[chris_1001]

Originally Posted by Joeybarb87

Where did you find 1.5% apr, can you help me? All I’m seeing is 5+ in NJ..

Sorry, this was in November 2021. Dealer offered a high % told them my credit union has 1.5% and they (BMW financial) matched it.

[JABCAT]

Originally Posted by toddwalton

A car is no different than any other monthly utility. You pay $500 for your electricity, you pay $300 for your cable/internet, you pay $250 for your mobile phone, you pay $800 for your groceries, and you pay $700 for your car. You don't think about what your electricity costs. You just know that it's hot and you need AC and you hit the button and you pay the bill at the end of the month. Your car, same thing.

If you're paying the above for those items, maybe you should think about what they cost . I do care about the cost of those items, not because I can't afford them, but because I don't want to pay more than I have to. I have a service, that for $10/month constantly searches for and switches us to the lowest possible electricity rates. I pay attention to how much my electricity costs ($0.11/kwh fixed currently, btw), along with all those other items you mentioned. It's called a budget (a word my wife hates )

[toddwalton]

Originally Posted by JABCAT

If you're paying the above for those items, maybe you should think about what they cost . I do care about the cost of those items, not because I can't afford them, but because I don't want to pay more than I have to. I have a service, that for $10/month constantly searches for and switches us to the lowest possible electricity rates. I pay attention to how much my electricity costs ($0.11/kwh fixed currently, btw), along with all those other items you mentioned. It's called a budget (a word my wife hates )

You "don't want to pay more than you have to" yet you bought an expensive German luxury car, optioned it heavily, and almost took a $4,000 bath because you wanted out.

I appreciate you counting the nickels and pennies of your monthly electric bill, but if someone is really that concerned with money and investing and ROI the last thing they should be doing is buying a $60,000 BMW.

Which is why I lease perpetually. Because it's a monthly payment I can control every 36 months. Times are good, bring on a $900 payment. Times are tough, take it down to $600. Not a depreciating asset. Not a wildcard of potential warranties/deductibles/repairs. Predictable monthly spend based on what type of luxury I can afford. Just another utility like a phone bill. Just another entertainment expense like a vacation. No car on a pedestal. It's not a house. It's not real estate.

[Gladius Nova]

Originally Posted by chris_1001

Sorry, this was in November 2021. Dealer offered a high % told them my credit union has 1.5% and they (BMW financial) matched it.

For how many months?

[Gladius Nova]

Originally Posted by toddwalton

That's a good perspective. Mine is a bit different:


A car is no different than any other monthly utility. You pay $500 for your electricity, you pay $300 for your cable/internet, you pay $250 for your mobile phone, you pay $800 for your groceries, and you pay $700 for your car. You don't think about what your electricity costs. You just know that it's hot and you need AC and you hit the button and you pay the bill at the end of the month. Your car, same thing.

That’s stupid logic. No one “needs” a $75k car. You can still get from point A to B with a $16k Nissan Versa.

[toddwalton]

Originally Posted by Gladius Nova

That’s stupid logic. No one “needs” a $75k car. You can still get from point A to B with a $16k Nissan Versa.

And you can live in a house without air conditioning. And you can live without a mobile phone. No one "needs" expensive groceries.

Let's not get away from my point, which is:

Your house, your land holdings, and your portfolio are a big deal because they are investments. Your car is not one of these things. It's a utility. So you don't put it up on a pedestal and get into the nuances of its impact on your finances. You need a car. So you lease the one you can afford, you pay the monthly payment you're expecting and not a penny more, and you move on with your life, takes no more decision making or consideration than a mobile phone contract.

No one in a BMW need care about the $1,500 +/- in the bank every 3 years that buying vs. leasing provides. That's our bar bill at the club. That's a week of our kids summer camp. Talk about how much you spend a year on toilet paper. It's actually more impactful than how you choose to pay for your 3 Series.

[TheMaxXHD]

Well, technically all debt (leasing included) is impactful beyond just the monthly payment, because it factors into DTI (debt to income) which directly impacts your ability to get other loans, most notably, mortgages. The biggest trap anyone can get into is simply using monthly payments as the basis for can or can not afford, in part because of things like DTI, as well as equity elsewhere and cash reserves. The world of finance is complicated.

Anyway, this isn’t a finance forum. It was a good thought provoking question, but one I think that has been sufficiently answered by now and I fear there isn’t much else to add

[JABCAT]

Originally Posted by toddwalton

You "don't want to pay more than you have to" yet you bought an expensive German luxury car, optioned it heavily, and almost took a $4,000 bath because you wanted out.

I appreciate you counting the nickels and pennies of your monthly electric bill, but if someone is really that concerned with money and investing and ROI the last thing they should be doing is buying a $60,000 BMW.

