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Old 01-31-2005, 10:57 AM   #1
gatorpiss
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Who here leases vs finances? pole: your thought process behind it?

I am just currious to see how many ppl lease vs finance on this board and for what reasons? I have always thought it would be better to buy something out right than to pay on something you can't really afford for a couple years and then have to "give it up?" then start all over again with a new lease. its just not a good investment idea..any thoughts would be appreciated.

I'm not trying to diss anyone for leasing, i just don't understand.



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Old 01-31-2005, 11:00 AM   #2
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I finance......leasing would be great as I could afford more car.......but I dont hold cars for that long.


leasing is good if u dont want to deal with the hassle of trying to sell the car and possibly taking a bath while doing so
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Old 01-31-2005, 11:03 AM   #3
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Quote:
Originally Posted by gatorpiss
I am just currious to see how many ppl lease vs finance on this board and for what reasons? I have always thought it would be better to buy something out right than to pay on something you can't really afford for a couple years and then have to "give it up?" then start all over again with a new lease. its just not a good investment idea..any thoughts would be appreciated.

I'm not trying to diss anyone for leasing, i just don't understand.
Leasing is great and makes financial sense if you can write it off like a business owner or such? Leasing is also good because you can significantly reduce your monthly payment that way. Other than that, I personally do not see the benefit. You are restricted to ridiculously low miles, makes modding a b itch and you have to give the car in back in near perfect condition, only to have them turn around and sell or even lease it again! PBMW wants you to lease, I can tell you that!
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Old 01-31-2005, 11:04 AM   #4
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Originally Posted by 10chi
I finance......leasing would be great as I could afford more car.......but I dont hold cars for that long.


leasing is good if u dont want to deal with the hassle of trying to sell the car and possibly taking a bath while doing so
Sorry.....to answer your question, I finance 2 of my vehicles (330 and G35) and own the other two outright (FJR1300 and Passat)!
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Old 01-31-2005, 11:11 AM   #5
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I'm financing my 330, as I plan on driving this thing until the wheels fall off.

I can see the merits in leasing. Some folks like having a new car every few years. Maybe they work close to home or have a second car, so mileage isn't a concern. Leasing also allows you to have a car of greater value than you would normally be able for afford. For some people, leasing is a perfect solution. I think varies from person to person, situation to situation.
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Old 01-31-2005, 11:17 AM   #6
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Originally Posted by roadracer516
Leasing is great and makes financial sense if you can write it off like a business owner or such? Leasing is also good because you can significantly reduce your monthly payment that way. Other than that, I personally do not see the benefit. You are restricted to ridiculously low miles, makes modding a b itch and you have to give the car in back in near perfect condition, only to have them turn around and sell or even lease it again! PBMW wants you to lease, I can tell you that!
I am a business owner and i still think it's a better idea to finance.... and yeah, I guess modding would be out of the question if you were leasing! didn't think about that...lol could you imagine trying to return a car after you drop it an inch, add an intake, shark, clears, angel eyes...ect. they would make you pay big time!
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Old 01-31-2005, 11:21 AM   #7
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^There's plenty of people that mod their lease, it's just when it comes time to turn it back in, they have to return the car to stock. That's why you'll see a lot of "Parting Out" threads in the classified section.
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Old 01-31-2005, 12:00 PM   #8
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We lease both our BMW's. My wife's car is a write off so we swap hers out every 2 to 2.5 years or so. I lease mine to get lower payments and swap out every few years. I have modded my last 2 leased cars. I sold my 530 privately and broke even. My current whip will be modded beyond the point to be practical for trading in. I am going to buy it outright when the lease is up and lease a bigger car on MY new business.
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Old 01-31-2005, 12:13 PM   #9
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I bought b/c I tend to go WAAAYY over 10K miles/year. For some odd reason, I've been able to keep under that w/ the BMW, but when I bought it, I had never been close. Plus, I like to keep cars until they very, very tired and on their last legs.

If I had my own business and drove less than 10K/yr for sure, I'd lease. You get a new car constantly and a writeoff.
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Old 01-31-2005, 12:49 PM   #10
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Lease are easily done for 12k and these more like 15k. My lease is 15k per yeard. That's plenty for me and I like to drive.

I've always bought my cars before. Purchasing a daily drive vehicle is not, never, never has been a good "investment". Never think about a depreciating assest as an investment and you'll feel happier about how you "buy" it. When I think "invest", I think of something where I will get a return on the money I put in. With a daily drive vehicle the only investment is the return of it's use not in terms of how much it will be worth at the end of the lease or loan.

One aside, I would NEVER NEVER NEVER, buy a vehicle like a BMW with cash. These cars cost a lot of money and if you have that much cash that you can buy it outright, DON'T. There are real investments that can be made with that kind of money rather than spending it on a vehicle that can be had in other ways, such as leasing.

