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Leasing v. Buying Entry-Level Luxury

syght

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For a law student graduating this year, thankfully promised a decent salary in this horrible economy, what considerations should go into my decision regarding leasing or buying my first car.

Assume we're talking Audi or BMW --

I know Audi (and perhaps BMW) has a program for recent graduates looking to lease (I believe they give a bit more wiggle-room when considering credit history and score). That would factor in.

Other factors:

1. I'd be in NYC. Crappy roads. Cuts in favor of leasing.
2. Wouldn't be driving a ridiculous amount (10-15K miles maybe). Cuts both ways.
3. Would want to switch cars in a couple of years. Cuts in favor of leasing.
4. Would be taking a significant pay cut in 4 years (so wouldn't be able to afford a brand new BMW or Audi then). Cuts in favor of purchasing.

Thoughts?
 

Jumbie

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Don't squander your money on leasing a fancy car. I know that it's tempting after not having crap as a student for so many years (I say this as someone graduating next year; unfortunately I have at least 3 years of making $40-50k first before I can make any real money) but shouldn't you focus on making some savings first? Especially since you say you're taking a significant pay cut in 4 years.

I know that's not what you want to hear but those are my thoughts.
 

KBW

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Why are you taking such a pay cut in 4 years?
 

West24

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Originally Posted by KBW
Why are you taking such a pay cut in 4 years?

strippers have a very short shelf life.
 

dtmt

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Given the current state of the economy and if you know your pay will go down in a few years, I'm not sure it's such a good idea to get an expensive car right now...
 

dkzzzz

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Owning a car in NYC is not very smart choice.
 

Millerp

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Originally Posted by dkzzzz
Owning a car in NYC is not very smart choice.

Agree.

Parking and insurance is rediculous.

Just rent a car by the day/week if/when you need one.
 

Joffrey

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Like everyone else, in NYC forget about the car. I live in DC and the first thing that went was my car. I would do the same in NYC.

By the way, you were "promised" a job? Promises were meant to be broken, especially in this economy and in NYC and for a lawyer
 

suited

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Originally Posted by dkzzzz
Owning a car in NYC is not very smart choice.
If you're living IN Manhattan, it's almost a physical impossibility, let alone a choice.
 

JayJay

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Originally Posted by Jumbie
Don't squander your money on leasing a fancy car. I know that it's tempting after not having crap as a student for so many years (I say this as someone graduating next year; unfortunately I have at least 3 years of making $40-50k first before I can make any real money) but shouldn't you focus on making some savings first? Especially since you say you're taking a significant pay cut in 4 years. I know that's not what you want to hear but those are my thoughts.
I tend to agree.
 

danyllau

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I like to think that lease/finance(buying) is the same thing, it has more to do with how fast you want to repay the money if you are borrowing. Lease costs are just glorified interest (you pay back less principle per year but more interest), especially b/c I think cars are not hard to get rid of at a reasonable price. If you have better use of you cash, then do lease by all means. But if it is a better investment to avoid those extra interest, then you should buy and pay more towards the principle.

Also, at the end of the lease you are not particularly free from it, you will often have to pay extra from damage, and especially new tires; and you may want to buy it out b/c it the buy-out price is just a bit below. You just avoid "some" of the risks, but you do pay more interest + extra for it.
 

Lucky7

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Go read The Millionaire Next Door first. Leasing, unless you have the ability to write the entire "nut" off is absolutely pointless. I'm not going to "school" you on the whole living in the city thing with a car, I'm assuming you already know that.

1. Why not buy a certified pre-owned vehicle and let someone else eat the depreciation? You still get a 100k warranty with BMW or Audi..take a A4, 3-Series, or 5 -Series for example..sticker cost new = $45,000. Three years later the car is now selling for $25,000 with a warranty...you would be silly to buy the car new.

2. Why the pay cut? If you buy, you will always have it..nobody can take it away from you. If you lease, and your situation is different in 3 years you still must buy something in order to have wheels.

See if you can work for a little while to get some downpayment money..if not pay off the whole thing. I'm not a "payments" type of guy. I pay everything off from the start..I just hate the thought of paying interest to someone that I don't need to be dealing with in the first place.
 

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