[ward]

as long as you don't drive crazy miles (25,000 a year personally)

leasing may make sense,

if you drive the crap out of the thing, leasing is not a good choice

[blueStreak]

Originally Posted by ward

at the end of a finance contract you own a car, at the end of a lease you own nothing.

so I guess all the homeowners on the board with a mortgage own their homes just about as much as renters since in both cases the title is held by the bank

I think a lot of people here do not understand leases. You are comparing something that appreciates to something that depreciates.

Cars (this is a generalization before someone jumps on me about collector cars and the like) depreciate. Whether you finance or lease, you aren't on the title which means you don't own it and every day you are losing value.

Homeowners are on the title. Realestate (another generalization) appreciates. Whether you own outright or have a mortgage, any change in the value of your property is yours. If you are renting, you have no vested interest in what happens to the value.

[counter_strike]

I lease because i use my spare cash to invest in the stock market which has given me 51% return ( i started trading this April ) I have been lucky...


I dont want to tie up my money. and I dont want to pay taxes up front. I am in Canada, 17% tax here

[ward]

if the car you buy sucks,

you can sell or trade in a financed car easier than a lease

[espo]

I've thought about this alot... my current car was a lease because in 2003 I knew that BMW would be coming out with a new version of the 3series in the next 3 years so when my lease was up I would be able to get the new version. I also decided to lease the new one for the following reasons:

- lease payment will be about $705/month for 36 months and 36,000 miles (with what the dealer is giving me for lease rates) a loan payment for 5 years at 6% (which seems to be a good going rate and the equilvant of the MF I have on the lease) the payment is about $925/month. This is no money down in each case and including all of the taxes in the loan. The difference is $220/month.
- The break even point on the loan (the time at which the principle value left on the loan equals the residual price of the car) is somewhere between the middle and the end of the third year using the residual value of 61% that is part of the lease quote. BTW the current buyout on my 2003 BMW lease is within $1k of the current KBB re-sale value of the car. Seems that BMWFS is relatively good about approximating the actual value of the car after 3 years to use as the residual for the lease. So if I try to get rid of the car before that point I will actually have to pay someone to take my car. Looks like I have to keep the car for 3 years even with a loan. In the case of the loan, the residual value is also not guarenteed, so that break even point can be pushed out farther (not a large possibility, but still plausible)
- In the case of a loan I will be paying the state of New York about $2k more in sales tax. Never like to give the government too much of my money at one time.
- I can take the $220/month difference and help my wife go back to school and finish her college degree (she never got to do that before). I see that as a much better investment for our long term financial goals then buying an asset that will continue to depreciate in value.
- During the cost of the loan, the only maintenance I will be paying on the car are a new set of tires (which seems to be required with the A/S at about $25k miles). In the case of the loan, for the 5th year I would be paying both the loan and any maintenance.
- At the end of 36 months on the lease I turn the car in for the newest model (maybe a 335 ) and it's always nice to have a NEW car :rocks: .

For those reasons right now I'm leasing. Who knows in the future what will happen, but for now I'll go with the lease and use difference in the payments to "invest" in things that are going to have a higher payback in the future.

[Kao BMW]

Originally Posted by Username18

Would you buy a loved one?

Get serious... instead of picking on logic.

[theclay]

Originally Posted by Epyon

finance, leasing is stupid, and so is buying outright (unless your gonna keep the car for a while)

smartest thing is to take the car, and drop the money for it (finance) and just jump to a new car before depreciation hits too hard.

I agree that leasing is stupid unless you can write the lease off at tax time. However buying outright is the smartest way to go unless you enjoy giving banks your money and paying much more for the car in the end. I financed about half the cost because I didn't want to totally deplete my savings but I intend to pay off the loan early so as to avoid most of the interest.

