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Anyone purchase their vehicle and upon hindsight wished they had leased?

12K views 125 replies 65 participants last post by  oneon3putts 
#1 ·
Or vice versa? I understand that this is probably an awkward question, but I'm hoping that current owners who may have something to say about this will share their thoughts. I'm at that stage where I'm about to order the 550i msport (euro delivery) and I am agonizing over whether to buy or lease. I have done all the research and run all of the numbers and I am leaning toward leasing. I have found that it really does come down to how long one intends to keep the vehicle, and to how much of a premium one places on the option to buy at the end of the lease term.

I apologize in advance if this topic isn't for this forum, but i figured since I was posing a general question and not asking about any particular aspect of the ordering process, that this is the appropriate forum. Thanks in advance.
 
#2 ·
There is a really good thread over on the F30 Forum that has lots of pros and cons of leasing vs buying:

http://www.bimmerfest.com/forums/showthread.php?t=596309

I'm in the pay cash camp but there are many valid reasons to lease depending on your individual circumstances.

I will say it complexes the deal (in the dealers favor) so being armed with knowledge which can be gained form this board is priceless!
 
#4 ·
I think a lot depends on where you are life. I personally like to drive a new car, but because I'm still working it means I put on around 15,000 miles a year, along with the wear and tear that goes with a lot of highway miles. Leasing make sense to me. When I retire, the mileage and wear and tear should be lower, so I'll probably buy. It may also make more sense for younger owners with kids to go with the lower lease payment rather than either a higher loan payment or paying cash.
 
#5 ·
27,000 mi and 15 mos later im glad i purchased.
 
#6 ·
I have never understood leasing - seems like an overpriced way of renting to me. If I couldn't afford to buy the car I wanted outright, or the monthly payments where I financed, I'd get a cheaper car. But paying someone large sums to rent a car they own doesn't sit well with me.
 
#10 · (Edited)
Regardless of how you choose to finance your car, your single greatest cost is depreciation and that particular cost impacts lessees and buyers alike. Paying someone a large sum for what is after all a depreciating asset doesn't sit well with many customers. Ultimately, there are times when it make sense to lease and times when it makes sense to buy. With close to free money and BMWFS subventing residuals, leasing can be a great option even if you have the cash ready to go. Either way, you flushed just as much cash down the crapper as anyone who leased at the same time that you bought ;)
 
#7 · (Edited)
Leasing is a great option if you have a business. It's much less expensive than buying if you can write it off.

It is also less risky (do not put down payment except MSDs) just in case if you're involved in accident or get a lemon car.

I bought my previous car had it for 7 yrs. Someone hit me from behind and got into record. I had to lower my car value by 10% when selling because of the record.
 
#8 ·
Vote 1 for lease

I'm a big fan of leasing, even though I can't deduct any part of a car lease. This is my 3rd lease, and I don't think I'll ever go back.

First, you can think of a lease as a purchase with a "put option". At any time, I can buy the car for the sum of the remaining lease payments plus the residual. My lease interest rate equates to 3.26%- the rest of my payment is negotiated price less the residual divided by 36 payments. So apart from paying ~ 3% interest for 3 years, there would be do difference from me buying out my lease and buying new.

BUT... (3 Buts actually)...

1. I don't have to keep the car if I don't want to. If my car consumes oil (like my last owned 5 did but was within spec), I can give it back. Something better comes along, I get it instead. I have a put option- in 3 years I can walk.

2. If I bought, I'd pay sales tax on the full price of the car. By leasing I pay tax on the amount it depreciates (actually the lease payment which is almost all depreciation). So, my case, MSRP = $57.5k, negotiated price = ~ $51k, tax (CA) would be $3,950. The sum of tax on my lease payments is half that, at $1,818.

3. I think life's short and there are so many nice BMWs to drive- I've averaged a different car every 3 years (for the last 30 years!). But selling private party is a time consuming, potentially unsafe, hassle. And trade in values? They're a joke. With a lease, you negotiate the purchase price, AND the disposition price at the same time. It's really pretty good...

John
 
#16 ·
2. If I bought, I'd pay sales tax on the full price of the car. By leasing I pay tax on the amount it depreciates (actually the lease payment which is almost all depreciation). So, my case, MSRP = $57.5k, negotiated price = ~ $51k, tax (CA) would be $3,950. The sum of tax on my lease payments is half that, at $1,818.
John
One note for those who live in Arkansas, Maryland, Minnesota, Texas and Virginia, leasing is a little bit more expensive because those states charge sales tax on the entire sale price. For my 7, the difference is $1,058.55 in TX vs $929.43 if I had leased my car in CA.
 
