never put $ up on a lease, sign and drive

 

What absolultely kills me is that BMW reported a $2b (that's B for Billion) loss on the financial end due to over inflated residuals and BS money factors.

When will they learn? LOL

 

Care to elaborate? I don't know much about leasing but would be interested to know what your thoughts are on leasing right now (good / bad) compared to previously whether it be a year ago or ten years ago.

 

Leasing used to be " You can use part of the car and only pay for a portion of it" essentially the bank held most of the risk. In light of the recent economy; the banks took almost ALL the risk as cars came off the lease. The cars were NOT worth as much as the banks had thought, and subsequently took massive losses as the car was passed by dealers and went round for round in the auction.


NOW in todays world; leasing cars can be, almost - not very good for the consumer. Meaning you're paying a higher portion of the cars depreciation. It's not uncommon now to find a lease when you could simply buy it for the same monthly amount.

The upside to leasing- assuming you're a good leasing candidate; is that you don't have to deal with 'trade in or depreciation'. just hand in the keys and get a new shiny new car.

Previously leasing was heavily subsidized by the banks - so MANY people were paying ridiculously low payments on all sorts of cars.


Now, not so much. Many former leasing clients are in for a very abrupt awakening.

 

^What he said. I can't say it any better. Lower residuals, higher lease rates = consumer pays for much more of the car.

 

Yeah, my family was typically a lease family, but after trading back a few cars this year, it just didn't make sense anymore. To get newer versions of the same cars we had for only 2 years (2 yr leases were essentially) the same price as 3 yr when we took em, cost hundreds extra monthly. Very few banks are playing with money factors like they used to, and residuals are actually representing reality now. Over the last 10-15 years of our leasing, I cannot think of one situation where we would have come ahead by owning the car, depreciation wise, after the 2-3 year period. As described above, it is now making much more fiscal sense to buy cars, as 50k cars leasing at $5-600 are not the norm.

 

With normal fees due a 50k car is more like an $800/mo car usually. Of course this depends on several other factors, but for the most part if it's actually leasing at 50k I don't think that's unreasonable.

 

Agree a $50k car is usually mid 7s to mid 8s, however over 2 years ago now, we leased 2 50k+ cars, with fees+first month down for 500 and 610 respectively on 2 yr 12k mile programs, one happened to be a BMW

 

^Yup, sounds about right. My dads car was 53 and with $0 due he was around $700 incl tax in 2008.

 

That's retarded. Those numbers are approaching 60 month financing (assuming tier 1 credit). Of course, if you have the habit of dumping your car every 2 or 3 years, the amortization table isn't going to be nice to you.

If it isn't a BMW (or something with similar residuals, etc.) I'd be buying used, taking care of the cars, holding 4 to 6 years, and selling privately.

With that being said, is there any better deal currently than BMW's leases. A great model range, incredible monthly payments, and free maintenance.