Doesn't Anyone Buy Anymore?

Originally Posted by e46NJ

I said I found it laughable that one thinks of equity in a car like it's investment property. Point taken about loans - I'm a big fan of arbitrage and leverage if you know where to invest your money.

Laughable / Funny, meaning is the same:

"I always find it funny when people say those that lease can't afford to buy."

Originally Posted by Kamdog

As it turns out, 2003 was a terrible car year for me. I had to buy three cars. So I bought my daughter a Civic, my wife a CR-V, and myself an Accord. When they were all paid off, I gave my daughter the Accord, sold the Civic, and bought my 535.

The Accord and Cr-V are still going strong, and the 535 is paid off too.

This is an important side of buying. Once you buy something, you own it. I now have three cars and no payments, rather than some 1500 a month in lease payments for the cars.

Oh I'm not talking about the wife too. Just my cars. My wife is awesome about cars. She buys and holds for 7-10 years. I'm not that guy. Wish I could be. Her horrible audi will probably be in our garage for 2-3 more years. In that time I'll at least get another car. Probably 2.

Originally Posted by blueguydotcom

Oh I'm not talking about the wife too. Just my cars. My wife is awesome about cars. She buys and holds for 7-10 years. I'm not that guy. Wish I could be. Her horrible audi will probably be in our garage for 2-3 more years. In that time I'll at least get another car. Probably 2.

Well, it is a lot cheaper to change out cars every few years compared to changing out wives.

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).

Can't blame you,I hate debt...which is why I choose to pay cash and be done with it

Originally Posted by 16n69

Can't blame you,I hate debt...which is why I choose to pay cash and be done with it

And you prepay for 3 years on your cell phone too, right?

Originally Posted by blueguydotcom

And you prepay for 3 years on your cell phone too, right?

I agree with the person above you about debt (and he was actually agreeing with me) - that is why I don't lease or borrow - no need to have debt - I can plan my life better. And I think this is what separates generations: for example, cell phones: yes, I have one - we average $100 per year - we're on a prepaid plan and pay about 6 cents a minute - so answering what you asked the other person - I prepay my phone for four months and pay $25 - $30! I do actually have some debt - a mortgage. I live in an exclusive golf course community and my mortgage is about 25% of the value of my house. I can afford my house because I have no other debt.

Originally Posted by palermo22

I agree with the person above you about debt (and he was actually agreeing with me) - that is why I don't lease or borrow - no need to have debt - I can plan my life better. And I think this is what separates generations: for example, cell phones: yes, I have one - we average $100 per year - we're on a prepaid plan and pay about 6 cents a minute - so answering what you asked the other person - I prepay my phone for four months and pay $25 - $30! I do actually have some debt - a mortgage. I live in an exclusive golf course community and my mortgage is about 25% of the value of my house. I can afford my house because I have no other debt.

+1...exactly
If we went back to the time honored principles that if we cannot afford to pay for things comfortably with the resources we HAVE...don't buy them, this country would be in better shape, starting with our govt. right on down to us!
To finance things that deprecate and drop like a led zeppelin...then pay hefty finance charges on top of it...not very wise.
A home has traditionally been the biggest and in many cases, the only investment one can have, therefore acceptable debt...not the same as depreciating items.

Originally Posted by 16n69

A home has traditionally been the biggest and in many cases, the only investment one can have, therefore acceptable debt...not the same as depreciating items.

Real estate has characteristics of both an asset and a liability. A house can provide shelter, but it also commits the owner to an infinite stream of maintenance costs and tax payments.

Once a speculative bubble bursts, it can take years if not decades for prices to recover.

Still, in 2010 about 30.3% of owner-occupied homes were owned free and clear, without a mortgage according to the Census Bureau. http://www.calculatedriskblog.com/20...hip-rates.html I think that number is probably fairly accurate. My neighborhood is more than 30 years old and about half are original owners so they shouldn't have mortgages. Not everyone went crazy borrowing during the credit bubble!

I'd prefer to pay cash and to drive a cheaper car and live in a smaller house than I can afford than to be a slave to debt. It would drive me crazy to wake up and need to go to a job I didn't love to make a car payment.

Originally Posted by Majikthese42

I'd prefer to pay cash and to drive a cheaper car and live in a smaller house than I can afford than to be a slave to debt. It would drive me crazy to wake up and need to go to a job I didn't love to make a car payment.

+1 on this. I am completely debt free which has allowed me to escape the stress others have felt due to the downturn in the economy.

Right now BMW is offering 0.9% financing. That is as near to free money as you'll get. At that price I'd rather keep my $40-50k liquid for more useful purposes like buying all of the awesome apple stock TSoc is hyping in another thread.

