Anyone doing the Lease option?

2445 Views 15 Replies 6 Participants Last post by WRS, Jan 20, 2002

Joose

Discussion Starter · Jan 17, 2002

How is/was it? Do you regret it? I like the payments it offers but i hear some people dont like it. Any thoughts?

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Imola Ed

· #2 · Jan 18, 2002

I've leased the past 3 cars I've had. Originally, I was kind of skeptical because hey, it's really not my car. I wasn't sure I liked that. But it turns out to not be a big deal. I recommend leasing if:

- You don't drive a lot of miles each year
- You tend to buy a new car every 2-3 years anyway
- You don't modify your car

then it's totally worth it, since you're only paying for the part of the car you used. Hey, you're going to have a car payment anyway, might as well make it smaller.

My next car, however, will be a purchase because I do plan to modify the car, and I tend to drive over 15K per year. Plus I think I'll have the new M3 longer than most of my other cars. The longest I've ever kept a car up until now has been 3 years. The shortest time will be my current 325 - 6 months! I need to slow down...

Joose

Discussion Starter · #3 · Jan 18, 2002

Why cant you modify the car? All you have to do is unbolt the stuff when you give it back.

Imola Ed

· #4 · Jan 18, 2002

Sure, you can play that game, but it's kind of a pain, especially if you've done a lot of stuff.

Alex Baumann

· #5 · Jan 18, 2002

Joose said:
Why cant you modify the car? All you have to do is unbolt the stuff when you give it back.

I wouldn't modify (the engine) a leased car. If some problems occur, you must prove that it's nothing to do with the mods. And that is difficult.

Ben Chou

· #6 · Jan 18, 2002

Leasing definitely has it ups and down. While you do pay less for the car monthly generally, you still end up paying in the long run more for the car than if you just bought it. The advantages are that you don't have to worry about selling the car, nor repairs if you coincide your lease term to be within the warranty period, which is what most people do. Most people who lease usually are also get a tax write off on a portion of their lease payment.

If you do decide to lease make sure you know how much you will be driving each year. If you know that you will need more than the 15K a year which is the standard max amount, then I would suggest that you pre-purchase you mileage. I do that now and the good thing is that if you don't use that much mileage you get a refund from BMW for what you paid for the mileage. The cost is 15 cents a mile if you purchase it before and 20 cents after. the five cents don't sound like much, but trust me it can add up. The worst case to be in when leasing is you be upside on the lease and owe thousands at the end of the lease term in mileage fees.

Add up the pros and cons for yourself and then make the decision whether to buy or lease. Good luck.

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Joose

Discussion Starter · #7 · Jan 18, 2002

Well whats the difference between the Lease option and the owners choice?

Imola Ed

· #8 · Jan 18, 2002

Ooh. I other advantage to a lease that I only just remembered is that you can finance the cost of the taxes as well, which you can't do with a buy, if memory serves me...

Imola Ed

· #9 · Jan 18, 2002

Lease vs. Owners Choice

From the description, it doesn't sound that different, but I would call them to find out the real difference...

Joose

Discussion Starter · #10 · Jan 18, 2002

...and how accurate is the BMWUSA page? From what it says my monthly payment will be $350 er so give or take $20. Is this what my payment really would be or is there extra stuff involved that they dont show till your ready to sign away.

Im sorry for all the questions, this is my first "NEW" car. I've always bought used cars. Im kind of excited to say the least.

Ben Chou

· #11 · Jan 18, 2002

Joose said:
Well whats the difference between the Lease option and the owners choice?

Owners Choice and the traditional lease are both leases. The difference are subtle but can make a difference. Owners choice is what is termed a open ended lease term. This means that you the title is in your name and you have posession of it. (I will explain the significance of this later) At the end of your lease term you have three options, 1) Keep the car, pay it off 2) Sell your car and keep any profits that you make 3) Turn the car in

In a traditional lease you only have two options really 1) Keep the car and pay it off 2) Turn the car in. The reason why you can't sell that car...well you can but is a major pain in the ass is that you don't have the title when you do this type of lease. The title is not in your name and you don't have posession of it at all.

