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Leasing Cars

Ducky_Fresh said:
I should get some advice then! My GS350 is up at the end of the year. I get my MSD's back if I turn in, or I can apply to vehicle purchase of course.

I did 45k miles, 3 year, I think residual is $35,600 or something from $49,xxx.
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I'm looking to sell my '15 M3, 22k miles, mint. clean title at hand in my name. Time to upgrade your ride Ducky. I'll take $56k cash. Looking to move it soon to order my new car.

asdfghwy said:
Just sent out my offer the on the 530i I wanted with all the packages I was looking for (MSport, driver assistance, premium).

I used a method on a BMW forum to calculate the approximate invoice to aim for an offer of invoice + $500 to $1000 for the cap cost.

Edmunds forum says the July money factor set by BMWFS is .00151 so that's what I offered, I'm already assuming they will not want to go that low.

I guess we'll see what they counter with.
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I would try to find dealers that advertise/post on enthusiast boards often. I see Steve Thomas BMW often advertise and post prime rates.

JesasaurusRex said:
where does one come across advertised residual values? manufacturers websites?
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Residual percentages are set by the manu and often change. There is no real guide other than asking/emailing the dealer.
 
JesasaurusRex said:
let's punch in some numbers just so i understand this

buying <$50,000 + $5,000 (10%)> let's say you have it for 3 years and sell it for $25,000 (50% depreciation)

Your total cost to buy after resale/trade in was $30,000

Now lease that same vehicle for 3 years and the manufacturer also gives the vehicle a 50% depreciation value your total payments will be at least $25,000 + $2,500 for tax and fees (10%)

Now stan was saying lease agreements are typically 2% higher rates than ordinary loans, so assuming a 0% loan on the first vehicle and a 2% agreement on the second, using a lease calculator i'm coming up with

total cost to lease for 36 months comes in at $29,750

guess the gamble is in the mileage limits vs service costs and if you itemize the lease gets a bit cheaper

is it safe to assume the manufacturers depreciation estimate is always on the high side though, or else they'd be taking on all the risk? Math wise real world i can't see how leasing a vehicle is cheaper than buying, short of large mechanical cost, which should still fall under the warranty periods for the lengths of times we're discussing.

Only way i see this making any sense at all is if you want lower month to month payments and always seeing yourself having a payment by getting a new car every year or two.

Did i miss something?
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There are other variables to leasing outside of just comparing payment with a traditional loan. What if you have a business? Also, your liability is much less when you lease a car. (think getting a mortgage, and they look at debt to income ratio)

I work with a lot of rich guys and a lot of them lease. They like to keep their $ liquid and their liabilities to a minimum. They $500 bucks or so they throw a month for a new BMW is just an expenditure to them -- like eating out or cable TV.
 
stan23 said:
There are other variables to leasing outside of just comparing payment with a traditional loan.
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Another example is if you get into an accident. Your resale value will take a hit if you own the car. Just hand over the keys if you leased it, no change.
 
stan23 said:
There are other variables to leasing outside of just comparing payment with a traditional loan. What if you have a business? Also, your liability is much less when you lease a car. (think getting a mortgage, and they look at debt to income ratio)

I work with a lot of rich guys and a lot of them lease. They like to keep their $ liquid and their liabilities to a minimum. They $500 bucks or so they throw a month for a new BMW is just an expenditure to them -- like eating out or cable TV.
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Ya i get all of that :thumbup , I'm still having trouble wrapping my head around why you said you never want to turn the vehicle in at the end of the lease. Could you expand a bit on why it's beneficial to sell/ trade in before then? You probably did already but i need it dumbed down a hair more :laughing
 
Ducky_Fresh said:
I should get some advice then! My GS350 is up at the end of the year. I get my MSD's back if I turn in, or I can apply to vehicle purchase of course.

I did 45k miles, 3 year, I think residual is $35,600 or something from $49,xxx.
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Year/ options/ submodel. $35,600 is gonna be high for a 2015. Crafted line? AWD? 45K miles?
 