Originally Posted by 3ismagic#

Right now BMW is offering 0.9% financing. That is as near to free money as you'll get. At that price I'd rather keep my $40-50k liquid for more useful purposes like buying all of the awesome apple stock TSoc is hyping in another thread.

For people with A+ pristine credit, yes. Personally I was in the position that it's taken me quite a while to recover from the beating my credit took thanks to my ex wife. As a result, the absolute best interest rate I could get on my new car was something like 4.5%, and that was last September. In the end, I ended up with a much lower effective interest rate on leasing.

At the end of the day, leasing appeals to some people. Like me for example; I have always avoided leasing in the past because on average I do about 20K miles per year. However, that has been offset in recent years by the fact that I ride a motorcycle during the spring/summer/fall. Now that I put about 10K miles per year on my bike I can happily lease (though I picked a 15K per year lease) and not stress too much about excessive mileage.

Also, as I said in my post above I have a tendency to trade out cars often. I'm just not the type to hold onto a car for 10 years and quite frankly the work required to fix cars these days is just making it not worth it.

Speaking of which that's another thing I factored in. Looking at my previous cars, I was able to work on them because they were relatively simple. My Subaru SVX was one of the easiest cars in the world to work on and thus I did most of the work myself and managed to keep it running for many years. However, once I started buying cars built after about 2004 I started running into problems. The level of complexity and electronics running these things got more and more difficult to work with, particularly without specialized electronic tools. Particularly once you get into a BMW it gets ridiculous in that you basically can't do a damned thing to your car without having to get into the computer with some specialized computer toolkit and reset or change something. To me that took me beyond the "I don't want to own a Bimmer out of warranty" to the point of saying "I don't want to own a Bimmer... but I'd like to drive one."

Once I factored in the costs of maintenance (including the cost for my time... which yes I can assign a value to since I am partly self employed) and repairs, the hassle of having to find a buyer for an owned car or take a bath on a trade-in every few years, not to mention that I would prefer to have cash-on-hand in the event my job suddenly went south... yeah, I found leasing VERY attractive.

I also made the point above that I could've purchased a 128i in cold hard cash... a damned nice little car that would've been a blast to own and mod the hell out of. However, I still have that cash in the bank for a rainy day and get to drive a 135i every day that the weather won't let me ride my bike. Yes, it increases my monthly cost of living by the amount of a car payment... but to be honest I'd rather do that than have a car in my garage that's I paid ~$30K for and is now worth $25K just by driving it off the lot and having to direct my "car payment" money into my savings account to recoup the cash I just spent on the car. In this economy not having a cash base for at least a few months of living expenses just seems stupid.

I have a fat bank account, and I'm socially insecure. So I'm afraid that if I were to lease, people might think I couldn't afford to buy. So I have to pay cash.

Originally Posted by 3ismagic#

Right now BMW is offering 0.9% financing. That is as near to free money as you'll get. At that price I'd rather keep my $40-50k liquid for more useful purposes like buying all of the awesome apple stock TSoc is hyping in another thread.

With all of the arguments I have provided about debt - I would be eligible for this rate and would seriously consider it. What I would do is throw $40K into my USAA tax free bond account (which is eraning an effective rate of 3%) and then use the funds from there to make payments --- if it really is a 0.9% loan. But first things first: I have to make sure this is the car we want (my wife has a say in this) - or I am back looking at other cars.

I plan to buy, but that's because:
(a) I don't understand how leases work.
(b) I don't have the ability to plan how many miles I will be driving, or what sort of wear and tear the car will see while I own it.

Originally Posted by e46NJ

One reason I decided to lease after owning an E46 330i Sport is because it was costing me $1000-1500 for whatever went wrong with it. It's left me stranded in VT and on the highway in NY. I ended up leaving BMW for Lexus for many reasons and now I'm back with the 335ix Sport through a lease. I've never owned a car for more than 3 years other than the E46 and now I also want to avoid the hassles of fixing a bmw after the warranty runs. Lease makes the most sense for me.

You can get the extended warranty and the extended maintenance plan. That way, the only thing you pay for is tires and gas. It makes owning the car to 100,000 miles pretty painless. The problem is that I'll probably get to that number in 5 years.

Originally Posted by Majikthese42

Real estate has characteristics of both an asset and a liability. A house can provide shelter, but it also commits the owner to an infinite stream of maintenance costs and tax payments.

Once a speculative bubble bursts, it can take years if not decades for prices to recover.

Still, in 2010 about 30.3% of owner-occupied homes were owned free and clear, without a mortgage according to the Census Bureau. http://www.calculatedriskblog.com/20...hip-rates.html I think that number is probably fairly accurate. My neighborhood is more than 30 years old and about half are original owners so they shouldn't have mortgages. Not everyone went crazy borrowing during the credit bubble!

