[Bogey4me]

If you keep a car for 5-7 years then buying makes sense. If you like a new $100k toy every 3 years like my wife and I then you can't beat leasing a bmw. The releases are supported by me, you always have warranty AND most maintenance covered and you NEVER get stuck with a car that has diminished value from even a minor accident and so it has a CARFAX accident on it. Buying a BMW because you think it will cost less this optimistic. I spend less every month all in on my BMW leases than I would buying them.

[Bogey4me]

Originally Posted by mjr24

Not true, at all.

Residuals go down a lot with more miles bought up front. It's more expensive on a higher-priced car.

I run all the numbers before I lease....I know what I'm doing here.

BMW only discounts miles under 15k miles at time of leasing the car. After that all they do is add the extra per mile charge that you would pay when you turn it in. It's better to do what OP is suggesting and buy the miles at a discount a few months before turning it in...I forget how long before lease end you have to do it.

[Pierre Louis]

Sorry, there is no better way of losing money on a car than getting a new, heavily depreciating car every three years. You always take the biggest depreciation hit, whether leasing or buying, and are stuck with car payments forever.

The fourth through tenth year depreciation average substantially less but obviously still occurs.

https://i0.wp.com/thecashdad.com/wp-...tion.png?ssl=1

Since BMW by some calculations has the highest maintenance costs of major brands, it can be put into perspective compared to depreciation:

https://autowise.com/carmakers-with-...over-10-years/

Dealer repair and maintenance costs are often nearly double compared to private mechanics.

https://www.yourmechanic.com/cars/bmw

One can easily assume these costs are baked into the prices paid for cars when new. Buying used is a different story.

[jjscsix]

Originally Posted by Pierre Louis

Sorry, there is no better way of losing money on a car than getting a new, heavily depreciating car every three years. You always take the biggest depreciation hit, whether leasing or buying, and are stuck with car payments forever.

The fourth through tenth year depreciation average substantially less but obviously still occurs.

https://i0.wp.com/thecashdad.com/wp-...tion.png?ssl=1

Since BMW by some calculations has the highest maintenance costs of major brands, it can be put into perspective compared to depreciation:

https://autowise.com/carmakers-with-...over-10-years/

Dealer repair and maintenance costs are often nearly double compared to private mechanics.

https://www.yourmechanic.com/cars/bmw

One can easily assume these costs are baked into the prices paid for cars when new. Buying used is a different story.

Everyone gets that we pay a premium to trade every 2-3 years a opposed to keeping it much longer. The issue several of us are making is that if we like to trade every 2-3 years a good lease deal is often the better choice.

I'll repeat this till I'm blue in the face. If it were all about how little or how much money we spend on a car we should not be in BMWs anyway. I have traded cars every 2-3 years for nearly 50 years now....because I can!

[HighlandPete]

Originally Posted by jjscsix

Everyone gets that we pay a premium to trade every 2-3 years a opposed to keeping it much longer. The issue several of us are making is that if we like to trade every 2-3 years a good lease deal is often the better choice.

I'll repeat this till I'm blue in the face. If it were all about how little money we spend on a car we should not be in BMWs anyway. I have traded cars every 2-3 years for nearly 50 years now....because I can!

Can make so much sense to lease for short term use, (which 2 - 3 years really is). For me, the bottom line, depreciation has to be paid for, whichever way we finance a vehicle. Getting the right deal (discounts, incentives, etc.), is where we may shave off some costs.

Agree on spending as little money as possible, almost certainly rules out BMW, even running longer term. Personally I've concluded buying 'nearly new' is the best way for me to run a 'better' BMW, for the money I'm prepared to spend on motoring.

[Pierre Louis]

If I got something cheaper, I would want to trade it in every 2-3 years. Getting exactly what I want that satisfies my needs makes it much easier to rationally own a car like BMW. I might save a bunch this way too, as a fully depreciated premium car can maintain its value very well at times. I think "reverse value" which is cost of replacement is high on such cars, so I gain lots from holding on to it.

My latest came off the lot as a leftover for a CPO price. I won't buy used from a lease knowing how in the past cars like Mercedes W211's were abused by their lessors (these cars are not Porsches). I buy diesels knowing BMW was one of the best at making these engines. I use great private mechanics that know how to keep a German car reliable and economical (my current one is Bavarian). The buyback of my leased 535d was significantly discounted by BMW so I paid essentially a 3-series price for my new 5-er. I take great care of my fine machinery, especially knowing I plan to keep it longer.

I try to do my own maintenance, especially oil/filter change and the small stuff. It gives me a good feeling of "oneness with the car" - my ancestors probably had horses ha ha.

