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Old 01-14-2013, 05:56 AM
boltjaM3s boltjaM3s is offline
Location: USA
Join Date: Nov 2009
Posts: 9,049
Mein Auto: BMW M428i
Originally Posted by PK2348 View Post
You are not very good in finance either. First of all, you paid more, but bmw also gave you few cars instead of just one. Second, you paid more because you're paying interest. becasue in essense you borrowed the purchase price from the bmw financial, and you pay them back in monthly payments and then at the end by returning the car. It's a fairly simple amortization schedule if you're familiar with it. When your lease is over BMW owns your car and most likely has to sell at a car auction at whatever it brings in. They would much rather get a check from you upfront for the full purchase price. The interest built in to your payments also reflects the risk of the car overdepreciating when the lease is over. So you paid BMW to retain the risk of ownership. Anytime financial risk can be eliminated is good for business, as it removes uncertainty. Long term reliability and long term owners are important as it has direct effect on what they get for the car when your lease is over.
I run a $300M division of a Fortune 500 company, have a dual-income SVP wife, own two homes, have 4 kids whose college funds are secured, am on track for an early retirement mid-50's, have no debt whatsoever (aside from minimal mortgages for tax purposes), and have a 7-figure net worth that makes me blush. So, yeah, I think I am actually "very good in finance" thank you very much. Might want to think twice before insulting strangers on the internet next time.

Your rambling high-school version of how leasing works is really thoughtful of you, but you're proving my entire point: If you pay more you can get a new car every 3 years, eliminate the loss of owning a depreciating asset, and eliminate the variability of service and repairs completely. Those who buy a $45,000 BMW, keep it for 7+ years, and then sell it off are the ones who are being thrifty, driving the financial equivalent of a $20,000 car for that span. Lecture them. Tell them that they're in over their heads, shouldn't be owning a BMW they really can't afford.

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