05-13-2019, 09:23 AM | #89 | |
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If I pay cash & keep 10 years, I am way ahead of the game vs 3 leases. When you pay 40K over 3 years & end up with nothing, not sure how that is a smart move. |
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05-13-2019, 10:37 AM | #90 |
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Depends on what your goal is. If it is to always have a vehicle that is new, under warranty, etc. then leasing may be the smart move. If the costs/savings is your motivation then it probably will not be. Each person has there own reason for leasing or purchasing and what seems like a great move for one may not be for the other. Just like some folks are only comfortable investing in CDs or bonds while others are 100% growth, neither is necessarily wrong. We all have our own comfort level with risk, spending, etc. Sometimes paying more is actually the least expensive, maybe not in terms of dollars but in terms of discomfort or stress.
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05-13-2019, 10:44 AM | #91 | |
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My point is simple. There's an opportunity cost to the $70-80k you put into something that's guaranteed to lose 45-50% of its value in three years, and up to 90% of its value in 10 years. That money could have been otherwise invested in real estate, stocks, bonds, businesses, an education, self gratification, whatever. Leasing, despite having its own opportunity costs, leaves you that much more initial capital to do so if you wish. And that difference in opportunity cost should be factored into these 'leasing versus buying outright' calculations as it is often not. I don't see why this is an argument. |
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05-13-2019, 02:18 PM | #92 | |
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05-13-2019, 02:28 PM | #93 |
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I am leasing our X5 and it is the first time I have leased. At this point in my life, completely retired, we are putting way less than 10K miles on each of our 3 cars so a low mileage lease was feasible. With the high depreciation of BMWs, just like almost all luxury makes, I did not want to tie up $75K in a depreciating asset. I can afford a monthly payment for a very nice car that is under full BtoB warranty. In addition, BMW still pays for all routine maintenance for 3 years which is the term of our lease. Since we get a new car every 3 years, I am fine with never "owning" the car. It will depreciate at least 50% in 3 years but the residual was set at 59% so in essence, BMW is till subsidizing leases to make it attractive for those that want to lease. Investing in a depreciating asset at this point in my life didn't make sense. If we end up really liking the X5 after 3 years I may look into buying a nice CPO 2020 model. I won't be buying out my car since the residual will be higher than the market value.
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05-13-2019, 08:13 PM | #94 | ||
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If you're interested in modifying, accessorizing, or customizing - unless it's reversible - one shouldn't be leasing, period - that's on them or better informed. While all of my leased BMWs starting from 2001, have been trouble free, except for my 2001 540iT M Sportwagon (BMW V8s back then were horribad for reliability), I won't be owning one in the future. There's just too much technology in vehicles these days to f-up, LOL. We're all adults and can do w/e with our finances - I don't really care if people buy or lease. We're all here to enjoy an automotive brand we're passionate about and the vehicles they make. Enjoy the ride!
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05-13-2019, 08:30 PM | #95 | |
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Basic reversible mods like wheels, suspension, exhaust, add-ons - no different than if you're parting out a car you're selling or trading in. If you've done something more permanent to your leased car, that's just very poor foresight. |
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05-15-2019, 05:03 AM | #96 |
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Do what fits your budget. I drive approx 21k year and already eyeing up a high mileage lease. when you do the math a lot of it makes sense. What drives me crazy about BMW and other german cars, they don't last long. Ive gone through several german cars and i swear once you get close to 100k on them they blow up. its literally like someone at headquarters monitors and presses the "times up" button. oil leaks and everything else. yeah, their more fun to drive than most japanese cars but reliability is ridiculous. Im actually doing a lot of research on where BMW gets their parts from. I just don't get it. To have an $80k car literally break down because the software needed to be updated is retarded. Never see this from Lexus, unheard of. Im totally on the fence as to whether to step into a new X5. All the new tech is slick, no doubt, but all the new electronics scares the crap outta me. If your low mileage and just lease and turn in every 3 years who cares right. But if your passionate about the car, pay it off, own it, Im really having a tough time investing in something that is going to shit the bed fast. The only thing thats keeping me in the game with BMW is the service dept at the dealer where I live. Everything is just easy and turn key, in and out. Like a pit crew. There is value there. Lexus, Christ, its like every 2500 miles you get multiple alerts telling you you need another oil change. Constant.
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05-24-2019, 08:30 PM | #97 | |
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05-24-2019, 11:36 PM | #99 |
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As I mentioned before, the only reason I leased the X5 is to ensure the vehicle is always under warranty. I purchased my F10 and expensive repairs started after the warranty period expired. It is, frankly, very stressful.
