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-   -   24 month lease vs 36 month lease (http://www.bimmerfest.com/forums/showthread.php?t=662993)

NeoBMW 12-08-2012 06:54 PM

24 month lease vs 36 month lease
 
Curios to find out some thoughts on leasing a Beamer for 24 month as opposed to the " standard" 36. I guess I'm asking from a financial sense.

Has anyone done it? Is it too quick? Pros, cons etc.

...All this while I'm looking for my elusive car..... :)

Thanks.

wildvlad 12-08-2012 07:09 PM

You will end up with higher monthly payments (unless there is special promotion for shorter term lease; currently there is no)

Remember, when mfr advertises lease prices they advertise them on "sweet spot" by duration, e.g. with lowest payments.

cordoor 12-08-2012 07:35 PM

Recently 39 months has had the best monthly.

-Corey

ChrisF01 12-08-2012 07:48 PM

Your payment is going to significantly higher, the first and second years are the quickest and deepest dive in terms of depreciation. So it's like financing a car with 0 down, then selling it after 2 years. You're going to be way upside down (if you only paid the payment and nothing over) In a lease case, your lease payment is that huge depreciation.

If money isn't an object go for it, more turnover, new cars more frequently.

NeoBMW 12-08-2012 08:42 PM

Hmmm...

Then why i was quoted a 24 month payment same as my 36month??Similar cars. (63k msrp) of course not paying MSRP.

Thx for the feedback

wildvlad 12-08-2012 08:43 PM

Quote:

Originally Posted by ChrisF02 (Post 7238553)
Your payment is going to significantly higher, the first and second years are the quickest and deepest dive in terms of depreciation. So it's like financing a car with 0 down, then selling it after 2 years. You're going to be way upside down (if you only paid the payment and nothing over) In a lease case, your lease payment is that huge depreciation.

If money isn't an object go for it, more turnover, new cars more frequently.

Actually, I just did that with my previous car (vw diesel jetta). $0 down, sold just prior to turning 2 years. Made $26 back :)

BUT, the car was purchase, so monthly payments were much higher comparing to those if I would lease the car for 3 years.

Basically 2 years lease for me would work almost exactly same (in terms of monthly payments) as financing car for 5 years

miamiboyca 12-08-2012 11:25 PM

Quote:

Originally Posted by NeoBMW (Post 7238491)
Curios to find out some thoughts on leasing a Beamer for 24 month as opposed to the " standard" 36. I guess I'm asking from a financial sense.

Has anyone done it? Is it too quick? Pros, cons etc.

...All this while I'm looking for my elusive car..... :)

Thanks.

Actually there are some great deals in CA for 24 month leases on 5 series. Check out the ask a dealer section. The thread is call something like super deal or dea of the year...

I think the residual is like 71%.

BTW to your question. I did it once and the difference at that time was about 2% more in my monthly payment. Well worth it IMO

5Xwen 12-10-2012 12:53 PM

Quote:

Originally Posted by NeoBMW (Post 7238491)
Curios to find out some thoughts on leasing a Beamer for 24 month as opposed to the " standard" 36. I guess I'm asking from a financial sense.

.

BMW Financial Services (or any car leasing company) may have promotions from time to time that make a shorter term lease the same as, or less expensive than a longer term lease.

I leased a E60 535xi for a 30 month term that was less expensive than a 36 month term.

I also leased a Mercedes E350 Sport for a 24 month term that was less expensive than a 36 month term.

In both cases, the manufacturer was subsidizing the shorter term lease to make it more attractive so the lease end date was coterminous with the launch of a new / upgraded model.

However, if you are making a financial decision, you need to consider several other factors including sales taxes, property taxes, documentation fee, return fees, etc.

With leasing - knowledge is power.

jjsC6 12-10-2012 01:29 PM

Quote:

Originally Posted by NeoBMW (Post 7238635)
Hmmm...

Then why i was quoted a 24 month payment same as my 36month??Similar cars. (63k msrp) of course not paying MSRP.

Thx for the feedback

I agree with the other posts. But be sure you know all the fine print - miles per lease period, disposition fees, taxes ets. I used to do only two year leases. But when the economic meltdown took place most manufacturers quit subsidizing two year leases to the extent they had been - maybe due to a short term issue of so many cars coming in off leases and the owner not being able to afford replacing the lease turn-in with another car from the same manufacturer.

