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Discussion Starter · #1 ·
Trying to decide to lease or purchase. Lease would be 36 mos or purchase using a 5 year loan, I would be putting down enough money on the purchase that the monthly payments would be nearly identical. If I purchase I'd plan to keep the car for 5 years, hopefully be in good shape keeping it only 1 year outside warranty. The calculation comes down to what the car would be worth after 5 years. Could one expect a 50k msrp configured car to be worth 20k in 5 years assuming around 65k miles? Went to kbb.com and configured a similar 2008 328 and it has a current trade in value of 16k, but I know the car was likely a bit less expensive then. It seems that with a value of 20k the monthly cost of ownership is about 85 per month less on the purchase, assuming its worth 20k, less then that and likely the lease is the way to go.
 

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I purchased instead of leasing. I plan to keep the car more than 5 years. If you plan to keep the car just 5 years; it is a tough call on whether to purchase.
I will add an extend warranty and maintenance plan when it is at 49K miles or just before 4 years. It is too risky not to have an extension; since it is very costly should something major go wrong.

Don't forget to consider how many miles you will drive each year. The advertised lease rates are based on 10K miles per year. If you opt for 12k or 15k miles per year the lease will go up significantly. That is another reason I purchased; since my average yearly miles will be around 15K.
 

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Trying to decide to lease or purchase. Lease would be 36 mos or purchase using a 5 year loan, I would be putting down enough money on the purchase that the monthly payments would be nearly identical. If I purchase I'd plan to keep the car for 5 years, hopefully be in good shape keeping it only 1 year outside warranty. The calculation comes down to what the car would be worth after 5 years. Could one expect a 50k msrp configured car to be worth 20k in 5 years assuming around 65k miles? Went to kbb.com and configured a similar 2008 328 and it has a current trade in value of 16k, but I know the car was likely a bit less expensive then. It seems that with a value of 20k the monthly cost of ownership is about 85 per month less on the purchase, assuming its worth 20k, less then that and likely the lease is the way to go.
2008 model year pricing is available here on Bimmerfest. Search the Ask a Dealer forum using the keyword "confidential" and you will get threads with past price lists.
 

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I did a similar comparison on a 335 that I'll be picking up in Munich in 10 days. I figured it based on having the car for 3 years, and found that the cost would probably be at best the same but more likely cheaper to lease than buy, depending on what I could sell the car for at 3 years. I looked up the MSRP of a similarly equipped 2009 335 on Bimmerfest as tturedraider suggested, and then looked up the value of that car now on KBB, Edmunds, and NADA. The values were 54-58% for a private party sale and 49-54% for a trade-in. I'd figured for a purchase to cost the same as a lease, I'd have to recoup 58% of MSRP when I sold or traded it in. That didn't seem too likely, especially since my experience in selling my cars has been I don't get as much as KBB, etc., say I should get. So I ended up leasing it. Although I don't like giving up the flexibility of being able to dispose of the car whenever I want, on the other hand I won't have the hassle of selling it.

I think the purchase-vs-lease calculation depends a lot on where you live. I live in WA state, where the sales tax on cars is 8.7%. If I lived 20 miles to the south in Oregon, where there's no sales tax, the result would have been different.

I'm curious why you're comparing a 3-year lease to a 5-year purchase, though. I'd think you'd need to assume holding the car for the same period to have a meaningful comparison.
 

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Discussion Starter · #5 ·
Thanks. It's a tough call.

With the purchase vs lease, I think it really doesn't make sense to buy and only hold for 36 months because of the sales tax of 7%, you need a longer period to amortize that cost. I don't mind holding the car for a longer period but then the maintenance becomes an issue Otherwise I have no problem keeping the car for 6 or 7 years in which case buying becomes the way to go.
 
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