# 24 month vs. 36 month leasing.



## duc_748 (Jan 14, 2006)

Are there any real disadvantges to leasing for only 24mths as opposed to 36mths? It seems BMW is pushing a 24 mths lease at the moment on X5, any thoughts? Thanks


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## SARAFIL (Feb 19, 2003)

duc_748 said:


> Are there any real disadvantges to leasing for only 24mths as opposed to 36mths? It seems BMW is pushing a 24 mths lease at the moment on X5, any thoughts? Thanks


No disadvantage other that the fact that you're going to have to get another car sooner (and pay all the inception fees all over again). You're paying inception fees twice in a 6 year period if you do 3 year leases, but three times in a 6 year period if you do 2 year leases. These fees are things like the acquisition fee, doc fee, reg and title fees.

It is good if you like to switch cars often. We find many people that get the itch 2 years into a 3 year lease, and it costs them money to get out early (or they put up with the desire to get a new car for a year until they can get out of their lease). If you're such a person, this lets you get out more frequently without penalties.

The other big thing to be careful with is a cap cost reduction on a 2 year lease. If you put some money down, it lowers your monthly payment more on a 24 month lease vs. 36 month. Don't let the dealer fool you and make you think they are giving you a phenomenal deal when it is really just do to the fact that your cap reduction goes further on a 24 month lease.


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## SS (Dec 20, 2001)

SARAFIL said:


> No disadvantage other that the fact that you're going to have to get another car sooner (and pay all the inception fees all over again). You're paying inception fees twice in a 6 year period if you do 3 year leases, but three times in a 6 year period if you do 2 year leases. These fees are things like the acquisition fee, doc fee, reg and title fees.
> 
> It is good if you like to switch cars often. We find many people that get the itch 2 years into a 3 year lease, and it costs them money to get out early (or they put up with the desire to get a new car for a year until they can get out of their lease). If you're such a person, this lets you get out more frequently without penalties.
> 
> The other big thing to be careful with is a cap cost reduction on a 2 year lease. If you put some money down, it lowers your monthly payment more on a 24 month lease vs. 36 month. Don't let the dealer fool you and make you think they are giving you a phenomenal deal when it is really just do to the fact that your cap reduction goes further on a 24 month lease.


Actually, there are quite a few more advantages to leasing for 36 months, rather than less, or more. The 36-month lease period can be near perfect for very strategic buyers.

As a person who sold news cars for a couple years (until very recently), and still currently sells used vehicles, I've got a little information on this which may be useful. I know there are a few salespeople on the board, so, I'd rather send you a few tips via email to respect them. Feel free to email me at [email protected] and I can shed a little more light on what a smart leasee would do


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## jl5555 (Jan 28, 2003)

SS said:


> Actually, there are quite a few more advantages to leasing for 36 months, rather than less, or more. The 36-month lease period can be near perfect for very strategic buyers.
> 
> As a person who sold news cars for a couple years (until very recently), and still currently sells used vehicles, I've got a little information on this which may be useful. I know there are a few salespeople on the board, so, I'd rather send you a few tips via email to respect them......


I'm dying! What could it possibly be?????????????????

Seriously, what a complete crock of you-know-what.

Honestly, what could be the difference you're talking about. Sarafil got it right in that about the only difference is in paying lease inception fees more often. But you're saying there is something more. If the finance rate is the same what could it be? Depreciation? Well, there are actually instances where the 0-1-2 year annual depreciation is less than the 2-3 year depreciation, so keeping your car the extra year costs more!!!

Example on a 525 10k/yr lease, 24 month residual is 77%, or 11.5% annually for the first two years. To go to 3 years your residual drops to 63%, another 14%. So you pay an another 3.5% for that extra year. On a $40,000 car that's an extra $1,400 just to keep it a third year. Damn, you could have turned the thing in and re-leased, paying another lease inception fee and still save money.

What in the world could you possibly be talking about?? I'm mystified......


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## SS (Dec 20, 2001)

jl5555 said:


> I'm dying! What could it possibly be?????????????????
> 
> Seriously, what a complete crock of you-know-what.
> 
> ...