Which is why I lease perpetually. Because it's a monthly payment I can control every 36 months. Times are good, bring on a $900 payment. Times are tough, take it down to $600. Not a depreciating asset. Not a wildcard of potential warranties/deductibles/repairs. Predictable monthly spend based on what type of luxury I can afford. Just another utility like a phone bill. Just another entertainment expense like a vacation. No car on a pedestal. It's not a house. It's not real estate.

I don't know to whom you're referring in the first paragraph, but I didn't buy an expensive German luxury car, option it heavily and then take a $4k bath. I did buy a '22 330e as a daily driver, MSRP was $50,250 & I received a $1k college grad rebate plus the $5700 tax incentive, basically bringing my expensive German luxury car down to $43k and change. My BMW is the least expensive of my 4 vehicles not counting my son's '03 Wrangler, that I technically own be used he's only 14 and hasn't paid off his balance to us yet.
I have a $125k Corvette that's paid for (and appreciating), but we do make payments on my wife's '23 $70k Grand Cherokee (purchased for $63k because I do care about all expenses) because she receives a car allowance that more than covers the payments. We could just pay it off and pocket the car allowance $, but it was just easier to let the allowance pay for the payments and keep that money.

I care about the easily controllable expenses so I can enjoy life. We travel at least once a month, we have season tickets to two of our favorite sports teams, we donate a lot to our alma maters & have set up annual scholarships as well. Have kids in college and two more almost there. We're able to do all that because we pay attention to things like electricity bills, water bills, grocery bills, car/home insurance bills, etc., and not having recurring car payments when we don't need to.

[toddwalton]

Originally Posted by JABCAT

I don't know to whom you're referring in the first paragraph, but I didn't buy an expensive German luxury car, option it heavily and then take a $4k bath. I did buy a '22 330e as a daily driver, MSRP was $50,250 & I received a $1k college grad rebate plus the $5700 tax incentive, basically bringing my expensive German luxury car down to $43k and change. My BMW is the least expensive of my 4 vehicles not counting my son's '03 Wrangler, that I technically own be used he's only 14 and hasn't paid off his balance to us yet.
I have a $125k Corvette that's paid for (and appreciating), but we do make payments on my wife's '23 $70k Grand Cherokee (purchased for $63k because I do care about all expenses) because she receives a car allowance that more than covers the payments. We could just pay it off and pocket the car allowance $, but it was just easier to let the allowance pay for the payments and keep that money.

I care about the easily controllable expenses so I can enjoy life. We travel at least once a month, we have season tickets to two of our favorite sports teams, we donate a lot to our alma maters & have set up annual scholarships as well. Have kids in college and two more almost there. We're able to do all that because we pay attention to things like electricity bills, water bills, grocery bills, car/home insurance bills, etc., and not having recurring car payments when we don't need to.

Two points:

1. If I had the exact same cars as you and leased them, I would have six figures in the hands of my portfolio manager providing growth. Leasing means the money isn't gone and tied up in the car, the vast majority stays invested and gets withdrawn slowly, something that has an ability to generate far greater ROI or less-loss if you will.

2. If I had the exact same cars as you the delta between where you will be in a few years and where I will be in a few years is so close, within a couple grand, that it really makes no difference buying vs. leasing.

Since #2 is true, again, no need to put the cars on a pedestal and treat their financing as if its anything more/less than a monthly cellphone bill or monthly utility bill. It's just a bill. You pay for as much cable/internet as you need/afford and that's it. You don't expect anything back from it. It's not some investment. It's cable/internet. It costs a certain amount each month and you pay it.

[Cammy440iGC]

Those who often point to leasing say the "money isn't gone tied up in the car?"

This ignores that your are making monthly payments and an interest rate in perpetuity.

I pay cash...avoiding all interest payment...and give the monthly payment to my money manager who invests it.

Avoiding these high interest rates...and monthly payments...and giving that lease payment to your money manager is a solid alternative.

I invest more...about $1,000 each month because my car payment is $0.

[TheMaxXHD]

Also ignores DTI…again…which most people need as low as possible for yanno…a home…because most people don’t own investment accounts (outside of retirement ones)…because they don’t have that much money lying around…

The best “investment” for most people who don’t have the cash flow to dump the difference into the market is a car with 0 payment lol. Not leasing perpetually

[zazzau]

Yeah agreed with others: OPs question has been answered at this point. The wheels are already coming off the thread. Good interesting read though.

