[WickedC5]

I'm looking to get into a 2014 335i xDrive 8AT within the next couple of weeks and this would be my first BMW. I test drove one recently and definitely liked it, but just can't decide if l should just buy it or lease. Especally with the 2016 models coming out, I hope I don't regret not waiting. 20-30hp difference won't bother me too much since I'd probably do a MPPK anyways, and I hear the 2016's won't have any major cosmetic changes.

Thoughts, suggestions?

TIA

[auf Deutsch]

There are endless pros and cons to each. I'll let others get into that.

I lease because it's minimal cash due at signing ($1200 on a $57k car in my case). Additionally, having a car with nothing to worry about such as maintenance (besides scheduled), warrantee, etc. is cool.

Knowing I'll be getting a brand new car in 3 years in nice also, given BMW churns out new models like mad.

I'd suggest if you're driving relatively low mileage and you take car of your car, go ahead and lease.

[bill1718]

i lease ill never buy a bmw again i dont like when thier warranties expire and i get bored quick

[tony20009]

There are tons of threads on here about the lease or buy topic. Additionally, there is lots of general discussion about it on the Internet.

If perusing those resources don't provide you the insight you need to make the best decision for your situation, you should consult your financial advisor. You'll also need to establish the exact terms of your lease deal and accurately predict your usage and future purchase pattern in order to know which acquisition method will be best for you.

I can tell you that for myself, my automobile acquisition objectives are (1) to have nice and reliable transportation, (2) to have that transportation at the lowest possible price given the vehicle I determine is the one I want to drive. Given those primary goals, leasing never comes out to the be least expensive approach and as a result, I buy my cars (no loan) and keep them for at least 10 years before disposing of them. If the car is going strong at the 10 year mark, I keep it even longer. I am a firm believer in the saying: A nice older car is still a nice car.

I've seen folks write that they prefer to lease so as to avoid the cost of maintenance and repairs as the car gets older. I have to say that I have yet to see a financial case with hard figures that shows that the cost of maintaining an older but still late model car is greater than the cost of making payments on a new one. It is possible that in any one year the cost of maintenance and repairs could exceed the costs of payments on a new car -- something would actually have to break and need fixing for that to happen -- but over a period of years, that doesn't continue to be the case unless one must make those kinds of expensive repairs every year.

As an example, I'll use the first BMW I ever bought. It was a 1993 318i for which I paid ~20K when I bought it new (no loan) in February of 1993. I kept the car until July 2007 at which point I gave it to a relative. It was in fine condition as I took good care of it. The wiring on the driver side fog lamp had gone bad, but I opted not to fix that. I had no other things on it that ever needed repairs, but I did pay for annual maintenance of the car.

Now you can do the math of the purchase price divided by the term of ownership and see that the cost of keeping that car was far lower than the cost of replacing it. Even adding in routine maintenance costs (I'm going to estimate ~$1K/year -- which I know is well above the actual costs -- as I don't recall the exact sums), it was still "cheaper to keep her." When I finally did dispose of that car, it was because (1) I just wanted something different, and (2) I'd determined that I'd gotten my money's worth out of it.

Obviously, if you are committed to having a new-ish car on a more frequent basis than I, the figures play out differently. Roughly speaking, folks who insist on having a new car every two or three years will find leasing to be less costly. The last time I evaluated the "lease or buy" scenario for myself -- using a specific set of terms that were offered to me by my dealer -- and assuming that I'd swap cars more often than I do, I found that leasing was cheaper if I swapped cars more often than every 6 years or so.

All the best.

[adhrp]

I find leases to be a huge waste of money unless you are the type who gets bored of cars easily or wants to try out a new type of car without committing right away and/or have lots of money to throw at leases. I am the type who cherishes my vehicles and keep them for several years. I'd rather throw my money into investments.

[tdizzle]

The above posters summed it up nicely. Lease if you plan on changing cars every few years and buy otherwise. Work out to get the best deal you can either way obviously.

Buying makes no sense if you're jumping into something in the neighborhood of under 4 years. The break point varies but depreciation will hit you hard and makin leasing favorable if you're planning on keeping a purchased car a short time. I said 4 years but it may actually be closer to 5 or 6 in some cases but def longer than 3.

(I wish my current car was a lease as I'm eyeing a m4 at the 22 month from purchase date....)

[auf Deutsch]

^^exactly. The M2 will be out also in less than 2 years...hmmmm

[Ali Shiralian]

I lease because I love driving new cars and want to have a new one every few years. I DO NOT look at cars as investments. They are for pleasure and I treat them as such. Can't wait to bring in my 335 back to the dealer and get an M4 in 3 years. My rule...warranty out=car out

[oonowindoo]

Everyone is different. I have leased and financed many cars, i personally prefer leasing at least for now.

Finance/buy:
Pros:
You have something to show for after you pay off the car in X years.
You don't have to worry about how many miles you drive (but more miles = less resale value)
No car payment after it is paid off
Insurance cost is lower

Cons:
Repair and maintenance cost (unless you purchase a good extended warranty but that will only last for so long)
You HAVE to keep the car for a LONG time (at least 6 years) for it to make sense financially. If your car history has been getting a different car every 3,4 or 5 years. Then don't buy, especially don't buy European cars.


Lease:
Pro:
Low/no down payment
Lower monthly payment
New cars every 2-4 years with the latest tech
Don't have to worry about repair or maintenance bills.
YOU STILL have the option to buy the car if you love it so much at ANY TIME during your lease or at the end of your lease
You STILL have the option to sell the car to Carmax or whereever you choose for ANY REASON
*if you hate this car so much, you are not stuck with it. More flexibility

Cons:
Higher insurance cost
Feels like you don't own the car
Mileage limitation (although, most of the dealers will not care if you went over your miles as long as you lease another BMW from them later)
You will always have car payment and higher car registration cost.

