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Hi everyone. We plan on ordering a 328d Sports Wagon here pretty soon and I am starting to have some second thoughts on the diesel and whether we should buy or lease. We drive HIGH miles (25,000) so it seems to make more financial sense to buy vs lease. I was planning on POSSIBLY keeping the car until 100,000 miles or so, but some of the talk about high repairs for BMWs (especially diesel issues) out of warranty has me wondering if that's the best idea.

One of my friends is trying to tell me a 2 year, 25,000 mile/yr lease might be the best bet as we won't be having a BMW out of warranty in that situation. I am thinking I could just trade it in after 50,000 miles and still likely be ahead in money (vs a lease) with the option of keeping it longer if we wanted if we outright purchased. Looking at the costs overall I still think buying will be best in either situation.

Has anyone else wrestled with these same questions?
 

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No but I too was considering a 328d but after consultation with some long time BMW/ European lux car mechanics I went with the 328i. Also never buy anything from your friend, potential for spoiling the relationship if something happens to car. Just my 2 cents.
 

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I think you will find the overall cost to own and operate a diesel and gas engine car to be about the same in the USA over the long term. In countries where diesel sells for less then there is a decided advantage to a diesel. One plus for someone who drives a lot is that the diesel may allow you to drive further between fill-ups.

There is no reason a BMW or other comparable car should not run for a lot longer than 200,000 miles if maintenance is kept up and problems fixed as they arise. It almost always makes more financial sense to repair a used car rather than replace it with a new one even if the repair runs into thousands of dollars. However there does come a point when that older car starts looking a bit too dated and worn to keep.

Wow...25k miles per year. You will be through the warranty in about 2 years.

Yes, I too would avoid buying a car or lease from a friend. I've seen too many personal friendships strained by such a deal. Including one with a vintage BMW.
 

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Has anyone else wrestled with these same questions?
Yes, but in a different scenario with different car type.

I owned diesel as a daily driver since 2006 and would not buy anything else for daily driving duty.

That said, it ALL depends on only one question you need to answer : if you DO buy a BMW, is the money for unplanned repair pain in the ass and it disturbs Universe-in-balance or is that money non-existent? Meaning, are you shunning potential repairs because they are just philosophically wrong or are you shunning them because there's no money left in budget for them?

We do not need to know the answer to the above, but you must know that before going in. If it is a philosophical problem and you really want a BMW, go for it. Otherwise, in the second case, buy a diesel wagon, but move down the street to VW dealer. Oh, no, there will be repairs there, but you are saving almost $20,000 on purchase price - that pays for a lot of philosophical wrongs :)
 

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Note that BMW's rate for excess miles (16 cents/mile if you buy before lease end) is substantially less than those same miles would cost you in actual depreciation if you owned the car and re-sold it at some point between 50k-100k miles.

Edmunds lists the private party value for a clean 2012 328i with 100k at ~35% of new MSRP. If you bought for $40k, you'd lose ~$26k in depreciation. And that's private party, which is always hard to get. On a dealer trade you'd probably get ~$2k less, making your total depreciation hit ~$28k.

If you instead leased at a 62% residual for 45k miles then bought the remaining 55k miles @16 cents/mile, you'd be out $23k in depreciation+miles.
 

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Note that BMW's rate for excess miles (16 cents/mile if you buy before lease end) is substantially less than those same miles would cost you in actual depreciation if you owned the car and re-sold it at some point between 50k-100k miles.

Edmunds lists the private party value for a clean 2012 328i with 100k at ~35% of new MSRP. If you bought for $40k, you'd lose ~$26k in depreciation. And that's private party, which is always hard to get. On a dealer trade you'd probably get ~$2k less, making your total depreciation hit ~$28k.

If you instead leased at a 62% residual for 45k miles then bought the remaining 55k miles @16 cents/mile, you'd be out $23k in depreciation+miles.
wow, that's really interesting that you can actually come out ahead leasing a car while driving so many miles vs. owning the car...but of course I'm assuming this situation only works where you're going to keep cycling new cars vs. just buying the car and driving it into the ground (and dealing with all the maintenance of a high mileage BMW)

OP, if the scenario the_phew detailed can work out for you, that sounds like a better deal both financially and less stressful. I wouldn't think it be easy to offload your 100k mile 4 year diesel wagon.
 

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Disagree that 25K miles is a lot for a lease. 25K miles is not a lot of miles unless you live in an inner city and drive only a few blocks. 10K/yr mileage on a lease is already 30K so you'd be under. And as has been already stated, you can buy miles at a discount up until the end of the lease.

