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Am I crazy for wanting to lease a top-of-the-line 3-series out of college?

Discussion in 'Fine Living, Home, Design & Auto' started by GreenFrog, Jun 20, 2011.

  1. eqpablon

    eqpablon Senior member

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    There is so much bad advice in this thread, I hope GF is taking everything with a grain of salt. I'm disappointed Pio hasn't shown up to debunk the leasing misstatements. Generally I'm in agreement with username79's line of reasoning in this thread.

    I don't want to hand out advice here because I don't have much to add at this point and it seems GF has changed his tune but I would point out that to me the most salient information was that GF wasn't going to be driving the car much. Leasing a car makes a lot more sense when you're relatively close to the number of miles you are paying for - it sucks to pay for 10k a year and only drive 3k.

    I do want to point out a couple of things to the advice givers who seem to be missing the point and should probably reconsider their admonitions:

    1. No maintenance costs on a BMW the first 4 years - therefore none over the course of a lease.
    Similarly - gas will be roughly the same for t he BMW as most other cars. We're not talking huge dollars here, particularly since GF said he won't be driving on a daily basis.

    2. Lots of people (myself included) would hesitate to own a BMW outside of the warranty period because maintenance can quickly add up. Just look at the BMW horror stories thread. You could get a used BMW that's screwed together great and only requires minimum maintenance, or you could be like everyone I know with a BMW that routinely spends large sums for things that are "never supposed to break."

    3. Why do people think leasing is so bad? $590 for a month for that car is a pretty good deal - and he'd only be on the hook for 27 months. I don't know if that 590 includes an amortized down payment or if that assumes you're putting $$ down as well - GF really need to tell us the whole story to get a sense as to what you were planning.

    4. Everyone who was arguing based on the retail price of the car being high should be disregarded. The purchase price by and large doesn't matter to GF - only the amount he's paying to rent the car for 27 months.

    5. To the guy who said he would aim to save 75% of his take home - for GF that would mean limiting spending to around $1k a month (see norcaltransplant's analysis above). How is $1k in Boston a reasonable goal? Even $2k a month. If GF could save $1k a month at this point, that would be great. Maybe you were pissing in the wind and saying that people who make 300k can easily live on 25-50% of their take home, I don't know - but clearly it doesn't apply to someone making 75k in Boston.

    6. GF will have plenty of friends blowing $600 a month on drugs, booze, food, clothes, etc. If he forgoes all of that for a car, more power to him. If he wants to have it all, obviously finances will be tight with the car. Everyone has to make their own decisions.

    7. Without calling anyone out in particular - if you are reading this thread and don't understand how tax withholding works, please make sure you have a good accountant, and read this: http://www.consumerismcommentary.com...-on-bonus-pay/


    /thread
     
  2. GreenFrog

    GreenFrog Senior member

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    My A4 has been a pretty bad maintenance nightmare (thanks Dad for taking care of the expenses!) and it's a slow ass, automatic slushbox. If it were a stick shift I'd probably consider keeping it. But, again, it's not in the best shape and I'll have to spend a couple thousand to get it in tip-top shape.
     
  3. eqpablon

    eqpablon Senior member

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    I lurk religiously at B-fest and Bimmerforums and the majority there drive E36's, E46's, E34's and E39's. There is not really a pro-lease attitude on those boards. I like the respect the old cars get over there.

    Try the "Ask a Dealer" and "European Delivery" sections of the board. I too participate in B-fest, and you won't find much info on leasing in the E36/E46 portion of the board. There is a reason why 75%ish of new BMW's are leased. Username79 and UnFalconable have summed up the reasons much better than I have.
     
  4. tj100

    tj100 Senior member

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    There is so much bad advice in this thread, I hope GF is taking everything with a grain of salt. I'm disappointed Pio hasn't shown up to debunk the leasing misstatements. Generally I'm in agreement with username79's line of reasoning in this thread.

    And yet, you basically end up agreeing with all of this "bad advice" - that it's not a very smart economic decision.

    I'm with you on the leasing vs. buying debate, especially if you want a new car. Personally, I think the sweet spot in the value curve is buying a low-mileage CPO car (BMW, Porsche, whatever) where you miss out on some of the steep part of the depreciation curve but still benefit from the warranty.
     