My budget is generous at times but stays sane with smart buying/leasing. I drive the best for a "reasonable" price.

I could understand people's choice of leasing every 3 years, especially with the security of a warranty and service contract as well as getting newer tech. But it will cost you. In my case, as a diesel head, there are fewer choices. I got a loaner 530e and felt only the brakes to be an improvement, everything else was slightly worse. Hint: I don't want any oil money to go to dictatorship countries so I'd rather keep the price of a barrel low with a small contribution. Yes, eventually EV may be the way to go, but government intrusion into the market as well as total surveillance of EV's like Tesla keeps me out for now.

[babaikram]

What about the psychological satisfaction that you own the car and not in debt. You could do whatever you like to it, decides or not to repair small dents, wheel scrapes etc. This compared to a a leased car when you are forced to do the above before returning the car. The sense of loss of control.

[jjscsix]

Originally Posted by babaikram

What about the psychological satisfaction that your own the car and not in debt. You could do whatever you like to do it, decides or not to repair small dent, wheel scrapes etc. This compared to a a leased car wen you are forced to do the above before returning the car. The sense of loss of control.

That is a reasonable concern. In my case, the only cars I have leased have been the cars that are the one that are essentially just my work cars. For many years I owned fun cars, many of which I made anywhere from mild to wild mods to them. Those I never leased. So I get your point.

But I never cared much about the pride of ownership. I guess that's because I am always looking for my next car. I retired a year ago to the day. I just ran the numbers this morning. In that year I put 38,000 miles on my combined three motorcycles, and 5,000 miles on my BMW. And I love my BMW. But despite all that and wanting to manage my money a little more carefully, I still can't help searching for my next car every day. It's a disease!

[Warp Ten]

I guess I stirred the pot a bit. Oh well. To clarify, my comments were meant to compare the purchase vs lease of a new car, but also understanding that a used/CPO car is a great way to lessen the depreciation hit. I am a big fan of buying a CPO BMW that is two to three years old. And you really can't lease a used car and have it make economic sense because used car leases are very expensive to the lessee. We almost never leased our used cars but often had very competitive financing rates for CPO cars. And I must underscore that the single most important financial factor in the acquisition of a car is the capital cost. You should always negotiate the lowest possible cost on a car purchase before even thinking about how you will finance it. Once you have the lowest possible price agreed to on a car you want, then you can evaluate which of the three ways of financing the purchase works best for you (cash purchase, finance with a loan, or lease). When I ordered my 2019 540xi I negotiated the price, then I decided to finance part of the purchase (whereas I would ordinarily pay cash) because BMWFS was offering $2,000 off for doing so plus a lower interest rate than I could earn on investments. And if desired you can always pay off a loan after about 6 months without getting the dealer a charge back. At least that is my experience. As always, your mileage may vary. --Bob

[Bogey4me]

Originally Posted by jjscsix

Everyone gets that we pay a premium to trade every 2-3 years a opposed to keeping it much longer. The issue several of us are making is that if we like to trade every 2-3 years a good lease deal is often the better choice.

I'll repeat this till I'm blue in the face. If it were all about how little or how much money we spend on a car we should not be in BMWs anyway. I have traded cars every 2-3 years for nearly 50 years now....because I can!

This is especially true in California where if you buy you pay sales tax on the entire value of the car every time. In Utah I know you only pay in the amount above your trade in. With leasing I only pay sales tax on the monthly payment. If 3 years or less leasing will always cost you less money.

[jjscsix]

Originally Posted by Warp Ten

I guess I stirred the pot a bit. Oh well. To clarify, my comments were meant to compare the purchase vs lease of a new car, but also understating that a used/CPO car is a great way to lessen the depreciation hit. I am a big fan of buying a CPO BMW that is two to three years old. And you really can't lease a used car and have it make economic sense because used car leases are very expensive to the lessee. We almost never leased our used cars but often had very competitive financing rates for CPO cars. And I must underscore that the single most important financial factor in the acquisition of a car is the capital cost. You should always negotiate the lowest possible cost on a car purchase before even thinking about how you will finance it. Once you have the lowest possible price agreed to on a car you want, then you can evaluate which of the three ways of financing the purchase works best for you (cash purchase, finance with a loan, or lease). When I ordered my 2019 540xi I negotiated the price, then I decided to finance part of the purchase (whereas I would ordinarily pay cash) because BMWFS was offering $2,000 off for doing so plus a lower interest rate than I could earn on investments. And if desired you can always pay off a loan after about 6 months without getting the dealer a charge back. At least that is my experience. As always, your mileage may vary. --Bob

Your thoughts are appreciated. Thanks!