[NOBLE MOTORCARS]

My experience, I financed my 09 335i...still had about 10k owed on the car before shit went wrong with it cause I had it tuned and full bolt on...and had my fun on it. Only had the car for 4 years...no more warranty, and I felt like I was just handing out money left and right... I guess i rather hand out money to get a new car every few years and not have to pay for things to be fixed...but thats just my personal opinion, some like to have new things and some don't.

[WickedC5]

Thanks for the input thus far. Lots to think about. My dealer was telling me about "owners choice" as well which is kind of like a lease but the car is technically mine with the option of keeping it or after 3 years giving it back.

He said 85% of customers go that route, not sure how realistic his numbers were but who knows.

Seemed like he was trying to put one over on me, but then again im not too trusting of dealers lol.

[oonowindoo]

when you calculate the #s (down payment + monthly payment + 10k owed) for a car that you only had for 4 years... it does not make sense to pay that much to have a car for 4 years when you can lease the same car for 4 years for MUCH MUCH cheaper.

That is when leasing makes sense.

[oonowindoo]

Originally Posted by WickedC5

Thanks for the input thus far. Lots to think about. My dealer was telling me about "owners choice" as well which is kind of like a lease but the car is technically mine with the option of keeping it or after 3 years giving it back.

He said 85% of customers go that route, not sure how realistic his numbers were but who knows.

Seemed like he was trying to put one over on me, but then again im not too trusting of dealers lol.

Owners choice?

what he described sounds like Leasing to me.
The car is never yours regardless you lease or finance until it is paid off.

You can use mortgage as an example, we the so called home owners, see what happens if you miss some mortgage payments and let's see who really owns the house.

[Luongo]

You should never lease a car in Illinois.

You have to pay tax (anywhere from 7~10.25% depending on what county you live in) for the full purchase price of the car, not just on the depreciated value of the car like most other states.

If you decide to buy the car out at the end of the lease, you have to pay full taxes on the residual value of the car. (Double taxation)

On top of that, you pay 8% use tax on your monthly payment. (Triple taxation)

I suggest that you finance the car and then trade it in after you have built up a positive equity.

[oonowindoo]

Originally Posted by Luongo

You should never lease a car in Illinois.

You have to pay tax (anywhere from 7~10.25% depending on what county you live in) for the full purchase price of the car, not just on the depreciated value of the car like most other states.

If you decide to buy the car out at the end of the lease, you have to pay full taxes on the residual value of the car. (Double taxation)

On top of that, you pay 8% use tax on your monthly payment. (Triple taxation)

I suggest that you finance the car and then trade it in after you have built up a positive equity.

is that even legal??

[WickedC5]

Originally Posted by oonowindoo

is that even legal??

Only in Texas and Illinois it's "legal".... That's why those two states have "Owners Choice" program to avoid all those taxes. Same as a lease but your name is on the title not BMW. That's what I found out.

[nicknaz]

Originally Posted by Luongo

You should never lease a car in Illinois.

You have to pay tax (anywhere from 7~10.25% depending on what county you live in) for the full purchase price of the car, not just on the depreciated value of the car like most other states.

If you decide to buy the car out at the end of the lease, you have to pay full taxes on the residual value of the car. (Double taxation)

On top of that, you pay 8% use tax on your monthly payment. (Triple taxation)

I suggest that you finance the car and then trade it in after you have built up a positive equity.

+1

This is exactly what happened. When I moved from CA (where I only got taxed on the monthly lease payment) to IL I had to pay tax on a portion of the car (since I didn't up front) and I had to pay a use tax.

I would buy in IL for sure.

[Luongo]

Originally Posted by WickedC5

Only in Texas and Illinois it's "legal".... That's why those two states have "Owners Choice" program to avoid all those taxes. Same as a lease but your name is on the title not BMW. That's what I found out.

You still pay tax on the full purchase price of the car with owners choice. You only benefit if you decide to buy the car at the end of the term because you can avoid double taxation. Still better to finance, imho.

[Luongo]

Originally Posted by oonowindoo

is that even legal??

Illinois is one of the worst states when it comes to taxes.
High sales tax (7~10%), high state income tax, ridiculous tax on automobile lease but the worst is the property tax.

In Lake county, you pay nearly 3% of your home's value in property taxes annually. Imagine paying $15,000 a year in property taxes on a $500,000 house.

I wonder everyday why anyone would live in this state.

[WickedC5]

Originally Posted by Luongo

Illinois is one of the worst states when it comes to taxes.
High sales tax (7~10%), high state income tax, ridiculous tax on automobile lease but the worst is the property tax.

In Lake county, you pay nearly 3% of your home's value in property taxes annually. Imagine paying $15,000 a year in property taxes on a $500,000 house.

I wonder everyday why anyone would live in this state.

I agree. Between getting taxed to death and the crappy winters, its not really that appealing.

[Matts435coupe]

Originally Posted by WickedC5

I agree. Between getting taxed to death and the crappy winters, its not really that appealing.

Sent you a PM.

[adhrp]

Originally Posted by Ali Shiralian

I lease because I love driving new cars and want to have a new one every few years. I DO NOT look at cars as investments.

In case you are referring to my comment, I should make it clear that when I said investment I meant property or mutual fund or something. Not referring to the car.

Either way this is a thread about leasing or buying and I don't want to be that person to change it into yet another how-to-use-your-money-better unsolicited advice thread so I'll stop here. But just wanted to clarify my point.