Ralph1201 12-10-2012 02:24 PM

I would like to point out that

beamer is a BMW motorcycle. 5 series is a bimmer :p

(not really a finance guy so i left that for the experts)

chuck92116 12-10-2012 03:01 PM

There are several things to consider beyond the basic lease payment.

A 24 or 36/39 lease may make sense depending on your circumstances.

Tires for example will last approx 2 years. Depending on how you drive and the tire cost, you could be on the hook for $1500+ in tires before lease turn in.

In California, registration on a 3 series could be $350 or more if they repeal the registration rollback fees. So registration could be $800 or more soon. With a 39 month lease, you have to pay registration just as you are turning the car in.

When you factor in tires and registration alone, you could be talking an extra $50-$75 per month depending on the vehicle and state you live in, if you spread the costs ove rthe life of the lease.

Based on financial calcs alone, the 36 month is the best lease. But is it better than a 24 month lease? That depends if you are putting new tires on your car at month 22.:)

jjsC6 12-10-2012 03:07 PM

Quote:

Originally Posted by Ralph1201 (Post 7241348)
I would like to point out that

beamer is a BMW motorcycle. 5 series is a bimmer :p

(not really a finance guy so i left that for the experts)

Gee, they are the same company, aren't they? I have one of each and I could not tell you which is which - but then again who really cares? :p

5Xwen 12-10-2012 03:15 PM

Quote:

Originally Posted by chuck92116 (Post 7241406)

Tires for example will last approx 2 years. Depending on how you drive and the tire cost, you could be on the hook for $1500+ in tires before lease turn in.

Excellent point.

Tires, taxes and fees should be considered.

cordoor 12-10-2012 04:14 PM

Financials aside, I wonder if a 24 month lease would be more fun than a 36/39 month lease.

Is there anyone here who does a 24 month lease just for the fun of getting a car upgrade every two years instead of every three years?

-Corey

jjsC6 12-10-2012 05:39 PM

Quote:

Originally Posted by cordoor (Post 7241528)
Financials aside, I wonder if a 24 month lease would be more fun than a 36/39 month lease.

Is there anyone here who does a 24 month lease just for the fun of getting a car upgrade every two years instead of every three years?

-Corey

I don't really consider it fun, I'm just incredibly picky and in my nearly 45 years of driving I just have trouble liking a car for more than two years. I leased my Lexus GS350 for three years - my first ever daily driver I have bought with the intention of keeping for that long. I got out of the lease at two years and three months (and actually made money on it).

miamiboyca 12-10-2012 07:03 PM

Quote:

Originally Posted by cordoor (Post 7241528)
Financials aside, I wonder if a 24 month lease would be more fun than a 36/39 month lease.

Is there anyone here who does a 24 month lease just for the fun of getting a car upgrade every two years instead of every three years?

-Corey

I used to do it all the time. Registration did not really come in to play especially when I was in CA and they would stiff you the same every year. Only slightly more for a new car.

This is a great option, especially when you consider there will be a refresh to the 5 series in 2014. This would line you up for a 2015 quite nicely:thumbup:

jagu 12-10-2012 07:32 PM

Quote:

Originally Posted by cordoor (Post 7241528)
Financials aside, I wonder if a 24 month lease would be more fun than a 36/39 month lease.

Is there anyone here who does a 24 month lease just for the fun of getting a car upgrade every two years instead of every three years?

-Corey

A 24 month lease is not much more expensive because of the higher residual. I have only done 24 month leases and yes it's fun because you start shopping for the next car as soon as you drive off the lot:D

AggieKnight 12-11-2012 06:33 AM

Quote:

Originally Posted by jagu (Post 7241920)
A 24 month lease is not much more expensive because of the higher residual. I have only done 24 month leases and yes it's fun because you start shopping for the next car as soon as you drive off the lot:D

You, sir, are brilliant. I hadn't even thought to look into a 24 month lease. That would mean a European Delivery every 2 years!

OMG, brilliant!

