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      10-10-2012, 09:08 PM   #8
New Member

Drives: BMW X1 (awaiting delivery)
Join Date: Sep 2012
Location: San Francisco Bay area

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Originally Posted by Monterra View Post
If you can't write off mileage as an expense, buy and hold (5+) almost always makes more sense- to me anyway. In general the more new car transactions you make the more you'll lose, BMW loves this- who wouldn't? Leasing forces the hand after 3 years, forces timing (maybe that new model isn't out yet), fees, too many miles (+10k per year!)you lose, too few miles you lose unless you buy it out where you'll probably still lose but instead you'll just get another new one and lose even more. Love cars, hate losing ie. leasing. Clearly many disagree but I think many of those who can't write anything off are probably driving more car than they can truly afford. In short the people who can least afford to lose more $ on auto expenses are doing just that by leasing because they can swing the ~450/mo payment with a few k down. That's ~20k to drive a ~40k car no more than 30k miles for 3 years? Sold to you, take 2 while you're at it.
Besides wanting to swap out cars earlier, most people lease a BMW since they do not trust the reliability history of BMW's enough. While I don't believe Edmunds numbers completely, if you look at their "true cost to own" data, sometimes its cheaper on a per year basis to just own a BMW for 3 years via a lease then it is to own it for 5 or 6 years. If you aren't going to search for an affordable independent garage after your warranty is up, a lease begins to make more sense.

Time will tell if I'm right but my honest guess is that I will end up driving my BMW sDrive X1 with Nav and satellite radio about 30k over the next 3 years and be able to sell it private party for 4k over the expected residual value of $20203 on my lease contract which is based upon 36k miles. So my anticipated out of pocket cost after fairly high taxes(8.75%) in CA will actually be around $12000-13000 and that includes the airfare and cheap hotels for a relatively short trip to Europe. The good thing about leasing 2013 models early in the season is that they will be worth a bit more 3 years from now then models that are leased later.

I simply buy the car from BMW financial services before the lease is up and sell it via private party within 10 days. There is no taxes that I have to pay in that situation in California based upon everything I have read.

Every sitution is a bit different and has to be evaluated on its own merit but in general X1 sDrives make a bit more sense to buy if you know you won't need AWD and xDrives make a bit more sense to lease. Why? xDrives can be more expensive to repair/maintain then RWD models.

I am a former finance major so I am very good with numbers and in truth you really have to become knowledgeable about your choices and the tax ramifications of the state you live in to decide whether or not a lease makes sense for you.

And if you can't get the _buy rate_ on a lease and no markup on the bank fee, I would tend to purchase the car in many more situations.

In general, BMW gets you with expensive sometimes tempting options more then they get you on the buy vs lease decision. But you only live once so you have to decide if those tempting options are worth it to you...