most people lease because they can't afford to buy.

I agree. Best is to buy used and pay for cash or just finance it. Plus you can get a CPO warranty along with it. You get the best of both worlds.

[Kyoshi71]

Originally Posted by Azorean

Best bet is buy used.

Holy crap!! It took 12 previous post before somone mentioned where the TRUE value is (however, I bought my 2010 because when I was looking in Aug '09, the money factor was bordering on criminal)