Can someone explain leasing to me????

luckym13 · 02-07-2008, 10:41 PM

When I get out of the military I plan on getting a BMW. Obviously cant pay for it all cash so I have to lease it, but I dont understand how that works.

Because say for instance you see a car for 500/mo for 48 months, but the car retails for 34,000. You really end up only paying 24,000 by my calculations and I have seen this type of situation on a lot of ads.

Other than that can someone just generally explain leasing to me?

Thanks.

Double White · 02-07-2008, 10:44 PM

well after a lease you give the car back and what you pay is how much the car depreciates throughout your term

canucklion · 02-07-2008, 10:47 PM

http://www.google.com/search?hl=en&q...xplained&meta=

BMWE90 · 02-07-2008, 10:51 PM

Quote:

Originally Posted by canucklion

http://www.google.com/search?hl=en&q...xplained&meta=

niiiice

The "enforcer" is making his round on all the noobs.

To the original poster- if you still have questions after researching, feel free to PM me and I'll be more than happy to help clarify things for you.

AndrewAZ · 02-07-2008, 10:54 PM

A lease is a way of financing..

You are paying the cost of the car which should be negotiated as if your buying the car. Minus the depreciation after the set time in your example 48 months. So your paying for the difference in value of your purchase and what BMW thinks the car will be worth in 48 months.

Leasing is not good if you can not afford the car to begin with, first 500 a month quotes are to get you into the door, most come with $3k needed to sign and drive off the lot. Leasing main advantage is for folks who own their own business and cuse use it as a tax write off or for folks who end up buying a new car every few years and dont drive much.

Its something that you want to do a lot of research on since you can get easily burned by a lease if you dont understand accounting and financing and even then its hard. Never NEVER worry about the monthly payments, you always worry about the begging purchase price and interest rate along with the residual value (which is set by BMW if you lease from them) generally BMW and Mercedes have higher than actual market residual value since they want you to lease the car since they make the most money off that arm of the company, but again they will screw you with the interest rate, sure they might drop $20 a month off but your interest rate might go up .02 or so.

So in conclusion do a lot of research, I would hate to have you get into a lease contract and end up getting screwed after you have worked hard.

luckym13 · 02-07-2008, 11:06 PM

Oh, see I thought leasing was paying for the car monthly and you OWN it. But now that I know what it is, that doesnt seem too profitable if you lease it. Your just paying to rent a car basically...

I will have probably 30 grand when my enlistment time is done for a car in around 3 years.....should I just buy one used?? Do BMW's have good resale value??

Thanks AndrewAZ

tintivilus · 02-07-2008, 11:15 PM

Quote:

Originally Posted by luckym13

Oh, see I thought leasing was paying for the car monthly and you OWN it. But now that I know what it is, that doesnt seem too profitable if you lease it. Your just paying to rent a car basically...

I will have probably 30 grand when my enlistment time is done for a car in around 3 years.....should I just buy one used?? Do BMW's have good resale value??

Thanks AndrewAZ

If you could handle lease payments, you can handle payments on a traditional loan with that much cash to drop. If you put 30K down on a 50K car you loan's not going to be that big.

If you're just paying cash up front I'd much rather get a used 3'er than a new Corolla.

AndrewAZ · 02-08-2008, 01:03 AM

Quote:

Originally Posted by luckym13

Oh, see I thought leasing was paying for the car monthly and you OWN it. But now that I know what it is, that doesnt seem too profitable if you lease it. Your just paying to rent a car basically...

I will have probably 30 grand when my enlistment time is done for a car in around 3 years.....should I just buy one used?? Do BMW's have good resale value??

Thanks AndrewAZ

To give you an idea it costs about $5-6k a year to lease a 328i sedan. And if you into getting cars often its worth it to lease like I mentioned BMWs residual values are very high compare to what the car would sell for in the real market down the road.

A better bet if you dont have a house is to start investing in a house rather than a car which is a depreciating asset.

Uberdude328i · 02-09-2008, 02:44 PM

Quote:

Originally Posted by luckym13

Oh, see I thought leasing was paying for the car monthly and you OWN it.

That's called financing. Not a bad option. Substantial down payment (a portion of your savings there) with manageable monthly payments.

Leasing IS basically renting long term. It makes sense for some, like those whose job tells them how old their car can be. People who need a car short term. Those who fell in love with the 335 and decided they'd rent it for three years then exercise their payoff option because they're going to own it the rest of their lives.

