# To Lease or to Buy?



## SteveMD (Apr 22, 2002)

Can you financial whiz-kids give me some advice? My own financial-whiz kids for hire aren't returning my calls.

I may be buying a house later this year.
I don't drive much.
I don't have a business of my own.
I don't modify my cars.
I live in Maryland.

These MSD Leases and Buyer's Choice deals sound interesting. I have never leased before. Thanks in advance.


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## JST (Dec 19, 2001)

SteveMD said:


> *Can you financial whiz-kids give me some advice? My own financial-whiz kids for hire aren't returning my calls.
> 
> I may be buying a house later this year.
> I don't drive much.
> ...


Leasing makes sense, if and only if the following statements are true:

-The money factor being offered is reasonably competitive with financing rates

-The residual being offered is a decent approximation of what the value will be at the end of the term

-You plan on buying a new car every two or three years anyway

-You don't mind mileage restrictions

Leasing especially makes sense when:

-You are planning to order an odd or unique vehicle that would otherwise be difficult to resell (such as, ahem, a ZHP with no sunroof)

-You do not want to tie up a large amount of cash in a vehicle purchase

In your case, I think it does make sense to lease. The leasing programs that BMW offers now sound good, and it sounds like all of the above factors are true for you.

Are you doing ED? I can't remember. If so, the one downside of leasing is that your lease term will actually be running while the car is in transit from Europe. OTOH, your cap cost will be based on the ED price, whereas your residual will be based on a percentage of the US MSRP, so you will get a strong break in the size of payments.

IF I buy a new car, I will go back to a 24 month lease. I have ascertained that the idea of me keeping a car much longer than two years is basically laughable, so why not make trading as convenient as possible?


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## JetBlack330i (Feb 8, 2002)

Consumer Report Lease Guide


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## Guest84 (Dec 21, 2001)

Who actually owns the car?:

Leasing:
Leasing a vehicle is more like renting one than buying one. When leasing you never actually own the car. When your lease is over you must return the car unless you would like to buy it from them at that time. 

Buying:
When you buy a car, it is yours. When you make your monthly payments, you are paying to own the car. When you are done with your payments, you own the car outright. 

What happens when I want to end my agreement?: 

Leasing:
When you want to turn in a leased vehicle early, you may be responsible for contract termination charges. 

Buying:
When you want to end you financing agreement, you need to make the pay off on the car. This will be everything you still owe on the car plus any finance charges. 

What if I want to get rid of the car?: 

Leasing:
At the end of the lease, you can give back the car and pay any fees that may occur such as extra miles put on the car or wear and tear charges. 

Buying:
Once you've bought a car, getting rid of it will be your chore to deal with. You can sell it or trade it in as a down on another car. 

What are my options at the end?: 

Leasing:
When you are at the end of your lease agreement, you have a couple of options. You could turn the car in, trade it in, sell the car privately, or buy the car. When you turn in the car you are responsible for any added fees that may occur such as extra mileage or added dealer fees. Trading in the car would be the same as trading in a car you had bought. The dealer will tell you the value of the car as is and that value will either be more or less than the lease end buy out. If it is less or more, that amount will be applied to the next car you wish to buy. If you opted to sell the car, you would be responsible for paying the dealer the lease end value of the car. Your last option would be to buy the car from the dealer, which would mean that you would pay the lease end fees, and then take possession of the car. 

Buying:
When you have completed the finance agreement for your new car, you can either sell it or trade it in on a new car. (See our section on selling your used car.)


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## bren (Jul 1, 2002)

SteveMD said:


> *Can you financial whiz-kids give me some advice? My own financial-whiz kids for hire aren't returning my calls.
> 
> I may be buying a house later this year.
> I don't drive much.
> ...


Well, I'm no financial wiz but I'll tell you what I think....

Based on numbers 1,2, and 3 leasing sounds like a good option for you.

I live in MD also and I did the Owner's Choice...mainly because the monthly payment was actually lower than it would have been with a lease and I was paranoid about leasing. I like it b/c the car is titled to me and there are no penalties if I were to sell it before the baloon payment is due. If it were a lease it wouldn't be as easy to get out early.


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## bren (Jul 1, 2002)

*Re: Re: To Lease or to Buy?*



JST said:


> *
> 
> Leasing especially makes sense when:
> 
> ...


Oh yeah, this was another reason I did the Owner's Choice...I got the cloth/leather interior and I was worried that it might be hard to sell. With the OC they set a residual just like a lease so if I have trouble selling my car I have that to fall back on.


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## SteveMD (Apr 22, 2002)

All good advice, and I appreciate it. Thanks. 

As for not getting a moonroof, I love the clean lines of a solid roof, the opportunity to drop 50-60 pounds from the E46, more $$ in my wallet, and more room for my helmet. 

Resale value? I dunno. I'm sure there would be someone out there looking for a 330i loaded for bear with the ZHP and Xenon.


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## JST (Dec 19, 2001)

SteveMD said:


> *All good advice, and I appreciate it. Thanks.
> 
> As for not getting a moonroof, I love the clean lines of a solid roof, the opportunity to drop 50-60 pounds from the E46, more $$ in my wallet, and more room for my helmet.
> 
> Resale value? I dunno. I'm sure there would be someone out there looking for a 330i loaded for bear with the ZHP and Xenon. *


The thing is not value, so much. It's ease of sale. There will certainly be some people looking for the kind of "enthusiast's special" that you're ordering, and those people will probably even pay a bit of a premium for the car. The problem is, how long will it take you to find those people when you want to sell? Because of this, dealers will give you (much) less on trade--they don't want to have to carry a car waiting for the 1% of consumers who are actively looking for that odd option set.


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## AEC (Jan 19, 2003)

> As for not getting a moonroof, I love the clean lines of a solid roof, the opportunity to drop 50-60 pounds from the E46, more $$ in my wallet, and more room for my helmet.


Speaking of helmets, anyone know if leasing is a problem for people interested in autocrossing?


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## bren (Jul 1, 2002)

SteveMD said:


> *
> Resale value? I dunno. I'm sure there would be someone out there looking for a 330i loaded for bear with the ZHP and Xenon. *


Yeah, me 

.....that is if those "spy" photos circulating right now are any indication of the next generation 3er.


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