Doesn't Anyone Buy Anymore?

I became a member of Bimmerfest a little while ago - I'll probably wind up buying a 328 with European Delivery (just waiting to test drive and see the car in person). But the point I want to make is that it seems as though more people lease this car rather than buy. I realize there are business reasons to lease (tax write-off) and that those that don't keep their car longer than three/four years that leasing might be the way to go. However, I plan to keep the car at least six/eight years - as a long-time car buyer I have always done this on the basis that a car depreciates immensely the first few years and then slows down - meaning that once you get past year three the car is less expensive unless the manufacturer is not reliable and various problems pop up in the later years (hopefully, this will not be the case with the 328). Anyway, just wanted to see if there was something that I am not aware of by buying instead of leasing (while I had planned to buy with cash - getting a 1.99 or even 2.99 loan might change my mind - I don't like to have debt).

Roughly 50% lease and the other half buys. There's no truly fiscally sound reason to lease except for business purchases. Otherwise leasing is really a lifestyle choice.

Just so you know, www.PenFed.org is a first rate credit union. Anyone can join. They have 1.99% financing currently up to 48 months, 2.49% to 60 months. Since they cater to the military they are very familiar with ED financing. Most other lenders are not. They get very nervous about not getting their lien perfected post haste. PenFed understands the process. BMWFS, of course, is the biggest lender for EDs. If you are eligible to join USAA they are also well versed with EDs. Are you a veteran? If so, you are eligible to join USAA. If you are eligible and are not a member I highly suggest joining. No one can touch their auto insurance rates. Their auto financing is usually right in line with PenFed's.

Originally Posted by tturedraider

Roughly 50% lease and the other half buys. There's no truly fiscally sound reason to lease except for business purchases. Otherwise leasing is really a lifestyle choice.

Just so you know, www.PenFed.org is a first rate credit union. Anyone can join. They have 1.99% financing currently up to 48 months, 2.49% to 60 months. Since they cater to the military they are very familiar with ED financing. Most other lenders are not. They get very nervous about not getting their lien perfected post haste. PenFed understands the process. BMWFS, of course, is the biggest lender for EDs. If you are eligible to join USAA they are also well versed with EDs. Are you a veteran? If so, you are eligible to join USAA. If you are eligible and are not a member I highly suggest joining. No one can touch their auto insurance rates. Their auto financing is usually right in line with PenFed's.

Thanks - I have been a USAA member for 25 years (I am a retired State Department Foreign Service Officer).

Originally Posted by palermo22

Thanks - I have been a USAA member for 25 years (I am a retired State Department Foreign Service Officer).

cool, so like CIA?

Originally Posted by justinnum1

cool, so like CIA?

So, not exactly - but close!

Leasing made sense a while ago when the residuals were ridiculously high. Buying new never makes sense, you take the huge depreciation hit in the early years regardless of how long you hold on to it. All 3 BMW's I currently own were bought very low mile CPO at huge discounts vs new. I own several other cars I bought new, but buying them used wasn't an option.

Originally Posted by palermo22

Thanks - I have been a USAA member for 25 years (I am a retired State Department Foreign Service Officer).

Originally Posted by justinnum1

cool, so like CIA?

Originally Posted by palermo22

So, not exactly - but close!

I was an intelligence analyst in the Army for four years.

Originally Posted by justinnum1

cool, so like CIA?

Originally Posted by palermo22

So, not exactly - but close!

I'm confused, I thought that about the only place State and the Agency intersected was at Embassies, where if you looked at the org chart and could identify a GS-14 Chief of Potable Water (or some other meaningless position), you had also identified the CIA Chief of Station.

Originally Posted by tturedraider

Roughly 50% lease and the other half buys. There's no truly fiscally sound reason to lease except for business purchases. Otherwise leasing is really a lifestyle choice.

Just so you know, www.PenFed.org is a first rate credit union. Anyone can join. They have 1.99% financing currently up to 48 months, 2.49% to 60 months. Since they cater to the military they are very familiar with ED financing. Most other lenders are not. They get very nervous about not getting their lien perfected post haste. PenFed understands the process. BMWFS, of course, is the biggest lender for EDs. If you are eligible to join USAA they are also well versed with EDs. Are you a veteran? If so, you are eligible to join USAA. If you are eligible and are not a member I highly suggest joining. No one can touch their auto insurance rates. Their auto financing is usually right in line with PenFed's.

awesome thread here.thanks for this info

Perhaps a lot of folks lease because they like the payment.

