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  #126  
Old 07-22-2007, 10:57 AM
XJSChris XJSChris is offline
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Originally Posted by Suraj View Post
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?
A great deal of people get emotionally attached and have the "finance/pay cash" mentality, regardless of the economics.

as a buddy of mine put it, talking about leasing vs. financing is a religious debate because of the emotional attachment and lack of due diligence.

Last edited by XJSChris; 07-22-2007 at 11:01 AM.
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  #127  
Old 03-09-2008, 01:06 PM
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  #128  
Old 06-04-2008, 11:28 PM
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I've just come to the end of my first lease, and I have to say it "feels" bad. I invested some money up front, paid all of the monthly payments, and now have to give it back. I get nothing for it, and have to pay a thousand to fix up a few minor scratches. Also, I have quite enjoyed the car, and would like to have kept it for another year, but the changes in value for E90 323i's is so significant re-leasing for another year is both too costly, and quite simply BMW Canada apparently won't extend for less than two years anyway.

I also don't like how if your situation changes that there is no easy way out.

All-in-all leasing didn't work out for me ... I'm now waiting for my new 128i to arrive, which I'm buying this time around. Yup ... it's an emotional decision as much as anything.
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  #129  
Old 06-05-2008, 09:08 AM
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Originally Posted by arrons1969 View Post
I've just come to the end of my first lease, and I have to say it "feels" bad. I invested some money up front, paid all of the monthly payments, and now have to give it back. I get nothing for it, and have to pay a thousand to fix up a few minor scratches.
What did you invest up front? And to pay a thousand, you must have quite a bit more than a few minor scratches.

Keep in mind that if you kept the car, the warranty will expire and the car is entering a phase where it is more likely to need costly repairs.

If you had purchased the car, your up-front investment would have been much higher, as would your monthly payments, and you'd likely still be making those payments for another two years.

Leasing is not for everyone ... for those who really want to own something, and plan to drive the car for many years after making that last payment, and invest in an extended warranty, buying clearly makes more financial sense.

For me, the biggest advantage is getting rid of the car before things start to break, when I have to bring the car into the shop more often, and pay potentially thousands of dollars a year in maintenance. Not to mention, it is nice to drive a brand new car every 3 years. I'm already looking forward to a new F10 in 2011
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  #130  
Old 06-05-2008, 07:29 PM
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Originally Posted by arrons1969 View Post
I've just come to the end of my first lease, and I have to say it "feels" bad. I invested some money up front, paid all of the monthly payments, and now have to give it back. I get nothing for it, and have to pay a thousand to fix up a few minor scratches.
I have returned several BMW's and have never had to pay to get "minor scratches" fixed. I have always been amazed at what you can get away with.
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  #131  
Old 09-22-2008, 08:04 AM
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Originally Posted by arrons1969 View Post

All-in-all leasing didn't work out for me ... I'm now waiting for my new 128i to arrive, which I'm buying this time around. Yup ... it's an emotional decision as much as anything.
I have a 135 convertible on order that I was not planning to lease until I saw the 2yr residual BMW is offering. If the MF is not subsidized I will probably just prepay the lease.
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  #132  
Old 09-22-2008, 09:43 AM
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I'm a BUY person but I leased my '08 Z4, and it was absolutely the right decision financially. First of all, you are not ruling out buying out your lease at lease-end--you always have that option and you know exactly what it will cost! But even better, I've been reading on the boards about BMWFS making REDUCED *****out offers to people whose leases are up. The way I look at it, I drove a hard bargain for my cap cost for the lease--if BMWFS offers me a $5k discount to buy my car at lease-end, I'm $4300 ahead (LAF taken into account) and there is NO WAY I would have gotten that $4400 off when I negotiated my price initially! But I've had the option to drive this car for two years and see how reliable it is, to try it out during winter, which is a concern, and to see how well it meets my needs. My state just makes me pay sales tax on my lease payments, not on the cap cost, although I pay an extra 3% for the privilege of not paying 100% up front.