Wow...are you attempting to actually ask me a question, or try and tell me I don't know what I'm talking about, based on what YOU don't know? There are more factors you have not mentioned, and probably have no clue about.

Those who wanted to know have asked me via email, and I have given them a bit of information. If you're curious, just do the same and I'll have no problem explaining. I'd rather have a little more respect for the salespeople on this board by not posting all this information on the board.


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## jl5555 (Jan 28, 2003)

SS said:


> Wow...are you attempting to actually ask me a question, or try and tell me I don't know what I'm talking about, based on what YOU don't know? There are more factors you have not mentioned, and probably have no clue about.
> 
> Those who wanted to know have asked me via email, and I have given them a bit of information. If you're curious, just do the same and I'll have no problem explaining. I'd rather have a little more respect for the salespeople on this board by not posting all this information on the board.


Uh huh. Bogus non-answer. What don't I know? What magical piece of the pie am I missing here? Leasing is not rocket science and the variables involved that might make one choose a 2 year lease over a 3 year lease are not complicated. There's also nothing proprietary or threatening to the BMW sales process that you could possibly reveal.

I'm not curious about your information, I'm just plainly stating that I think it's bogus. I feel sorry for the people who wasted time writing to you. I hope you didn't misguide them in any way. That's the problem with your "offer" of information. There's nobody around to critique it.....


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## chuck92103 (Oct 9, 2005)

Rampant BS. :tsk:


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## eddiethekub (Apr 17, 2005)

It is pretty simple...run the numbers for a 2 year lease & a 3 year lease...see which one is better. The formula is on the board...I agree it is not rocket science.


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## SS (Dec 20, 2001)

jl5555 said:


> Uh huh. Bogus non-answer. What don't I know? What magical piece of the pie am I missing here? Leasing is not rocket science and the variables involved that might make one choose a 2 year lease over a 3 year lease are not complicated. There's also nothing proprietary or threatening to the BMW sales process that you could possibly reveal.
> 
> I'm not curious about your information, I'm just plainly stating that I think it's bogus. I feel sorry for the people who wasted time writing to you. I hope you didn't misguide them in any way. That's the problem with your "offer" of information. There's nobody around to critique it.....


You must not have taken your meds today; that's not my problem. You're acting as though I'm leading people on by selling information, or something. I offered information to be nice...just to help. If you're not interested in the information, fine. But, don't sit there and try to discredit me just because you're having a bad day.

If you feel the need to act immature, take it elsewhere. A more tactful and civilized approach, or a simple question would have been sufficient; especially if you don't know what you're talking about, and are up against someone who has actually sold/leased new vehicles. I'd sure think that after years of being in the business, I would know what I'm talking about.


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## 760Lifan (Oct 6, 2004)

SS said:


> You must not have taken your meds today; that's not my problem. You're acting as though I'm leading people on by selling information, or something. I offered information to be nice...just to help. If you're not interested in the information, fine. But, don't sit there and try to discredit me just because you're having a bad day.
> 
> If you feel the need to act immature, take it elsewhere. A more tactful and civilized approach, or a simple question would have been sufficient; especially if you don't know what you're talking about, and are up against someone who has actually sold/leased new vehicles. I'd sure think that after years of being in the business, I would know what I'm talking about.


So if you know what you're talking about, why do you have a problem talking on this board??:blah:

The name of this part of the forum is ASK-A-DEALER.
This board would be useless if every dealer would say "Oh, I can only give you information by sending you an e-mail.":dunno:

See, people are looking for help and info ON THIS BORD and not in other people's mailboxes. You are actually the first "professional" I've seen on this board who has a problem with posting general information...:tsk:

You might have your reasons but they seem to be unique...


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## SS (Dec 20, 2001)

760Lifan said:


> So if you know what you're talking about, why do you have a problem talking on this board??:blah:
> 
> The name of this part of the forum is ASK-A-DEALER.
> This board would be useless if every dealer would say "Oh, I can only give you information by sending you an e-mail.":dunno:
> ...