[Pierre Louis]

Originally Posted by Bogey4me

This is especially true in California where if you buy you pay sales tax on the entire value of the car every time. In Utah I know you only pay in the amount above your trade in. With leasing I only pay sales tax on the monthly payment. If 3 years or less leasing will always cost you less money.

Some states especially in the South charge an "ad valorum" fee/tax every year based on the value of the car as calculated through NADA guides. Georgia wants the tax up front whether you buy or lease but doesn't repeat it every year. Buying out a lease requires starting over with the tax on what the car is worth at the time. I can see just taxing the lease payment, which was more common as I recall in the North, to be a better thing.

[Warp Ten]

Originally Posted by Bogey4me

This is especially true in California where if you buy you pay sales tax on the entire value of the car every time. In Utah I know you only pay in the amount above your trade in. With leasing I only pay sales tax on the monthly payment. If 3 years or less leasing will always cost you less money.

In Illinois, it has always been the case that when one trades in a car, the trade value is deducted from the selling price to calculate sales tax. That has been a big help in selling cars. Not anymore, however: starting Jan 1, 2002, Illinois will be capping the value of the trade at $10,000 for the sales tax calculation. If your trade value is $20,000, you only get credit for $10,000 when calculating sales tax. Creeping closer to Kalifornia rules.... Also in Illinois, one always pays the entire sales tax due when leasing a car. It is rolled into the capital cost. It you buy the car out of the lease at lease end, you pay a sales tax on that purchase. The state--desperately in need of funds --double dips on sales tax. Neighboring Wisconsin only taxes the lease payment, not the full purchase amount in a lease. Local folks with a second home in Wisconsin would often lease using their Wisconsin address. Bob

[Bogey4me]

Originally Posted by Warp Ten

In Illinois, it has always been the case that when one trades in a car, the trade value is deducted from the selling price to calculate sales tax. That has been a big help in selling cars. Not anymore, however: starting Jan 1, 2002, Illinois will be capping the value of the trade at $10,000 for the sales tax calculation. If your trade value is $20,000, you only get credit for $10,000 when calculating sales tax. Creeping closer to Kalifornia rules.... Also in Illinois, one always pays the entire sales tax due when leasing a car. It is rolled into the capital cost. It you buy the car out of the lease at lease end, you pay a sales tax on that purchase. The state--desperately in need of funds --double dips on sales tax. Neighboring Wisconsin only taxes the lease payment, not the full purchase amount in a lease. Local folks with a second home in Wisconsin would often lease using their Wisconsin address. Bob

Ugh. That all sucks a lot. If it weren't for the weather in Sou Cal people wouldn't put up with the 13% top income tax rate, the 10% sales tax, property tax etc. Surprised Cal does apply full tax on lease too....one thing that is readable in California! This is an important consideration when determining lease vs buy!

[Pierre Louis]

There seems to be a real War On Cars

https://www.facebook.com/NMAWaronCarsWatch/

[BlueSander]

Originally Posted by DarkgraphiteNYC

You can write off a purchased vehicle too

Personally, I've leased a few cars over the years and it has been a losing proposition for me. I am not the type of guy who needs to be in a new car every two years and I like not having to endlessly make car payments.

I think it's all depending on personal references. If you normally drive your cars more than 5 years, sure. If you knew you are gonna buying something else sooner, leasing might be a cheaper alternative. Heck, my buddy got to drive his brand new 2014 Audi R8 over a year for almost free. The car was in service a few times and Audi bought it back at the end but, free is still free lmao.

[mjr24]

Originally Posted by Warp Ten

In Illinois, it has always been the case that when one trades in a car, the trade value is deducted from the selling price to calculate sales tax. That has been a big help in selling cars. Not anymore, however: starting Jan 1, 2002, Illinois will be capping the value of the trade at $10,000 for the sales tax calculation. If your trade value is $20,000, you only get credit for $10,000 when calculating sales tax. Creeping closer to Kalifornia rules.... Also in Illinois, one always pays the entire sales tax due when leasing a car. It is rolled into the capital cost. It you buy the car out of the lease at lease end, you pay a sales tax on that purchase. The state--desperately in need of funds --double dips on sales tax. Neighboring Wisconsin only taxes the lease payment, not the full purchase amount in a lease. Local folks with a second home in Wisconsin would often lease using their Wisconsin address. Bob

