Buy vs. Lease?

[imported_MPower]

Originally Posted by Garrett

I think it starts at $22k ..!

It's an impressive deal. I used to own a 2004 Mazda3 and it was a pretty nice car but no matter how good the Mazdaspeed3 is, you still have to deal with the terrible Mazda dealers and, in my opinion, cheap interiors. Still, the power is certainly appealing but the MINI was much, much better for me (big difference in size which could be a deal-breaker for most).

The good thing is that there is a decent selection in this market and if you wanted something different, I am sure you could pick up a real good deal on a Mazda RX-8.

[TESLAASTRO]

Originally Posted by MPower

It's an impressive deal. I used to own a 2004 Mazda3 and it was a pretty nice car but no matter how good the Mazdaspeed3 is, you still have to deal with the terrible Mazda dealers and, in my opinion, cheap interiors. Still, the power is certainly appealing but the MINI was much, much better for me (big difference in size which could be a deal-breaker for most).

The good thing is that there is a decent selection in this market and if you wanted something different, I am sure you could pick up a real good deal on a Mazda RX-8.

Make no mistake, I'm getting a 135....but for the $, that looks like one hell of a car....

[asv]

If you plan on keeping the car for awhile, and are not the type of person who wants a new car every 2-4 years, I would definitely buy. Especially if you have 10k for a down payment an drive a lot of miles.

If you dont drive a lot of miles and get sick of cars quick, leasing is the best option.

The great thing about BMW's is its hard to get sick of them. I have a 2000 328ci with 130k, and its still a joy to drive.

When talking about car purchases, people love to point out the opportunity cost to make money instead of buying a car outright. Cars are lousy places to spend money, but for every person that leases a car, and takes their 10-20k in cash and makes 30% over the course of say 5 years, there are 10 people who lose it all by either spending it somewhere else or making stupid investments.

[TESLAASTRO]

Originally Posted by asv

If you dont drive a lot of miles and get sick of cars quick, leasing is the best option.

yes, that would be me......however, I'm buying 135 and driving it for 4 years then giving it to my kid....works out pretty much the same as a lease......

[UJackM]

Originally Posted by TESLAASTRO

people dont!......and people carry huge credit card balances too.....do you know what credit card companies call those customers?: "our best friends"....as long as there are Joneses to keep up with, BMW and the premium auto companies will do just fine......

Suzi Orman is not our personal financial planner, so yes, she speaks in generalizations....but, with regard to American's excessive debt load, she's so on point

Just for my edification Tijuana, how much do you think should one's gross personal household income be to go out and buy a 135?......of course I'll forego asking you if it is important to save for your child's education, an emergency, or retirement.....

And I am the worst nightmare of credit card companies. The only significant balances at any given time is travel expenses, which are 100% reimbursed and paid off in the full amounts immediately. Paying credit card interests is just not in my dictionary. In a few rare occasions where I forgot to send payments by due date and they put late fees and finance charges, guess what, I called them and DEMANDED them to remove those (saying otherwise I would cancel the cards) and they obediently complied. All debt I have is the house mortgage, which is way less than my one year salary. Many people would have probably set out to buy 5, 7 or 6-series with my household income. Yet, I am still not even sure if I can "afford" to buy 128i. Life calls for a lot more than JUST A CAR. Oh, and I do not have a car payment either.

[TESLAASTRO]

Originally Posted by UJackM

And I am the worst nightmare of credit card companies. The only significant balances at any given time is travel expenses, which are 100% reimbursed and paid off in the full amounts immediately. Paying credit card interests is just not in my dictionary. In a few rare occasions where I forgot to send payments by due date and they put late fees and finance charges, guess what, I called them and DEMANDED them to remove those (saying otherwise I would cancel the cards) and they obediently complied. All debt I have is the house mortgage, which is way less than my one year salary. Many people would have probably set out to buy 5, 7 or 6-series with my household income. Yet, I am still not even sure if I can "afford" to buy 128i. Life calls for a lot more than JUST A CAR. Oh, and I do not have a car payment either.

you write the truth......

