• We’re currently investigating an issue related to the forum theme and styling that is impacting page layout and visual formatting. The problem has been identified, and we are actively working on a resolution. There is no impact to user data or functionality, this is strictly a front-end display issue. We’ll post an update once the fix has been deployed. Thanks for your patience while we get this sorted.

Leasing a car VS Buying a car

Page 3 - Seeking answers? Join the AnandTech community: where nearly half-a-million members share solutions and discuss the latest tech.
Originally posted by: FlyPenFly
Listen, if the advice was well founded with numbers to back them up, I'd take them in a heart beat. I asked for advice because I didn't want over generalization from what people heard or is the general stereotype. So far only very very few people even bothered to back up what they say with any numbers.
Click to expand...

I just told you, your numbers are wrong. As PlatinumGold said, the cost of the lease is based on the amount of value the car loses over the length of the lease. According to you, the car will lose about $15,000 in value, and they're willing to lease it to you for $14,200 over 3 years? Why would they do that?

A base 2001 325i has a retail value of (according to KBB which tends to be inflated) about $21,000 now. You obviously are getting a lot of options to push that up $4,000. After 3 years, your car will be worth at least $16,000, probably higher. I'm basing that on some extrapolations from other models, because they didn't make the 325 in 1998 (6 years old). So for your $11,000 in additional payments, you will have a car that is worth $16,000+ ($5,000+ profit), or you can have nothing.

So...
a. Your numbers are wrong.
b. As someone said several times, are you really only going to keep it for 3 years? If not, then you have to figure that you'll be paying to lease/buy another car in 3 years, where if you had bought the BMW it would be yours free and clear, and you would have no car payment (a very good thing).

Now you have some accurate numbers that prove it's a better financial decision to buy it than lease it. Do with them whatever you want. You obviously want to buy a nicer car than you can really afford, so leasing is really the only way to go.
 
Originally posted by: mugs
Originally posted by: FlyPenFly
Listen, if the advice was well founded with numbers to back them up, I'd take them in a heart beat. I asked for advice because I didn't want over generalization from what people heard or is the general stereotype. So far only very very few people even bothered to back up what they say with any numbers.
Click to expand...

So...
a. Your numbers are wrong.
b. As someone said several times, are you really only going to keep it for 3 years? If not, then you have to figure that you'll be paying to lease/buy another car in 3 years, where if you had bought the BMW it would be yours free and clear, and you would have no car payment (a very good thing).

Now you have some accurate numbers that prove it's a better financial decision to buy it than lease it. Do with them whatever you want. You obviously want to buy a nicer car than you can really afford, so leasing is really the only way to go.
Click to expand...

regarding B) when he goes to turn in the BMW (or whatever he can lease. he is NOT going to get a lease with a fico of 550) he will have to pay a bunch.

So now he is out of a car and has to save to put down on another lease or down payment.


lease are only good for people who can afford to blow $400 a month a new car and want a new car every 2-3 years.

Buying a car and paying it off in 3-4 years is a better idea. While the numbers for the first car won't look great the numbers for the new car will.

the op is only looking short term. NOT long term.

I don't see BMW payinf for all maintenance and repair work. that just does not make sense why should they pay to repair the brakes and tune-ups etc?

you state you will get a cosigner with over 700 credit to cosign? pfft lets see a 550 and 700 credit score to LEASE a BMW? man no matter what yo do the payments are going to be high. heh must be nice to be young and full of dreams.
 
A credit score above 680 is considered a prime borrower and can most definitely receive the lease at that stated price.

A base 2001 325i has a retail value of (according to KBB which tends to be inflated) about $21,000 now. You obviously are getting a lot of options to push that up $4,000. After 3 years, your car will be worth at least $16,000, probably higher. I'm basing that on some extrapolations from other models, because they didn't make the 325 in 1998 (6 years old). So for your $11,000 in additional payments, you will have a car that is worth $16,000+ ($5,000+ profit), or you can have nothing.
Click to expand...

Its also certified used by bmw meaning it carries with it a hefty warranty which definitely pushes up the price a lot. In 1998 they made 318i which was in the same price bracket as the 325i , meaning it was in the same slot as their line up now. I'm not sure what your putting into KBB to get that out but it always comes out near 10k for me in Good condition with moderate miles.

So now he is out of a car and has to save to put down on another lease or down payment.
Click to expand...
Yeah exactly, I would be out of a asset that has lost significantly more value and would have avoided dumping another 11.6k into it which could have gone into somethine else that appreciates.

I don't see BMW payinf for all maintenance and repair work. that just does not make sense why should they pay to repair the brakes and tune-ups etc?
Click to expand...

Because its covered under their Certified used program, read the terms of that kind of car. This is really pointless though because I'm not getting this model.

you state you will get a cosigner with over 700 credit to cosign? pfft lets see a 550 and 700 credit score to LEASE a BMW? man no matter what yo do the payments are going to be high. heh must be nice to be young and full of dreams.
Click to expand...

It is nice to be young and full of spunk, I agree. 🙂 The payments would be close to what they quoted for the 700 credit score person because they woudl be a prime borrower, if they gave me higher rates because of cosigning, I have the option seeing as how its my sister, for her to lease it under her name.
 
I sure hope your degree isn't in accounting.

😉

Do post back with the results...you will NOT get those rates, nor will your sister.
 
