[S1nner]

This topic has turned to counting someone else's money. Do your math and get whatever you're comfortable with. All I know is, I always smile, whenever I jump into my BMW. Like it has been said here, was it best financial decision? Probably not, I could've saved some extra $$, but I don't care.

[BimmerDimmer6]

Originally Posted by zx10guy

LOL. Yes. After owning it for a few months, it's still odd for me to call it a scooter. The thing is actually a bit bigger than both of my superbikes. Everyone that has seen it think it's a motorcycle. On a group one earlier this year, I was railing that thing pinned to the back side of the lead rider on a 1400cc sport tourer. He was shocked I was glued to him the entire time.

You're an animal!

[BimmerDimmer6]

Close thread please! Lease is always a waste of money and for idiot. It's not even debatable!

[Bongoxxx]

Originally Posted by BimmerDimmer6

Close thread please! Lease is always a waste of money and for idiot. It's not even debatable!

I guess I’m an idiot . Been leasing ever since I bought, sorry leased, my first car, 30 years ago. I get a new one every 3-4 years and my only cost is personal gas usage

I expense my payments along with my insurance and all my work kms

But I’m an idiot

It’s comical when I see “I bought my BMW for $25k Of MSRP”
Well of course you did, you bought a friggen 2-4 year old depreciating asset. You can’t compare buying used to leasing new, it’s apples to oranges...if you want an accurate comparison, you need to compare new purchase vs new lease.

There are pros and cons to each when comparing new lease to new buy, but a 4 year lease will always cost less monthly then a 5-6 year finance....let’s be realistic most consumers are looking at what they can afford weekly, bi-weekly, monthly and leasing fits the bill for a large number of consumers. Heck you can just look at the manufacturer advertising and how it’s changed....used to be the car purchase price, then it became $xxxx a month finance for 3 years, then $yyyy for 4 years finance, then 5 years, then 84 months, then 96 months and now $zzz weekly for leasing.

[upstatedoc]

Clark Howard says it's the worst way to buy a car. I guess I should listen to someone else.

[turboawd]

Originally Posted by F32Fleet

No. It's why ever since beginning in 2007 with the N54 that CPO vehicles have been plagued with engine and transmission issues. Initial owners tuning the shit out of their cars and leaving second/third owners to deal with the fallout.

I also blame BMW for not being more diligent.

You're assuming young kids who mod their cars are the majority who lease. When it's probably the opposite.

[jmg]

Originally Posted by upstatedoc

Clark Howard says it's the worst way to buy a car. I guess I should listen to someone else.

He also says that if you like to drive the latest and greatest or the cars are well subsidized, they are exceptions to the rule.

[ASAP]

I am still blown away this thread continues on and on... just do whatever works for you.

I personally am a fan of the lowest payment... but what does that mean to me? Lowest payment as well as ownership, this means financing the car with the max reasonable down payment possible. I put 50% down payment on my M2C... what does that do for me?

1) It helps keep the monthly payments to a reasonable level.
2) I am not tied to anything at all... can sell at any moment and will effectively never be uspide down.
3) Gap insurance becomes totally irrelevant
4) I can always refinance again to an EVEN lower payment (without worrying about being upside down).
5) Because the payment is low, even if the car sits / isn't driven much / lost job / economic downturn or whatever, I still have the most flexibility and will have 0 reason to sell the car.

The quickest way to get yourself in trouble - run a highly monthly payment and get yourself in an upside down equity position... that's how so many on this board sell their cars within a month when things go south. Lease payments prevent the upside down scenario but still tie you down w 0 equity unless you buyout (which is more expensive than buying in the first place) or you lease transfer (always a pain in the ass).

Moral of the story - do what is right for you...

But I advise the following no matter what buying option you choose-

1) Always be in a position where you can buy the car cash... if you can't afford to buy it for cash... you probably cannot afford it even when financing.

2) Always have 6+ months of savings... I advise 12 months so you don't have to dump your car the moment things go south.

3) Do not pay more for a car per month than 10% of your salary... anything outside of that is stupid.

Good luck.

[Alfisti]

I think this whole argument gets lost and divisive because folks forget what the real discussion is about.

No one should be judging anyone in regards to how they spend their money, if you want a new car every 3 years that is fine and frankly leasing makes a lot more sense than buying if you do this.

The true discussion is about the cost of leasing on an ongoing basis to avoid the cost of repairs and out of warranty service. There is no way, no how, i can find any math to support that argument.

Buy a new car, keep it 6 to 8 years, will always be cheaper than leasing or buying new every 3. The biggest expense on any car is depreciation in the first three years, this is fact unless desperately unlucky and you lose an engine.

