[injeyeo]

Hello Forum members!

After a few months of researching and being in the market, I finally decided to get 335i.

But, the question is... Should I lease it? or buy it.

As you all know, for both of them there are pros and cons.

Like the post below, he said financing is way to go, but is it really better?

Most likely, I am going to buy or lease out of this forum. (or maybe swaplease)

What do you guys think? buy it? or lease it?

Thanks for all your opinions!!!!!!!

[Solonng]

Buy it..thats the way to go. Don't get caught in this renting business. Think of the people that signed up for adjustable mortgage. Also, if your financial situation changes, you can still sell you car.

[sinnet112]

Lease it. I don't like purchasing depreciating assets, personally. Not to mention, a new car every two to three years is always nice. If you have a "If I buy it, then that's only when it'll be mine" complex (that doesn't apply to everybody haha, I just know some people who do live by that), then yeah, you'll probably want to buy it, but look at it this way –

Set aside the $50,000, put it in the markets (SPY or QQQQ) and you'll probably get back on average 10-12% a year the first year, with the exception of the past year which is cyclical I'd say. So for that first year, you've made, conservatively, $5,000 which will cover about 8 months of your lease. The next year, because it compounds, you'll cover 9 months of your lease. Repeat this over time and you'll never have to pay a penny for your cars.

You also mentioned you can take over a lease, thus, if your financial situation changes, this option is open for you as well.

In the end, the choice is up to you.

[galahad05]

Not so simple. It really depends on how long you'd keep your car anyway. Three years is usally the breakeven point: keep your car any less time, it's cheaper to lease, (intend to) keep your car longer, it's cheaper to buy.

Cars are money pits any way: throwing money into a depreciating asset sucks. Renting a depreciating asset also sucks (the owner will pass costs along to you).

EDIT: It seems sinnet beat me to it.

[Solonng]

Three issues with this:

1) Over the long run, the market returns less than 10%. If you can guarantee 10-12%, let me know and i'll sign up with you.
2) If you hold your investments only for 12 months, its after tax return will be significantly less.

investment return* (1-your income tax rate)= your after tax return
3) Interest rates is at its lowest level since the last recession. Eventually the Fed will have to raise the lending rates in order to fend off inflation and the continued decline in the dollar.

I just think that if I can borrow less than 4%, chances are I will be ahead if interest rates go up.

[injeyeo]

The part that cars are depreciating assets really.. gets me.. lol

nice info!!!! havn't really thought about this...

[McLuVan]

lease........then buy

[Socratesbmw]

You should Owners Choice it. Your name on the title while you pay lease down and monthly payments

[Socratesbmw]

Originally Posted by injeyeo

The part that cars are depreciating assets really.. gets me.. lol

nice info!!!! havn't really thought about this...

Do you think they're not? Is your 335 worth more than when you first picked it up? if so, let me know who you're selling to.

[Majikthese42]

Buy it for cash and keep it for ten years.

[injeyeo]

Originally Posted by McLuVan

lease........then buy

lease then buy..

then, I can just take over someone's lease that is almost over and buy the car after? I don't think that's the case is it? or.. is it the case.

[BMWE90]

crap. You've just opened up Pandora's box. All hell will break loose when more people chime in about lease vs buy.

[Solonng]

Also, you might defer to the members experience during the last period where interest rates was high. What was the impact on leases then? I'm still young so I don't remember much except for a 11% CD yield in the early 90s. What would happen if after the 2-3 year lease period, you need to get another car and interest rates is higher. Lastly, I think that most people on this forum are wealthy and they have resources to invest their money elsewhere that generates high returns and they also get tax deductions with their lease. I'm just an average joe so I base my assumptions on the most conservative investment returns.

HOWEVER, I would agree that if certain sectors in the S&P 500 turn around, you can get a nice return over the next 5 years. But you have to reinvest the money to get a new lease and pay taxes. In two years, if the devil elects Hillary or Osama, I'm willing to bet that taxes will go through the roof.