Jagu, you are my new hero...and my wife nemesis. Congrats. :thumbup:

cordoor 12-11-2012 06:38 AM

I'm asking about switching from a 39 month lease to a 24 month lease now (my car doesn't arrive until Feb). As soon as I have the numbers in hand, I'll let you guys know so we can compare the two deals :-)

-Corey

miamiboyca 12-11-2012 12:58 PM

Actually they are more expensive. Yes their is a higher residual (6 or 7 percentage points which equals about 10% higher) but you have a much shorter window to pay (cut payments by 33% on a typical 36 month lease) for the depreciation so unless its heavily subsidized by BMW (what they were offering CA) it becomes counter intuitive.

cordoor 12-11-2012 07:20 PM

I have lease information for my particular build. For me, 24 months vs. 36/39 months is not worth it because it would be about $200 more per month to go with the 24 month lease over the 39 month lease.

My build is a 550i xDrive with MSRP at $85,450. Here are the monthly payments (not including tax) for each term with $0 down as well as the total "cost," that is, the total additional amount I would pay over the shorter term, to go with the shorter term:

24 months: $1,114/month, Total cost: $4,752
30 months: $1,007/month, Total cost: $2,730
36 months: $934/month, Total cost: $648
39 months: $916/month

So my opinion: It is not worth $4.7K to get out 15 months earlier. Go with either the 36 month or the 39 month lease. Go with a 36 month lease right now if you want to land your next lease three years from now within the fall discount/credit window of opportunity. Go with a 39 month lease right now if you are ordering your vehicle and you want to also order your next vehicle, but you want to take delivery of your next vehicle three months later than you take delivery of this vehicle so you can do PCD (performance center delivery) in the spring when you don't have to drive home through the Rockies in the winter :-)

-Corey

smashhell 12-15-2012 02:16 PM

Do

jagu 12-15-2012 02:25 PM

Quote:

Originally Posted by cordoor (Post 7244199)
I have lease information for my particular build. For me, 24 months vs. 36/39 months is not worth it because it would be about $200 more per month to go with the 24 month lease over the 39 month lease.

My build is a 550i xDrive with MSRP at $85,450. Here are the monthly payments (not including tax) for each term with $0 down as well as the total "cost," that is, the total additional amount I would pay over the shorter term, to go with the shorter term:

24 months: $1,114/month, Total cost: $4,752
30 months: $1,007/month, Total cost: $2,730
36 months: $934/month, Total cost: $648
39 months: $916/month

So my opinion: It is not worth $4.7K to get out 15 months earlier. Go with either the 36 month or the 39 month lease. Go with a 36 month lease right now if you want to land your next lease three years from now within the fall discount/credit window of opportunity. Go with a 39 month lease right now if you are ordering your vehicle and you want to also order your next vehicle, but you want to take delivery of your next vehicle three months later than you take delivery of this vehicle so you can do PCD (performance center delivery) in the spring when you don't have to drive home through the Rockies in the winter :-)

-Corey

I find it very difficult to believe that it cost $5000 more. The two times I have leased, the difference has been less than $90/mo more for the 24 month lease over the 36 month with no down payment required.

miamiboyca 12-16-2012 06:10 AM

Quote:

Originally Posted by jagu (Post 7252052)
I find it very difficult to believe that it cost $5000 more. The two times I have leased, the difference has been less than $90/mo more for the 24 month lease over the 36 month with no down payment required.

At times these leases are heavily subsidized, like what you are seeing in CA. But usually it's about $150-$200 difference per mon.

Build out a 5 series, price it at $500 over invoice and run the numbers yourself using the posted residuals.

jjsC6 12-16-2012 09:38 AM

Quote:

Originally Posted by miamiboyca (Post 7253073)
At times these leases are heavily subsidized, like what you are seeing in CA. But usually it's about $150-$200 difference per mon.

Build out a 5 series, price it at $500 over invoice and run the numbers yourself using the posted residuals.

I agree. I've run many lease comparisons on several different cars. It's unusual for the difference between 24 and 36 months to be less than a couple of hundred dollars. As others have said, there are exceptions, but it's rare. As I said above, I used to do 24 month leases and had some very good ones. But things have changed in the leasing business the past 3-4 years.


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