[Stinkyxy]

The reason I lease is because it is an option to walk away if needed. The option has a cost, generally not more than $1k, at least where I am. In one case I leased a car and when including the buyout it was actually cheaper to lease and buyout than purchase outright.

If you put 0 down and get into a totaled accident then you walk away and the insurance takes care of it. You get a new car as soon as it is written off. I believe there is potential to lose your deposit in this situation, it happened to a friend of mine.

When you finance the car the claim process is a little different and it can take longer. You may have to wait to purchase a new car.

If it's not totaled, insurance fixes it and you hand it back. No potential issues in the future.

If residual is too high, negotiate a new buyout or toss it back.

So leasing in my mind is additional insurance usually at a small price.

[LexxM3]

A lease, done carefully, is a multi-year test drive. Bimmers need to be tested extensively before the final decision.

To those that take pride in "owning", I certainly get it, but consider the difference of owning an appreciating asset versus a depreciating one. Owning a property or a blue chip stock vs. owning a car that's "worth" 30% less when you drive it off the lot are not the same thing.

Having said that, this is only going to be my second lease ever and it's specifically due to the experience of owning the previous bimmer.

[notanaudi]

I always just buy I want to be able to do whatever I want to my cars
Same reason I own a house and not a condo or apt

[Penguino]

Buy with extended 7/100 warranty. Pay off in 36 months. Keep for 7. Repeat.

[PBMX5]

With the lease support (inflated residuals) it was attractive enough to lease rather than buy at the moment. We'll see how it does reliability wise during that time. I typically look for a good CPO to purchase.

[mrjoed2]

I buy mine. Main reasons are the fact I don't put alot of miles on my cars, so it makes no sense to lease. And second is the pride of ownership & the ability to customize & modify as I wish. Something that you can't do or simply makes no sense as you would be putting money into something your going to part ways with in 3 years.

[sygazelle]

Originally Posted by LexxM3

A lease, done carefully, is a multi-year test drive. Bimmers need to be tested extensively before the final decision.

To those that take pride in "owning", I certainly get it, but consider the difference of owning an appreciating asset versus a depreciating one. Owning a property or a blue chip stock vs. owning a car that's "worth" 30% less when you drive it off the lot are not the same thing.

Having said that, this is only going to be my second lease ever and it's specifically due to the experience of owning the previous bimmer.

For those who take the cash they didn't have to spend on a lease and actually invest that cash in an appreciating asset, then leasing makes more financial sense. For those who lease to get the most car for the least monthy payments, they are essentially renting a depreciating asset at the steepest part of its decline (1st 3 years) and then doing it again, and again, and again..... This is a complex topic and there is no right or wrong sinces each person's economic situation is different.

[Penguino]

Originally Posted by Stinkyxy

The reason I lease is because it is an option to walk away if needed. The option has a cost, generally not more than $1k, at least where I am. In one case I leased a car and when including the buyout it was actually cheaper to lease and buyout than purchase outright.

If you put 0 down and get into a totaled accident then you walk away and the insurance takes care of it. You get a new car as soon as it is written off. I believe there is potential to lose your deposit in this situation, it happened to a friend of mine.

When you finance the car the claim process is a little different and it can take longer. You may have to wait to purchase a new car.

If it's not totaled, insurance fixes it and you hand it back. No potential issues in the future.

If residual is too high, negotiate a new buyout or toss it back.

So leasing in my mind is additional insurance usually at a small price.

It is never cheaper to lease + buyout than to buy outright. The lease payment is based on residual + depreciation&interest. Residual + depreciation = 100%.

[sygazelle]

Originally Posted by PBMX5

With the lease support (inflated residuals) it was attractive enough to lease rather than buy at the moment. We'll see how it does reliability wise during that time. I typically look for a good CPO to purchase.

Inflated residuals is like a drug pusher giving a kid some drugs for free to get him/her "started". Once on the bandwagon, leasing is addictive to some people.

[jcm304]

I always struggled with the lease/buy options as well. I really thought I was going to buy my G05 this year after my M4 lease ended, but the lease deal was just to good to say no to and I kept thinking what if I want to upgrade in 3 years...

[TurtleBoy]

Originally Posted by Penguino

It is never cheaper to lease + buyout than to buy outright. The lease payment is based on residual + depreciation&interest. Residual + depreciation = 100%.

That is not quite accurate. While the residual is based on the MSRP, the depreciation is based on the adj cap cost (price you negotiate - any down). In addition, many manufactures offer lease incentives that are not available when financing. While it is usually best to lease, take them and buyout early if they are large enough waiting until the end of the lease can still be beneficial.

[Penguino]

Originally Posted by TurtleBoy

That is not quite accurate. While the residual is based on the MSRP, the depreciation is based on the adj cap cost (price you negotiate - any down). In addition, many manufactures offer lease incentives that are not available when financing. While it is usually best to lease, take them and buyout early if they are large enough waiting until the end of the lease can still be beneficial.