That said, for long-term buyers, it also makes sense to lease with an eventual plan to purchase. There are two reasons behind this logic: 1) If the car turns out to be a dud or you wreak it, you can unload it at the end of the lease and 2) if the car is worth less than the residual, you can often negotiate a lower buyout price -- effectively giving you another bite at the apple. The downside to the lease is that the cost of money (the effective APR) is often a little higher.

Originally Posted by Robert A

Perhaps a lot of folks lease because they like the payment.

That said, for long-term buyers, it also makes sense to lease with an eventual plan to purchase. There are two reasons behind this logic: 1) If the car turns out to be a dud or you wreak it, you can unload it at the end of the lease and 2) if the car is worth less than the residual, you can often negotiate a lower buyout price -- effectively giving you another bite at the apple. The downside to the lease is that the cost of money (the effective APR) is often a little higher.

This is a valid point. Some people look at it as buying an option to purchase depending on future performance and circumstances.

Originally Posted by Robert A

Perhaps a lot of folks lease because they like the payment.

That said, for long-term buyers, it also makes sense to lease with an eventual plan to purchase. There are two reasons behind this logic: 1) If the car turns out to be a dud or you wreak it, you can unload it at the end of the lease and 2) if the car is worth less than the residual, you can often negotiate a lower buyout price -- effectively giving you another bite at the apple. The downside to the lease is that the cost of money (the effective APR) is often a little higher.

Some leasing companies (in my experience GMAC now Ally) won't let you renegotiate the price of a "Buy" at the end of your lease. You either pay what's on the contract or the dealer collects the car and it goes to Auction.

Now once at Auction you can track it down and try to get it back for less than your original "Buy" amount. This was done mostly because leasing was heavily subsidized by some leasing companies thru inflated residuals (that's one of the main reasons GMAC needed so much Gov money and why Chrysler Financial effectively went Bankrupt).

Originally Posted by Robert A

Perhaps a lot of folks lease because they like the payment.

That said, for long-term buyers, it also makes sense to lease with an eventual plan to purchase. There are two reasons behind this logic: 1) If the car turns out to be a dud or you wreak it, you can unload it at the end of the lease and 2) if the car is worth less than the residual, you can often negotiate a lower buyout price -- effectively giving you another bite at the apple. The downside to the lease is that the cost of money (the effective APR) is often a little higher.

so if you wreck or damage the car in any way you don't have to fix or pay for it if it's leased?

Originally Posted by bcl0328

so if you wreck or damage the car in any way you don't have to fix or pay for it if it's leased?

you do.

Originally Posted by justinnum1

you do.

alright, i guess i'm thinking too literally when he says 'walk away' meaning like you wreck it and take it back to the dealer and say i don't want it anymore.

it's more like wreck it, fix it, then you don't have a wrecked/fixed car when you turn it in and get a new one?

Originally Posted by Robert A

Perhaps a lot of folks lease because they like the payment.

That said, for long-term buyers, it also makes sense to lease with an eventual plan to purchase. There are two reasons behind this logic: 1) If the car turns out to be a dud or you wreak it, you can unload it at the end of the lease and 2) if the car is worth less than the residual, you can often negotiate a lower buyout price -- effectively giving you another bite at the apple. The downside to the lease is that the cost of money (the effective APR) is often a little higher.

Leasing to buy is usually the worst way to purchase a vehicle.

That's quite a generalization.

Originally Posted by EddieB

Leasing to buy is usually the worst way to purchase a vehicle.

Originally Posted by Robert A

Perhaps a lot of folks lease because they like the payment.

That said, for long-term buyers, it also makes sense to lease with an eventual plan to purchase. There are two reasons behind this logic: 1) If the car turns out to be a dud or you wreak it, you can unload it at the end of the lease and 2) if the car is worth less than the residual, you can often negotiate a lower buyout price -- effectively giving you another bite at the apple. The downside to the lease is that the cost of money (the effective APR) is often a little higher.

That said, for long-term buyers, there is the possibility for it to make sense to lease with an eventual plan to purchase.