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05-24-2019, 11:50 PM | #100 |
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I'm sure your situation is the case for a lot of people who lease. Very few, I think, actually take cash they didn't spend because they leased and actually invest in an appreciating asset. What's probably more prevalant is they lease more car than they could have afforded if they had purchased. Great instant gratification, but not the best choice in terms of financial decision making. Buying more car than you can afford at the highest point of the depreciation curve and then repeating that transaction every 3 years has a very high premium. But, if a person wants the latest and doen't want out-of-warranty issues, then its a price worth paying. I've kept 4 BMWs for years past their warranty and never had a problem. So far, I've been lucky I guess.
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05-25-2019, 11:12 AM | #101 |
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There is no one-size-fit-all blanket answer. I evaluate lease vs. buy for every car purchase individually, since lease pricing IS heavily dependent on how the numbers set for each model at any given moment.
With the right deal, lease can be financially much better than buying. Rule of thumb for good lease deal: no down payment and monthly payment less than 1% of MSRP (or LeaseHacker.com Score of > 10 years, meaning it would take > 10 years of payments to be equal to MSRP). Specific own examples (3 years leases): 2016 535i 68k MSRP, total lease cost 23k. 2018 M3 ZCP 82k MSRP, total lease cost 27k. Some folks manage to get even better deals. That said, some brands or models have absolutely terrible lease rates and should never be leased (e.g. M2). Current numbers for X5 are not bad, but not great either, so I might buy this time instead of lease. At the end of the day, from _purely_ financial perspective buying BMW is terrible idea regardless how to do it |
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05-26-2019, 01:20 PM | #102 | |
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05-26-2019, 01:22 PM | #103 | |
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05-26-2019, 03:46 PM | #104 |
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I planned to finance but now I’m seriously considering lease. In my case the money is coming out of an IRA that is currently earning 15 %. Finance would be at 2.99 percent but actual dollars/monthly payment would be much lower with a lease. So a lease keeps the max amount of $$ in savings earning for me.
Also, every dollar I take out of an IRA is taxed -an added expense to consider. I’ve never leased a car or considered leasing. Every new car we have bought has been cash, a family car we always plan to drive into the ground. With the X5 being my first tech and luxury car, I’m starting to think a lease will be best because I’m not comfortable with the long-term maintenance/cost history of BMWs. This way i can choose to decide later if I want to buy a BMW I plan to keep for longer than four or five years. Or switch to a Lexus - which hopefully will have some better choices in a few years. A Lexus I would not hesitate to keep long term. If I finance for five years I end up with a car that is upside-down almost from the gitgo. Basically I’ll never really have any equity to put toward a trade or down payment. If I lease, when I get rid of the car I don’t expect to have any equity, but I’ll have a lot fewer dollars invested in it. My car will probably be built next week, so I have maybe 10 more days to make a decision. I will have the dealer send me the specs on both lease and finance contracts before I go to pick up the car. I’m sure I will love the car, but being retired now I might want to keep a new car that is under warranty rather than maintain a BMW as it gets older. |
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05-26-2019, 07:12 PM | #106 | |
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As already mentioned, buying maybe a better financial move for some, while for others it's to lease. It really does depend on the individual situation. If you're someone who wants a new car every few years (and can afford it), there is no sense in buying the car and taking the full hit on depreciation when it comes time to sell or trade. If you're in a state that only charges tax on the leased value of the vehicle instead of the full amount, that is another plus. That being said, I don't know your situation, but I would generally question whether money should be taken out of an IRA for a brand new luxury car purchase. As you said, that penalty is an added expense along with the lost earnings of "15%". |
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05-26-2019, 07:56 PM | #107 |
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Yes, and I don’t expect the stock market to keep me in the 15% range forever - that could change for the worse at any time. But buying the car outright is nonsensical due to the tax hit. So I have to decide how to finance.
A 3-year lease would cost almost $1,000 a month less. With every dime I spend being taxable, that is a large potential savings. I feel like I will continue to want a car that is new under warranty. Trading it in at the end of the lease would probably give me a larger trade than financing for five years ( my original plan) but I’m not sure. I’m going to get in touch with the finance manager this week and find out what all of the numbers are. |
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05-26-2019, 08:06 PM | #108 | |
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05-27-2019, 11:45 AM | #109 | |
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AND I’ve only spent $27k to drive a $70k car for three years. For someone living off retirement savings, this seems like a no-brainer to me. I think I’m convinced to lease and just lease a new vehicle again in three years. |
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05-27-2019, 12:01 PM | #110 | |
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