I try not to buy constantly depreciating assets, and prefer to always have a car under warranty. Yes you're paying the depreciation in the lease, but that's the part of the price you wont get back when you sell it anyway.
 

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Gas is more fun!

I too considered the diesel vs gas F31 for some time. Test drove both several times, did the UDE autocross in both (F30, not F31), did extensive research on ownership experiences with both. At the end the day, I ordered a gas F31 for ED next week.

My analysis is biased towards longer term financing and paying for repairs once out of warranty. I can't bring myself to continuously pay the highest part of a depreciation curve to just lease new cars every few years. (Yes, there are special circumstances where there may not be much difference, particularly with manufacturer "subsidies" for whatever reason; but generally, depreciation on years ~1-3 is much higher than any other out years. IMHO, the additional costs with owning outside of warranty rarely make up for the massive depreciation difference, but your mileage may very.)

I'm also biased from a S2000 DD for the last 8 years. No, I'm not getting rid of that that car...looks like ever.

1) My estimated TCO was more of less the same even with the diesels excellent efficiency. By the time you accounted for the cost of AdBlue, diesel taxes/fuel cost in the USA, initial cost, etc. the cost was mostly awash. Like you, I expect to drive ~20k/yr.

2) The gas was more fun. Yes, the diesel is "effortless" at normal driving speeds, but it's also heavier and never gave any sense of urgency when accelerating. Overall, I wasn't impressed with the 2L diesel, but things likely would have been different if BMW-NA sold the 3L diesel. At least then you have a HP/Mass ratio similar to the 2L gas, but with massive amounts of additional torque...enough to make me look the other way about the weight penalty. If I want a nose heavy diesel, I want it to have massive torque like a freight train and the 2L just isn't; so give me at least some revs.

3) All the hassle and potential issues with owning a clean diesel over gas didn't help either. This is just the situation in the USA for small diesels. It may add something to the ownership experience that you enjoy though.

4) Track Package. BMW-NA hates fast diesel wagons, so you're SOL. ;)

That sums it up, but if I lived in Germany or the USA adopted much higher speed limits, I would buy the diesel, even the 2L diesel. In my experience, the efficiency of the diesels is much better than gas at sustained speeds >100MPH. That would skew the cost numbers, but more importantly I wouldn't mind paying the speed fuel tax for longer trip if I could legally cruise around at those speeds.

It goes without saying that all of this is useless if BMW ever made the F81. :thumbup:
 

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One of my friends is trying to tell me a 2 year, 25,000 mile/yr lease might be the best bet as we won't be having a BMW out of warranty in that situation. I am thinking I could just trade it in after 50,000 miles and still likely be ahead in money (vs a lease) with the option of keeping it longer if we wanted if we outright purchased. Looking at the costs overall I still think buying will be best in either situation.

Has anyone else wrestled with these same questions?
It is impossible for you to be 'ahead money' when trading in a 2 year old car that you bought new with 50k miles on it. Totally impossible. When you factor in the epic depreciation hit you'll take + tax etc. you will basically take a bath. Unless you put a great deal of money down on the car, you would most likely be underwater on the loan at the 2 year mark (figure more rapid depreciation based on such high mileage). If you put a lot of money down on the car, a lot of that will be eaten up by depreciation and even if you came out looking 'even' on paper in the end, you wouldn't get for the car what you put into it. So if you trade it in (worst case, get reamed at dealer trade-in) or sell it private party after 2 years (best case), even if you get money for the car, the only reason you will get money for the car is because you put so much down on the front end. What I am saying is that whether you finance it for X years and trade it in at the 2 year mark, put money down and finance some or just pay cash for the car, you'll lose a lot of money by dumping it after 2 years. All of this because you are afraid of repairs out of warranty? You'll lose a lot more money by letting go of it after 2 years vs. just paying for repairs as they come or buying an extended warranty.

That said, I have never heard of anyone doing a 25k mile per year 2 year lease. I would just buy the car and keep it like 10 years and pay for the repairs when they come about. That is the only way the math will work out in your favor.

In a normal lease situation though, with a new car, you will never, ever come out ahead buying and trading in after a few years vs. leasing.

Ever.
 

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Discussion Starter · #14 ·
Thank you guys for all the input!