[Mark Venture]

Originally Posted by JABCAT

I don't know to whom you're referring in the first paragraph, but I didn't buy an expensive German luxury car, option it heavily and then take a $4k bath. I did buy a '22 330e as a daily driver, MSRP was $50,250 & I received a $1k college grad rebate plus the $5700 tax incentive

Altering the subject a bit...since you bought an electric car, how does the tax credit work?
Reading about it, I get the impression that most people think that if the fed is giving you, say, a $7500 credit that you're going to see that $7500 in some form come the next tax filing. So if your fed tax burden was $0, then you'd get a "refund" for $7500. If you owed fed tax of $5000, then you'd get $2500 back from them.
But, that is not how it works, right? Isn't it really a case of you have to have a tax burden to see any of that $7500? So for example:
Tax burden of $5000. The $7500 wipes out the $5000 that's due, but you do *not* see the extra $2500.
Tax burden of $0 - you don't see any of the $7500.
Getting a refund - you don't see any of the $7500.
Is that how it works, you must have a tax burden to see benefit from the tax credit. And if you have zero tax due or a refund coming, you get nothing. (and you can't carry the credit to the next year either)

[Aero7000]

With current interest rate early pay-off is a must.
I just financed wifes SQ5, by-weekly is very manageable, but cost of borrowing is 15 grand over the course of the loan
So fuck it, must pay it off in a year or so, it was the plan anyway.

[toddwalton]

Originally Posted by TheMaxXHD

The best “investment” for most people who don’t have the cash flow to dump the difference into the market is a car with 0 payment lol. Not leasing perpetually

You missed my point. None of this is investment, it is all the same thing, whether leasing or buying we are all spending the same rather frivolous money. It’s not something that should be put on a pedestal of importance like a home. You buy the car or you lease the car, it’s all the same in the end plus or minus a couple grand, and we can all afford a couple of grand. This is a BMW forum, after all.

[JABCAT]

Originally Posted by Mark Venture

Altering the subject a bit...since you bought an electric car, how does the tax credit work?
Reading about it, I get the impression that most people think that if the fed is giving you, say, a $7500 credit that you're going to see that $7500 in some form come the next tax filing. So if your fed tax burden was $0, then you'd get a "refund" for $7500. If you owed fed tax of $5000, then you'd get $2500 back from them.
But, that is not how it works, right? Isn't it really a case of you have to have a tax burden to see any of that $7500? So for example:
Tax burden of $5000. The $7500 wipes out the $5000 that's due, but you do *not* see the extra $2500.
Tax burden of $0 - you don't see any of the $7500.
Getting a refund - you don't see any of the $7500.
Is that how it works, you must have a tax burden to see benefit from the tax credit. And if you have zero tax due or a refund coming, you get nothing. (and you can't carry the credit to the next year either)

I let my tax professional handle all that. I do know that we received our largest refund in quite some time this year, and it was a bunch more than the $5700 tax credit.

The gentlemen who prefers leasing (renting) vehicles assumes, I think, that those who pay cash for vehicles don't have money in investments as well. As mentioned before, there literally is no correct answer. Everyone thinks their scenario is the right one.

[bavarianride]

My first BMW was a E39 5-series bought brand new with cash and that car was sold after 12 years and 100k miles.

My sales guy kept in contact and provided me pretty good lease offers every few years. Based on those quotes with prevailing terms and incentives, the total cost of 4 back-to-back leases of a similarly priced BMW(either 5 or 3-series) was roughly 100% more than the total cost of buy-and-hold of that E39, including all maintenance and repair and tires(excluding fuel and insurance).

To paraphrase, it was a $50k difference after 12 years between buying and leasing. Effectively my next car, a brand new F30 3-series, was a free car(that I owned for 8.5 years and 80k miles).

I do agree a car is a utility tool, so paying up front in cash just means the utility of the next 10-15 years/100k-200k miles(e.g.) is pre-paid. Since it is a utility tool, just like a fork or a spoon, it makes no sense to get into perpetual payments that cost 100% extra(at least that is the case for me).

Originally Posted by toddwalton

Two points:

1. If I had the exact same cars as you and leased them, I would have six figures in the hands of my portfolio manager providing growth. Leasing means the money isn't gone and tied up in the car, the vast majority stays invested and gets withdrawn slowly, something that has an ability to generate far greater ROI or less-loss if you will.

2. If I had the exact same cars as you the delta between where you will be in a few years and where I will be in a few years is so close, within a couple grand, that it really makes no difference buying vs. leasing.

Since #2 is true, again, no need to put the cars on a pedestal and treat their financing as if its anything more/less than a monthly cellphone bill or monthly utility bill. It's just a bill. You pay for as much cable/internet as you need/afford and that's it. You don't expect anything back from it. It's not some investment. It's cable/internet. It costs a certain amount each month and you pay it.

[toddwalton]

Originally Posted by bavarianride

My first BMW was a E39 5-series bought brand new with cash and that car was sold after 12 years and 100k miles.

My sales guy kept in contact and provided me pretty good lease offers every few years. Based on those quotes with prevailing terms and incentives, the total cost of 4 back-to-back leases of a similarly priced BMW(either 5 or 3-series) was roughly 100% more than the total cost of buy-and-hold of that E39, including all maintenance and repair and tires(excluding fuel and insurance).