I'd prefer to pay cash and to drive a cheaper car and live in a smaller house than I can afford than to be a slave to debt. It would drive me crazy to wake up and need to go to a job I didn't love to make a car payment.

Like any financial chart - snapshots give misleading information. While it's true that home prices have been on the decline for the past five years - if you spread that picture out to the past ten or twenty years - then the negative 29% pales in comparison to the gains that were made. A mortgage - as long as you are not over your head - is a worthwhile liability because it's attached to an asset that will continue to appreciate (most likely with inflation) over the long term (just as the stock market will - again, long term).

Originally Posted by palermo22

Like any financial chart - snapshots give misleading information. While it's true that home prices have been on the decline for the past five years - if you spread that picture out to the past ten or twenty years - then the negative 29% pales in comparison to the gains that were made. A mortgage - as long as you are not over your head - is a worthwhile liability because it's attached to an asset that will continue to appreciate (most likely with inflation) over the long term (just as the stock market will - again, long term).

+1 There are merits to both sides of buying or Leasing, I say do what works for you and your
financial situation and enjoy driving your BMW, life is too short.

Originally Posted by palermo22

Like any financial chart - snapshots give misleading information. While it's true that home prices have been on the decline for the past five years - if you spread that picture out to the past ten or twenty years - then the negative 29% pales in comparison to the gains that were made. A mortgage - as long as you are not over your head - is a worthwhile liability because it's attached to an asset that will continue to appreciate (most likely with inflation) over the long term (just as the stock market will - again, long term).

Just like the long-term appreciation over 20 years that we see here:
http://finance.yahoo.com/echarts?s=%...e=off;source=;

Originally Posted by mr_clueless

Just like the long-term appreciation over 20 years that we see here:
http://finance.yahoo.com/echarts?s=%...e=off;source=;

We're really getting off subject: if you want to compare our economy with Japan - then go ahead (actually, you already did). We have gone from leasing vs. buying - to the world's economy.

Originally Posted by awwwyeah206

do some research/speculation on residuals and the money factor and plug it in to a lease payment calculator. it's pretty simple. you'll also have to factor in your local tax rate.

didn't you mention you were going to just pay cash? Cash is going to trump financing/leasing any day of the week and 10 times on sunday. you have no need for gap insurance coverage, you are fully equitable, and your total cost of ownership = total cost of the car + tax + license (no lease fees, no interest, no turn in fees, etc). If you want to get rid of your car early you can do it whenever you want and don't have to fuss with paying off a loan and waiting for your title.

Plus you don't have to give out your SSN!

Buddy of mine works for a Financial Services company, he gets new cars every 8 to 10 months. Doesn't matter if it's a lease or a buy, he gets the new dealer to "buy him out" of his old car and keeps his payment the same or makes it smaller. When you talk to dealers daily he says you can get some amazing deals.

Originally Posted by LS2 MN6

Buddy of mine works for a Financial Services company, he gets new cars every 8 to 10 months. Doesn't matter if it's a lease or a buy, he gets the new dealer to "buy him out" of his old car and keeps his payment the same or makes it smaller. When you talk to dealers daily he says you can get some amazing deals.

Sounds like one of those ads: $500 monthly - you can afford it - what they don't say is that it's probably for the rest of your life. Your buddy is in constant debt - at some point it catches up to you.

Originally Posted by palermo22

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.

How is that different from buying a $45k car now and then in 4 years having a car that is only worth $20k?

Buy or lease, you can calculate it down to a monthly "cost" either way. Pick whichever option makes the most sense for your particular situation when you balance the monthly cost, your plans for how long you'll keep the car, etc.

Originally Posted by SARAFIL

How is that different from buying a $45k car now and then in 4 years having a car that is only worth $20k?

Buy or lease, you can calculate it down to a monthly "cost" either way. Pick whichever option makes the most sense for your particular situation when you balance the monthly cost, your plans for how long you'll keep the car, etc.

Well... In the case of my relative's 2001 TT that got turned in with 75k, burnt clutch and three deer hits it included a pretty nice bill on the end of it too. Its a really taste thing and often times taxes... I know that the golden rule with planes is to never own one... but on the same spirit, you wouldn't want a house either so someone else will mow the lawn, even though you're really paying out the teeth for it, its just a simplified payment.

Originally Posted by sunny5280

Laughable / Funny, meaning is the same:

"I always find it funny when people say those that lease can't afford to buy."

Thanks for the quote but there were two points: the equity point and afford to buy point. I'm not sure what your point it. I still find it laughable people think of owning a car like an investment property - i.e., equity. I conceded the point about who can afford to buy...read my posts.

I'm not sure why this is conversation is dragging out.