Lease or buy?
- Thread starter WillJitsu
- Start date
Big Daddy is right on that part... The questions to raise are: Do you not care about the car? Do the minimum when maintaining it? Get into accidents or fender benders? (significantly decrease resale value in the least, if not the drive experience as well if they repair it poorly) Do you use the car a lot on bumpy roads or urban conditions? If you answer yes to most of those questions then leasing is probably a better bet... You can also try and figure out the cost of financing the car vs. purchasing it vs. leasing (compare it to the residual value) if you can live with parting with $18k to drive the hell out of a new BMW for 3 years then I'd lease. Just remember to put as LITTLE MONEY DOWN AS POSSIBLE... However, if you baby and take good care of your cars, then it's probably a better idea to buy it. I personally wouldn't want a 1st year model completely on my tab, but you can always purchase gap insurance incase you intend on purchasing the car after the lease is up (In the event you treated her like a queen, she was impeccably reliable, and you kept her in immaculate condition...)![[thumb]](/images/smilies/icon_smile_thumb.gif "Thumbs Up [thumb]")
Leasing is a good option, but you have to know your limits with it. In a lease, you are entering a binding contract so it becomes tricky if you want to exit or terminate the lease early. Some cons of leasing:
-You never truly own the car.
-Depending on the lease deal, you may end up paying more money for having the car for the duration of the lease as compared to owning the car for the same period of time.
That being said, leasing is a great option if you know how many miles you drive each year, you want to keep maintenance costs down, and you want a brand-new car every 3 or 4 years before the vehicle is off warranty. You also do not have to worry about lost value due to accidents, vandalism, etc.
-You never truly own the car.
-Depending on the lease deal, you may end up paying more money for having the car for the duration of the lease as compared to owning the car for the same period of time.
That being said, leasing is a great option if you know how many miles you drive each year, you want to keep maintenance costs down, and you want a brand-new car every 3 or 4 years before the vehicle is off warranty. You also do not have to worry about lost value due to accidents, vandalism, etc.
The only advantage of a lease that I'm aware of is that it allows a buyer to drive a car that he otherwise couldn't afford. In terms of value, I don't think the leasing option is a good one. Let me give you an example. The best leasing deal I was able to get on my '02 M3 was $840 a month for a 36 month lease. After the discount I paid a little over $52K for the car. I sold my M3 in 2004 for $45K. So two years of driving the M3 cost me a little over $7K. The lease on the other hand would have cost me over $20K over the same peiod and there are penalities you have to pay for early lease termination. Also in addition to the monthly payments, leasing companies kill you with fees. There's an aquisition fee, a disposal fee, etc. The fees can easily add a couple of additional thousand to the leasing price.