If you take a loan you don't "own" you car, the band or the loan company does. When you lease you don't own it either in that sense.
But, the point is for all intents and purposes it's your car to do with as you please. The modding issue doesn't bother me as I don't do mods that are not reversable. And, if I wanted a car that gives me good performance return on mod expense, I wouldn't be buying a new car for that in the first place.

The are many things that make leasing a smart choice. If I wanted to actually loan purchase my car I would have put $8000-$9000 down, CASH, to get a monthy payment for 5 years that is the equivalent to what I am paying on my lease for 3 years. This way I can invest those $8000 dollars in anyway I like or even leave it in the bank where it will get a return and be worth more in 3 years. Giving that down payment to BMW means they will get the return on the cash rather than me. In that sense, getting a lease IS an investment for me.
I calculated how much it would cost me to loan purchase my BMW including the down payment and then sell it at the end of 3 years compared to how much it would cost me to make the monthy payment on a lease for the same term and include the the fees associated with a lease. The difference?
It cost about $400 more to lease the car for the 3 year period. A small sum for the options a lease gives you. Also, keep in mind that I still have my $8000 (that I did't have to put down on the loan purchase) which is worth more than that at the end of 3 years.
Basically, leasing didn't cost me anymore than a loan purchase and I actually had investment money to boot.

Now, I can choose to either buy the car, or I can sell it and give BMW their money, or I can return it and get a new one, or I can return it and go get any other car I want to drive now. I'm at a point in my life where I want to drive the newer cars every few years. I've bought and sold many used cars in my days and even though I don't mind the process, I like the idea of having that option with a lease.

The thing to know about leases is the price of the vehicle, money factors, residual, and fee's (maybe down payment to lower monthy).
There are cars that are NOT worth leasing and you are better off on a loan purchase. BMW is not one of those. BMW, Audi, MB have excellent residuals which means they keep much of their original price. In other words, they don't depreciate nearly as fast as other brands like GM or Ford.
BMW does do a lot of lease business. I was told that BMW does nearly 50% of it's sales in lease. For them a lease is great because their cars have value to the owners and dealers alike. There is a demand for used BMW's and BMW gets a great price for them, thus they can afford to do leases which are affordable.

Basically, when you lease your payments are based on the depreciation of the car you want. You are paying off the depreciation of that car for the period which you own it. When that is done BMW gets the car back and then they assume the responsibility for what to do with it, unless of course you decide to purchase the vehicle. And, many times you can negociate that purchase price to be lower than the actual residual.

So, that's what I did and why I did it and that was my thought process behind it all.
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Old 01-31-2005, 01:17 PM   #11
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Thanks for the awsome response! I love to hear other ppl's input and how different options work for them.

Ownership is still the way to go for me. I'm not sure where you are getting 8-9k from? i only put 3k down on my used e46 and the payments are not that high. BTW, an "investment" does not always have cash value. I will save WAY more by paying my car off in 5 years and then driving it until the wheels fall off!

The money you "save" by leasing does not match financing. You will be making car payments for the rest of your life if you lease. thats not cheaper by any means. Since you pointed out how well BMWs hold their value over time. I will sell mine WAY down the road and have serveral grand to put down on a new one.

Where I come from when you finance a car you OWN it at the end of the term.
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Old 02-01-2005, 09:36 AM   #12
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Originally Posted by gatorpiss
Thanks for the awsome response! I love to hear other ppl's input and how different options work for them.

Ownership is still the way to go for me. I'm not sure where you are getting 8-9k from? i only put 3k down on my used e46 and the payments are not that high. BTW, an "investment" does not always have cash value. I will save WAY more by paying my car off in 5 years and then driving it until the wheels fall off!

The money you "save" by leasing does not match financing. You will be making car payments for the rest of your life if you lease. thats not cheaper by any means. Since you pointed out how well BMWs hold their value over time. I will sell mine WAY down the road and have serveral grand to put down on a new one.

Where I come from when you finance a car you OWN it at the end of the term.
I thought you wanted input and opinions?
Seems you wanted an argument instead.

I thought we were comparing a new car for lease or purchase. It seems you were interested in a used car. That changes the conditions.

Compare a new to new and you'll see where the $8k comes in.
I think you missed my whole point.
But I won't go over it, it's all right there.

One does NOT invest in something which is known to lose value over the years, and with cars, that can be quite extensive.
An investment is something you do on the prospect that you will have MORE at the end of certain period.

""BTW, an "investment" does not always have cash value. I will save WAY more by paying my car off in 5 years and then driving it until the wheels fall off!""

Please explain this. Compared to what?
Also, you have a 5 year old car now. By the time you pay it off in 5 years it will be 10 yrs old. Well, son, by that time the wheels may be falling off and you will more than likely be making costly repairs while still making payments. You will say "WAY more..."? Over what? An investment? I wouldn't want you as my advisor.


TT

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Old 02-01-2005, 01:07 PM   #13
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Quote:
Originally Posted by SST
I thought you wanted input and opinions?
Seems you wanted an argument instead.

I thought we were comparing a new car for lease or purchase. It seems you were interested in a used car. That changes the conditions.

