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F30 / F31 / F32 / F33 (2012 - current)
The sixth generation 3 series, chassis code F30. 2013 model year 328i and 335i sedans now in production. Read the F30 frequently asked question thread for all your basic question and dive into all the details in the ultimate F30 information thread.

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  #501  
Old 11-29-2012, 07:01 AM
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Chris90 Chris90 is offline
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Originally Posted by boltjaM3s View Post
The example was a 5 year old 328i which makes it a 2008 which in good condition with a realistic 80,000 miles has a trade-in value of $12,000.

I put $2,500 down on my leases, so that $5,000 is for both years.

Learn to read.

BJ
Ok fine, use the same percentage depreciation to predict the value of a 2013 328i that cost $48k:

$15273 (57k miles since I assume your lease is 12k/year, and very good condition, since it would cost you if you returned a lease in 'good' condition)
divided by $33,175 (original sticker)
= 46% (a reasonable value for anyone how knows anything about BMW residuals)

$48k * 46% = $22,000.

So the buyer paid $45k - $22k = $23,000 over 57 months.

You paid $539*57 + $5000 = $35,700.

That's $222 per month your leasing costs vs buying. I guess that is negligible to you, so you win.
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Last edited by Chris90; 11-29-2012 at 07:08 AM.
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  #502  
Old 11-29-2012, 07:14 AM
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Originally Posted by MonkeyCMonkeyDo View Post
Keep wasting perfectly good money that is better invested elsewhere.

I can guarantee I understand math better than you because you are fixated on trying to prove some point that I never argued. Get over it. Your argument has nothing to do with the discussion this thread is about.


Just keep reading and learning from BJ's posts. He makes the strongest argument for leasing, and he understands the math at least.
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  #503  
Old 11-29-2012, 08:44 AM
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Originally Posted by SamS View Post


Just keep reading and learning from BJ's posts. He makes the strongest argument for leasing, and he understands the math at least.
BJs best argument, IMO, is that the extra dollars one might pay for leasing is worth it from a lifestyle point of view.

I agree with him on that. If you are the kind of person who wants to drive new cars all the time, don't mod them, and don't mind being on their schedule as far as replacement goes, leasing is just a way easier way of dealing with car ownership. You throw it into your budget and forget about it. No surprises.

Those who oppose ownership under the idea that you don't 'invest' in a diminishing asset are off base, IMO. A car, for those who buy them, is a consumable, not an asset. I eat at restaurants, I go on trips, I wear clothes, I spend money on all kinds of things that I use up. I don't consider any of them an 'investment' any more than I consider my car an investment.
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  #504  
Old 11-29-2012, 09:10 AM
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I agree with him on that. If you are the kind of person who wants to drive new cars all the time, don't mod them, and don't mind being on their schedule as far as replacement goes, leasing is just a way easier way of dealing with car ownership. You throw it into your budget and forget about it. No surprises.
I agree with BJ on that too, the only thing I disagree with is his fudging the numbers to make leasing and long-term buying look close in cost, when they're really not.

As if leasing magically lets you avoid things like depreciation, taxes and interest.
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  #505  
Old 11-29-2012, 09:37 AM
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No doubt that BJ is fudging the numbers to make leasing look like less of a financial hit than it really is.

What it really boils down to, is if it is worth the premium (let's say $100 per month as a more realistic 'cost' after adjustments) to be driving a modern car with all of the amenities every 3 yrs vs buying cars that you drive for 7-9 years and then trade.

Buying has a lot of advantages (cost chiefly) but some of the arguments for buying are also being prevented lopsided, such as the ease of flipping a car at a moment's notice for top dollar. In reality, getting top dollar on a used car is difficult, and certainly won't come from a dealer.

I wanted to sell my last used car in a hurry for no other reason than to free up the garage space, and ended up letting it go for $12,000 vs the $13,500 I probably could have gotten for it if I'd started with a high price, let 100 idiots drive it, haggle with them, deal with tons of 'kids' who are in the market for a car at that price range, etc.

