Am I getting raped on this lease???

[pintoca]

I kinda of feel like I have been ripped off on my wife beamer lease. I paid $5k down on a 06' 525i and I pay $680/mo with 15k miles of use. At the end of the lease I am guaranteed it will be worth $27k.

Did I get ripped?

For once I will be honest with you curling

Leasing rates simply depend on:

1. mileage/year
2. Down payment
3. Type of contract (mileage or residual value)
4. lenght of contract in years

1. Careful with this, there is a "sweet spot", which varies with cars and with brands, where a lease is no longer economical: If you drive 60.000 miles/year (just pulled the number of my ass), chances are the lease will be as expensive as buying.

2. Why would you put a downpayment on something you will never own? I never pay anything on my leases, 0, nothing, nada. I prefer to play with the other factors. But that is just me

3. This is where most people get chaffed: Here we have 2 types of contracts: Mileage, which specifiy how many miles/year you will drive. At the end of the contract, you drove more, you pay per mile, you drove less, you get money back. With a "Residual value" type of thing, you agree beforehand, what will be the end-value of the car after you use it... you can estimate it, but you have NO CONTROL over this. This is how salesmen can offer very low monthly rates: They simply overestimate (knowingly) the residual value... what is the catch? at the end of the period you have to pay, cash, the difference between the real value and the estimated value. Beware of a contract of this type that says "residual value of 45-50% after 5 years..." you won't know what hit you.

4. Again, need to find the sweet spot, it varies from brand to brand and from car to car (how hot a car is). Most cars are a good deal, ONLY, starting at 3 years contract... Most people lease from 36 to 60 months...

The decision to lease a car is a complicated one where you cannot sterotype, you need to keep in mind foremost:

1. How long do you keep your cars
2. How well do you treat them
3. How important is the aftermarket factor to you (tuning and stuff)
4. How reliable is the car you are leasing

I keep good care of my cars, and my previous lease I sold to a friend, since he knew how well the car was kept.

All in all, demand transparency from the leasing company, NEVER tell what you can pay/month. Negotiate on the basis that you are BUYING the car, not leasing it.

 

[Mr. dB]

The equivalent priced new car would've been the 4 cylinder - once I drove the 6 cylinder, I was sold.

They haven't offered a 4-cylinder 3-series in the USA in over a decade, not since the E-36 318ti hatchback was discontinued.

 

[pintoca]

They haven't offered a 4-cylinder 3-series in the USA in over a decade, not since the E-36 318ti hatchback was discontinued.

really?

those are the money makers here, specially the 320d

 

[SoKlueles]

I think unless the lease payment would be something that i could afford, I would rather just finance it and when the 3 or 5 years is up, the car is paid for, instead of having to buy it AGAIN, or getting another vehicle that your obviously going to have to pay for.

 

[NJjuice22]

I kinda of feel like I have been ripped off on my wife beamer lease. I paid $5k down on a 06' 525i and I pay $680/mo with 15k miles of use. At the end of the lease I am guaranteed it will be worth $27k.

Did I get ripped?

well you should never put 5k down on a lease. Always just pay the inception fees. Lets say your car was stolen or totaled, you will get only the value of the car...your 5k is gone , you'll never see it again. Someone who put 1k down will get the same amount for the car as someone who put 5k down.

 

[curling]

well you should never put 5k down on a lease. Always just pay the inception fees. Lets say your car was stolen or totaled, you will get only the value of the car...your 5k is gone , you'll never see it again. Someone who put 1k down will get the same amount for the car as someone who put 5k down.

Dang this sux. Thanks to you pintoca for the advice. I wish you would have gave it to me before. Doesn't the 5k down make my lease pymts less or anything? I mean did I just chunk 5k down the drain?

 

[pintoca]

Dang this sux. Thanks to you pintoca for the advice. I wish you would have gave it to me before. Doesn't the 5k down make my lease pymts less or anything? I mean did I just chunk 5k down the drain?

They do lower your payments, but the risk is that. I find you are paying way too much, specially after such a down-payment. That money is gone for good.

Worst case scenario is that after the lease expires, you decide to buy the car for the residual value, that normally, depending on the car, works up to 5-10K more expensive than MSRP

 

[curling]

They do lower your payments, but the risk is that. I find you are paying way too much, specially after such a down-payment. That money is gone for good.

Worst case scenario is that after the lease expires, you decide to buy the car for the residual value, that normally, depending on the car, works up to 5-10K more expensive than MSRP

Dang, if I didn't like staying alive to ride my chopper, do trackdays on GSXR and wakeboard in the summer, I think I would just shoot myself in the head for getting ripped off. I hate being ripped off.