Lease are easily done for 12k and these more like 15k. My lease is 15k per yeard. That's plenty for me and I like to drive.
I've always bought my cars before. Purchasing a daily drive vehicle is not, never, never has been a good "investment". Never think about a depreciating assest as an investment and you'll feel happier about how you "buy" it. When I think "invest", I think of something where I will get a return on the money I put in. With a daily drive vehicle the only investment is the return of it's use not in terms of how much it will be worth at the end of the lease or loan.
One aside, I would NEVER NEVER NEVER, buy a vehicle like a BMW with cash. These cars cost a lot of money and if you have that much cash that you can buy it outright, DON'T. There are real investments that can be made with that kind of money rather than spending it on a vehicle that can be had in other ways, such as leasing.
If you take a loan you don't "own" you car, the band or the loan company does. When you lease you don't own it either in that sense.
But, the point is for all intents and purposes it's your car to do with as you please. The modding issue doesn't bother me as I don't do mods that are not reversable. And, if I wanted a car that gives me good performance return on mod expense, I wouldn't be buying a new car for that in the first place.
The are many things that make leasing a smart choice. If I wanted to actually loan purchase my car I would have put $8000-$9000 down, CASH, to get a monthy payment for 5 years that is the equivalent to what I am paying on my lease for 3 years. This way I can invest those $8000 dollars in anyway I like or even leave it in the bank where it will get a return and be worth more in 3 years. Giving that down payment to BMW means they will get the return on the cash rather than me. In that sense, getting a lease IS an investment for me.
I calculated how much it would cost me to loan purchase my BMW including the down payment and then sell it at the end of 3 years compared to how much it would cost me to make the monthy payment on a lease for the same term and include the the fees associated with a lease. The difference?
It cost about $400 more to lease the car for the 3 year period. A small sum for the options a lease gives you. Also, keep in mind that I still have my $8000 (that I did't have to put down on the loan purchase) which is worth more than that at the end of 3 years.
Basically, leasing didn't cost me anymore than a loan purchase and I actually had investment money to boot.
Now, I can choose to either buy the car, or I can sell it and give BMW their money, or I can return it and get a new one, or I can return it and go get any other car I want to drive now. I'm at a point in my life where I want to drive the newer cars every few years. I've bought and sold many used cars in my days and even though I don't mind the process, I like the idea of having that option with a lease.
The thing to know about leases is the price of the vehicle, money factors, residual, and fee's (maybe down payment to lower monthy).
There are cars that are NOT worth leasing and you are better off on a loan purchase. BMW is not one of those. BMW, Audi, MB have excellent residuals which means they keep much of their original price. In other words, they don't depreciate nearly as fast as other brands like GM or Ford.
BMW does do a lot of lease business. I was told that BMW does nearly 50% of it's sales in lease. For them a lease is great because their cars have value to the owners and dealers alike. There is a demand for used BMW's and BMW gets a great price for them, thus they can afford to do leases which are affordable.
Basically, when you lease your payments are based on the depreciation of the car you want. You are paying off the depreciation of that car for the period which you own it. When that is done BMW gets the car back and then they assume the responsibility for what to do with it, unless of course you decide to purchase the vehicle. And, many times you can negociate that purchase price to be lower than the actual residual.
So, that's what I did and why I did it and that was my thought process behind it all.
Make sure you know what you're doing by learning what you don't know.
TT