#9 ·
Whether I lease or buy depends on what I want do with the car, how long I want to keep the car, and the overall cost of ownership. I run the numbers numerous ways before deciding which way to go. Since I wanted to mod my F10, buying was the only option for this car.
 
#39 ·
This is me sans the mod thing. I am not into modding my cars myself, but I do an independent analysis of each purchase before I decide to buy or lease. The current stable are both financed because the independent analysis showed that made the most sense at the time. Next time might be different. The vast majority of my BMW's were leases though.....
 
#11 ·
BMW's are sophisticated cars and quite cutting edge in terms of delivering new innovations. My N54 had issues with the fuel pump, injectors and water pump. I also had two bent rims and had to replace two run flat tires. I am glad everything was changed under recalls, warranty or additional insurance that I purchased. That said, I would never want to own a BMW in the long term due to these issues. It would be very costly.

I made the mistake of financing my N54 with the intentions of keeping it 10-years. Realizing all of the aforementioned problems, plus the eventual costly carbon build-up cleaning on back of the injectors due to the direct injection design, plus wastegate problems, and having twin turbos adding to the complexity of the engine, I decided to lease my N63.

I rather pay for the rest of my life each month to own a new BMW, then return it after 3-years, and get another brand new one with the latest body style and features. To me, that is enjoyment and complete peace of mind.
 
#12 ·
That is how I feel too about my N54 - I wish I had leased it - that way I could have seen how reliable the car is during the lease and bought it after the lease if the car proved reliable.
 
#24 ·
Following the vacation analogy ... Do you buy the hotel and the airplane that got you to it , or just pay for what you used?

No need to buy 100% of a car when you're only going to use 1/3 of it. Just pay for what you use. John
Well, by that logic you should never buy a house... and would probably be better off renting your clothes and any other personal belongings you don't take to the grave.
 
#21 ·
Bottom line is it leasing can be an excellent option if and only if you as the customer understand the component parts of the lease and how they work and if you do your research prior to negotiating with the dealer.

If you know nothing about leasing it is an incredibly great opportunity for the dealer to take advantage of you. There are some wonderful websites that can arm a customer with what they need to negotiate a good lease. Edmunds.com has invoice pricing and ridewithG has lease money factors and residuals. And there are many excellent lease calculators which will help you to calculate the monthly price based on the component parts of the lease.
 
#22 ·
I can't believe how many of you lease - what a phenominal waste of money. I suppose if you only intend on keeping the car for a short while you might as well rent, but over the long haul that becomes an incredibly expensive proposition - from a net cash outflow perspective (as a rule). Financials aside, I like knowing that the car I drive is actually "my" car, not one I'm borrowing. Not hammering leasing - but it just wouldn't make financial or emotional sense to me; I don't intend to change out cars every couple of years...
 
#23 ·
If you are like me and want a new car within the warranty at all times then leasing makes sense. If you like keeping your car until the wheels fall off then buying is the best choice.
 
#30 ·
I have never leased a car. My next car will be a leas though. I don't keep cars long term. I like getting a new car every few years, and I'd rather have the smaller payment. If you are the type of person that is going to A. Drive the car in to the ground, and keep it for 15 years then leasing isn't join to be for you. In the long run, it's a personal decision based on what you want out of a car.
 
#31 ·
Precisely
 
#34 ·
If you watch Suze Orman....you'll know leasing is a terrible financial decision.

It's a personal decision though. I bought my 535 and I'm glad I did. I don't have to worry about miles. I just drive where I want and take long road trips when I want. As long as I have the BMW warranty and maintenance coverage, I'm A-OK. Also, if another 2008/2009 happens in the economy I can just keep my car without having any car payments once my finance period is over.

If you buy, you should make sure you have the full BMW warranty and possibly the extended warranty.
 
#35 · (Edited)
If you watch Suze Orman....you'll know leasing is a terrible financial decision.

It's a personal decision though. I bought my 535 and I'm glad I did. I don't have to worry about miles. I just drive where I want and take long road trips when I want. As long as I have the BMW warranty and maintenance coverage, I'm A-OK. Also, if another 2008/2009 happens in the economy I can just keep my car without having any car payments once my finance period is over.