If I had bought my Z4 and then sold it even 3 or 4 years down the road, I'd be out 6% of the whole purchase price, and probably wouldn't be able to sell it for what the artificially-inflated residual value would have been--absolutely no chance I could have gotten even close to that on a trade-in! And it also protects you from a drop in used car values, which we are seeing now. If the value of my Z4 is substantially less than my residual and I'm not offered a reasonable discount for *****out, I can always turn my car in and buy a similar one, same model yr, for thousands less than my residual, so I've got that additional discount off my purchase price, no matter what.

The mistake most people make when they talk about throwing away the $ they spend on a lease is that they forget that they always have that *****out option and the money isn't wasted at all. In my opinion leasing hedges your bets and broadens your options--you can buy if you want with little to zero financial penalty, or turn it in if you decide it isn't a good investment.

Here's another scenario--the only other car I leased was my '01 Windstar. At the time my kids were still young (I have 3) and I needed the space to drive them and all their friends around, but since they were getting older (they were 11, 14, and 16 then) I knew I wouldn't need a minivan for too much longer. I did a three-year lease which was perfect, because at the end of it I really didn't need a minivan. That thing was a gas-hog and terrible mechanically, lots of repairs, and I was glad to return it and buy an Accord, which I still have. When I turned it in the residual was ~ $17K but KBB (I think--it's been a long time!) was ~$12K. Had I BOUGHT and then went to sell or trade in I'd have taken a $5K hit plus the sales tax on the residual, which I didn't have to pay otherwise (well actually I got stuck for that because I had leased it when I lived in DE, 1.5% on cap cost, but then moved to PA where I had to pay 9% on lease payments with no credit for DE sales tax, but if I stayed put it would have been different).
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Last edited by erdoran; 09-22-2008 at 09:47 AM.
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  #133  
Old 09-22-2008, 01:14 PM
kostia kostia is offline
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I still think over 6 years buying is by far cheaper

I have been doing a lot of calculations and it is quite possible that I am missing something, and I hope some one can tell me what it is. Lets take X5 for example.
Leasing for 6 years 3 x 2 would cost about 750 x 12 x 6 + 3K(down) x 2 at least which makes it 58K. Probably the same amount for 2 year x 3 leases or a bit more.
Now I just bought an X5 paid cash for it an hope to have it for 6 years. 52K+ tax = $54500K
now lest add extended warranty that I can buy 3k + tires and maintenance lets take high estimate of 6K, this makes it 60K. With no worries for mileage, scratches etc.

Thus to break even I have to sell the car or trade it in for 2K after 6 years.

I am thinking selling on my own is possible for about 16K fairly easily assuming that the car is in good condition which you have to assume on lease as well.
Where am I wrong? Of course this does not consider that I POTENTIALLY could invest in a second house that just dropped in price a 1/3 if I did it 6 years ago... or in the market that maybe could make me 20% which is about 10K - taxes 7K.
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  #134  
Old 09-22-2008, 02:18 PM
adgrant adgrant is offline
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Originally Posted by kostia View Post
I have been doing a lot of calculations and it is quite possible that I am missing something, and I hope some one can tell me what it is. Lets take X5 for example.
Leasing for 6 years 3 x 2 would cost about 750 x 12 x 6 + 3K(down) x 2 at least which makes it 58K. Probably the same amount for 2 year x 3 leases or a bit more.
Now I just bought an X5 paid cash for it an hope to have it for 6 years. 52K+ tax = $54500K
now lest add extended warranty that I can buy 3k + tires and maintenance lets take high estimate of 6K, this makes it 60K. With no worries for mileage, scratches etc.

Thus to break even I have to sell the car or trade it in for 2K after 6 years.

