Why do so many new BMW drivers lease (most of any brand)?

[carseatsm5]

Originally Posted by lucasb5696

Been reading through the thread and the links but the article carseatsm5 posted doesn't seem to have anything on it anymore so probably quite outdated.

Curious if anyone's got other insights or any 2025 data on this, would be interesting to see if that 77% figure's moved at all with how rates have been, and whether it's just a BMW thing or other brands lease at similar rates too.

You brought my thread back to life!

[carseatsm5]

Originally Posted by DrFerry

Here y'uh go...
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https://www.spglobal.com/ratings/en/...TML/id/3451821
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https://www.bmwgroup.com/content/dam...Q3-2025_EN.pdf
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https://www.experian.com/blogs/ask-e...ased-vehicles/
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https://insideevs.com/news/727150/bm...se-percentage/
.

Cool data thanks for sharing.

[carseatsm5]

Two years later and I’m still wondering what is specific to BMW drivers that makes them lease so much more. Very few people even attempted to address the question!

Best guess I have is that luxury cars skew heavily toward lease in general and this isn’t only a BMW phenomenon. As to why I’m guessing the lease is financially easier to reach than the purchase.

Also a good suggestion was made that BMWs are regarded as unreliable so fewer people want to buy them outright feeling they’re on the hook for the unreliability long term.

[baron95]

Originally Posted by carseatsm5

Two years later and I’m still wondering what is specific to BMW drivers that makes them lease so much more. Very few people even attempted to address the question.

It's quite simple really. BMW Financial NA is used by BMW to provide sales incentives without discounting the MSRP. In addition, BMW is *the* aspirational brand for younger second hand luxury/sport buyers (infinitely more than Mercedes, Lexus, etc). So that keeps residuals high.

Lease incentives + high residuals + BMWs 3 year included service mean low cost leases with no ownership hassles. What is not to like.

[JamesBMer]

Leasing is especially attractive with BMW because of strong residual values, competitive lease incentives, and the fact that many buyers like driving a new car every 2–3 years. A lease still counts as a sale for BMW since the vehicle is sold to the finance company or leasing arm. The real question isn't whether it's a "real" sale—it's whether the model retains enough value to make leasing attractive.

[Janjohn]

Originally Posted by afadeev

As is usually the case with all generalities - it's not as simple as claimed.
For anyone still reading this thread - run your own #s for your own life's circumstances. Three will be scenarios when buying and holding for a long time is the right move (2 out of 4 cars in my garage). There will also be circumstances where leasing is the best way to go (other 2 out of 4 cars).

The Devil is in the details.
As with most interesting situations in life!

Case in point - good luck to anyone who owns a BMW with hot-V8 engines (N63, S63, etc). Those ones were born'n'bred to leak and self destruct by ~60-80K miles. Replacing them is ridiculously expensive as well, $20-25K with parts and especially labor. Basically, when those engines go, the cars are mechanically totaled.

YMMV,
a

I would suspect the ad is funded by Lexus.

[EBS0712]

Besides all the above .....
If you live in a high sales tax state or local leasing saves on the sales tax because you are only paying tax on roughly 40. % of the cost of the car. On a $60 K purchase the tax at 10% is $6,000. The same leased is $2,400 so the savings is $3,600 which is substantial.

[carseatsm5]

Originally Posted by baron95

It's quite simple really. BMW Financial NA is used by BMW to provide sales incentives without discounting the MSRP. In addition, BMW is *the* aspirational brand for younger second hand luxury/sport buyers (infinitely more than Mercedes, Lexus, etc). So that keeps residuals high.

Lease incentives + high residuals + BMWs 3 year included service mean low cost leases with no ownership hassles. What is not to like.

Some good thoughts. Well said.

[Rob_G77]

Originally Posted by JamesBMer

Leasing is especially attractive with BMW because of strong residual values, competitive lease incentives, and the fact that many buyers like driving a new car every 2–3 years. A lease still counts as a sale for BMW since the vehicle is sold to the finance company or leasing arm. The real question isn't whether it's a "real" sale—it's whether the model retains enough value to make leasing attractive.