If you buy, you should make sure you have the full BMW warranty and possibly the extended warranty.
Suze Orman focuses on the lowest common denominator. I have four personal cars, one of my four is leased. I am a business owner, and I can deduct the lease payments and some other operating expenses to the extent that the car is used for business purposes. Suze Orman's advice wouldn't work well for me as I can't deduct anything had I bought the car outright. Orman and her ilk are one size fits all merchants, she's not in the business of catering to affluent business owners or the more sophisticated professional. In reality, there is only one "one size fits all" answer to this question and that is that there IS NO "one size fits all" answer to which is the smartest approach in terms of a lease vs buy decision. The bottom line is that both can be viable options and terrible options - it is a fact and circumstance driven equation, and a smart customer can make either alternative work. For what it's worth, Orman would be simply aghast that you'd blown your cash on a BMW, even that relatively inexpensive one. Anything above the basic Honda and its ilk, and to the Ormans of this world you've made, to use your own platitude, a terrible financial decision.
 
#36 ·
I wonder if leasing without write-off is ever the cheaper option independent of the length of the lease. Maybe if you don't look after your car. I only buy cash and swap every three or four years. If you negotiate an ED well and trade the car in a state that it can be CPOd buying has been cheaper for me. My E60 535i for example costed me about $600 a month in depreciation over three years and ~12k miles a year. I don't think I could have gotten a lease at that cost. Maybe there are cases when leasing is cheaper, I still like the feeling of driving my car over someone else 's.
 
#38 ·
For those who appreciate facts over emotion here are summary numbers on the cost of owning (paying cash) on a per month and a per mile basis for 4 of my recent BMWs.

Obvious lessons:

Buy used (still under factory warranty) omits bad first year depreciation and achieves best cost per mile.

Drive a long time (the 02 330i, still going) is lowest cost per month and per mile.

Anyone care to share comparable lease cost numbers?

(I'm not anti-leasing ..... just pro cash paying!)
 

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#40 · (Edited)
There won't be any comparable lease numbers as no one leases a used car and keeps it on lease for 11 years. There won't be any data that would make for an apples to apples comparison to your specific case.

What you do works for you, what others do works for them. Some folks want a new car, some folks are OK with one that someone else has driven before, some have more advantageous tax circumstances, some can take advantage of close to free money from BMWFS, some see that subvented residuals that artificially reduce lease payments can indeed make leasing a BMW a very viable way to drive a BMW.

You're OK buying used and keeping them, if you're frugal and on a budget what you do is probably right for you. Others may have zero interest in driving around in an 11 year old 330. Either way, your situation isn't one that will compare to a lease. If you bought a car and flipped it every three years or so you'd likely find leasing to be the cheapest option. If you plan to hold a car for a long time, you're probably not going to want to lease it.

Still, the underlying point remains - sometimes it makes sense to buy, sometimes it makes sense to lease, and there isn't any one size fits all approach that can be applied. I wrote a check for three of my cars, I leased one, and in all four cases I made the right decision for me and my own specific circumstances. That is the only relevant point that one ought to consider.
 
#42 ·
Life is short - if you can afford the payments of a lease and understand the paper downsides, go for it. If one was being truly fiscally logical, buy a Honda Civic for cash and drive it into the next century. No one here on this board buys into that, else why would one spend exponentially more for what is just a hunk of metal running on four wheels (and RFT's;))
 
#44 ·
Based on your country of residence you have an interesting perspective worth noting!

I wonder how the fiscally responsible Germans feel about using leasing and debt financing to sell much higher volumes of expensive BMW's, Mercedes, etc to the Americans who are enabled by having easy monthly payment terms readily available?
 
#47 ·
There can't be an answer since we're all different. I leased my '08 535i and was glad I did. I never had significant problems but the problems I did have were frequent. Given the rep the N54 had, I was glad to be off the hook in 3 year.

I replaced it with a F10 535i which I bought. I couldn't pass up the 0.9% 36 month financing available at the time. The payments are enormous but the money is almost free.

I ordered the car and got just what I wanted so I figure I'm in for the long term. Wish me luck. It'll be paid off in October, 2014.
 
#55 ·
I replaced it with a F10 535i which I bought. I couldn't pass up the 0.9% 36 month financing available at the time. The payments are enormous but the money is almost free.

I ordered the car and got just what I wanted so I figure I'm in for the long term. Wish me luck. It'll be paid off in October, 2014.
I took the 0.9% + $1,500 cashback. It was such a good deal, I didn't put a penny down and ended up with a $2,185/mo payment. My magic date is March 2014. ;)
 
#48 ·
In general, leases don't make sense at all.

