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The cost of new cars has gone up a lot in the past few years. especually with COVID and the shortage of microchips. Nowadays a brand new Kia can cost upwards of $30k.
A lot of lessees want to drive a premium luxury car they normally can't afford to buy. And they don't want to risk hidden problems they might get in a used car. Or they don't want to, or can't afford to, commit a significant amount of cash up front, since it requires only a small down payment. If you look at the statistics, the average New BMW lessee (Non corporate) driver makes less than $90K a year (Depending on model). Whereas the average New BMW Owner makes more than $130K a year (Again depending on model) For example, a fully loaded 2025 530i X-Drive runs somewhere in the mid $70K neighborhood. But you can lease one for around $6K down and pay somewhere in the neighborhood of $1000 a month depending on options. That puts them in the drivers seat of a car they could not afford to buy unless they inherited the money or won the lottery.
The 540i X-Drive M Sport Pro like I just ordered runs around $79K or more depending on options. But I buy cars and drive them for about 10 years, and never take out more than a 60 month loan, and pay around 50% up front. I also always sell my cars myself, and never trade them in, since its a rip-off. Yes, it makes it easy and convenient, because they don't have to pay to detail, or market and sell their own used car. It's a one-stop shopping at the dealership. But Dealers know how to take advantage of this and never give fair market value. Always wholesale or auction prices, and they have experts to manipulate numbers and play smoke and mirrors. People know this yet still trade in their used car because it's easier.
Also, not everyone can come up with enough cash to put down on it to keep the payments and interest reasonable on a 60 month loan. But they still want to drive a new, state of the art BMW.
And then again, a lot of people get them as a company executive lease. The employer will give them an allowance. So they, or the employer, lease the car they want, knowing they can either unload it and trade for a new one in 2-3 years, or buy out the lease if they really love it and want to keep it. And the company has foot the bill and paid the depreciation up front. They can get their own car for a lot less that way. Also at that point, they can still purchase the extended warranty and service plan since it still has manufacturer's warranty left.
My dad did that 2 or 3 times when he was an Executive VP, then Publisher for a Magazine in NYC. He would buy out the company lease, give it to his wife, and get another company car, and she would give her previous car, former lease/purchase to the next child coming of age to drive. So the whole household was driving BMW and Mercedes until they bought their first car for themselves. I, of course never got to gain from this as I was a child of his first marriage.
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