02-25-2011, 11:59 PM | #1 |
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Finance vs Lease
I am trying to decide what route to go and hoping to get input from all of you.
I was heavily leaning towards financing the car since I want to keep it long term and won't be putting tons of mileage on it (will have an add'l car for quick runs to the supermarket, drugstore etc) but of course with the financing comes a larger payment and longer term. Where as a lease will give me a lower monthly pmt but I'll have to give up the car at the end of the lease term with what will more than likely be a BRAND NEW CAR. So wouldn't it be wise to lease the car and then purchase it outright afterwards? Are there any benefits this way? Any input would be welcomed. |
02-26-2011, 12:27 AM | #2 |
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There are many different websites you can visit that will help you decide which is the best way to go.
I have owned and leased many cars and also have an X3 on order. Your suggestion to lease the car and then buy it out after is not a bad decision as it gives you a chance to check out the vehicle before plunking more money down for it. If it is problematic or you get into an accident, you just give it back at the end of the lease and you wash your hands of it. The downside - you end up paying a lot more for it. For my X3, I have come to the decision that i will purchase the car for the following reasons: 1. I am tired of leasing my vehicles and not owning something at the end. With my past vehicles, I usually leased it for two years and then leased another new vehicle. I am planning to buy this X3 and drive it for at least five to six (maybe 7) years and then either sell it or trade it in for something else. The way I look at it, is that even after the warranty passes, the maintenance cost in years 5 and 6 have to be lower (i hope) than leasing another car. 2. The lease rate is high where I am - currently around 5.5 or 5.45%. 3. Maybe the most important point is that I can afford to buy the car right now which is helping me make the decision to buy and not lease. Like I mentioned earlier, there is no right or wrong decision to lease. It all comes down to what you feel comfortable with and what your cash flow situation looks like and if there are any tax advantages you can use. Lastly, the other thing you could consider is you could lease the car and then also determine what the comparable payment is for financing. If you're disciplined enough, you could put away the difference in a savings account each month and use that to help you with the lease buyout. Hope this doesn't confuse you. |
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02-26-2011, 02:03 AM | #3 | |||
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Some past experiences that I have and things to consider while leasing are additional things to pay for other than the initial cost of financing or leasing. When leasing it's unlikely for someone to buy a new set of tires for their car, the continentals on both MBs were total crap. Not only did they ride harsh but were prone to damage, I had to replace the tires twice on the E350, once was out of pocket and the other covered under warranty due to it needing to be replaced within a six month period. During the two year lease for the C300 I've also replaced two tires and a rim due to it getting bent when one of the tires popped. Another thing to consider is that you have to be extremely careful with a leased vehicle. The lease of my C300 was due on Feb. 13 and about two weeks before returning the vehicle someone in a parking lot had scraped and left a +12 inch long scratch on my rear passenger door and dented the rear fender. The cost of repair was $1500. Even when being careful you can't always trust others to do the same. As you've mentioned at the end of the lease you'll have to give up the car and as a lease it's an awesome feeling to be able to drive a new car every two years or so. Quote:
Before I returned the C300 to the dealership I also contemplated buying it outright but decided not to. A few months prior to returning the vehicle the car had a coolant leak and the system had to be replaced, thankfully it was still under warranty. While I realize that any car can have a host of problems with it, buying a car then finding out it has a problem is easier to swallow then deciding to either purchase the leased car outright and hope that it won't have any more problem or to either lease another car for two years. Hope this helps a little with your decision. |
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02-26-2011, 11:01 AM | #4 | |
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Thanks for the info! |
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02-26-2011, 11:04 AM | #5 | |
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I have a few weeks before I even order my X3, as I am waiting to go home (to So Fla) and see what offers I get from there and then will bring it back up here to Charlotte and see if they can beat it. I am leaning towards financing right now as I want to keep it as mentioned above and then eventually get a 5-series a few years down the road but one thing I read here or another thread was that you end up paying more for the car if you go the lease to buy option instead of the straight financing option. How so? |
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02-26-2011, 04:39 PM | #6 | |
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02-26-2011, 06:01 PM | #7 | |
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Do you know what the price is for the extended warranty in Canada? Also, some of the posts in other threads indicate the BMW warranty is price negotiable and you can also buy it at other BMW dealers. |
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02-26-2011, 06:44 PM | #8 | |
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This is something I am debating as well since I'm looking to purchase the car for long term keeping. But I was told that you can get it later but it might be more expensive as opposed to getting it up front, but I don't want to purchase a warranty (for 2 more years) at year 1, maybe later on. So if you get more details, please let us all know. |
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03-06-2011, 08:19 PM | #9 |
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I leased my first car, financed my last two (the last one being an E90 330i) but am leasing the X3. Just looking for something while the kids are still young and want to hand back the keys in 3-4 years, no questions asked.
It is, however, a highly personal decision with a lot of factors to consider. Best of luck.
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03-06-2011, 08:39 PM | #10 |
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Thanks for all the input but I have decided that I will finance the car and keep it outright there after. Gonna be placing my order mid-April. I still need to decide on a few options. lol
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