Dealer offered me $10,500, so it's not all bad, I did better than what they were offering.
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  #506  
Old 11-29-2012, 09:59 AM
spicytofu spicytofu is offline
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BMW used to be somewhat of a status symbol. (I know its also performance, but I would be buying a M for that) When I was younger, I wanted a BMW after I made good money and bought a luxury home. I finally get my BMW and what do I find? 16 year old high school kids driving the same car I have, only 4 years older. I think BJ and I are on the same boat as to why we constantly want the new models. You dont see people changing lambos or Ferrari every 3 years becayse no 16 year old can buy that (maybe a few lucky ones). Since I am the type who wants a new car, leasing is the best option. I assure you I will be buying my Ferrari, not leasing it. (probably not possible anyways)
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  #507  
Old 11-29-2012, 10:05 AM
bmw_or_audi bmw_or_audi is offline
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Originally Posted by MonkeyCMonkeyDo View Post
Not 70% interest people. 70% of each monthly payment goes to interest. Have a bank, even those offering 2% interest, give you a payment schedule. Car loans work exactly the same as home loans. Watch how interest and principal work. Your payoff amount does not go down in equal amounts.
That's exactly what I did. I used a loan calculator to generate a loan amortization schedule. You should follow your own advice instead of pulling random numbers out of a magic hat. There is no 70% rule. It all depends on the duration and interest rate of the loan.

Here is the fist payment for a $10K 5-year loan with 1.5% interest

Payment --- $173.10
Principal Paid --- $160.60
Interest Paid --- $12.50
Total Balance --- $9,839.40

So about 7.22% of the very first payment goes to interest. That percentage goes down from there on each month.

You are not just off, you are off by a full order of magnitude.
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  #508  
Old 11-29-2012, 10:06 AM
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Originally Posted by spicytofu View Post
BMW used to be somewhat of a status symbol. (I know its also performance, but I would be buying a M for that) When I was younger, I wanted a BMW after I made good money and bought a luxury home. I finally get my BMW and what do I find? 16 year old high school kids driving the same car I have, only 4 years older. I think BJ and I are on the same boat as to why we constantly want the new models. You dont see people changing lambos or Ferrari every 3 years becayse no 16 year old can buy that (maybe a few lucky ones). Since I am the type who wants a new car, leasing is the best option. I assure you I will be buying my Ferrari, not leasing it. (probably not possible anyways)
I don't care what other people are driving one bit. The wealthiest people I know personally, all of them millionaires, drive 'lesser' cars than I do.

They do that because they don't get the same level of enjoyment out of a car that I get.

My tennis buddy, who drives a 6 year old Avalon, takes a $7000 a month place in Florida for February, and stays at Four Season's hotels when he travels.

Different people will spend their discretionary income on different things, and one is not better than another.

The problem comes when you really can't afford to be doing what you are doing, but your ego is unchecked, so you do it anyway.
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  #509  
Old 11-29-2012, 10:18 AM
spicytofu spicytofu is offline
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Quote:
Originally Posted by Kamdog View Post
I don't care what other people are driving one bit. The wealthiest people I know personally, all of them millionaires, drive 'lesser' cars than I do.

They do that because they don't get the same level of enjoyment out of a car that I get.

My tennis buddy, who drives a 6 year old Avalon, takes a $7000 a month place in Florida for February, and stays at Four Season's hotels when he travels.

Different people will spend their discretionary income on different things, and one is not better than another.

The problem comes when you really can't afford to be doing what you are doing, but your ego is unchecked, so you do it anyway.
I agree that just because you are wealthy does not mean you need to show it. But these kids are not buying a BMW for any other reason other than to "look" rich. It annoys me. Some probably are, but they will not be driving a 2006 BMW. I only bought a BMW because it was one of those dreams I had when I was young (middle school lol). I did not go scrap up 5k, which is not a lot during college years, to buy a BMW to show off around campus. I still see college kids flaunting their e46 like they are loaded. /rant off/
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  #510  
Old 11-29-2012, 10:26 AM
bmw_or_audi bmw_or_audi is offline
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Originally Posted by Kamdog View Post
BJs best argument, IMO, is that the extra dollars one might pay for leasing is worth it from a lifestyle point of view.
And I don't think anyone is disputing that. In the same vein, a 328i is worth the extra money over an Accord "from a lifestyle point of view." There is no deep meaning here. It's very simple to understand.