You need to compare Apples to Apples. You can't say lease might make more sense if there are lease incentives because the same argument can be had if there were financing incentives. Apples to Apples, my statement is still correct.

Leasing a $74k MSRP car with a 8% discount from MSRP and $3k down you are paying $1040 tax in using Feb/March numbers. That gives you a total of $36,366 + a buy out of $43,660 for a total of $80,026 over 3 years excluding disposition fee of $395.

If you buy it with a 8% discount, $3k down over 36 months is equal to $75,799.

[TurtleBoy]

Originally Posted by Penguino

You need to compare Apples to Apples. You can't say lease might make more sense if there are lease incentives because the same argument can be had if there were financing incentives. Apples to Apples, my statement is still correct.

Leasing a $74k MSRP car with a 8% discount from MSRP and $3k down you are paying $1040 tax in using Feb/March numbers. That gives you a total of $36,366 + a buy out of $43,660 for a total of $80,026 over 3 years excluding disposition fee of $395.

If you buy it with a 8% discount, $3k down over 36 months is equal to $75,799.

LOL - never mind. If it makes you feel better just make up any scenario to fit your flawed logic. Your original statement is absolutely correct - "It is never cheaper to lease + buyout than to buy outright."

[Penguino]

Originally Posted by TurtleBoy

LOL - never mind. If it makes you feel better just make up any scenario to fit your flawed logic. Your original statement is absolutely correct - "It is never cheaper to lease + buyout than to buy outright."

Don't get mad because I'm right

[gs1403]

Originally Posted by Penguino

It is never cheaper to lease + buyout than to buy outright. The lease payment is based on residual + depreciation&interest. Residual + depreciation = 100%.

Technically makes sense until you consider the opportunity cost of the huge chunk of cash you just blew.

[mrjoed2]

Originally Posted by gs1403

Technically makes sense until you consider the opportunity cost of the huge chunk of cash you just blew.

Also consider the total cash you blow on a lease, only to look at a empty garage space after 3 years

[sygazelle]

Originally Posted by gs1403

Technically makes sense until you consider the opportunity cost of the huge chunk of cash you just blew.

For those who do invest the cash in an an appreciable asset, that's great and for them, a lease can be a good thing. For those who lease because they get get more car than they could otherwise afford, its great for instant gratification but probably not such a sound financial decision. They put themselves on a perpetual cycle of paying for a vehicle during its steepest depreciation rate (1st 3 years).

[gs1403]

Originally Posted by mrjoed2

Also consider the total cash you blow on a lease, only to look at a empty garage space after 3 years

Not sure what that has to do with opportunity cost. Pretty big difference between blowing $30-40k over three years versus being out $70-80k in one day (of which you'll get some back albeit same empty garage space

[gs1403]

Originally Posted by sygazelle

For those who do invest the cash in an an appreciable asset, that's great and for them, a lease can be a good thing. For those who lease because they get get more car than they could otherwise afford, its great for instant gratification but probably not such a sound financial decision. They put themselves on a perpetual cycle of paying for a vehicle during its steepest depreciation rate (1st 3 years).

Very true. That's a whole different question of affordability however. Don't think there's one answer to the leasing vs buying conundrum. Over the past couple years, BMW made it very attractive to lease with their lease cash, low money factors and high residuals. This trend seems to be changing and were I to buy a G05 today I'd probably finance it versus my F15 that is leased.

[bigdaveindubai]

Purchased two new bmw's cash in the last 8 months. I have never leased and never will. If you cant pay for it cash you dont need it.

[TurtleBoy]

Since the X5 was: my first BMW, my first SUV, and in the first model year I decided to lease. If everything continues to go as it has been, in three years I will be ordering a new one and purchasing it.

There is no one answer to the lease/buy question. For the long term owner, in the overwhelming majority of times it is less expensive to purchase rather than lease although in some circumstances with special incentives leasing and then buying is less expensive.

Some folks like to have a new vehicle every few years, for them it is probably better to lease rather than purchase but would depend on risk comfort, tax laws, incentives, interest rates, etc.

A prospective owner has to look at all of the numbers as well as consider their future plans and come up with something they are comfortable with. If they enjoy the vehicle and can make the payments/outlay without problems, in the long run it really doesn't matter whether they purchased or leased since the difference will probably not be significant.

[QVDriver]

Never leased in my life. However I typically don't finance either. With cars / SUVs easily broaching 100k between tax license extended warranty and service plans well it gets to be a challenge. However, we set aside a certain amount every month for big stuff. Typically keep the cars for 10 years. So for the X5 you could say it is 9000 a year assuming zero value at the end of the 10 years. Not sure how that compares to leasing.