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Originally Posted by sdiver68
Time out here...
When you run ROI or TCO calculations for lease versus buy, often times you come out ahead on the lease particularly on high residual, subsidized leases like BMW's current 3 series (.0015 MF, or 3.6%). There are often many, many reasons to lease versus buy even when the buyer could put down cash outright, and only by looking at each individual situation and deal can you make that determination.
People who think buying is the best financial decision are often fooling themselves. For instance, if you are in the top tax bracket, and can either give BMW $45K of your money OR borrow from them at 3.6%, deduct the cost of the lease, and invest your $45K in a safe double tax free bond at 5% (equivalent to ~7%)...you will come out way ahead leasing at the end of the lease period.
Then there is the risk shifting portion on resale...I could go on and on....
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good points, but you're assuming that people have 45K on hand to make that scenario work. Just looking at the overall savings rate for the US tells us that few have that much cash on hand (top-bracket included- making alot of money doesn't equal saving alot of money). In most cases, the only extra money they have to invest is the $50-100 difference between the lease vs. buying payments.