Originally Posted by EddieB

Leasing to buy is usually the worst way to purchase a vehicle.

Originally Posted by Robert A

That's quite a generalization.

hmmm....I'd say that's a pretty fair generalization. For long term buyers it's a pretty rare set of circumstances that makes leasing then buying a worthwhile prospect.

Having said that I did help my sister get into a lease with the plan to buy at the end. There was so much lease MF support that the rate is virtually 0%. We did the lease at 18k miles per year to maximize the depreciation and the amount "financed" at the 0% and to minimize the residual at the end to be either paid for outright or refinanced, depending on what the rates are next spring when the lease matures.

Originally Posted by EddieB

Leasing to buy is usually the worst way to purchase a vehicle.

Maybe. Depends on the circumstances. Depending on the vehicle the out of pocket is not much more expensive than buying at the outset and if you are worried that the residual of the car is going to tank (due to massive gas prices with an SUV six years ago for example) it is pretty cheap insurance against buying something that winds up with much worse resale than what the finance company offered.

Originally Posted by palermo22

I became a member of Bimmerfest a little while ago - I'll probably wind up buying a 328 with European Delivery (just waiting to test drive and see the car in person). But the point I want to make is that it seems as though more people lease this car rather than buy. I realize there are business reasons to lease (tax write-off) and that those that don't keep their car longer than three/four years that leasing might be the way to go. However, I plan to keep the car at least six/eight years - as a long-time car buyer I have always done this on the basis that a car depreciates immensely the first few years and then slows down - meaning that once you get past year three the car is less expensive unless the manufacturer is not reliable and various problems pop up in the later years (hopefully, this will not be the case with the 328). Anyway, just wanted to see if there was something that I am not aware of by buying instead of leasing (while I had planned to buy with cash - getting a 1.99 or even 2.99 loan might change my mind - I don't like to have debt).

Leasing is often a means to get into a vehicle which you cannot afford to buy.

Originally Posted by sunny5280

Leasing is often a means to get into a vehicle which you cannot afford to buy.

I understand the concept of leasing - I was just trying to determine why so many people on here are talking about leasing (as opposed to buying - especially with the low interest rates out today). I have always thought of leasing as renting: at the end of the rent period you have nothing to show for what you spent. Of course, I understand when you're young it may become the sole option for getting into a BMW (or other expensive car).

Originally Posted by palermo22

I understand the concept of leasing - I was just trying to determine why so many people on here are talking about leasing (as opposed to buying - especially with the low interest rates out today). I have always thought of leasing as renting: at the end of the rent period you have nothing to show for what you spent. Of course, I understand when you're young it may become the sole option for getting into a BMW (or other expensive car).

Given some of the discussions I've read it's partly for the reason I stated.

Originally Posted by palermo22

I understand the concept of leasing - I was just trying to determine why so many people on here are talking about leasing (as opposed to buying - especially with the low interest rates out today). I have always thought of leasing as renting: at the end of the rent period you have nothing to show for what you spent. Of course, I understand when you're young it may become the sole option for getting into a BMW (or other expensive car).

Leasing is like renting no doubt but many of us prefer it for a few reasons. It's still much less expensive due to the residuals and relatively low money factors. Also, it allows you to get a brand new car every 3 years and avoid BMW's pricey maintenance. The negative and for some this is huge, is the lack of equity.

Originally Posted by Michael Schott

Leasing is like renting no doubt but many of us prefer it for a few reasons. It's still much less expensive due to the residuals and relatively low money factors. Also, it allows you to get a brand new car every 3 years and avoid BMW's pricey maintenance. The negative and for some this is huge, is the lack of equity.

Yes, I would imagine that would be huge: making $500+ payments for four years = $24,000+ and at the end of that period you have no equity.

Lease
-------
Smaller payment, no money down
New car every 2-3 years
Low miles traveled

Buy
----
Larger payment, with money down
Car is yours, no one can take it
High miles traveled

Those are the most basic reasons for doing one versus the other. Over time it really depends on your life style (and how long you keep a buy and how much money you dump into it) that really makes one choice better than the other.

I personally drive a TON (20-25k a year), so I have to own my cars or be willing to drive the **** out of my Corvette in the summer (to not go over my lease mileage on my "other" car). I did that once, never again.