Buy Vs Lease ? Check this out

Do keep in mind that LOC is not deductible for AMT unless used to buy or improve your home. Though it looks like you are already above AMT income levels, so it should not be an issue.

And if you are planning to keep it for four years, just lease it. The sales tax savings alone will compensate for almost everything else (higher interest rate, acquisition fee etc.).

Originally Posted by BayAreaBMWFan

Do keep in mind that LOC is not deductible for AMT unless used to buy or improve your home.

My HELOC is always used to improve my home...it improves my home to have a BMW in the driveway!

Originally Posted by Ågent99

My HELOC is always used to improve my home...it improves my home to have a BMW in the driveway!

Originally Posted by ***197;gent99

...and the MSD program....

It has been shown that one can save even more dollars by doing a two year lease then purchasing extra miles at 16 cents/mile vs. doing a 3 year lease.

You gotta crunch the numbers...everyone's situation is unique.

Can you elaborate on this a little more. Do you mean you would be purchasing the extra mileage for going over the mileage limit during the 2 years, or that you can somehow extend the lease beyond the 2 years while neither purchasing the car nor turning it in?

Thanks, Kevin

After reading this thread, it is very clear that leasing is a better option than buying in most cases. Makes me wonder what % of people lease vs buy?

Why do people buy new at all? Is it mostly the ones with the typical profile of 'keeping it for long', 'mods to be done' etc?

I tend to just buy my cars and hold them for awhile (5 years or more), then sell to a private party which usually works better than trading in. I put very low miles on my car so this actually helps the resale value in the future and makes buying the better decision since even if I leased at 10K miles per year I'd be leaving about 2-3K miles on the table. After 5 years I'll have a car with only 40,000 miles on it which shouldn't be too difficult to sell since its garage kept.

I'm sure there is a scenario where leasing could save me a few dollars but I don't think its significant. I would only consider leasing if I was sure I wanted to bascially rent a car for a short period of time and if I owned my own business so that I could deduct the lease payment.

it looks like i'm gearing more towards leasing now, compare to buying. But let me ask you all this(sorry if it sound dumb, but i'm new to this. I mostly finance or purhase cars in the past), who would be the bank that would do the lease. Should I search on my own, or trust a bmw dealership?

Hey everyone, i been reading all the posted. And i need some advice. Right now i'm deciding either if i should buy or lease. The car i'm looking at right now msrp 46,120. If I purchase the car, i would be fiancing it through a credit union for about 5.9% either 3 or 5 years. The Invoice is 42269. Of course i want to haggle and get it down to like 43000 or less. If thats possilbe of course. I live in CA with the tax rate of 8.25%

Now i dont know to much about leasing. So I don't know how to crunch the number. Is it actually cheaper if I was to lease it first and then buy it off?

Pro
- I can write it off
- Drive only about 10,000 miles a year.

Con
- I like the idea of owning my first bmw.

It's the lease part i dont know how to crunch in the number. But of course i need some suggestions. thanks

Originally Posted by lazyfatboy1030

Hey everyone, i been reading all the posted.

Well, I don't think you've read enough...keep reading and looking through all the "sticky" posts. There is a lease calculator.

However, judging by what you did post, leasing does sound like it would be your best bet.

Originally Posted by indostal

it looks like i'm gearing more towards leasing now, compare to buying. But let me ask you all this(sorry if it sound dumb, but i'm new to this. I mostly finance or purhase cars in the past), who would be the bank that would do the lease. Should I search on my own, or trust a bmw dealership?

I would just use a BMW dealership (and thus BMWFS) as the bank. I think you'll get the best rates rather than a 3rd party.

thanks for the advice. BUt where can i find the leasing calculator

There are two other sticky posts that you haven't posted to...check 'em out.

The main point I was attempting to make with this thread was that if you were going to buy a car like mine, you should lease it and then buy it at the end of the lease. Beyond the clear money savings, with a lease you have the option to NOT buy the car. This could be very important if, for example, you needed a different type of car or you didn't like the car after 2 or 3 years or it was worth much less than the buyout.
BTW, this savings is only "clear" if you get a super low money factor.

Here's the info on my situation and I would like some help in figuring the "financially smart" solution for my pending 06 330i;

I'm selling / trading my 2004 FX35. I can get 26k from Carmax for it, not sure how much from the dealer yet. I live and work in Northern Virginia. I'm a transplated Canadian (which may or may not affect what I can do?).

I like to change cars often; I used to lease cars in Canada because I could write them off as a business expense, but I can't here. I'm losing huge on the FX, because I've had it less than a year, but I am soooo fed up with SUV's now. I had a G35 coupe before the FX (impulse buy on the FX due to circumstance back then).