  5. Prince

    Prince Senior member

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    Try the "Ask a Dealer" and "European Delivery" sections of the board. I too participate in B-fest, and you won't find much info on leasing in the E36/E46 portion of the board. There is a reason why 75%ish of new BMW's are leased. Username79 and UnFalconable have summed up the reasons much better than I have.

    Of course there will be people on Bimmerfest who lease their BMW, but someone made a point as if the guys on Bimmerfest would understand the OP better than the folks on SF. I highly doubt that, since most active members on Bimmerfest drive older BMW's. The leasing crowd is definitely a minority there.

    There is a reason 75%ish of new BMW's are leased. Many people are incapable of making sound financial decisions and cannot accept the fact that they cannot show of the newest BMW. That's probably why.
     
  6. eqpablon

    eqpablon Senior member

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    Of course there will be people on Bimmerfest who lease their BMW, but someone made a point as if the guys on Bimmerfest would understand the OP better than the folks on SF. I highly doubt that, since most active members on Bimmerfest drive older BMW's. The leasing crowd is definitely a minority there.

    There is a reason 75%ish of new BMW's are leased. Many people are incapable of making sound financial decisions and cannot accept the fact that they cannot show of the newest BMW. That's probably why.


    That may be partially true, but they are chosing BMW's over Merc's, Caddys, Audis, etc because of the subvented leases. Even tho they might make poor financial choices doesn't negate the fact that BMW does have the best lease programs in that market segment. 2011 M3 Convert's for mid $500, Z4 35IS's for mid $300's, etc etc. No one comes close.

    Here are the only 3 stickies in the "Ask a Dealer" forum. They all deal with leasing, and they do a pretty good job explaining why in most, but not all cases, leasing a new BMW is actually cheaper than owning.

    http://www.bimmerfest.com/forums/sho...d.php?t=150794

    http://www.bimmerfest.com/forums/sho...d.php?t=146090

    http://www.bimmerfest.com/forums/sho...d.php?t=547043
     
  7. otc

    otc Senior member

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    I lurk religiously at B-fest and Bimmerforums and the majority there drive E36's, E46's, E34's and E39's. There is not really a pro-lease attitude on those boards. I like the respect the old cars get over there.

    This is because "car people" like to own cars. You can't do stuff to leased cars...even stuff that is removable (like some anti-sway bars or the eyelids that all of the vwvortex people were putting on their mkIV golfs/gtis) won't be done since you will just have to take it off and discard it a year later when your lease expires.

    Try the "Ask a Dealer" and "European Delivery" sections of the board. I too participate in B-fest, and you won't find much info on leasing in the E36/E46 portion of the board. There is a reason why 75%ish of new BMW's are leased. Username79 and UnFalconable have summed up the reasons much better than I have.

    75% of new BMWs are leased because they are status symbol cars (or douchebag cars). A majority of those people aren't buying them because of how awesome they drive but because it is what their neighbor has in their driveway. Nobody wants to have last year's status symbol and a lease lets you have a new one all of the time. If always having a shiny new car (and *always* having a car payment) is important to you, then leasing may be the right option--hey, this is styleforum...people want shiny pretty things.
     
  8. Prince

    Prince Senior member

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    That may be partially true, but they are chosing BMW's over Merc's, Caddys, Audis, etc because of the subvented leases. Even tho they might make poor financial choices doesn't negate the fact that BMW does have the best lease programs in that market segment. 2011 M3 Convert's for mid $500, Z4 35IS's for mid $300's, etc etc. No one comes close.

    Here are the only 3 stickies in the "Ask a Dealer" forum. They all deal with leasing, and they do a pretty good job explaining why in most, but not all cases, leasing a new BMW is actually cheaper than owning.

    http://www.bimmerfest.com/forums/sho...d.php?t=150794

    http://www.bimmerfest.com/forums/sho...d.php?t=146090

    http://www.bimmerfest.com/forums/sho...d.php?t=547043


    Hmm, interesting. Anyway, I'm not going to argue that BMW's leasing program is bad or something. I'm not that well informed when it comes to leasing terms and comparisons with other brands. Judging from those threads it could well be possible that leasing is cheaper than buying. But it is important to take into account that OP cannot buy the car, so he needs to lease. If he has 60k on a shelf, who am I to say that he should not lease. My point is that you should not get a car that is out of your reach and that leasing a car is always a bad idea compared to buying a car with the money you have right now. Maybe OP needs to settle for an E36 now. When his career gets going, who knows..Maybe in a few years time he makes enough cash to buy a new 335i and pay for it and then he should definitely do it.
     