Folks are getting into an argument about whether that extra cost is justified. First, the extra cost is a function of circumstances. Second, whether it is justified or not is not a simple number-based call. That decision involves many subjective factors.

But there are some instances where you can save a significant amount of money by buying. For instance, if you are driving 4-5K/year, you can keep your car for 10 years with a very low likelihood of needing repairs outside of regular maintenance. My father-in-law is in that situation, having driven less than 50K over close to 12 years. Had he leased over 12 years, he would have spent probably $25-35K more. It is in great shape cosmetically and mechanically, but he is getting bored with it. He could easily drive that car another 5+ years and that would be the right thing to do from a purely financial point of view. But we don't make decisions based solely on money. It's that simple. And some people get bored with a car far sooner than after 10 years. Some get bored with it after 3 years
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  #511  
Old 11-29-2012, 10:36 AM
bmw_or_audi bmw_or_audi is offline
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Quote:
Originally Posted by Kamdog View Post
Different people will spend their discretionary income on different things, and one is not better than another.
It really is that simple, isn't it?

Quote:
The problem comes when you really can't afford to be doing what you are doing, but your ego is unchecked, so you do it anyway.
Exactly.

And when someone can afford what they are doing but we chastise them about it, we should realize that we making more of a moral judgement rather than a financial one.
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  #512  
Old 11-29-2012, 10:53 AM
hans007 hans007 is offline
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Originally Posted by Kamdog View Post
I don't care what other people are driving one bit. The wealthiest people I know personally, all of them millionaires, drive 'lesser' cars than I do.

They do that because they don't get the same level of enjoyment out of a car that I get.

My tennis buddy, who drives a 6 year old Avalon, takes a $7000 a month place in Florida for February, and stays at Four Season's hotels when he travels.

Different people will spend their discretionary income on different things, and one is not better than another.

The problem comes when you really can't afford to be doing what you are doing, but your ego is unchecked, so you do it anyway.

EXACTLY!.

you can have luxuries. you just have to be able to afford them. I mean as i like to say to my coworkers who have wives who say dont work, or kids who say jesus you bought another car... i say, well you have a wife and children and a dog or cable tv or whatever, stop having luxuries i don't spend money on.

nice cars are just what i spend money on.
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  #513  
Old 11-29-2012, 11:09 AM
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Chris90 Chris90 is offline
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Quote:
Originally Posted by spicytofu View Post
BMW used to be somewhat of a status symbol. (I know its also performance, but I would be buying a M for that) When I was younger, I wanted a BMW after I made good money and bought a luxury home. I finally get my BMW and what do I find? 16 year old high school kids driving the same car I have, only 4 years older. I think BJ and I are on the same boat as to why we constantly want the new models. You dont see people changing lambos or Ferrari every 3 years becayse no 16 year old can buy that (maybe a few lucky ones). Since I am the type who wants a new car, leasing is the best option. I assure you I will be buying my Ferrari, not leasing it. (probably not possible anyways)
Try not buying the base model - I see tons of 325's but very rarely do I see a ZHP. The F30 328i is already more common than my car on the road.

Luxury cars in general have morphed, they're no longer a sign of being rich, like they were in the 70s or 80s. The rich are now driving Camrys.
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  #514  
Old 11-29-2012, 11:13 AM
energetik9 energetik9 is offline
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This debate will go on long after we stop posting. All I know is what I prefer, and that will be to purchase my next car be it an M3, RS5, or CaymanS. I've always done well purchasing and have always enjoyed the flexibility. Yes, I tend to keep my cars around 5 years, so maybe the answer becomes more obvious in the longer term. I also really enjoy configuring the car as I wish right from the start and also knowing that no one else has driven the car excessively at the red line. I like lots of options on my car and I like it pristine from the start. The exception was probably my M-sport 335 which I sold after 18 months of purchasing new simply for the reason that it sat in the garage for weeks at a time. Even then I was able to sell it when I chose too, and I was still able to recover 95% of my original deposit in the sale. In the end, who really cares? People will get into a car in whatever way works for them and sometimes whether they can afford it or not.
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  #515  
Old 11-29-2012, 11:35 AM
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boltjaM3s boltjaM3s is offline
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Originally Posted by Chris90 View Post
80,000 miles in 57 months? Is that what your $539 lease allows, 17k miles per year?