I've been a bit grumpy dropping $1500 or so a year on repairs for my saab but even dog base nissan versa is more than $1500 a year on a lease and who the hell wants to drive that?

[zx10guy]

And there's always an extended warranty to deal with repairs outside of the warranty period.

As has been mentioned, I just prefer to buy new now for the most part. It ensures I know the full history of the car. I know how it was broken in. And I know how it's been operated. Now a days, I tend not to beat the piss out of my vehicles. There is something to be said about performance vehicles being bought new. Most people look to play hard with them. This is why I have never bought a sport bike used. And I applied the same logic to when I purchased my 135i new. With the car being 6 to 7 years old, it's never left me stranded and hasn't had a major failure either.

I occasionally kick around the idea of getting a M2C or maybe even a 718 Cayman. But the cheap bastard side of me keeps stepping in reminding me how it's been bliss not having a car payment for years now. The only illogical purchase which will probably happen is buying the latest gen S1000RR. I've been hankering to have this bike as one of my own since spending years of seat time with it at the track.

[ASAP]

Originally Posted by zx10guy

And there's always an extended warranty to deal with repairs outside of the warranty period.

As has been mentioned, I just prefer to buy new now for the most part. It ensures I know the full history of the car. I know how it was broken in. And I know how it's been operated. Now a days, I tend not to beat the piss out of my vehicles. There is something to be said about performance vehicles being bought new. Most people look to play hard with them. This is why I have never bought a sport bike used. And I applied the same logic to when I purchased my 135i new. With the car being 6 to 7 years old, it's never left me stranded and hasn't had a major failure either.

I occasionally kick around the idea of getting a M2C or maybe even a 718 Cayman. But the cheap bastard side of me keeps stepping in reminding me how it's been bliss not having a car payment for years now. The only illogical purchase which will probably happen is buying the latest gen S1000RR. I've been hankering to have this bike as one of my own since spending years of seat time with it at the track.

The cheap bastard in me also did not want to buy a new M2C... but I felt the time was right and may have been a one off opportunity.

I personally would typically buy used CPO cars but knowing what I know about M cars and this forum, that option was out of the window.

Plus with Electric cars being the norm... not sure how many opportunities I had to buy a new sports car in my life...

[David70]

Originally Posted by Cyberdemon

Per the previous comment, see why this is wrong and incorrect in thinking.

1- Residuals and programs vary month to month. I got a great deal in December and all those programs went poof on Jan 4th.
2 - Putting cash down on a lease is a bad idea for the same reason gap coverage is important. If you put $10K down on a car, drive it off the lot and into a ditch - the insurance will almost certainly ONLY satisfy the remaining payoff on the loan, and not repay money you paid in advanced on taxes or capital cost reductions.

And that's why lease swaps can be attractive. Most BMW loaner cars can be leased for 16-18% discount before those incentives. For those who don't care about a very particular spec this is a tremendous way to get a car that is fully covered under warranty for an extremely low monthly payment. This is what I recommend to many people who leases will work for.

Nobody has to convince you to lease, but once you visit a site like Leasehackr you clearly understand there are ridiculously good deals to be had out there on new cars, and if you follow the process and buy when a deal is good it is very easy to get a car for extremely little.

Volvo also has tremendously good deals over the past few months. Here's a near $70k Volvo for $495/mo by stacking $10k+ in incentives. Some of these deals require a substantial amount of legwork to achieve, but if money is worth some to you then it's hard to argue driving the same car that would cost you ~$1200+/mo to finance.

Not following how insurance only pays off the balance of the loan. Sure doesn't work this way with a purchase. After a serious accident they don't ask you about how much you owe and instead pay what the value of the car at the time of the accident. So if I decide to pay up front for a 3 year lease and total the car the next day insurance pays nothing or only what the residual is at the end of the lease?

As far as the "great deals", maybe great compared to buying new and replacing every 3 years but I don't see it compared to other ways to get a car. I bought my car at a huge discount from new because it was a year old and had 11k miles on it. Now 6 years later I would be not on the same car but instead getting my 3rd leased car. I would have zero equity, need to come up with cash for the 3rd car and be looking at car payments for the rest of my life. Said over and over if you want a new car every 3 years it's a good way to do it but don't make it out to be economical way to have a car.

Local dealer occasionally sends me offers that if I trade my car in on a new one very close to what i have now that I only need to come up with $35k cash/finance to get it. Makes me laugh.

[Cyberdemon]

Originally Posted by David70

Not following how insurance only pays off the balance of the loan. Sure doesn't work this way with a purchase.