[dxk]

Originally Posted by espo89

I've thought about this alot... my current car was a lease because in 2003 I knew that BMW would be coming out with a new version of the 3series in the next 3 years so when my lease was up I would be able to get the new version. I also decided to lease the new one for the following reasons:

- lease payment will be about $705/month for 36 months and 36,000 miles (with what the dealer is giving me for lease rates) a loan payment for 5 years at 6% (which seems to be a good going rate and the equilvant of the MF I have on the lease) the payment is about $925/month. This is no money down in each case and including all of the taxes in the loan. The difference is $220/month.
- The break even point on the loan (the time at which the principle value left on the loan equals the residual price of the car) is somewhere between the middle and the end of the third year using the residual value of 61% that is part of the lease quote. BTW the current buyout on my 2003 BMW lease is within $1k of the current KBB re-sale value of the car. Seems that BMWFS is relatively good about approximating the actual value of the car after 3 years to use as the residual for the lease. So if I try to get rid of the car before that point I will actually have to pay someone to take my car. Looks like I have to keep the car for 3 years even with a loan. In the case of the loan, the residual value is also not guarenteed, so that break even point can be pushed out farther (not a large possibility, but still plausible)
- In the case of a loan I will be paying the state of New York about $2k more in sales tax. Never like to give the government too much of my money at one time.
- I can take the $220/month difference and help my wife go back to school and finish her college degree (she never got to do that before). I see that as a much better investment for our long term financial goals then buying an asset that will continue to depreciate in value.
- During the cost of the loan, the only maintenance I will be paying on the car are a new set of tires (which seems to be required with the A/S at about $25k miles). In the case of the loan, for the 5th year I would be paying both the loan and any maintenance.
- At the end of 36 months on the lease I turn the car in for the newest model (maybe a 335 ) and it's always nice to have a NEW car :rocks: .

For those reasons right now I'm leasing. Who knows in the future what will happen, but for now I'll go with the lease and use difference in the payments to "invest" in things that are going to have a higher payback in the future.

I agree with you, only thing is, your lease payment seems to be a bit too high, what was your selling price if you don't mind me asking?

[Kao BMW]

Originally Posted by dxk

As an MBA from a famous school in the Boston area:
You are very very wrong !
It's only a scam if you don't know what you're doing

...and as professor with a PhD from a famous school in California: You don't know what you're doing and you're being scammed if you're leasing...

[espo]

Originally Posted by dxk

I agree with you, only thing is, your lease payment seems to be a bit too high, what was your selling price if you don't mind me asking?

I got $1K of the MSRP of the car listed below. The MSRP is a little over $43K.

[theclay]

Originally Posted by Kao BMW

...and as professor with a PhD from a famous school in California: You don't know what you're doing and you're being scammed if you're leasing...

The doctor is in the house and he's right folks!

[espo]

Originally Posted by Kao BMW

...and as professor with a PhD from a famous school in California: You don't know what you're doing and you're being scammed if you're leasing...

.....and as an engineer with a PhD from a VERY famous school in NJ, if you buy a depreciating asset you are being scammed

Seriously though, everyone has a different reason, both financially and emotially for the method in which they obtain their BMW. You just should fully understand each choice and pick the approach that is correct for YOUR situation

[dxk]

Originally Posted by espo89

I got $1K of the MSRP of the car listed below. The MSRP is a little over $43K.

If it's 12K miles per year, payment should be $650 including NY sales tax, for 15K miles - $669

[wac77]

It basically comes down to the cost of money.

If you have money burning a hole in your pocket, or in the bank earning 3% or less, just use it!

If you have money invested at a higher rate of return, you should still take some out to purchase the car unless you have a guaranteed return higher than the interest rate in a normal car loan.

If you have to borrow money, borrow the least possible amount, at the lowest possible interest rate.

Lease only if you have a cash flow problem, or some tax advantage (business deduction). Or, and this seems to be true sometimes for BMWs and other luxury cars, if there are particularly good subsidized leases. I don't think this will happen on E90s anytime soon.

[espo]

Originally Posted by dxk

If it's 12K miles per year, payment should be $650 including NY sales tax, for 15K miles - $669

The actual breakdown of the cost (taken from the delear price list, all MSRP):

330XI base 38,500
Dest Charge 695
Metalic Paint 475
ZPP 2,200
CWP 850
CA 500
ZSP 900

Total MSRP $44,120

Total lease $43,120 + $850 (NY acquisition fee, which is supposed to go down) + 8.25% sales tax on deprec and interest with a 61% resid and MF of 0.0025 comes out to $705/month for 36 months. I used the lease calculation sheet posted somewhere on this board.

[dmbigs]

ive never seen so many people make so many misguided, ignorant statements. i don't even know where to begin.....