Compare a new to new and you'll see where the $8k comes in.
I think you missed my whole point.
But I won't go over it, it's all right there.

One does NOT invest in something which is known to lose value over the years, and with cars, that can be quite extensive.
An investment is something you do on the prospect that you will have MORE at the end of certain period.

""BTW, an "investment" does not always have cash value. I will save WAY more by paying my car off in 5 years and then driving it until the wheels fall off!""

Please explain this. Compared to what?
Also, you have a 5 year old car now. By the time you pay it off in 5 years it will be 10 yrs old. Well, son, by that time the wheels may be falling off and you will more than likely be making costly repairs while still making payments. You will say "WAY more..."? Over what? An investment? I wouldn't want you as my advisor.


TT
TT you my friend have your stuff straight! People just feel bad now on how much money they are losing in their "investment"
By the time you pay off your car, you are going to want to get a new car and cycle goes over and over and you keep losing money!
Im leasing and it works great for me! By the time you finish paying off your 10 year old car im gonna be rolling with a new E90 M3
I didnt intent to flame nobody, this is just my opinion and nobody shouldnt get frustrated!
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Old 02-01-2005, 02:45 PM   #14
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Sorry, I sort of got off on a tangent...my apologies. yes I was asking for opinions. No hard feelings I hope! Thanks for the input. Maybe I was using the wrong term.

I have a 5 yr old car, but I bought it 2 yrs ago and am hoping to pay it off in 2 more. From everything I have read about BMW I should be able to drive 150,000 miles before I need to start worring about major repairs, I have 67K on it now. Since I only drive 10k or less a year it should last me a LONG time.

Quote:
Originally Posted by SST
I thought you wanted input and opinions?
Seems you wanted an argument instead.

I thought we were comparing a new car for lease or purchase. It seems you were interested in a used car. That changes the conditions.

Compare a new to new and you'll see where the $8k comes in.
I think you missed my whole point.
But I won't go over it, it's all right there.

One does NOT invest in something which is known to lose value over the years, and with cars, that can be quite extensive.
An investment is something you do on the prospect that you will have MORE at the end of certain period.

""BTW, an "investment" does not always have cash value. I will save WAY more by paying my car off in 5 years and then driving it until the wheels fall off!""

Please explain this. Compared to what?
Also, you have a 5 year old car now. By the time you pay it off in 5 years it will be 10 yrs old. Well, son, by that time the wheels may be falling off and you will more than likely be making costly repairs while still making payments. You will say "WAY more..."? Over what? An investment? I wouldn't want you as my advisor.


TT
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Old 02-01-2005, 07:57 PM   #15
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pay cash...............if you can't afford it, then dont buy it

lol, then you dont have to have full coverage
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Old 02-01-2005, 09:13 PM   #16
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pay cash...............if you can't afford it, then dont buy it

lol, then you dont have to have full coverage
lol, I think you have all of us beat!
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Old 02-02-2005, 02:04 PM   #17
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Originally Posted by tedwright
pay cash...............if you can't afford it, then dont buy it

lol, then you dont have to have full coverage
Yeah! That's even smarter considering that you could easily get into an accident when you damage your own car and then YOU pay for it's repairs.
So, now, not only did you lose a lot of money making potential, but you will have to pay maybe thousands more to repair a car that is depreciating even faster. Now, you're in it for the price of the car and repair, all to save a bit of dough on the insurance.

BMW's can be had between 1.9%-2.9%. If you have over $30k to pay cash for a new BMW then you have enough to make the monthy payments on a low interest loan, which allows you to that sizeable chunk of money and actually invest in something that could earn you at least over 5% in a non-aggressive, low risk investment.

There is not only one correct answer. There are differing scenarios from person to person. Those who don't mind driving cars for a long time, such as my father, will never lease as it woudn't make sense. But, those of us who like to drive a different or new vehicle every 2-3 years, may want to look into a lease. One thing I would never do is buy a brand new car with cash, UNLESS I were a multimillionaire out to spend my money. Even then, I would insure all my vehicles with no deductibles.

TT
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Old 02-02-2005, 03:41 PM   #18
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well, considering progressive wanted almost $6k per year from me for my 99 328i for full coverage, i figure that 3 years or insurance alone is more than the car is worth.

looking at it this way, i would have to total the car at least once every 2.5 years just to get my moneys worth from the insurance.
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Old 02-03-2005, 10:39 AM   #19
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well, considering progressive wanted almost $6k per year from me for my 99 328i for full coverage, i figure that 3 years or insurance alone is more than the car is worth.

looking at it this way, i would have to total the car at least once every 2.5 years just to get my moneys worth from the insurance.
Ted, it was YOU who said and I quote, "pay cash...............if you can't afford it, then dont buy it"

Well, affording the insurance falls under vehicle ownership.
If you can't afford to insure your car properly, to save you from further financial burden, then you can't afford to own that car.

TT
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Old 02-03-2005, 11:22 AM   #20
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man, i think i started a monster!
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