  9. tj100

    tj100 Senior member

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    As an aside, I do think the way the OP's question is framed is different from where the discussion has gone: "Am I crazy for wanting to lease a top-of-the-line 3-series out of college?" No, you're not crazy for wanting a top-of-the-line 3-series right out of college. That seems perfectly natural. I want a Ferrarri 599 GTO. You're crazy if you think it's a wise financial decision.
     
  10. Prince

    Prince Senior member

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    This is because "car people" like to own cars. You can't do stuff to leased cars...even stuff that is removable (like some anti-sway bars or the eyelids that all of the vwvortex people were putting on their mkIV golfs/gtis) won't be done since you will just have to take it off and discard it a year later when your lease expires.



    75% of new BMWs are leased because they are status symbol cars (or douchebag cars). A majority of those people aren't buying them because of how awesome they drive but because it is what their neighbor has in their driveway. Nobody wants to have last year's status symbol and a lease lets you have a new one all of the time. If always having a shiny new car (and *always* having a car payment) is important to you, then leasing may be the right option--hey, this is styleforum...people want shiny pretty things.


    +1. I agree with what you've said here.
     
  11. otc

    otc Senior member

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    But it is important to take into account that OP cannot buy the car, so he needs to lease. If he has 60k on a shelf, who am I to say that he should not lease.

    Hey man...this is AMERICA--we don't need no stinkin $60k to buy a $60k car.
     
  12. Prince

    Prince Senior member

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    Hey man...this is AMERICA--we don't need no stinkin $60k to buy a $60k car.

    Hehe, exactly. This attitude is what really strikes me in this thread. I mean, people do crazy shit with money over here, but I've yet to see someone who just gets his first job, leasing a 60K car just for fun drives.
     
  13. HRoi

    HRoi Senior member

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    2011 M3 Convert's for mid $500
    Where 2 kop?!?! [​IMG]
     
  14. eqpablon

    eqpablon Senior member

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  15. UnFacconable

    UnFacconable Senior member

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    Still a lot of fail going on. Only GF can know whether he wants the car for the "right" reasons (which I guess in these circumstances is for driving enjoyment) or the "wrong" reasons (which people seem to think includes creating an impression on others). I don't necessarily disagree with these viewpoints, but they are opinions, not absolute statements. There are those who think that people who dress well only do so to create an impression on others and is therefore just as bad as buying a car to impress others.

    Setting that aside, GF has already shown us one reason why people lease - his out of warranty A4 is going to cost him a mint to keep on the road. Whether or not the 75% of BMW drivers lease for that reason, or any other, is really irrelevant, the question to ask is whether a given lease is a better economic decision than purchasing outright. If you intend to drive a new BMW for 3 years (which many do), I would assume the rational actor would want to minimize total cost of ownership over that period. If it's leasing, great. If it's buying and re-selling, great. Go with whatever one works. I'm going to go out on a limb and guess that with BMW's subsidized leases, often times the most cost-effective way to own a BMW is to lease and that's why people are doing it. Obviously there are limitations to leasing (mileage and modification restrictions, etc.) that make leasing a non-starter for some people but there are plenty of people for whom leasing is the rational choice.

    In my possibly biased and comparatively uninformed opinion, I have no interest in owning a German near-luxury brand car because I think the headache of post-warranty ownership far outweighs the benefits. I don't disagree with tj100 - buying a CPO and then getting rid of it before it becomes a maintenance nightmare is likely the most cost-effective way to get yourself a BMW, Audi or Merc if you're willing to do it.
     
  16. tj100

    tj100 Senior member

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    Still a lot of fail going on. Only GF can know whether he wants the car for the "right" reasons (which I guess in these circumstances is for driving enjoyment) or the "wrong" reasons (which people seem to think includes creating an impression on others). I don't necessarily disagree with these viewpoints, but they are opinions, not absolute statements. There are those who think that people who dress well only do so to create an impression on others and is therefore just as bad as buying a car to impress others.