I'll probably drive it around 12k , but not more than 15k. My work is only 15 or so miles one way. I won't do much on the weekend, 'cept Golf and I can always use my wifes SUV.

So after all that (and believe me theres more), I think I have the following choices;

1. Finance - put $26k as down and finance the remainder.
2. Lease option a - put minimal upfront and paydown heloc (5.9%)
Lease option b - put minimal upfront, put remainder fomr 26k into something like an ING account (4.5%?) and make payments from there.

Considering I will want to change it in 2 or 3 years, or may want to accessorize it (minimal) or worst case may want to return to Canada, I can't find the best / smartest answer.

So please, can someone show me the light. Thanks in advance.

There are many valid points made on this forum for both leasing and buying. But, I say keep life simple. Lease for 3 years at the best possible rates and then lease again when your contract ends....Life is too short to worry about how much $$ you may save or lose by leasing or buying. It's a BMW - enjoy it to the fullest by getting a new one every three years. If this is beyond your reach, buy the bimmer and keep it until it drops, or go get yourself a Ford. No more debating please, I got a headache.

Originally Posted by carnuts3

There are many valid points made on this forum for both leasing and buying. But, I say keep life simple. Lease for 3 years at the best possible rates and then lease again when your contract ends....Life is too short to worry about how much $$ you may save or lose by leasing or buying. It's a BMW - enjoy it to the fullest by getting a new one every three years. If this is beyond your reach, buy the bimmer and keep it until it drops, or go get yourself a Ford. No more debating please, I got a headache.

You do know that many of us wouldn't know what to do with ourselves if we stopped this debate don't you. Don't just settle for a 3 year lease as the 2 year maybe more advantageous. Just have to run the numbers. ) sorry go get the tylenol.

Schley: no question you know the numbers as well as any. Is your conclusion based upon the extremely low MFs right now? I'm about to sign for a 530i. I'm excited, but I know there's some great stuff coming down the pike. 3 years locks me into a low payment, but 2 years gets me into new product, though likely at a higher MF. Yes?

Questions that I just must have missed:

1. Can you lease a lease return that you were not the original leasee?
1a. If yes, are the money factors the same as a new car lease? (using BMW Financial).
1b. Is there a negative to doing this (leasing a lease return)?
2. I see that the BMWCCA has money available (rebate) when you lease, would it be applicable if Q1 is yes?

I definately want to lease this next go around (1st timer), my circumstances are ideal. 3 yrs may be smarter, but I can barely make it 2 yrs before I get the itch. May even try the ED after talking with my neighbor who did it with his M5.

Why are the lease deals (money factors) as good as they are? I am mainly looking at a 5 series, but have given a little brain time to the 7 series also. Is it that the 5 series is going through a new engine line up for the 2008 models? Or ?

Originally Posted by carnutfan

Schley: no question you know the numbers as well as any. Is your conclusion based upon the extremely low MFs right now? I'm about to sign for a 530i. I'm excited, but I know there's some great stuff coming down the pike. 3 years locks me into a low payment, but 2 years gets me into new product, though likely at a higher MF. Yes?

I feel the possible higher mf is offset by the fact you are getting into a new car. You don't have to get the newest model. Look at what you are getting in the 5 series. It isn't a redesign and you are getting an awesome deal! It pays to get the car that has the best incentives at the time surely. I went from a 330 to a z4 because of the screaming z4 lease deals and I didn't have to have the back seat. I say don't worry about prognosticating the future, for is it worth keeping a 2 year old car for 1 more year to save possibly 10 - 20 bucks a month by not getting into a brand new model? You don't have to worry about that since you are getting yours for 3 years. i would like to get in for 2 years adn out personally and I was willing to pay an extra 23 bucks a month more for a 2 year rather than a 3 year. To me it is worth it to be able to get into a new car in 2 years and I could do ED again on something else.

But you do have to pay the acquistion fee 1 year quicker, but may not have to worry about tires with a 2 year as opposed to surely having to with a 3 year.

Myself and a friend did a 3 hour cost analysis of leasing vs. buying and found that for a honda accord you broke even at alittle less than 4 years. In my z4 it was alittle over 5. This is meaning your cash outlay of leasing during that time vs owning. When you get to those two different points in time every month you keep the car past that point you are better off buying rather than leasing. That is strictly a financial point of view as it doesn't take into account, how much is a new car worth to you? Do you like to customize your ride?

When I'm really bored one night I might go ahead and recreate it on the board but it was as thorough as I could imagine it being and that was our findings.