Originally posted by: FlyPenFly
It sure isn't but her's is, she's a CPA.

Can you tell me why she would not get those rates?
Click to expand...

A+ is 720 or higher. If she is indeed a CPA have her run the numbers, but use correct figures for resale, residual, money factor, mileage over 3 yrs, 5 yrs, etc.

The bottom line is leasing is not fiscally beneficial over buying - it cannot be made to be unless there are tax deductions involved. If you're comfortable with that fact then you understand.

At its core leasing is nothing more than financing the difference between residual and cap cost with added fees thrown in (you can get them to drop these.) The trick comes with out the leasing company figures out that financing...they play all kinds of tricks.

Luckily my lease is straight forward - it is a straight 3 year installment loan for the difference between cap cost and residual...nothing more and nothing less. No fees, no down payment, no nothing. Shop around leasing company's and use that to negotiate with the dealer.

I'm not saying don't lease. I have a lease - but like I said I have a bunch of disposable income and wanted to drive a nicer car than I wanted to spend outright. Its fiscally dumb, but I can live with that.
 
Tell me the exact model and I can tell you the residual.

I show base 325i at 28,495. Now remember that you'll rarely find a base 325i - there will be thousands in options tacked on like "you wanna a trasmission with that car?"

Residual of 16,527 (or 58% of MSRP) makes payments of 467.06 for 36 months at 15K miles, total payment of 17,281.
 
I give up, you obviously know what you want to do, and you'll twist the numbers to convince yourself that you're making the right decision. A dozen people who know far more about buying and leasing cars than you do have told you that buying almost always makes better sense financially than leasing. Obviously you're right though.

If your sister is willing to lease it for you, she's as big an idiot as you are.
 
She would fall in the A+ range, and if they can't get their advertised rates, I don't see who can.

I'm right now considering the followign models and its to be decided by the test drive:

All manual transmission, their advertised rates are:


2004 325i - $299 / 36 - $2500 down

2004 Saab 9-3 Linear - $249 / 36 - $2500 down

2004 Volvo S40 - $229 / 36 - $2500 down

2005 Scion TC - don't know, not advertised

2004/5 Mazad 3 - not advertised

2004 Honda Accord LX - $199 / 36 - $1500 down.

All for 36 months

These rates come from their manuf. websites
 
now see, there's your problem.

You are falling for the advertised rates. Those are called "get them in the showroom" numbers and have no basis in reality because they will quickly tell you "oh, those were for model xxx and we have none of those on the lot"

Do post back with what you worked out with the dealer though.
 
Ok will definitely let you know how it goes, any possibility on posting the residual for the 2004 Accord LX and the Saab and possibly the Scion and Mazda too?

🙂
 
Originally posted by: FlyPenFly
Ok will definitely let you know how it goes, any possibility on posting the residual for the 2004 Accord LX and the Saab and possibly the Scion and Mazda too?

🙂
Click to expand...

too many model options, need exact model.
 
sheesh.

you are dead set on the lease. WE have told you that you are NOT going to get those numbers. EVEN with the co-signer with 700+ fico score.

I OWN a dealership (ok small portion my father owns the rest) lease are a lose for the person doing it. IT is great for the manufacture. Here you pay for the car to cover the lose it will have then you have to turn it in with a set of mileage. NOT only that you have to keep perfect care of the car.

you have a lot going against you. bad credit, no real job, and still a college student that makes a you a real bad risk. the rates you are quoting are for people with good credit who do NOT need a cosigner.

but you are set on getting a lease. As spidey said it is a bad idea unless you have a good portion of disposable income and do not mind paying a lot for nothing. spidey laid it out for you really well. but go ahead and wait until you go to sign and you will learn more. be sure to read the fine print.


IF it was me i would be looking to purchase a 2 year old vehicle. that way when it is paid off you actually have something. where in a lease you have nada.
 
For the Accord, 2004 LX model base without options for now... for the Mazda 3 the S version without options, and for the Scion TC, just hte base, they only offer like two options which I am not interested in.

you have a lot going against you. bad credit, no real job, and still a college student that makes a you a real bad risk. the rates you are quoting are for people with good credit who do NOT need a cosigner.
Click to expand...

I think I already posted this twice but maybe third time is a charm. If the cosign rates are horrible, I wouldn't do it, iwould just have my sister sign the lease herself.

I am also looking at two year old cars. I am still exploring all options, and if the lease deals are not favorable when the contract comes, I'll get somethign else.
 
Originally posted by: FlyPenFly
For the Accord, 2004 LX model base without options for now... for the Mazda 3 the S version without options, and for the Scion TC, just hte base, they only offer like two options which I am not interested in.

you have a lot going against you. bad credit, no real job, and still a college student that makes a you a real bad risk. the rates you are quoting are for people with good credit who do NOT need a cosigner.
Click to expand...

I think I already posted this twice but maybe third time is a charm. If the cosign rates are horrible, I wouldn't do it, iwould just have my sister sign the lease herself.

I am also looking at two year old cars. I am still exploring all options, and if the lease deals are not favorable when the contract comes, I'll get somethign else.
Click to expand...

fly,

we're only being so hard on you because we've been in your situation before and have learned our lesson. I only wish somebody would have taught me what I know about money now when I was in my early twenties. if only...
 
You must log in or register to reply here.

TRENDING THREADS

Back
Top