[Animalneurodoc]

Hey guys, I know there are numerous posts about this but was hoping for some quickie input.

I just benefited from leasing my Z4. I opted for lease payoff at 31K and and was able to turn around and sell it for 10K more. Thank you COVID.

My new X5 arrives tomorrow. My expectation is to only keep the car for 3 years as I'd like to go electric but won't be in a house where I can have a charger until then. My yearly mileage is approximately 7500 miles. If you knew in advance you wouldn't keep the car past 3 years, would that make leasing advantageous or can you resell for a similar value? For what its worth the dealer is saying $500 in loyalty for purchase and $1000 for lease.

On a separate note can anyone speak to the expected return value of XPF stealth on resale?

Thanks!

[TXPearl]

The lease will cost you a $925 acquisition fee, but you'll get an additional $500 of loyalty, for a net cost of $425. The current BMWFS base money factor implies an interest charge of just under 4%. You can keep your cash and make about 4.5% (at least today, could change in future), but income taxes would eat up some of that return (individual circumstances vary). Normally, I'd say that makes leasing a no-brainer for you. The problem today is the lease residuals are so low (53% for your scenario) that they're much less likely to save you any money (e.g. when the value of the 3-yr old vehicle is less than the residual). It may be cleaner just to buy the car, keep your flexibility on timing, and trade it in when you're ready in three or so years.

If it's lease vs finance, that will depend on the finance interest rate. Would need to be equivalent to 4% or better.

Of course the dealer my try to mark-up the lease money factor or interest rate, so your actual variables may change.

[Animalneurodoc]

Thank you, this is very helpful!

[HNSKP]

I realize you already picked up your car but maybe this can help someone else.

Agree with all points made by TXPearl. Other factors that may or may not matter to you:

- In a lease, the residual is locked in which benefits you in case of an accident, where the value of the car can drop significantly. You’ll have to get the car fixed but you do not assume risk of additional depreciation due to the accident, BMWFS does.
- Leasing with maximum security deposits can be an effective way to lower the money factor and total rent charge. In my case, it worked out to ~7% return with essentially zero risk which beat out other risk-free investments at the time.
- It can be very simple to get out of a lease with almost no effect on cash flow. Use sites like swapalease, leasetrader or the classifieds here. Much easier to do this if you got a great deal to begin with. I did this with an F30 340i that I got bored with and it couldn’t have been easier. I’ve read that other brands can be more difficult to work with (eg Merc requires the new lessee to have a very high credit score).
- Potential tax deductions differ with leasing vs financing. Talk to your accountant.