Originally Posted by Warp Ten

In Illinois, it has always been the case that when one trades in a car, the trade value is deducted from the selling price to calculate sales tax. That has been a big help in selling cars. Not anymore, however: starting Jan 1, 2002, Illinois will be capping the value of the trade at $10,000 for the sales tax calculation. If your trade value is $20,000, you only get credit for $10,000 when calculating sales tax. Creeping closer to Kalifornia rules.... Also in Illinois, one always pays the entire sales tax due when leasing a car. It is rolled into the capital cost. It you buy the car out of the lease at lease end, you pay a sales tax on that purchase. The state--desperately in need of funds --double dips on sales tax. Neighboring Wisconsin only taxes the lease payment, not the full purchase amount in a lease. Local folks with a second home in Wisconsin would often lease using their Wisconsin address. Bob

This isn't true. Illinois changed the law in 2015. They tax the monthly payment now.

[AlteBMW]

The discussion above makes cars out to be some kind of investment. Like comparing buying stocks or bonds or having a savings account. The discussion ignores the emotional part of car buying. If emotion and satisfaction are eliminated from the equation, then we are talking about buying a transportation appliance and figuring out the cheapest way to do it. Once you are in the BMW camp (or any other high end brand), talking about economics alone is missing the point. We buy (or lease) these cars because we WANT to, not because we have to, and, in my case, getting a new one every three years is fun. What's the matter with that? I have 3 cars, an X3 I own (bought a demo) for utility and beach trips and bad weather, a MB wagon (2014, bought new) that my wife drives and that we'll use for trips where we need to haul a ton of stuff, and my 2020 G12 that is my DD, and which I lease, because I like having a new car every 3 years and like having full warranty for the term for a car that is a computer with wheels, and because I can afford it. If I was a completely economically rational person, I would have Toyotas that I would drive for 90,000 or 100,000 miles. I would be bored to tears. But I am not economically rational, and that is one of the things that keeps me happy.

[LuvMyE92]

Originally Posted by AlteBMW

The discussion ignores the emotional part of car buying.

Well said, thank you.

I was thinking about this just last night, driving home. I lease my 540i but I own my M2. I need a car to get to work, there is no mass transit here (well, there is, but I'd be walking a lot and it would take hours to get to work).

I make good money, and so I choose to spend some of it on an always-new car to drive to work. That's my choice. I know that I could save thousands a year by buying used, I can DIY, and I can negotiate. But I choose new because I can.

Without people like me, there are no used cars for you smarter folks to buy. So instead of bashing us and our poor financial decisions, you should be thanking us.

LOL. You're welcome.

[VirtualGuitars]

Can't we all just get along? I ran out of popcorn reading this thread!

[Pierre Louis]

Originally Posted by AlteBMW

The discussion above makes cars out to be some kind of investment. Like comparing buying stocks or bonds or having a savings account. The discussion ignores the emotional part of car buying. If emotion and satisfaction are eliminated from the equation, then we are talking about buying a transportation appliance and figuring out the cheapest way to do it. Once you are in the BMW camp (or any other high end brand), talking about economics alone is missing the point. We buy (or lease) these cars because we WANT to, not because we have to, and, in my case, getting a new one every three years is fun. What's the matter with that? I have 3 cars, an X3 I own (bought a demo) for utility and beach trips and bad weather, a MB wagon (2014, bought new) that my wife drives and that we'll use for trips where we need to haul a ton of stuff, and my 2020 G12 that is my DD, and which I lease, because I like having a new car every 3 years and like having full warranty for the term for a car that is a computer with wheels, and because I can afford it. If I was a completely economically rational person, I would have Toyotas that I would drive for 90,000 or 100,000 miles. I would be bored to tears. But I am not economically rational, and that is one of the things that keeps me happy.

Being "economically rational" doesn't mean buying a cheap car for a cheap price, especially if you are like me and would be first in line to trade it in. Buying or leasing a car that "meets your needs" that you actually enjoy driving to me is the rational choice, but one that your budget can afford and is worth the money.

To put it another way, I might spend the same money as someone leasing every 3 years but get something much better and keep it longer.

[Pierre Louis]

I consider most Toyota Camry models, a car used as a most practical "rational" choice, for example. But it has been over the years a special kind of ugly. Hideous.

Although I get attached to my cars especially when acquired new, I usually go well enough upscale to not get tired of it within 3 years. I also don't think newer models are reliably better than those they replace.

I love driving my 5 series as well as the power but considered it a stretch "budget" wise - would rather spend money on vacations etc.

But honestly, an item is worth what the customer is willing to pay, and leasing for 3 years then handing in the car has value to some.