Thirdly, the security deposit if there is one needed (BMW does not require a security deposit of you are not a first time leaser) get refunded back to you on a traditional lease. On a owners choice you do not get it back. Also, the residual can vary from a traditional lease to a owners choice. Owners choice gives you more of a flexibility to play with the residual amount, thereby lowering you payment but makeing your payoff higher. Hope this helps. Sorry for the long answer.

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Imola Ed

· #12 · Jan 18, 2002

Ben Chou said:
In a traditional lease you only have two options really 1) Keep the car and pay it off 2) Turn the car in. The reason why you can't sell that car...well you can but is a major pain in the ass is that you don't have the title when you do this type of lease. The title is not in your name and you don't have posession of it at all.

Actually, I've found that to not be true. Even with a normal lease, you can buy the car from BMW Financial. This also means you can sell it thereafter, but yes, that's a pain.

Ben Chou

· #13 · Jan 18, 2002

Joose said:
...and how accurate is the BMWUSA page? From what it says my monthly payment will be $350 er so give or take $20. Is this what my payment really would be or is there extra stuff involved that they dont show till your ready to sign away.

Im sorry for all the questions, this is my first "NEW" car. I've always bought used cars. Im kind of excited to say the least.

The BMW page is not that accurate. It gives you a ballpark number to go by. But it doesn't take into account such as you negotioating a better price as well as getting a better money factor (interest rate) on you lease. All this is negotiable.

The best way to lease is to negotiate your best price and then get the lowest money factor possible. These are set by BMW Financial but most dealerships will add 1/4 or more percentage to the money factor. Hence the term making money on the back end of the lease. Dealerships get to keep whatever additional percentage they get over the buy rate which is what BMW financial sets.

Email me and I will give you detail of my lease payment. I also have a calculator that will give you the payment easily. It is in excel so all you do is plug and play.

Ben Chou

· #14 · Jan 18, 2002

Imola Ed said:
Actually, I've found that to not be true. Even with a normal lease, you can buy the car from BMW Financial. This also means you can sell it thereafter, but yes, that's a pain.

Yes you can buy the car yourself. You can do that with both types of leases. However, if you want to sell to a third party, the traditional lease is very difficult to do so. I learned the hard way on my last car. The process is that you have to title the car from BMW financial into your name which means you need to register the car in your state which means you pay sales tax. You then can sign the title over to the third party, and they then have to go register the car in their name which means they pay tax again. It is such a pain in the ass that I don't think I would do it again. With a owners choice you don't have this problem. You have the title and it is in your name. BMW financial just send you the lien fullfillment papers and you can sign the title over to whomever you sell the car to.

jw

· #15 · Jan 18, 2002

Re: Lease vs. Owners Choice

Imola Ed said:
From the description, it doesn't sound that different, but I would call them to find out the real difference...

I opted for Owners Choice. While it was a slightly higher interest rate, there is more flexibility if you wan to get out of your lease early. Which I have done more than once. If trading in on a new vehicle, instead of having to pay all the remaining lease payments, you really are only paying for a fair market value of the car.

Given my situation at the time I think leasing is the only way to go. I'd have a hard time finding anyone to convince me otherwise. I don't modify my cars. I don't want to drive it after it's a few years old. I've accepted the fact that a car payment is part of my life. My mileage is under 15k/year. And I could care less about pride of ownership. I love my bimmer just as much as the rest. I just know I'll be trading up for a better model in less than 3 years while the rest of you complain about all the problems with your used cars.

WRS

· #16 · Jan 20, 2002

There are also different tax implications depending on which state you live in. I used to live in Ga, which is a very lease friendly state. In Ga you only pay sales tax on the amount of your monthly payment, which means no tax on the residual amount. I have since moved to Tx and found Tx to be unfriendly foe leasing. In Tx, not only is sales tax charged on the full sale price for a leased car, you also will get a yearly personal property tax statement. This is why people choose Owners choice, since the title is in your name their is no personal property tax! The difference in payments is about $20 higher for OC.

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