And a 2008 328i with no options like you selected was $33,175. Not exactly equivalent to your $48k car, but then your point is obviously to fudge the numbers as much as possible.
My $539 lease allows for 12K miles per year. A large amount of people who Buy instead of Lease do so because they can't live with a smaller mileage limit. As such, it's completely valid to compare a 12K leaser to a 17K buyer as that's what's going on in the real world. Not everything is apples to apples, as clean as you would like to pretend it is.

I refereed to 2008 as that is the 5 year look-back mark to 2013. If you want to run something from 2013-2016 feel free. We look backwards to see what the depreciation was towards future resale, not to compare dollar amounts.

BJ
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  #516  
Old 11-29-2012, 11:52 AM
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Originally Posted by Chris90 View Post
Ok fine, use the same percentage depreciation to predict the value of a 2013 328i that cost $48k:

$15273 (57k miles since I assume your lease is 12k/year, and very good condition, since it would cost you if you returned a lease in 'good' condition)
divided by $33,175 (original sticker)
= 46% (a reasonable value for anyone how knows anything about BMW residuals)

$48k * 46% = $22,000.

So the buyer paid $45k - $22k = $23,000 over 57 months.

You paid $539*57 + $5000 = $35,700.

That's $222 per month your leasing costs vs buying. I guess that is negligible to you, so you win.
Again, you accuse me of playing with the numbers and that's exactly what you're doing. Make your assumptions on real-world reality please. Start with the same car that has the same value.

The buyer paid $48,000 + taxes + fees that I did not pay. The buyer drives the car 17K miles a year where I drive it 12K, that's one of the reasons why he didn't lease to begin with.

Over a 57 month period, I paid $35,700. That's it, not a penny more. I'm in my second brand new leased car.

Over a 57 month period, he paid $48,000 + 7% NJ tax of $3,360 + $1,000 in repairs or $52,360. Using your 46% value number $22,000 is the value of the car in 2016, so he spent $30,360.

$35,700 - $30,360 = $5,340 or $93 a month.

And, again, if one takes the $48,000 one didn't put towards the purchase of the car (cash up front or at a hefty $832 a month) and invests it you'll make back a hell of a lot more than $5,340.

I'm not going to go through this exercise again. I don't come here for math wars with owners of $4,200 BMW's. Depending on mileage and length of ownership, there isn't enough $ to make purchasing a car a quantum-leap superior decision to leasing a car.

Myths busted:

"Leasing is a way to get into a car you can't afford on the cheap!" Not true. Leasing is more expensive, often marginally, than buying.

"Buying a car gives you a sense of ownership where leasing it is just renting it!" Not true. Banks own our cars for a substantial portion of both purchase paths.

"Buying a car and keeping it saves you a lot of money!" Not based on real world behavior of keeping a car for only 57 months before realizing you want a new car like everyone else.

"Buying a car makes you feel better than leasing one!" Really? An $832 monthly payment for 5 years is better than a $539 monthly payment for 5 years? It's a lot of hardship for most people just to claim "I own the car".

In the end, a buyer spends $300 a month more for a car they're going to trade in before the loan is up anyway. That's stupid on many levels no matter how many pennies they save as a result.

BJ
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  #517  
Old 11-29-2012, 11:57 AM
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Originally Posted by boltjaM3s View Post
My $539 lease allows for 12K miles per year. A large amount of people who Buy instead of Lease do so because they can't live with a smaller mileage limit. As such, it's completely valid to compare a 12K leaser to a 17K buyer as that's what's going on in the real world. Not everything is apples to apples, as clean as you would like to pretend it is.

I refereed to 2008 as that is the 5 year look-back mark to 2013. If you want to run something from 2013-2016 feel free. We look backwards to see what the depreciation was towards future resale, not to compare dollar amounts.

BJ
That's absurd. The question is how much the SAME buyer will pay leasing vs financing. You can't have different standards for the leaser and buyer. If you're gonna do that, then we'll pick a cash buyer who drives 500 miles a year, and you'll really lose that comparison.