Strong residual values?? That's certainly not the case here in Canada where residual values are around 40% after a 4 year lease. And BMW kept dropping the lease residual values which drove down resale value. Even the X5 has now become a resale turd.

Rob

[pbonsalb]

Originally Posted by EBS0712

Besides all the above .....
If you live in a high sales tax state or local leasing saves on the sales tax because you are only paying tax on roughly 40. % of the cost of the car. On a $60 K purchase the tax at 10% is $6,000. The same leased is $2,400 so the savings is $3,600 which is substantial.

My state does not have sales tax, but gets money from car buyers and lessees through high registration fees for the first few years. If you lease a $100k car or buy a $100k car, you pay the same registration fee, which is probably $2k or more. In the 4th year it drops dramatically.

[baron95]

Originally Posted by Rob_G77

Strong residual values?? That's certainly not the case here in Canada where residual values are around 40% after a 4 year lease. And BMW kept dropping the lease residual values which drove down resale value. Even the X5 has now become a resale turd.

Rob

A 4 year lease is far from typical. 36 and 24 month leases are for more common. Four years really starts to make leasing unappealing - that is already a long "ownership" time for new luxury car buyers.

There will always be good lease deals and bad lease deals, just like there are good purchase deals and bad purchase deals.

If you leased an XM you won the lottery. If you bought one you lost. If you managed to buy a GT3RS or GT4RS you won the lottery. If you bought a Taycan you got hosed. If you leased, "not your problem".

But in general, there are more good lease deals than purchase deals for BMWs if you like to trade cars every 2-3 years.

[Machinebuilder]

There are lots of reasons pro and con to lease. But the question was why BMW more than other luxury brand and that is difficult to understand. BMW rates are not that much better and their cars are in the same price range as others. No real advantages vs Audi, Porsche, Mercedes, Lexus etc.

[Janjohn]

Originally Posted by Machinebuilder

There are lots of reasons pro and con to lease. But the question was why BMW more than other luxury brand and that is difficult to understand. BMW rates are not that much better and their cars are in the same price range as others. No real advantages vs Audi, Porsche, Mercedes, Lexus etc.

My educated guess/opinion is that BMW has and is advertised as the high-tech brand. Those who lease generally are afraid that the electronics won’t last as long as the rest of the car or SUV. I bought my X3M50 instead of leasing because I’m betting that the electronics will last as long as I own it.

[F32Fleet]

Originally Posted by Machinebuilder

There are lots of reasons pro and con to lease. But the question was why BMW more than other luxury brand and that is difficult to understand. BMW rates are not that much better and their cars are in the same price range as others. No real advantages vs Audi, Porsche, Mercedes, Lexus etc.

Higher residuals.for entry level models.

[louielouie]

Originally Posted by DrFerry

House, apartment and condominium lease agreements do exist with an option to purchase and are commonly referred to as lease-option agreements, lease-purchase agreements, or "rent-to-own" contracts. These legal arrangements are used for houses, apartments, and condominiums alike.

Types of Rent-to-Own Contracts:
While they both combine a rental lease with a potential property sale, they have distinct legal differences:

Lease-Option Agreement: This gives you the right or option to buy the property when the lease expires, but you are not legally obligated to do so. If you choose not to buy, the option simply lapses.

Lease-Purchase Agreement: This legally obligates you to purchase the property at the end of the lease term. Failing to close the sale at the end can result in a breach of contract and legal penalties.

I agree that renting (leasing) a car does provide flexibility should a lifestyle change or adverse event happen. Which is the same when renting a house or an apartment; one can simply break the lease, typically incur a penalty, and then move out.

I didn't know this was a thing but tbh, short of favors to family and friends, I'm not sure what sellers would move forward with these options unless they were in a low demand area.

All I wanted to get across is leasing just isn't as bad as people make it out to be. Yea, the cheapest option is buying a new car and keeping it a billion years. Or better yet buying a used car for that. There's no magic/surprise there. But if you're not interested in doing that, leasing definitely isn't some money pit some think it is.