Man...a person just can't win for being nice enough to give people free information! :dunno: I've received emails from ~10 people who were curious to know; all of which understood what I was saying after I posted.

Why the public bashing when all I'm doing is offering help? If you want the information, fine...email me. If you don't...fine...don't email me. But it's pretty stupid to post BS about me when all I'm trying to do is help. I have more reasons for not posting on the board, and none of them are for personal gain.

I can't believe some of you guys would make such a huge stink about someone doing nothing other than offering free information!!! :tsk: Is it that hard to email me if you're so curious??? It's much better than bashing someone when you don't know what you're talking about.


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## adrian's bmw (Feb 14, 2003)

duc_748 said:


> Are there any real disadvantges to leasing for only 24mths as opposed to 36mths? It seems BMW is pushing a 24 mths lease at the moment on X5, any thoughts? Thanks


Here's my take on their strategy for marketing the 24 mo. lease vs. the 36 mo program.

The 2007 X5 comes out this fall. With that in mind, BMW wants more lease maturities of 2006 X5's so that they can more likely convert them to the new body style X5 rather than have them in the current body style for a year longer and risk losing that client to other brands.

The advantage, of course, is that the 24 mo program gives you more flexibility to be able to enjoy a current body style X5 over a short term and have the comfort of knowing or even looking forward to the new X5 in the future and more likely lease the new body style or even convert to another BMW.

The disadvantage in my opinion is the short time of two years. Two years can go by kinda quickly and some people don't want to have to shop again for a car or even be in a vehicle for such a short time in car years. Most people are used to keeping cars an average of 3-4 years. That's all.


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## SS (Dec 20, 2001)

adrian's bmw said:


> Here's my take on their strategy for marketing the 24 mo. lease vs. the 36 mo program.
> 
> The 2007 X5 comes out this fall. With that in mind, BMW wants more lease maturities of 2006 X5's so that they can more likely convert them to the new body style X5 rather than have them in the current body style for a year longer and risk losing that client to other brands.


Hey, that's smart, and would explain why they've been offering better deals on 24-month leases...due to the fact this shape will be worth less in 36-months anyhow!

This is nothing to do with why I recommend 36-months, but good thinking! Although, I think it's probably more a matter of absorbing the cost of lease returns at 36-months that aren't actually worth the residual, than it would be about losing deals to other brands. Point well taken, though.


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## jl5555 (Jan 28, 2003)

SS said:


> You must not have taken your meds today; that's not my problem. You're acting as though I'm leading people on by selling information, or something. I offered information to be nice...just to help. If you're not interested in the information, fine. But, don't sit there and try to discredit me just because you're having a bad day.
> 
> If you feel the need to act immature, take it elsewhere. A more tactful and civilized approach, or a simple question would have been sufficient; especially if you don't know what you're talking about, and are up against someone who has actually sold/leased new vehicles. I'd sure think that after years of being in the business, I would know what I'm talking about.


Look dude, you were the one that basically staked your whole position on the statement "36 month leases can be near perfect for the strategic buyer".

That's what I called you on the carpet for.

I very easily proved there are instances where it's actually NOT perfect to lease for 36 months. Granted, I'm not "someone who has actually sold/leased new vehicles", so if I was wrong in my analysis disproving your "perfect" lease term please do let me know.

I don't care if you have people emailing you for the receipe to Nieman Marcus chocolate chip cookies or Martha Stuart's home phone number. But don't go around saying you have the secret key to "perfect" leases when you can't even analyze this one situation properly in a public forum. I hope that people here have the sense to realize that this behavior calls into question your ability to answer their questions in private.


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## SS (Dec 20, 2001)

jl5555 said:


> Look dude, you were the one that basically staked your whole position on the statement "36 month leases can be near perfect for the strategic buyer".
> 
> That's what I called you on the carpet for.
> 
> ...


Still yapping the trap without a single bit of knowledge as to what is going on. I feel sorry for people who have to deal with you on a daily basis.

I very clearly wrote that I prefer to post information offline, and why...what part of that don't you get and why do you keep yapping that I'm somehow wrong just because I didn't post info. on the forum? :dunno: Do you always result to confrontation rather than being a polite & civilized individual and asking if maybe...just MAYBE you don't know everything you think you know?