We did decide to go with the diesel and we are buying the car outright. Not sure it's the best choice, but that's the one we're making :) Like someone pointed out before, it's kind of just about knowing what you want and doing it. We have the money and the money for repairs, it's just me getting into too much worrying about making the "perfect" decision. We know what we want and we're just going to go for it. :) I think we'll feel better owning because of the intangibles ... not so worried about door dings, options to keep the car longer if we choose, personalizing the car a bit more, etc. Looking forward to experiencing our BMW!
 

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Discussion Starter · #15 · (Edited)
It is impossible for you to be 'ahead money' when trading in a 2 year old car that you bought new with 50k miles on it. Totally impossible. When you factor in the epic depreciation hit you'll take + tax etc. you will basically take a bath. Unless you put a great deal of money down on the car, you would most likely be underwater on the loan at the 2 year mark (figure more rapid depreciation based on such high mileage). If you put a lot of money down on the car, a lot of that will be eaten up by depreciation and even if you came out looking 'even' on paper in the end, you wouldn't get for the car what you put into it.

That said, I have never heard of anyone doing a 25k mile per year 2 year lease. I would just buy the car and keep it like 10 years and pay for the repairs when they come about. That is the only way the math will work out in your favor.
When I said "money ahead" I meant buying versus leasing ... As in trying to figure what my total costs would be for leasing for two years @ 25,000 per miles or just doing a different lease and paying the mileage penalty versus what I could likely trade the car in for after 50,000 miles and 2 years ... figuring total tax paid for buying versus lower taxes on lease payments, etc. My best estimates told me I would likely "save" $3-5K by buying versus leasing all costs considered ... at least that was my best prediction.

We are going to pay cash. I would imagine we will keep the car for some time as it will be my wife's daily driver and she commutes 75 miles round trip on the Interstate at approximately 80 mph.
 

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That said, I have never heard of anyone doing a 25k mile per year 2 year lease. I would just buy the car and keep it like 10 years and pay for the repairs when they come about. That is the only way the math will work out in your favor.

In a normal lease situation though, with a new car, you will never, ever come out ahead buying and trading in after a few years vs. leasing.

Ever.
That's exactly how my math came out (as expected).
 

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Thank you guys for all the input!

We did decide to go with the diesel and we are buying the car outright. Not sure it's the best choice, but that's the one we're making :) Like someone pointed out before, it's kind of just about knowing what you want and doing it. We have the money and the money for repairs, it's just me getting into too much worrying about making the "perfect" decision. We know what we want and we're just going to go for it. :) I think we'll feel better owning because of the intangibles ... not so worried about door dings, options to keep the car longer if we choose, personalizing the car a bit more, etc. Looking forward to experiencing our BMW!
I'm sure you'll love it. Can't really go wrong with either the gas or diesel, they're just different beasts with different pros and cons. As an engineer...there's always a trade off; TANSTAAFL. It's wise to understand them, but don't stress out about finding the decision with no trade offs or no risk because it doesn't exist. Don't choose "perfect," choose optimal for you within the given constraints.
 

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After the fact thought IF repair and warrenty are a concern, thought about a CPO? You get the original warrenty plus and an additional 2 yrs or 50k miles after the original warrenty runs out. That and a reduced price for the purchase. Priced saved would offset any out of warrenty expence.
 

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Thank you guys for all the input!

We did decide to go with the diesel and we are buying the car outright. Not sure it's the best choice, but that's the one we're making :) Like someone pointed out before, it's kind of just about knowing what you want and doing it. We have the money and the money for repairs, it's just me getting into too much worrying about making the "perfect" decision. We know what we want and we're just going to go for it. :) I think we'll feel better owning because of the intangibles ... not so worried about door dings, options to keep the car longer if we choose, personalizing the car a bit more, etc. Looking forward to experiencing our BMW!
Good choice. I bought my diesel outright and plan to keep it many years. It is a pleasure to drive.
 

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We are going to pay cash. I would imagine we will keep the car for some time as it will be my wife's daily driver and she commutes 75 miles round trip on the Interstate at approximately 80 mph.
Oh! Well, you didn't say THAT in your original post ... You couldn't describe better conditions for driving a diesel vehicle if you intentionally wanted to. Excellent choice!

We have the money and the money for repairs, it's just me getting into too much worrying about making the "perfect" decision. We know what we want and we're just going to go for it. :)
:thumbup:

Now, let me throw a curve-ball into your plans ... consider it and your wife will be grateful for a long, long time. Check it out here

http://www.bmwusa.com/Standard/Content/Explore/Experience/EuropeanDelivery/Default.aspx

You can save much more than 7% off MSRP, just ask around this place, learn the ropes and contact a forum sponsor.
 
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