1.)Leasing is a scam
2.)I don't lease because I wanna own the car
3.)Leasing is only good if you don't do high miles
4.) And the icing on the cake for dumbest statement in the thread...

Bruce Lee's "let me jump to another car before the depreciation hits too hard....wow...did you win the lotto, or did you steal your BMW, because with logic like that, Id love to you who is paying you well....

I kid I kid

[puck724]

random question. what criteria would you be able to get a tax break through leasing?

[dxk]

Originally Posted by espo89

The actual breakdown of the cost (taken from the delear price list, all MSRP):

330XI base 38,500
Dest Charge 695
Metalic Paint 475
ZPP 2,200
CWP 850
CA 500
ZSP 900

Total MSRP $44,120

Total lease $43,120 + $850 (NY acquisition fee, which is supposed to go down) + 8.25% sales tax on deprec and interest with a 61% resid and MF of 0.0025 comes out to $705/month for 36 months. I used the lease calculation sheet posted somewhere on this board.

$676.87 a month + that $850 cash. I am pretty sure about this, unless there is something I am missing; used this method to get my car.
Here, use this calculator, I found this is matching dealer numbers exactly.
http://www.leaseguide.com/calc.htm

[dxk]

Originally Posted by dmbigs

ive never seen so many people make so many misguided, ignorant statements. i don't even know where to begin.....

1.)Leasing is a scam
2.)I don't lease because I wanna own the car
3.)Leasing is only good if you don't do high miles
4.) And the icing on the cake for dumbest statement in the thread...

Bruce Lee's "let me jump to another car before the depreciation hits too hard....wow...did you win the lotto, or did you steal your BMW, because with logic like that, Id love to you who is paying you well....

I kid I kid

I know, I just didn't want to put this quite like that

[espo]

Originally Posted by dxk

$676.87 a month + that $850 cash. I am pretty sure about this, unless there is something I am missing; used this method to get my car.
Here, use this calculator, I found this is matching dealer numbers exactly.
http://www.leaseguide.com/calc.htm

I just put in the numbers from the spreadsheet and came up with a total payment of $704.72. That includes the $850 as part of the total lease (rather than pay it up front). So we are on the same page.

[dme330i]

Originally Posted by Kao BMW

LEASING is the biggest scam of this century, or the past century rather. Would you LEASE a nice pair of watch? Would you LEASE a loved one? Would you LEASE a pet?

Just buy, and take pride in your purchase.

If you can't afford it, don't step into a BMW dealer.

Originally Posted by Kao BMW

...and as professor with a PhD from a famous school in California: You don't know what you're doing and you're being scammed if you're leasing...

You've got to be kidding! The guy was making fun of your "logic" because there is no logic to your argument above.

PhD's making broad generalizations - seems oxymoronic to me. Assuming that you really do have a PhD from a reputable school, I would think that you would support your argument with concrete evidence.

Give me a break! You state, "You're being scammed if you're leasing." How so?

All of you who simply state that one way is always better than the other are misinformed. It all depends on your own particular situation and preference.

In my case, I prefer to drive a new car every 2 years. Moreover, BMW's in particular are excellent vehicles to lease due to their relatively high residual values. Add the benefit of ED pricing and the lease deal becomes even better. The end result for me is low short-term costs, with front-end and back-end tax benefits. Finally, 20-24 months into the lease, I can transfer the lease (attractive monthly payment due to ED makes it easy to find a new leasee) and pick up a new lease to keep the new car cycle going.

[CnoteMD]

For some people it makes more financial sense to lease, for others it may make more sense to finance, and some people will just bypass the entire system and pay cash. Just be sure you fully understand the 3 options and do what's best for you.

Leasing used to be a much better deal, but banks have cought on and the rates have gone up considerably. Often, you can finance the car for only slightly more than the lease.

However, if you don't want to go through the trouble of selling your car (as dealers often will not give a fair trade-in) and you are able to write-off the lease as a business expense, then leasing still makes sense.

Financing the car (especially if the rates are low, or if you use a home equity loan for deductible interest) makes sense because it leaves more money available to invest in "appreciating" assets rather than putting it into something that loses money the second you drive off the lot.

And to be consistent, after getting my MD, I briefly held a faculty position at a VERY famous medical school in MA.

Michael