One last piece of advice: never take financial advice from a forum.

Leonardo629 · 02-09-2008, 05:17 PM

whatever you do, don't put any downpayment when you lease.

Bulldog 6 · 02-09-2008, 08:41 PM

Leasing is like renting when your time is up you turn it back in. I think it is good if you like to get a new car every few years and don't want the hassle of selling a car. A down side is that you continually have car payments. Just choose which fits your life style. If you are active duty military I wouldn't recommend leasing because of the mile restrictions. A couple of PCS's, trips to see your family or TDY trips my put you in a tight spot.

02-07-2008, 10:41 PM	#1
luckym13 Registered 0 Rep 2 Posts Drives: Honda that is slow Join Date: Feb 2008 Location: Chicago iTrader: (0)	Can someone explain leasing to me???? When I get out of the military I plan on getting a BMW. Obviously cant pay for it all cash so I have to lease it, but I dont understand how that works. Because say for instance you see a car for 500/mo for 48 months, but the car retails for 34,000. You really end up only paying 24,000 by my calculations and I have seen this type of situation on a lot of ads. Other than that can someone just generally explain leasing to me? Thanks.
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02-07-2008, 10:44 PM	#2
Double White Second Lieutenant 36 Rep 231 Posts Drives: Crimson Red e90 Join Date: Feb 2008 Location: SoCal iTrader: (0)	well after a lease you give the car back and what you pay is how much the car depreciates throughout your term __________________
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02-07-2008, 10:47 PM	#3
canucklion pull my finger to get your kinder® surprise 152 Rep 10,455 Posts Drives: circles around you Join Date: Dec 2005 Location: Toronto, Canada iTrader: (9)	http://www.google.com/search?hl=en&q...xplained&meta= __________________
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02-07-2008, 10:54 PM	#5
AndrewAZ Major 141 Rep 1,243 Posts Drives: 335i Join Date: Jan 2007 Location: CA iTrader: (0)	A lease is a way of financing.. You are paying the cost of the car which should be negotiated as if your buying the car. Minus the depreciation after the set time in your example 48 months. So your paying for the difference in value of your purchase and what BMW thinks the car will be worth in 48 months. Leasing is not good if you can not afford the car to begin with, first 500 a month quotes are to get you into the door, most come with $3k needed to sign and drive off the lot. Leasing main advantage is for folks who own their own business and cuse use it as a tax write off or for folks who end up buying a new car every few years and dont drive much. Its something that you want to do a lot of research on since you can get easily burned by a lease if you dont understand accounting and financing and even then its hard. Never NEVER worry about the monthly payments, you always worry about the begging purchase price and interest rate along with the residual value (which is set by BMW if you lease from them) generally BMW and Mercedes have higher than actual market residual value since they want you to lease the car since they make the most money off that arm of the company, but again they will screw you with the interest rate, sure they might drop $20 a month off but your interest rate might go up .02 or so. So in conclusion do a lot of research, I would hate to have you get into a lease contract and end up getting screwed after you have worked hard.
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02-07-2008, 11:06 PM	#6
luckym13 Registered 0 Rep 2 Posts Drives: Honda that is slow Join Date: Feb 2008 Location: Chicago iTrader: (0)	Oh, see I thought leasing was paying for the car monthly and you OWN it. But now that I know what it is, that doesnt seem too profitable if you lease it. Your just paying to rent a car basically... I will have probably 30 grand when my enlistment time is done for a car in around 3 years.....should I just buy one used?? Do BMW's have good resale value?? Thanks AndrewAZ
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02-09-2008, 05:17 PM	#10
Leonardo629 Lieutenant Colonel 171 Rep 1,788 Posts Drives: 2013 M3 Coupe Join Date: Sep 2006 Location: Taiwan iTrader: (10)	whatever you do, don't put any downpayment when you lease.
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02-09-2008, 08:41 PM	#11
Bulldog 6 The Logistician 77 Rep 799 Posts Drives: 2022 230i M-Sport Join Date: Feb 2007 Location: Richmond, VA iTrader: (0) Garage List 2007 328i E90 [0.00]	Leasing is like renting when your time is up you turn it back in. I think it is good if you like to get a new car every few years and don't want the hassle of selling a car. A down side is that you continually have car payments. Just choose which fits your life style. If you are active duty military I wouldn't recommend leasing because of the mile restrictions. A couple of PCS's, trips to see your family or TDY trips my put you in a tight spot.
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