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Discussion Starter #1
There is a lot of knowledge and wisdom on this sight and I would like to draw from some.

What are the pros and cons of auto leasing?

What areas are dangerous and what to look for in the contract?

Any other thoughts on the subject?

Thanks in Advance,
 

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The biggest "Pro" is that it can work out well if you want to get a new vehicle every couple of years, since you can get into a new vehicle fairly cheaply. IMO - It typically is better to buy it outright if you plan on keeping the vehicle a long time, or rack up more than the "allowed" miles over the lease term.
 

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hallzee said:
It typically is better to buy it outright if you plan on keeping the vehicle a long time, or rack up more than the "allowed" miles over the lease term.
Which is generally in the 12k miles per year range, but that can be negotiated and it will affect you lease cost.
 

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Leasing is like renting a house. You are making someone else's payments.

I get a new vehicle and make the payments, once paid for, all it costs is regular maintenance. If you take good care of your vehicles, they typically last well beyond 200k.

Leased 1 vehicle in my life and it just didn't make sense to me to make a monthly payment almost as much as if I were buying and at the end of the lease, if I didn't go over on the miles, that would cost more, I just turn it in with nothing to show for it.
 

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Lease or buy

There are a number of variables to consider, but the most important ones are:
How many miles do you drive per year?
How long do you normally keep the car?
How important is driving a late model car all the time?
Do you like to have the car under warranty all the time?
Do you normally finance the car or buy it outright?

Other thoughts: If you get the lease to cover your annual mileage and get a 3 year lease, the monthly payments are some less than financing for 3 years and no down payment.

There is no truth in lending law for leasing, so there is no easy way to compare. You must get quotes for you type of driving and do the arithmetic and compare the cost for your mileage and type of car.

All terms in the lease are negotable.(sp)
 

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Lease vs Buy

EricSuz said:
There are a number of variables to consider, but the most important ones are:
How many miles do you drive per year?
How long do you normally keep the car?
How important is driving a late model car all the time?
Do you like to have the car under warranty all the time?
Do you normally finance the car or buy it outright?

Other thoughts: If you get the lease to cover your annual mileage and get a 3 year lease, the monthly payments are some less than financing for 3 years and no down payment.

There is no truth in lending law for leasing, so there is no easy way to compare. You must get quotes for you type of driving and do the arithmetic and compare the cost for your mileage and type of car.

All terms in the lease are negotable.(sp)
Did a quick Google and other than the come-ons for specific "deals" this site has some straightforward info
 

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Discussion Starter #7
Thanks to everyone that posted I knew the knowledge and experience was here!
 

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Another thing to consider is whether you will keep the car just for the duration of the lease (typically 3 years or so) or more than 5-6 years (typical finance terms when purchasing). A major difference is the sales tax. Let's assume you lease a car for 3 years and your monthly payments are $500.00 before taxes, you then add about $41.00 in sales tax.If you purchase the same car you will pay sales tax on the entire purchase price, even if you sell the car after 3 years. You never get that money back.
Let's do the math: $41.00 x 36 months = $1,476 if you lease. If you purchase the same $40,000 car you will need to fork over the entire $40,000 x 0.825 (Los Angeles County for example) = $3,300.00 in sales tax. In most cases people include the sales tax in the amount financed, hence also paying interests on the sales tax. Ouch!!!
 

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Here is an observation from the service end of the business:

Most customers in new cars that are financed or paid cash will say that they intend to keep their new car "forever" or "until the wheels fall off". In reality many trade cars at the end of the warranty.

Moral of the story? Be honest with yourself before making a decision. Are you likely to get the irresistible itch after 3 or 4 years? If the answer is yes, and you positively do not drive more miles than the lease calls for, go and lease.

Also remember that at the end of the lease, YOU are responsible for deferred maintenance, worn out tires, cracks in the glass etc.

One more thing to consider: Cars that traditionally retain more of their value will have lower lease rates. Even if the model falls out of favour, you are locked in. That explains why relative to the sticker price, the best lease values are in luxury cars, specifically BMW, Lexus, Mercedes, and Porsche. Its driven by the resell price.
 
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