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trevdean
09-26-2010, 10:07 PM
Guys my new 550xi is en route and I expect to be able to buy within the next three weeks. I wanted to ask you guys a quick question. I am evaluating a two and three year lease for the car. I am a high mileage driver, minimum 15k annually. Normally I buy my cars but I've recently determined that I like having a new vehicle relatively frequently so I intend to lease the new bimmer. Which leads me to my question ...two or three years?

I know it is more expensive to lease it for two years but I'm drawn toward that option due to 1) new model year, it will potentially have rapid improvements, features, etc., and 2) oyster interior will show wear and tear, live in the mountains and may get dinged on lease return fees the longer I keep it anyway and finally 3) this is my first BMW so I am just not sure what the right "life span" is with 15k per year given warranty concerns.

I would appreciate any and all thoughts from previous owners. FYI the cost per month is several hundred less on the 36 month lease as you might imagine. :dunno:

vortexx
09-26-2010, 10:31 PM
Unfortunately, the current residual rate for the 550 is not that attractive, particularly for a new model. The 535 has a much better residual, so it makes for a better lease deal. Since you are a high mileage driver, and usually purchases, and likes to turn your car in every two years, and given that neither the residual or money factor are currently great, have you considered the .9%, 24 month financing offer? It is a pretty flexible program, since you can choose to have a balloon payment at the end of the lease, up to the residual value of the car. If you do the math between a purchase at .9% and a 2 year lease, the purchase looks pretty attractive. The disadvantage is that you are holding the risk for what the car will be worth, but in this particular case, it seems pretty safe. I almost always lease, but this time I am purchasing.

pony_trekker
09-27-2010, 10:53 AM
I'd say if you are going to be under 50k when you return the car then do the 3 year. If someone else is paying for the lease do a 2 year -- it's a whole lot more. Maybe 30 is in between somewhere but with these cars 3 years is the sweet spot.

quackbury
09-27-2010, 11:53 AM
Here's an outside-the-9-dots answer. I have traditionally done 3 year leases, and mounted snows for 5-6 months of each year. By rotating the tires like that, my E60 and two of my X5's were turned in with the original tires. HOWEVER, if I was running the OEM tires for 12 months, I would have had to buy at least one set of tires for each of those, and the RFT's are pretty darn expensive. So a question to ask yourself is: "If I go 24 months instead of 36 months, will I avoid spending $1,200 to $1,500 on tires over the lease term? If so, how does that affect the economics of the 24 month vs. 26 month lease?"

My 2011 X5D was ordered with the Sport Activity Package and 20" performance tires. I am seriously considering doing a 24 month lease for just this reason.

As always, YMMV.

trevdean
09-27-2010, 09:05 PM
Thanks for the data, guys. Only other question, are the wear/tear penalties linear over the three years given normal driving conditions? In other words, other than the tires (which is a really good point, BTW, I don't plan to change to snows in the winter), is there a calculation that I should think about with wear and tear penalties per year? E.g., keep the car one year, get dinged on average $200, keep car 3 years, get dinged $600?

Sorry for the dumb question, I've always bought my cars in the past so the finer points of leasing are a bit grey to me.

quackbury
09-27-2010, 09:21 PM
Thanks for the data, guys. Only other question, are the wear/tear penalties linear over the three years given normal driving conditions? In other words, other than the tires (which is a really good point, BTW, I don't plan to change to snows in the winter), is there a calculation that I should think about with wear and tear penalties per year? E.g., keep the car one year, get dinged on average $200, keep car 3 years, get dinged $600?

Sorry for the dumb question, I've always bought my cars in the past so the finer points of leasing are a bit grey to me.

No rule of thumb. Depends on where you live, and how hard you (and your kids) are on cars. With 4 BMW leases returned so far, the only excess wear penalty I've ever incurred was tires for my E39 540 SP. (They were almost down to the cords when the car went back - my lease was up in April so I kept the snows on till the day before turn-in - and it was cheaper to pay BMWFS for tires than to have them replaced at retail). OTOH I understand folks who live in NYC almost always have parking damage, from folks using the Braille method of parallel parking.