After a serious accident they don't ask you about how much you owe and instead pay what the value of the car at the time of the accident. So if I decide to pay up front for a 3 year lease and total the car the next day insurance pays nothing or only what the residual is at the end of the lease?

You are conflating a few issues. Insurance typically pays the balance of a loan. Gap insurance, as discussed which is included in almost every luxury brand lease covers the delta. I totalled my wifes 2.5 year old Jeep - in this case they aren't paying anything to me. They satisfied the balance of the lien with Chrysler financial and that was the end of the conversation, and that was all at zero deductible because the GAP covered that as well. If I didn't have gap insurance, then I would have had a $1000 deductible owed, plus the delta between the cars assessed value by the insurer and the payoff amount on the lease. Keep in mind, because taxes were rolled in not paid upfront I also wasn't liable for the remaining 8%+ tax on the remaining payments.

You seem to ahve conflated this with a one pay lease OR a capital cost reduction - which is a very different structure.

One pay lease means I am going to pay my entire 36 month (or whatever term) up front for a slight reduction in interest rate. This is a generally less great idea because currently you'd be better off having that money earning interest externally in almost any circumstance than the tiny amount you'd save by having it down up front.

A capital cost reduction is the typical "money down". Every BMW.com offer says "Lease a X5 for $699 a month, assuming a specific sale price, a $3000 capital cost reduction (Cash up front) fees, taxes, etc. In this case if you drive off the lot, crash the car - gap insurance will NOT refund your $3000, usually not taxes either though I know some folks who were able to get a prorated piece of it. It will only satisfy the remainder of the loan.

Again - this is my point - regardless of financial habits - most people do NOT understand the structures and nuances of leasing. They get into bad contracts and situations which put them at a loss.

Originally Posted by David70

If you drive your car off the lot on a standard monthly lease,
As far as the "great deals", maybe great compared to buying new and replacing every 3 years but I don't see it compared to other ways to get a car. I bought my car at a huge discount from new because it was a year old and had 11k miles on it. Now 6 years later I would be not on the same car but instead getting my 3rd leased car. I would have zero equity, need to come up with cash for the 3rd car and be looking at car payments for the rest of my life. Said over and over if you want a new car every 3 years it's a good way to do it but don't make it out to be economical way to have a car.

That's the exact point I'm making though. Some people prefer to drive new cars. Just like some people prefer to own the latest iPhone, even though an iPhone 6S on craigslist will do most of the same things. Some people also prefer new clothes, 5 star hotels, etc.

In SOME cases - leasing offers the ability drive new cars at substantially lower prices than outright purchasing. That is my only point here. I am not arguing that driving a few year older car is generally more economical. No one will argue that a 1992 Camry is the most financially Warren Buffet Esque way of moving about roads.

In the M2 example above - the M2 is a HORRIBLE lease. Zero incentives, poor discounts, and a very low residual value 100% make that a car to buy, regardless of if you want it new or used. An X3 on the other hand? The total cost of ownership for an X3 purchased at the right time (Even if you lease two of them) will likely be lower especially once the warranty expires and maintenence hits in.

If you like to keep cars for 10 years, then no one will challenge you to lease. If you're like many of us who see the new LCI tail lights and Idrive 7 updates and say "oh that looks really cool I wish I had that" then leasing should be evaluated and you can make that decision for yourself.

The predictability, zero need to ever worrying about a high dollar repair out of warranty, minimal trips to the dealership for maintenance (since most cars will only ever need oil changes) are very big pluses for many people.

"Fix it yourself" isn't something you can tell my wife, or people who live in a city apartment with no tools or garage.

Like I said I own my M3, and lease my X5 based on the fact that those were the very specific vehicles I wanted and those were the most cost effective ways to get them. If I have another kid and decide we need an X7 in a year, I would have zero regrets and don't have to deal with the major initial depreciation hit I would have had to pay if I purchased the car outright (along with $5K on taxes). Comparing the value of those two cars after about a year based on current market values would be about $3000 worse for financing.

But at the end of the day do what works for you. I'll report back in 12 months to see if the amount of money I sunk on my 9 year old M3 cost more or less than a new CS would have considering I keep a line by line spreadsheet of every expense.

[jmg]

Originally Posted by David70

Not following how insurance only pays off the balance of the loan. Sure doesn't work this way with a purchase. After a serious accident they don't ask you about how much you owe and instead pay what the value of the car at the time of the accident. So if I decide to pay up front for a 3 year lease and total the car the next day insurance pays nothing or only what the residual is at the end of the lease?