To paraphrase, it was a $50k difference after 12 years between buying and leasing. Effectively my next car, a brand new F30 3-series, was a free car(that I owned for 8.5 years and 80k miles).

I do agree a car is a utility tool, so paying up front in cash just means the utility of the next 10-15 years/100k-200k miles(e.g.) is pre-paid. Since it is a utility tool, just like a fork or a spoon, it makes no sense to get into perpetual payments that cost 100% extra(at least that is the case for me).

You didn’t save money because of smart lease vs buy principles. You saved money because you enjoy old, used cars at the sacrifice of new, advanced cars. Which is perfectly fine- more power to you- but apples and oranges as far as this conversation is concerned. We are discussing those who want a new car every 3-5 years, not someone who can tolerate a decade or more in the same car.

The proper financial comparison isn’t a savings of $50,000 either, because after Year 3, then Year 6, then Year 9, then Year 12 the proper comparison would be a comparable used car at each of those milestones. A 12 year old 100K miles BMW is comparable to a 12 year old 100K miles Mercedes, a 9 year old 70K miles BMW comparable to a 70K miles Audi, etc. You never were considering the new variant, you were in the used car universe, so your savings was the delta between the value of your old luxury car against the cost of another old luxury car of similar age. Which is nothing. You can’t take 1 vacation in 2006, then take no vacations for the next 12 years and claim you saved $120,000. You weren’t in the vacation game. Wasn’t important to you at all.

[TheMaxXHD]

Originally Posted by toddwalton

You didn’t save money because of smart lease vs buy principles. You saved money because you enjoy old, used cars at the sacrifice of new, advanced cars.

Which is exactly what smart lease vs buy principles are. Now that isn’t always true, depending on the vehicle and age, miles, etc, but as a general rule, it usually is. Also they never said they preferred old cars to new, though they might, just that they prefer to stay in an older car if it means they save some money. You are extrapolating what you want to see and believe without evidence.

This is why finance questions are problematic on the internet. OP asked a question, and for the most part, people were giving just their genuine feedback and that feedback has generally been pretty helpful I imagine for OP and others. We saw lots of different ways people look at how to buy cars, and generally, it’s just the preference and situation of the individual.

But…there is always that one person

[totalone]

We finance both of our BMWs x5 and m440. We got pretty good rates and also we like to keep our cash for investments. The way I see it, the money you pay upfront you can invest and car will pay for it self.

value of cars never go up, in my opinion paying upfront a lot is waste of money.

[toddwalton]

Originally Posted by TheMaxXHD

Which is exactly what smart lease vs buy principles are. Now that isn’t always true, depending on the vehicle and age, miles, etc, but as a general rule, it usually is. Also they never said they preferred old cars to new, though they might, just that they prefer to stay in an older car if it means they save some money. You are extrapolating what you want to see and believe without evidence.

This is why finance questions are problematic on the internet. OP asked a question, and for the most part, people were giving just their genuine feedback and that feedback has generally been pretty helpful I imagine for OP and others. We saw lots of different ways people look at how to buy cars, and generally, it’s just the preference and situation of the individual.

The OP was talking specifically about his 3 year car off-lease that he was thinking of keeping for another 3 years. And that is what my thoughts and math regarding perpetual leasing are about.

You, and another poster, are making this into some pissing contest over buying and keeping a car for 12+ years which is a different conversation entirely.

Originally Posted by TheMaxXHD

This is why finance questions are problematic on the internet.

No, the questions aren't problematic, the answers are, especially when they are ones you don't want to hear. In the name of saving money one is actually costing themselves money by buying instead of leasing unless they have the worst investment banker on Earth these past 3 years, at the very least, both the leaser and the buyer wind up in the same place plus or minus a couple grand. Again, a car isn't an investment so shouldn't be treated as such.

Originally Posted by TheMaxXHD

But…there is always that one person

That was rude and unnecessary.

[TheMaxXHD]

You know as they say, some of the richest people in the world are the ones driving the unsuspecting Hondas with no payments to speak of.

Talking about the potential money you are saving by leasing over buying a BMW is quite small compared to simply not buying or leasing a BMW at all. Which is why the vast majority of comments on this thread are just people stating their personal preferences based on their situation.

Why is it bad for someone to pay cash? Or to finance? Or for that matter to lease (indeed there are legitimate ways to come out ahead when leasing perpetually, like a tax write off or business incentive, which some people here do). To each his own. None of us are making particularly good financial decisions by simply owning BMWs, there is enough judgement on that front to go around for all of us.

I caution making assumptions about other people’s financial situation and decisions because you don’t know or understand the full picture for each person, which is why these questions are hard to answer on the internet.

For example, PA (my state) has an extra tax specific to leasing on top of normal sales tax that isn’t a thing for when you finance. As I said, situations are different for everyone.