I am thinking selling on my own is possible for about 16K fairly easily assuming that the car is in good condition which you have to assume on lease as well.
Where am I wrong? Of course this does not consider that I POTENTIALLY could invest in a second house that just dropped in price a 1/3 if I did it 6 years ago... or in the market that maybe could make me 20% which is about 10K - taxes 7K.
You are assuming the bottom doesn't drop out of the X5 used market (and your X5 is not in a serious accident). More importantly you are looking at a 6 year time frame instead of a 3 year timeframe. Leasing works best over a 2-3 year timeframe.
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  #135  
Old 09-22-2008, 02:39 PM
erdoran erdoran is offline
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Yeah, I agree with adgrant. My statements are based on my 2 yr lease. 3 probably still works, but the payments get MUCH higher for longer leases, or even higher mileage leases. If I knew I wanted to keep my car for 6 yrs I'd buy.
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  #136  
Old 09-23-2008, 08:44 AM
kostia kostia is offline
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6 years - either 2 3 year leases or 3 2 year leases

What I meant is the span of 6 years = either 2 or 3 leases.
The bottom may drop, but it would have to drop to 2K for a 6 year old car to break even - somehow I doubt it very much.
Even an accident would unlikely drop it to that price. Similarly, and I am not sure if this applies and how, if you get a serious accident on a lease what happens?
Other then that no one disagrees with me on the cost analysis?
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  #137  
Old 09-23-2008, 08:51 AM
chrischeung chrischeung is offline
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Originally Posted by erdoran View Post
Yeah, I agree with adgrant. My statements are based on my 2 yr lease. 3 probably still works, but the payments get MUCH higher for longer leases, or even higher mileage leases. If I knew I wanted to keep my car for 6 yrs I'd buy.
The last time I thought I would keep a car and drive it into the ground, I sold it after just 3 years. A wife and a kid came along in the meantime.

From that point on, I've just leased. If you're going to change your car every 3 years, leasing for me makes more financial sense. I think the breakeven point may be around 5 years, but I purely guessing. I value the options that leasing provides very highly - plus, you can transfer the lease very quickly on, with very little cost (compared to up front sales tax charges on a purchase).
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  #138  
Old 09-23-2008, 11:31 AM
adgrant adgrant is offline
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Originally Posted by kostia View Post
What I meant is the span of 6 years = either 2 or 3 leases.
The bottom may drop, but it would have to drop to 2K for a 6 year old car to break even - somehow I doubt it very much.
Even an accident would unlikely drop it to that price. Similarly, and I am not sure if this applies and how, if you get a serious accident on a lease what happens?
Other then that no one disagrees with me on the cost analysis?
If you get into a serious accident on a lease, you get the car repaired and turn it in. If you own the car, you have to try and get diminished value compensation.

Its true though, that owning the same car over 6 years is going to cost less than owning or leasing 2 cars over 6 years. You will have to probably pay for some repairs to the car and also pay for servicing costs though. OTOH, if you are looking for the most cost effective way to provide yourself with transportation, may I suggest a Toyota or perhaps a bus pass
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  #139  
Old 09-23-2008, 11:34 AM
erdoran erdoran is offline
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Originally Posted by adgrant View Post
If you get into a serious accident on a lease, you get the car repaired and turn it in. If you own the car, you have to try and get diminished value compensation.

Its true though, that owning the same car over 6 years is going to cost less than owning or leasing 2 cars over 6 years. You will have to probably pay for some repairs to the car and also pay for servicing costs though. OTOH, if you are looking for the most cost effective way to provide yourself with transportation, may I suggest a Toyota or perhaps a bus pass
Yepper, in Philadelphia you can get an unlimited Septa pass (public transit) for Philadelphia & immediate suburbs for $78/month, and you can expand to a 50 or so mile radius for about $150 or so (haven't priced that one), also unlimited. The basic one is less than what a lot of us pay just for insurance!! never mind car payment, gas, repairs, toys for our rides, etc....
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  #140  
Old 09-24-2008, 08:21 AM
kostia kostia is offline
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Bus pass - tranportation sure...