[injeyeo]

Originally Posted by Socratesbmw

Do you think they're not? Is your 335 worth more than when you first picked it up? if so, let me know who you're selling to.

lol... I haven't had 335 yet so I don't know.

of course it make sense they depreciate, just that I have not really thought about it

[sinnet112]

Originally Posted by BMWE90

crap. You've just opened up Pandora's box. All hell will break loose when more people chime in about lease vs buy.

Basically, haha, there's probably a ton of other threads about this.

[ZuerstBMW]

I will NEVER buy another car as long as leasing is available. I never keep my car past 2 to 3 years. Then your stuck trading it in (and the dealer gives you crap on trade) Or you have to sell it (which is a BIG pain in the ass) . NEVER again.

[galahad05]

Originally Posted by ZuerstBMW

I will NEVER buy another car as long as leasing is available. I never keep my car past 2 to 3 years. Then your stuck trading it in (and the dealer gives you crap on trade) Or you have to sell it (which is a BIG pain in the ass) . NEVER again.

Zuerst here is a prime example of the other reason: lifestyle choice. Lease = new car every few years with little muss, little fuss. But it doesn't make financial sense (compared to the fiscally-responsible "keep the car for 10 years" bit).

Of course, if you were to be really fiscally responsible, you'd buy the cheapest reliable gas-efficient little car you could (probably used), then drive the wheels off of it.

[xT4iw4n3zx]

Take the money you were going to use to buy the car with, and invest it into stocks, or buy some gold and sell it in the next few months. Either way your going to make a couple thousand, gold is going to go up as money value goes down, so sell it in the next 2-3 months before the elections are done and you'll make some money. But also do your research on which stock or investment path your going to take. In my opinion take the money, use a little bit every month to lease it, take the rest and invest it. Earn money while it's compounding from interest, and at the end of the three years buy the car out and you've still got most of your original capital. Lemme explain. Say you have 50k, invest it and say you get 5k back. over the next 3 years of compounding in a good firm, and you'll get around 60-65k. Use your income salary to pay for the monthly lease, i assume since you have 50k stored up you have a well paying job? Buy the car out for 25k or something at the end of the three years, and still have 35-40k left over for future investments. Thats the way to go. Lease and invest. You can't go wrong, unless you dont do your research =/

[xT4iw4n3zx]

Originally Posted by galahad05

Zuerst here is a prime example of the other reason: lifestyle choice. Lease = new car every few years with little muss, little fuss. But it doesn't make financial sense (compared to the fiscally-responsible "keep the car for 10 years" bit).

Of course, if you were to be really fiscally responsible, you'd buy the cheapest reliable gas-efficient little car you could (probably used), then drive the wheels off of it.

Chances are though, getting a cheap car that's fuel efficient usually equates to something that's small, and something that's japanese. I.E, Toyota Yaris. Now, I'm willing to bet the 335i could last you WAY longer than a cheap Yaris, so it's about the same if you look at it. Plus no1's gonna keep a Yaris for 15 years, whereas people do keep their BMW's that long, because they're reliable. BTW, thanks for the help with my car the other day. I'm bringing it in to fix the clutch 2mr, and then I'm going to go ahead and get a new 328i.

[galahad05]

Good to hear! You're gonna love the 328.

[sblument]

Lease vs. buy is a fascinating question. By financial accounting standards, leasing a car is like buying it -- in business it would be a capital lease. Why? Because you, the owner, take the economic risk of ownership (fluctuations in value, etc). Leasing is really just another form of financing. If you can't afford regular financing on a new BMW, buy a used one.

[ArmyBimmerDude]

Keeping the car less than 3 years, lease. Keeping the car more than 3 years, buy.

As far as investing goes, like xT4iw4n3zx(cut n paste) said, the gold and oil are the only sure things that you're guaranteed to make money on right now.