[ChrisC318]

Hey guys,
Hope this is the right place for this because I wasnt sure it deserved its own topic. Does BMW offer financing options like the smartbuy that Mercedes has? I didn't see this option on their website when pricing a 3 series.

I was considering getting the new C-Class sport and liked their smartbuy option with low monthly payments and a final balloon payment due at the end of your financing period.

Then the 1 series caught my eye and I am considering holding out for one but am wondering what financing options I will have.

Thanks guys!

[ARES45]

I think BMW has BMW Select which sounds like it may be similar. I haven't talked to anyone who knows more about it than what is on BMW's website. If you build your own vehicle, and use the payment estimator there is a definitions section that explains it.

[IrvRobinson2]

Originally Posted by SmoothStyle1

You can do a lot better things with your money than put $24K down on a vehicle.

Scenario 2 should not be an option.

I agree. Take the 24k and invest in something that doesn't depreciate

[gimme135]

This topic sounds more like "financing with a loan vs. lease."

Personally, I think of "buying" as paying the full amount to own it free and clear. It's a depreciating asset after all.

[Brandon26pdx]

Originally Posted by Tijuana

At 30%, your saying he needs to make $116,000 a year? So a two income household needs to make over $230,000. Less than 3% of the population makes more than this. Do you reasonably expect the other 97% of the population to not consider a car costing more than $35,000? This is America, don't you know we don't follow reasonable rules of thumb?

I don't think Suzi Orman would ever tell anyone to buy a BMW unless it was going to help her sell a book.

edit: I used wikipedia as my data source.

I suspect you might be the only sane person in the room. (And that includes myself)

[Tsion]

Even if you finance you still don't own the car......with even a small downpayment you might own maybe.....a side-view mirror?

[Dunbar]

Originally Posted by IrvRobinson

I agree. Take the 24k and invest in something that doesn't depreciate

This gets repeated often but it doesn't make a whole lot of sense. If you finance a 135i currently you'd pay somewhere around 5-7% in interest. By the time you pay taxes you would have to return 8-9% just to cover the interest. You could take out a home equity line of credit (where the interest is tax deductible) but you'd still have to return 6-7% just to break even. I know everybody on the internet can consistently beat the market, but the statistics suggest otherwise.

[Tsion]

personally I am going to lease with my dad who is an internet sales manager for BMW (yay!) so I can write off the lease. I am aiming for June so that way any hype will die off.

[Brandon26pdx]

Originally Posted by jus711

What if your in a different situation where you have the cash but not the income?

Unfortunately, due to some recent deaths in the family I stand to inherit roughly $2-300K. I recently graduated college with a BA from a top-ten school (Washington University in St. Louis). I don't as of yet have a job but I'm sure I'll find one soon, at least by the time the 135i comes out.

Now I realize that purchasing a car is a bad investment and that I don't need that much car, but I would like one. Given that an entry level job is likely going to put me in the $30-40K a year range to start, is purchasing a 1er--outright--really that bad of an idea.

I am recently married--my wife just graduated as well with a master's--I pay relatively low rent and I don't have many other expenses. Yes I know I need to save for retirement, down payment on a house, kid's college, etc. But I can do that with the money left over, no.

If I was in your shoes I'd pay off all my student loans (and wifes), and any other miscelaneous debt before I did anything else. Then I would take 6 months of expenses or 10k, whichever is less, and put that into a money market account, just to have for rainy days, not really for investment or anything else.

Then, assuming you had a stable job, pay cash for the car and just enjoy it. You can also take 5k and start a Roth IRA retirement account (5k is the max you can put in annually). The rest I would just park in another money market account until you're ready for a house.

[investor27]

I agree. If you qualify for a Roth IRA account, you should definitely put in the maximum amount. With the Roth IRA, all the interests earned and accumulated over the years until you retire will not be taxed when it's time to withdraw.

On a separate note. If you leased the 135i, and you wanted to put a Vishnu chip into it (the one that everyone is suggesting), will BMW be able to find out what you have done, and void the lease, or effectively make you pay for the entire car outright?