Sure... at the end it is all about what you are willing to pay. I would be willing to pay some premium to lease over buy. Some people are willing to pay 1.5-2K lease/month for something that they really want. So at the end of the day is how much extra are you willing to pay. This is exactly what I am trying to calculate for me 15K premium over 6 years is too much money to throw away and I was looking to see if my calculations are wrong.
Paying 6K premium over 6 years is fine in my book.
I am actually considering a 550i where payments per month would probably run me around $1200, even though I can afford it I am not willing to pay this much and that is why I am willing to buy a CPO at a significant discount.
The calculations I have made on X5 is what made me decide to go with buy options.
The only thing I keep missing is people claiming how much chepaer it is to lease a depreciating asset and I was never clear on how they can claim this given my math, that is why I am looking for someone to show me where my math is wrong.
16K over 50K is about 30% return.. investing money so wisely - tax... you have to be very lucky....
Argument of serious accident does not really work...
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  #141  
Old 09-24-2008, 08:31 AM
erdoran erdoran is offline
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My guess is that if someone is planning on buying a new car after three years, then leasing works.

1. Difference in sales tax on leased portion vs full purchase price (state dependent)--in my case 9% on $12k vs 6% on $52k
2. Difference in residual value vs what you could actually sell the car for--from the offers BMWFS is making to folks with their leases ending, thousands of dollars

balance either of those vs the "premium" which I consider only the LAF and you end up WAY ahead.

Now, if you plan to keep your car for more than three years, it may not work as well, as others have said.

Secondarily there are tax benefits for businesses, from what I understand--I'm not familiar as I'm leasing personally.

Here are some numbers I swiped from another post I just read....

"we appraised a car near the end of lease. his residual was 70k after 2 years, and his olp was 56k. our number came in at 53k...and he only had 17,000 miles. 51-54 sounds like a safe bet for low miles."

Not sure what he means by olp--I read this as his buyout number after two years is $70K, so his payments were purchase price - $70K--but if he had bought the car and decided to sell it, he would pay $17k more for the privilege!
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Last edited by erdoran; 09-24-2008 at 08:36 AM.
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  #142  
Old 09-24-2008, 08:37 AM
adgrant adgrant is offline
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Originally Posted by kostia View Post
The only thing I keep missing is people claiming how much chepaer it is to lease a depreciating asset and I was never clear on how they can claim this given my math, that is why I am looking for someone to show me where my math is wrong.
Your math is wrong because it is comparing apples to oranges. You are comparing owning one car for six years vs leasing two for the same period of time. Everyone else is comparing owning for three years vs leasing for three years.

Of course you will save money driving the same car for 6 years, you will save even more if you drive the same car for 10 years. People who lease want to drive a fairly new car covered by a new car warrantly. If they wanted to keep the same car for years, they wouldn't lease.
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  #143  
Old 09-24-2008, 10:36 AM
kostia kostia is offline
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The argument that is consistently being made is maintenance cost and owning a depreciating asset in the end the COST of lease vs COST of buying, disregarding "BUT I AM DRIVING A NEW CAR" factor. I am not questioning owning for 3 years vs leasing for 3 years that I can understand.
I am questioning "savings" when you consider long term driving - it does not work if you want to drive a new car every 2/3 years, since you are not concerned about actual cost at that point over a term longer then 3 years.
Cost-benefit of about $15K over 6 years for a 52K car is different for different people.
It is all about the goals that you have and money you are willing to spend on entertainment. BTW in terms of deductions, for business you can depreciate the car the same way as writing down a lease which may be even more beneficial in some cases.
I was actually tryign to figure out if it makes sense for me to lease and as I said it does not look that it does especially considering what I would like to get. Thus I am willing to get CPO.
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  #144  
Old 12-05-2008, 10:50 AM
Corgidog Corgidog is offline
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Originally Posted by chuck92103 View Post
The cheapest vehicle is still and will always be the one that is paid off.

A paid off BMW costs approx. $200 per month to maintain. Much less than any lease.

A paid off car costs always trumps a financed or leased one.

Can't let this statement pass even though it is almost 3 yrs later (lol).

Anyone know where one can get a "paid off car" (other than to pay it off which costs money.)
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  #145  
Old 12-14-2008, 06:30 PM
adgrant adgrant is offline
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Originally Posted by Corgidog View Post
Can't let this statement pass even though it is almost 3 yrs later (lol).