LOL...again, you're up against someone who has actually worked in the business. But, wait a minute, you know everything, so, I guess my experience means nothing just because I chose to provide information via email, eh? :rofl:

No response necessary...I'm through dealing with childishness. If anyone would like to ask me a question to which I will invest my valueable time to provide with nothing in return for myself, please feel free to email me. Clearly, there are some intelligent people here who don't think they know it all...


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## LmtdSlip (May 28, 2003)

So why not at least analyze his point about the reduced residuals on a three year lease? :dunno: 

The value of the 'fest is the open exchange of ideas and information for the betterment of the ownership experience.

To that end many BMW sales people post on this board and unless they are talking about a specific deal are willing to share experiences and knowledge here in an open forum to better educate 'fest consumers.

For that reason I find it odd that you wouldnt feel free to share your information out in the open out of respect for the sales people here on the board.

My $.02


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## jl5555 (Jan 28, 2003)

SS said:


> Still yapping the trap without a single bit of knowledge as to what is going on.
> 
> ...again, you're up against someone who has actually worked in the business. But, wait a minute, you know everything, so, I guess my experience means nothing just because I chose to provide information via email, eh
> 
> ...No response necessary...Clearly, there are some intelligent people here who don't think they know it all...


I seem to know enough to analyze a 2 year vs. 3 year lease. Why do you assume I think I know "everything"?

My only hope is to call attention to other forum readers here that perhaps your information should be viewed with a healthy dose of skepticism. Authority does not derive from your repeated statements that you have worked in the business. Authority derives from the ability to prove you know what you're talking about. Until you're able to do that in public I think we're all right in being suspicious of your knowledge on the matter as well as your offer of private information.

I'm glad you've decided to recuse yourself from dealing with this issue in this public forum. It was either that or you display your knowledge. Perhaps the choice of one proves the lack of the other???


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## 760Lifan (Oct 6, 2004)

LmtdSlip said:


> So why not at least analyze his point about the reduced residuals on a three year lease? :dunno:
> 
> The value of the 'fest is the open exchange of ideas and information for the betterment of the ownership experience.
> 
> ...


This is exactly what I was talking about!!
I highly doubt SS knows more about selling/leasing cars than SERAFIL, for ex. but SERAFIL *NEVER* had any problems in posting on this board....


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## 760Lifan (Oct 6, 2004)

SS said:


> Man...a person just can't win for being nice enough to give people free information! :dunno: I've received emails from ~10 people who were curious to know; all of which understood what I was saying after I posted.
> 
> Why the public bashing when all I'm doing is offering help? If you want the information, fine...email me. If you don't...fine...don't email me. But it's pretty stupid to post BS about me when all I'm trying to do is help. I have more reasons for not posting on the board, and none of them are for personal gain.
> 
> I can't believe some of you guys would make such a huge stink about someone doing nothing other than offering free information!!! :tsk: Is it that hard to email me if you're so curious??? It's much better than bashing someone when you don't know what you're talking about.


You see, now you have to send e-mails to everybody who mailed you instead of simply posting it..:dunno:

I didn't post any BS about you since I don't know you in the first place..:tsk:

All I said is that you're acting a bit strange (different to the other dealers on this bord) in my opinion, and I think I'm not the only one who has that impression...

I could have told you that you would be bashed if you say "I got great info but I can't share it on this board.." What did you expect??


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## BayAreaBMWFan (Aug 8, 2004)

Simple forumula:
1. Roll everything into the lease (acquisition fee)
2. Put the BMWCCA rebate as a down payment
3. Calculate 24 month lease and 36 month lease payments.
4. Add the cost of a set of tires for a 36 month lease especially if you have the Sports Package. On most 24 months leases you can get away with the original set.

And then DO THE MATH.

In a 24 month lease you will get to drive a new car sooner. In a 36 month lease you will not have to go car-shopping sooner.

On an ED a 24 month lease is typically a no-brainer.
On a non-ED there has to be something special to for for a short term lease which are generally more expensive than longer term leases.


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