Depreciation should be measured in percentages, not using the same trade-in value for a $33k car and a $48k car, that's retarded. Can't believe I have to explain this to you.
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  #518  
Old 11-29-2012, 11:57 AM
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Originally Posted by Kamdog View Post
BJs best argument, IMO, is that the extra dollars one might pay for leasing is worth it from a lifestyle point of view.

I agree with him on that. If you are the kind of person who wants to drive new cars all the time, don't mod them, and don't mind being on their schedule as far as replacement goes, leasing is just a way easier way of dealing with car ownership. You throw it into your budget and forget about it. No surprises.

Those who oppose ownership under the idea that you don't 'invest' in a diminishing asset are off base, IMO. A car, for those who buy them, is a consumable, not an asset. I eat at restaurants, I go on trips, I wear clothes, I spend money on all kinds of things that I use up. I don't consider any of them an 'investment' any more than I consider my car an investment.
Exactly.

I think most American's have two financial paths. We've got our monthly expenses and we have our life savings. For most people in a fortunate financial position to be able to drive $50,000 luxury cars, we don't put the automobile in the "life savings" bucket.

You take your monthly income, first checks you write are to yourself (retirement account, investment account, college funds) and the rest you put towards monthly expenses to the level you can afford.

A car is just another utility, just another electric bill, mobile bill, cable bill. My car is as important as my gas and electric and costs less money each month. There is no other reason to look at it any other way. There is no way to "beat" the system and pay less money for a new car owner/leaser. You pick a number, you find a car that meets that number, you lease it, you drive it. If after 36 months your lifestyle has changed, you set a lower number or a higher number.

This ain't rocket science.

BJ
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  #519  
Old 11-29-2012, 12:00 PM
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I agree with BJ on that too, the only thing I disagree with is his fudging the numbers to make leasing and long-term buying look close in cost, when they're really not.

As if leasing magically lets you avoid things like depreciation, taxes and interest.
Leasing does let you avoid depreciation, taxes, and interest. Not sure why you think otherwise. You don't own the car, therefore it does not depreciate. There is no loan, so there is no interest. Because the duration of the lease is a fraction of the life of the vehicle its easy to negotiate and have the dealer absorb the taxes.

You don't lease, you never have, so you don't fully understand the wins involved.

BJ
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  #520  
Old 11-29-2012, 12:07 PM
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Originally Posted by voip-ninja View Post

No doubt that BJ is fudging the numbers to make leasing look like less of a financial hit than it really is.
I'm not fudging any numbers. I'm just pencil-whipping quickly as I don't have the interest to take out a sliderule or call my financial planner.

In the end, after lots and lots of conversation, we're going to wind up in the same place:

Leasing and buying aren't that much different, not enough incentive for drivers of brand new BMW's to eschew the benefits of leasing for the few dollars that buying-and-keeping can offer. We are wealthy, we like brand new cars, that's that.

There are people in this thread, undoubtedly, who are pack-a-day smokers ($400/mo), own dogs ($300/mo), drink beer ($200/mo), or lunch at restaurants ($300/mo). What leasers choose to do with their extra bucks each month is up to them, go judge a chain smoker or a smelly dog owner if you want to flex your moral muscles on some pitiful spending.

BJ
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  #521  
Old 11-29-2012, 12:14 PM
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Originally Posted by spicytofu View Post
BMW used to be somewhat of a status symbol. (I know its also performance, but I would be buying a M for that) When I was younger, I wanted a BMW after I made good money and bought a luxury home. I finally get my BMW and what do I find? 16 year old high school kids driving the same car I have, only 4 years older. I think BJ and I are on the same boat as to why we constantly want the new models. You dont see people changing lambos or Ferrari every 3 years becayse no 16 year old can buy that (maybe a few lucky ones). Since I am the type who wants a new car, leasing is the best option. I assure you I will be buying my Ferrari, not leasing it. (probably not possible anyways)
First thing, a BMW 3 Series is two separate vehicles both called the same thing:

1. A $36,000 stripped, de-featured car with only a badge for the status-seeker. Priced like a Honda with none of the features.
2. A $50,000 loaded, fully-featured car with the amenities one would expect in a luxury car. Priced like a Mercedes and stuffed with amenities.

There's a misnomer that someone in a $36,000 no-line and someone in a $50,000 luxury/sport-line are driving the same car. They're not. Two completely different cars for buyers in two completely different financial situations.