But this is BMW we're talking about, who heavily subsidizes their leasing programs in the US to keep sales up, and so that they'll have a nice supply of CPO vehicles that they can turn around 3 years later and make money on again. I thought I read once that BMW actually makes more money selling the CPO cars than they do on the new leases. Either way, BMW's strong lease support makes a big difference.

I once ran the numbers for a buy vs lease on an E60 when I was considering one, and the break even point wasn't until 10 years where you'd really be saving money by buying, and at that point you'd be in a 10 year old BMW whereas you could have kept re-leasing and be driving a brand new one every 3 years the other way. The analysis included everything. Lease start-up costs for each lease, an assumption on inflation and in general higher costs on each re-lease, the fact that you would need a very large cash down payment up front on the buy, and that you could put that money into investments instead if leasing. Out of warranty repair/maintenance costs for the purchased car for which I used the "$200/mo rule of thumb" that wouldn't be an issue on the leased car were included, along with some other stuff.

I dunno. I'd rather be driving a new BMW every 3 years, not having to pay for any maintenance or issues that come up, and not worrying about direct injection injector and port clogging, turbos blowing up, fuel pumps and wastegates letting go, among many other things, while also not having to put down a huge $25k+ down payment on said car if I could lease, and put that money into investments instead, the kids 529 plans (nearly fully funded and they're only 2 and 4), extra payments on the mortgage (2+ years ahead), vacations, etc.

In the end, all BMWs are a complete waste of money. Nobody needs one. It's a luxury you can do without. If you really wanted to save money you could go buy a nice 2012 Camry like my parents did and then drive it for 10-15 years. It's a nice simple car by today's standards, so there isn't much that's going to go wrong with it. They paid cash for it, which still only would have been a down payment on an F10. So whether you lease, loan, or cash buy a BMW, you're still wasting a ton of money either way. It doesn't matter. Save money = go buy a nice reliable NEW or 2-3 year old Japanese car, and then run it into the ground.
 
#49 ·
As most people have echoed on here, its all relative to the individual. I purchased mine and I plan on keeping it for at least 8 to 10 years, barring any major accident or repairs. I am also looking forward to when its paid off and that note can be diverted towards something else or even to my savings.
I really think it depends on the financial standing of each individual, I have noticed business owners and people with considerable wealth prefer to lease and change cars every two to three years. If I was a millionaire or retired, I will probably belong to that group :-D.
Everyone else usually fall into the purchase group, especially foreigners (thats me) and frugal individuals. This is just my humble opinion.
 
#50 ·
Funny how some people are so clueless that they think it never makes sense to lease. As the sane people have already said, it all depends on the person and the situation. Many times it does make sense. Especially so for someone like me, who is shallow enough that I think I need to be driving around in the newest car all the time and never have one more than 3 years tops. On the other hand we bought my wife's X3 because she'll probably keep it for a long time.
 
#51 ·
OP here.

Just want to say thank you to everyone who shared their experiences and thoughts on the subject. I agree with the poster who said that there is no general answer to the lease/buy question and folks need to do what works best for them. In case anyone is curious, I made the decision that I'm going to lease the 550i instead of buy it. My thinking in making this decision began first with choosing which car I wanted: 535 or 550, understanding that both vehicles represent a fundamentally poor and wholly egotistical financial decision. I think once the decision is made to acquire a new and well optioned luxury car, and a check is written, you immediately begin fighting a losing battle against depreciation, and one can only hope to mitigate their losses.

I am leasing because--aside from the lower tax liability and the protection from diminished value due to the unforeseen--I decided I want to drive the 550 but I am wary of the "soft" resale values of v8 vehicles. But I am not the typical lease customer since I would actually entertain keeping the car if everything went well. My client adviser says it is not unusual for bmwfs to sell the car to the dealer at the end of the lease term for a sale back to the lessee at a price above auction value but a good amount below the residual. So even if I buy the car at the end of the lease term (usually not recommended), and pay a premium as opposed to having just financed it with a loan from the beginning, I am comfortable with paying that premium to have the flexibility of that option. To me the option is valuable. I don't know what fuel prices will be in the future, or if BMW engineers a more fuel efficient v8 or a more powerful 6, or even what the effect of tougher vehicle emissions standards recently adopted by California will have on the used v8 market. Also, my family situation (single/no kids) may change in 3 years (married/kids). At least my girlfriend hopes so.

So who knows. I think the point has already been made that everyone's situation is different. If I had decided on the 535, I may be more inclined to buy that car and keep it for at least 6 or 7 years with an extended warranty. Anyway, thanks again for all your comments.
 
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