But when you throw in promotional MF and residuals then you need to consider that in your decision and not think I can lock a payment in for 3 years at a great MF instead of 2. The fact is you aren't getting a brand new car for that last year, thus it isjn't a true comparison. You are leasing a 2 year old car with 30k miles for example for the same payment you did when it was new. Granted you got a great mf but it isn't the same car, and I usually lean toward the 2 year as long as it is not more than 20 bucks more a month or so, to give you that excitement and joy of getting new car 1 year earlier.

Originally Posted by DoctorBimmer

Questions that I just must have missed:

1. Can you lease a lease return that you were not the original leasee?
1a. If yes, are the money factors the same as a new car lease? (using BMW Financial).
1b. Is there a negative to doing this (leasing a lease return)?
2. I see that the BMWCCA has money available (rebate) when you lease, would it be applicable if Q1 is yes?

I definately want to lease this next go around (1st timer), my circumstances are ideal. 3 yrs may be smarter, but I can barely make it 2 yrs before I get the itch. May even try the ED after talking with my neighbor who did it with his M5.

Why are the lease deals (money factors) as good as they are? I am mainly looking at a 5 series, but have given a little brain time to the 7 series also. Is it that the 5 series is going through a new engine line up for the 2008 models? Or ?

1. yes you can lease a cpo
1a. no the mf isn't set and will be higher more than likely than the buy rates published as there is no buy rate for cpo's it is a niche financial instrument that is rarely used for each vehicle in year and miles is different.
1b. It isn't necessarily the MF that is your enemy here it is the VERY subjective residual % that the lender will apply. Who knows what the real residual value of a 3 year old 45k 3 series is going to be in 3 MORE years and 45 MORE miles added to it? It is VERY difficult to figure out and then agree upon for sure. Check out this thread as we discussed it fully.
http://www.bimmerfest.com/forums/sho...ight=cpo+lease

2. that is a good question. I know they are available on new car purchase and lease, even ED. you get 500 for any cpo purchase but not sure about if you lease a cpo. interesting question, but I don't know the answer to that.

I usually finance my cars, except for a Honda I once leased. I came out ahead because the residual was lower than the car was worth so I bought it at lease end. I have noticed though that BMW in their car ads never show MSRP prices or discounts off that. They are alway's based on lease payments. BMW must lease most of their cars. Mercedes is the same. They must feel the MSRP prices are so high it will turn off potential buyers. Factors not discussed in these threads are annual numbers of miles driven, car care, and the pychology that buyers tend to lease more expensive cars than they could afford if they had to finance it. That could either be a positive or a negative but it throws the savings calculations out the window. I do like the idea of leasing a car for three-fours years and get all of the maintenace and repairs free. BMW's get expensive to repair as they get older which is a major negative.

What would happen to the auto industry if literally everyone leased a new car and no one bought any cars. Who would actually end up with all the off-lease cars? Is it the manufacturer or some third party lease company?

Originally Posted by Gnu

What would happen to the auto industry if literally everyone leased a new car and no one bought any cars.

This could be good in getting rid of a lot of the negative equity we are seeing right now with those who are trying to get out of their long term finance arrangements.

Originally Posted by Gnu

Who would actually end up with all the off-lease cars? Is it the manufacturer or some third party lease company?

It depends on who the lessor is.

I'm new to leasing & trying to get a Z4 roadster 3.0i.

The dealer wants me to pay upfront Acq Fee, Capitalized Cost Reduction,& 1st month's payment. What are these items? Should I have to pay it?

Originally Posted by BayAreaBMWFan

A house is an appreciating asset (at least the land is). A car is a depreciating asset. Plus a house has tax advantages. You just can not compare the two.

There's nothing wrong with renting either. I have a degree in finance and still cannot figure out the emotional attachment people have to "owning stuff." It's the "pay cash or you cannot afford it" mentality which makes no sense to me sometimes. Then, when you ask someone with this mentality to work it out on paper, they refuse, citing the "pay cash or you cannot afford it" line.

Also, at times, it does not make sense to purchase a house. For example, a house that is in an area that is depreciating or is in an area that is not appreciating at all.

I've even seen people finance a house with a 30 year mortgage, only to see them sell and move after 3 - 5 years. What a waste of money. In those cases, I would have opted for an interest only ARM with a 5-year lock. if you decide to stay in the house at the end of your 5 year lock, then refinance with a 15 or 30 year fixed.

And, when I speak of interest only ARM's I am speaking about those who can actually afford the house with a traditional 15 or 30 year loan and not those who cannot afford it.

But anyways.. Back to leasing...