Anyone know where one can get a "paid off car" (other than to pay it off which costs money.)
Its pretty simple. You just keep your current car instead of leasing a new one and pay for the repairs yourself.
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  #146  
Old 04-22-2009, 01:44 PM
dnvrdrvr dnvrdrvr is offline
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Tax break for buying...

So now there's a new monkey wrench to throw into the mix: what about the ability to write off sales tax for buying instead of leasing? I'm a leaser but am thinking of buying so I can deduct the tax on next years return...
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  #147  
Old 04-22-2009, 07:17 PM
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What are tax write off are you specifically referring to?
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  #148  
Old 04-22-2009, 09:09 PM
dnvrdrvr dnvrdrvr is offline
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Thanks to one of the many stimulus packages approved recently, you can write off State sales tax on new vehicle purchases (leases don't qualify) valued up to $49,500 on your 2009 return. So you're talking about reducing income taxes paid. It only piqued my interest because my husband and I bumped into the next bracket in 2008 and lost our shorts - CPA told us to lower income any way we can to keep more of our it.

That said, I'm coming to the end of my lease on a 2006 330xi and while I've loved driving it, I'm ready for a new & different one. I'm pretty certain I'm a leaser. But am planning to order my next bimmer and get exactly what I want so would consider buying... if it makes sense. Husband is a buyer and so he's trying to influence me and threw this out as an argument to consider.
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  #149  
Old 04-23-2009, 06:16 AM
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jackalope jackalope is offline
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Originally Posted by dnvrdrvr View Post
Thanks to one of the many stimulus packages approved recently, you can write off State sales tax on new vehicle purchases (leases don't qualify) valued up to $49,500 on your 2009 return. So you're talking about reducing income taxes paid. It only piqued my interest because my husband and I bumped into the next bracket in 2008 and lost our shorts - CPA told us to lower income any way we can to keep more of our it.

That said, I'm coming to the end of my lease on a 2006 330xi and while I've loved driving it, I'm ready for a new & different one. I'm pretty certain I'm a leaser. But am planning to order my next bimmer and get exactly what I want so would consider buying... if it makes sense. Husband is a buyer and so he's trying to influence me and threw this out as an argument to consider.
Perhaps the US Tax Code recently changed, but I was under the impression you could only write off sales tax if you do NOT write off your state income tax. I live in a state (Florida) where there is no state income tax so for me it makes sense to write off sales taxes. Note that when writing off sales tax you can either use a government formula (which most likely lowballs your tax spend) or you can declare the actual sales taxes you paid, but it's a pain to keep receipts on every single consumer purchase all year long.

In your case, I don't think you can write off BOTH state income taxes and state sales taxes, unless something recently changed.
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  #150  
Old 04-23-2009, 08:46 AM
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kyfdx kyfdx is offline
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Originally Posted by jackalope View Post
Perhaps the US Tax Code recently changed, but I was under the impression you could only write off sales tax if you do NOT write off your state income tax. I live in a state (Florida) where there is no state income tax so for me it makes sense to write off sales taxes. Note that when writing off sales tax you can either use a government formula (which most likely lowballs your tax spend) or you can declare the actual sales taxes you paid, but it's a pain to keep receipts on every single consumer purchase all year long.

In your case, I don't think you can write off BOTH state income taxes and state sales taxes, unless something recently changed.
It's a special "above the line" deduction... for this year only. You can take it, even if you don't itemize..

However... 6% tax on $40K is $2400, which will net you $600, if you are in the 25% federal bracket...

For most people, that's just one car payment...
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Lease to buy david330 E90/E91/E92/E93 (2006 - 2013) 13 05-24-2005 03:20 PM
Questions on Inspection 2 Bill97Z 3 Series / 4 Series 22 01-03-2005 10:59 AM
Service info needed for 60k mile interval Maximus 3 Series / 4 Series 5 04-04-2004 05:53 PM


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