    Setting that aside, GF has already shown us one reason why people lease - his out of warranty A4 is going to cost him a mint to keep on the road. Whether or not the 75% of BMW drivers lease for that reason, or any other, is really irrelevant, the question to ask is whether a given lease is a better economic decision than purchasing outright. If you intend to drive a new BMW for 3 years (which many do), I would assume the rational actor would want to minimize total cost of ownership over that period. If it's leasing, great. If it's buying and re-selling, great. Go with whatever one works. I'm going to go out on a limb and guess that with BMW's subsidized leases, often times the most cost-effective way to own a BMW is to lease and that's why people are doing it. Obviously there are limitations to leasing (mileage and modification restrictions, etc.) that make leasing a non-starter for some people but there are plenty of people for whom leasing is the rational choice.

    In my possibly biased and comparatively uninformed opinion, I have no interest in owning a German near-luxury brand car because I think the headache of post-warranty ownership far outweighs the benefits. I don't disagree with tj100 - buying a CPO and then getting rid of it before it becomes a maintenance nightmare is likely the most cost-effective way to get yourself a BMW, Audi or Merc if you're willing to do it.


    I completely agree that if you want/like to have a new car, leasing is the way to go. Because at the end of the lease, you don't have what you wanted anymore - you have an older car. And you get to trade in for what you do want, another leased new car. Much better deal than buying new every two years.

    As I understand it (and I've been out of the BMW game for a few years), BMW subsidizes the leases because they sell a ton of CPO cars coming off leases (at decent margin) and need a steady supply.
     
  17. UnFacconable

    UnFacconable Senior member

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    I completely agree that if you want/like to have a new car, leasing is the way to go. Because at the end of the lease, you don't have what you wanted anymore - you have an older car. And you get to trade in for what you do want, another leased new car. Much better deal than buying new every two years.

    As I understand it (and I've been out of the BMW game for a few years), BMW subsidizes the leases because they sell a ton of CPO cars coming off leases (at decent margin) and need a steady supply.


    Huh - that's interesting. I wonder if they're trying to drive up residual values that way too. The fact that 75% of BMWs are leased combined with your statement about creating CPOs makes me think CPOs are a bad deal. The few times I've gone to the local BMW dealership I've been struck by what a ripoff some of the CPOs are, but assumed that was because San Francisco BMW gouges dumb San Franciscans who don't realize there are BMW dealers in the burbs.
     
  18. GreenFrog

    GreenFrog Senior member

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    Huh - that's interesting. I wonder if they're trying to drive up residual values that way too. The fact that 75% of BMWs are leased combined with your statement about creating CPOs makes me think CPOs are a bad deal. The few times I've gone to the local BMW dealership I've been struck by what a ripoff some of the CPOs are, but assumed that was because San Francisco BMW gouges dumb San Franciscans who don't realize there are BMW dealers in the burbs.

    Their CPO deals definitely are not that great, in my books at least.
     
  19. bigbjorn

    bigbjorn Senior member

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    If you intend to drive a new BMW for 3 years (which many do), I would assume the rational actor would want to minimize total cost of ownership over that period.
    The problem with this statement is that the OP's financial situation doesn't meet the criteria of the subjunctive clause. So discussing which he should do is a bit like discussing whether or not he should invest in a sole proprietorship llama farm or a ship building wharf. He has the capital for neither.
     
  20. spertia

    spertia Senior member

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    I currently have two BMWs: an e46 and an e39. I bought the former new. When it came time for a second car a while back, I bought the latter used (not CPO).

    So far I've been very happy with the used car, for way less money overall, and so I don't think that I would do the first option again (i.e. buy new). I don't really care about having a brand-new car (one reason that I've never looked into leasing), and I didn't really know any better back then when it came to the used BMW market. I do plan to drive both cars into the ground.

    Funny story. From day one, a friend of mine would always talk about my e46 when he came over; it's a sport wagon, which you don't see as many examples of. He kept saying how he wanted one of those, and so just this year, he finally tracked one down and bought it -- nearly the same exact car, just in a different color. For $5k!! Granted, it has a ton of miles, but still. That car new was almost $40k!
     

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