JesasaurusRex said:
Ya i get all of that :thumbup , I'm still having trouble wrapping my head around why you said you never want to turn the vehicle in at the end of the lease. Could you expand a bit on why it's beneficial to sell/ trade in before then? You probably did already but i need it dumbed down a hair more :laughing
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I guess easiest way I can explain it is that if you pick the 'right' car to lease, get the 'right' deal, the lease buyout is much less than the car is worth. The last few leases we did, we were right side up with equity in the car about a year into the lease. By year 3, it's a no brainer to just sell it 2nd hand/trade it in, then turn it in and get nothing. I'm not talking a lot of money though, just a few thousand.
 
That's working out cash + even with paying the tax/ reg, Stan?
 
A leased car? A buyout on a leased vehicle is going to trigger a tax and registration event to transfer the ownership of the vehicle to an individual from the leasing company.

IOW, you would first have to own the vehicle to sell it to a dealer, correct? Leasing companies own leased vehicles, not the lessee.
 
dadaR6 said:
Another example is if you get into an accident. Your resale value will take a hit if you own the car. Just hand over the keys if you leased it, no change.
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I don't lease my car, but I know plenty of people who do. What happens when their leased vehicle gets totaled in an accident?
 
stan23 said:
I guess easiest way I can explain it is that if you pick the 'right' car to lease, get the 'right' deal, the lease buyout is much less than the car is worth. The last few leases we did, we were right side up with equity in the car about a year into the lease. By year 3, it's a no brainer to just sell it 2nd hand/trade it in, then turn it in and get nothing. I'm not talking a lot of money though, just a few thousand.
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I got cha, thanks
 
I did the lease vs buy when I got my TDI Wagon.

It was $403 a month to buy with $2k down and trade in of $2,500. Car was $26,900 I think.

The beauty of buying I feel is after I paid the car off and then sell it for say $10k at some point, my monthly payment effectively drops to $2XX a month.

I can see leasing work in certain vehicles like Leafs and hybrid deals but for a 1200 mile a month commuter for me, it doesn work.

Now, taking over someones lease, that can be very cost effective.
 
Holeshot said:
A leased car? A buyout on a leased vehicle is going to trigger a tax and registration event to transfer the ownership of the vehicle to an individual from the leasing company.

IOW, you would first have to own the vehicle to sell it to a dealer, correct? Leasing companies own leased vehicles, not the lessee.
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Incorrect. If you sell the leased car private party, yes--you will need to buy it first, and pay taxes on the residual.

But.... you can sell the leased car to a dealer at any given time, and not have to pay taxes on residual. I'm not sure all leasing companies allow this. I know Honda Financial and Subaru does.
 
renxianqiclone said:
I don't lease my car, but I know plenty of people who do. What happens when their leased vehicle gets totaled in an accident?
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It gets paid off. As I said a few pages ago, Gap coverage is automatically included in a lease. So even if the insurance payout is less than what is still actually owed, it's covered. Leases typically require full coverage (of course) with very high limits.
 
TheRobSJ said:
It gets paid off. As I said a few pages ago, Gap coverage is automatically included in a lease. So even if the insurance payout is less than what is still actually owed, it's covered. Leases typically require full coverage (of course) with very high limits.
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Well, no higher than traditional loan cars--which I feel is waaay too low for the Bay Area. Can you imagine rear ending a tesla? That will be $60k please.
 
Holeshot said:
Interesting...

https://www.edmunds.com/car-leasing/3-ways-to-turn-your-lease-into-cash.html
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I covered all this in my posts :)

You just need to pick the right car, and get it at the right price. Like I said, i've usually come out positive equity on a no money down lease a year into it. People that don't get equity in their leases are usually the same folks over paying for their cars.

There are a lot of other interesting ways to make money off leasing, but it's more for advanced folks**

**Lease Tesla model X and put on Turo
 
stan23 said:
Like I said, i've usually come out positive equity on a no money down lease a year into it.
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So you're saying you put $0 down, drive off the lot, and a year or two later you trade/sell your car and make a profit? You're essentially getting paid to drive a new car? You should really start a lease consulting service where you collect a fee for setting other people up.

Who's Lisa Tesla? Is she related to Lisa Catera?
 
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