Quote:
Originally Posted by monkeyman8
Leased, it's the only way. If i like the car after 3 years, I'll buy it. The drive off depreciation is too steep to finance.
|
Yeah, but you're still paying for, and financing the depreciation through your lease payment - the majority, of which, is the depreciation component. The only reason you would want to buy the car (from a purely financial standpoint) at the end of the lease is if it was a garage queen. If you only drive 3,000 miles/year, your car's value will most likely be higher than your residual. If you buy at the residual, boom - Instant equity.
If you drive over the mileage allotment, you pay the fine at lease end and probably not buy it. There is a good chance the value is now below residual. Who would pay 75k for a car worth 68k? So, ya walk.
The depreciation is there in the car whether you lease it (BMW tells you what it is 3 years from now), finance it or buy it. The car does not car how you acquired it. The only known factor is the residual value. The rest is real world pricing based on depreciation and market forces 3 years from now.
It's kind of all the same. I got screaming deals when I leased two F90s. I ended up keeping each for only 17 months. Got out of them with very little, if any, financial damage). I bought my current M850 almost two years ago because I looked out at where we (as a country) were going to be in Dec 2023 when my last F90 lease would have been up. I could see we were heading into an insane inflation spiral and that means only one thing - much higher interest rates. Lease payments are nuts now - on top of price increases. I was going to pay cash, but swung a deal for only 2.74% - a great rate to lock in. I can keep my money invested for a much higher rate of return than that.
So it all depends. Each has their place in the car buying scheme. Some have better timing at various points in the economic cycle. It's hard to predict interest rates, but this was a no brainer in 2022. We were coming off a 40 year decline in rates and inflation was going to 40 year highs.