The insurance pays the lessor the value of the car, just as if yo purchased, regardless of the lease balance. The lessor gets all the money, the leaser gets nothing but washes their hands of the lease if they have GAP insurance. So, if you prepaid your lease, you just gave that money to the lessor. This is why you don't put a down payment on a lease. A down payment is simply a prepayment on your lease. You save a few dollars in taxes, but risk losing it if you total your car. Not worth it imho.

[David70]

Originally Posted by Cyberdemon

You are conflating a few issues. Insurance typically pays the balance of a loan. Gap insurance, as discussed which is included in almost every luxury brand lease covers the delta.

If you are talking about insurance in general, insurance typically pays for the cash value of the vehicle when it was damaged. The fact that you need GAP insurance to cover the delta shows that it doesn't pay the balance of the loan in the lease case because the car is worth less than what is owed on it. As you said the Chrysler was paid off because of insurance and the additional GAP insurance.

Originally Posted by Cyberdemon

You seem to ahve conflated this with a one pay lease OR a capital cost reduction - which is a very different structure.

One pay lease means I am going to pay my entire 36 month (or whatever term) up front for a slight reduction in interest rate. This is a generally less great idea because currently you'd be better off having that money earning interest externally in almost any circumstance than the tiny amount you'd save by having it down up front.

A capital cost reduction is the typical "money down". Every BMW.com offer says "Lease a X5 for $699 a month, assuming a specific sale price, a $3000 capital cost reduction (Cash up front) fees, taxes, etc. In this case if you drive off the lot, crash the car - gap insurance will NOT refund your $3000, usually not taxes either though I know some folks who were able to get a prorated piece of it. It will only satisfy the remainder of the loan.

Again - this is my point - regardless of financial habits - most people do NOT understand the structures and nuances of leasing. They get into bad contracts and situations which put them at a loss.

You completely missed my question and instead tried to answer something else. The question wasn't whether or not it was a good idea or how it works, the question was to how insurance paid out. If the insurance is only to pay off the loan and you paid the complete lease amount up front, will you get any part of the insurance money yourself or not, then is the value from when it was crashed or as you said the loan amont (residual)? Really simple question which doesn't need three paragraphs explaining how leases work.

Originally Posted by Cyberdemon

That's the exact point I'm making though. Some people prefer to drive new cars. Just like some people prefer to own the latest iPhone, even though an iPhone 6S on craigslist will do most of the same things. Some people also prefer new clothes, 5 star hotels, etc.

In SOME cases - leasing offers the ability drive new cars at substantially lower prices than outright purchasing. That is my only point here. I am not arguing that driving a few year older car is generally more economical. No one will argue that a 1992 Camry is the most financially Warren Buffet Esque way of moving about roads.

Comparing constantly leasing a new car to driving a 30 year old Camry. You seem to be confused by the huge option in the middle.

One thing you're right about, I prefer to not have the latest and greatest, instead getting 80-90% of it at 50% of the cost.

Originally Posted by Cyberdemon

In the M2 example above - the M2 is a HORRIBLE lease. Zero incentives, poor discounts, and a very low residual value 100% make that a car to buy, regardless of if you want it new or used. An X3 on the other hand? The total cost of ownership for an X3 purchased at the right time (Even if you lease two of them) will likely be lower especially once the warranty expires and maintenence hits in.

If you like to keep cars for 10 years, then no one will challenge you to lease. If you're like many of us who see the new LCI tail lights and Idrive 7 updates and say "oh that looks really cool I wish I had that" then leasing should be evaluated and you can make that decision for yourself.

The predictability, zero need to ever worrying about a high dollar repair out of warranty, minimal trips to the dealership for maintenance (since most cars will only ever need oil changes) are very big pluses for many people.

"Fix it yourself" isn't something you can tell my wife, or people who live in a city apartment with no tools or garage.

Like I said I own my M3, and lease my X5 based on the fact that those were the very specific vehicles I wanted and those were the most cost effective ways to get them. If I have another kid and decide we need an X7 in a year, I would have zero regrets and don't have to deal with the major initial depreciation hit I would have had to pay if I purchased the car outright (along with $5K on taxes). Comparing the value of those two cars after about a year based on current market values would be about $3000 worse for financing.

But at the end of the day do what works for you. I'll report back in 12 months to see if the amount of money I sunk on my 9 year old M3 cost more or less than a new CS would have considering I keep a line by line spreadsheet of every expense.

You told me to look into the "ridiculously good deals" on leases and I explained that they are mediocre in the overall picture of options to drive cars and you continue to try to sell me on them. No need to keep saying it over and over. I am completely happy with however you decide to spend your money.