Additionally, you get to an age where your car becomes something more important to you than it did when you were younger. I went through a decade where my kids trashed my cars, couldn't take pride in any of them. You wake up one day, you're 45, you realize that you just let 10 years slip by driving older cars you didn't love for the sake of your rugrats and you decide that it's "me" time and you start leasing brand new cars, treat yourself to something that never gets old for a few extra bucks a month. Over 60% of BMW's are leased. There's a reason.

BJ
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  #522  
Old 11-29-2012, 12:18 PM
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Quote:
Originally Posted by spicytofu View Post
I agree that just because you are wealthy does not mean you need to show it. But these kids are not buying a BMW for any other reason other than to "look" rich. It annoys me. Some probably are, but they will not be driving a 2006 BMW. I only bought a BMW because it was one of those dreams I had when I was young (middle school lol). I did not go scrap up 5k, which is not a lot during college years, to buy a BMW to show off around campus. I still see college kids flaunting their e46 like they are loaded. /rant off/
See, I want my 14 year old to want a BMW when he turns 17. I want him to drive that car, love that car, love being seen in that car. Because one day he's going to be 26 and in the early stages of a career and I want him to have a whole host of luxury-lusts so it drives him to be a financial success.

It's how you get the best toys, it's how you get the hottest women. You make a boatload of money.

And you need to get off your high-horse about what a BMW owner should/shouldn't be acting like. A BMW is a status-symbol, has been since the 1980's. Movies, TV shows, hip-hop videos, it's what it is. If being seen in a status-symbol bothers some people, they shouldn't buy them and pretend that they aren't.

BJ
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  #523  
Old 11-29-2012, 12:21 PM
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Quote:
Originally Posted by boltjaM3s View Post
Again, you accuse me of playing with the numbers and that's exactly what you're doing. Make your assumptions on real-world reality please. Start with the same car that has the same value.

The buyer paid $48,000 + taxes + fees that I did not pay. The buyer drives the car 17K miles a year where I drive it 12K, that's one of the reasons why he didn't lease to begin with.
Why does the buyer pay MSRP+tax while you get a ton of discounts and no tax? Oh right, to help your case.

The buyer pays exactly what you negotiated, to be a good comparison. Otherwise I'll just say my buyer knows a guy who got him the car for $5000 under invoice.

Is a fair comparison too much to ask for?
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  #524  
Old 11-29-2012, 12:22 PM
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Quote:
Originally Posted by bmw_or_audi View Post

My father-in-law is in that situation, having driven less than 50K over close to 12 years. Had he leased over 12 years, he would have spent probably $25-35K more. It is in great shape cosmetically and mechanically, but he is getting bored with it. He could easily drive that car another 5+ years and that would be the right thing to do from a purely financial point of view. But we don't make decisions based solely on money. It's that simple. And some people get bored with a car far sooner than after 10 years. Some get bored with it after 3 years
And to really sober up this thread, consider this:

Like many of us, I'm 48 years old. If I'm lucky, I've got 30 years left before I'm not in a position to drive anymore.

That means I've got 10 cars left in my lifetime. That's it. 10 cars. To save $50 a month, sorry, I'm not giving up one of them. There may come a time, in fact, that I may add an 11th or 12th, cut a lease short if I'm really not enjoying it.

Our time here is limited. We love cars. Drive as many as you can before you can't.

BJ
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  #525  
Old 11-29-2012, 12:26 PM
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Originally Posted by hans007 View Post
EXACTLY!.

you can have luxuries. you just have to be able to afford them. I mean as i like to say to my coworkers who have wives who say dont work, or kids who say jesus you bought another car... i say, well you have a wife and children and a dog or cable tv or whatever, stop having luxuries i don't spend money on.

nice cars are just what i spend money on.
That's right. Let's see what I don't spend money on.
  • I don't smoke ($400/mo).
  • I don't drink ($200/mo).
  • I don't have a dog ($300/mo).
  • I don't buy newspapers ($50/mo).
  • I don't play the lottery ($40/mo).
  • I don't eat my work-lunch at restaurants ($300/mo).

Wow. I think I just justified leasing a Ferrari. Cool.

BJ
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