Need advice from fellow BMW X5 leasee on whether to lease or finance next X5.
Background= secondary car. Drive 6-7000 miles annually for the last few years on lease cars. Don’t really enjoy the new car selection process every 3 years. I think replacing every 7-8 years is reasonable. While I know Japanese car finance is a no brainer as my primary car is Japanese. For an SUV, the newest Japanese avail on the market (even top trim) still don’t have some of the things I want. Hence the BMW X5 makes more sense. I’m aware German cars are prone to expensive repairs. Hence the question is more economics on the 2 choice. Leasing every 3 years or finance plus buying an extended warranty. No experience with bmw extended warranty cost or coverages. Hoping someone has experience in this to share experiences.
I’d look around on here to figure out what a great deal would be, then run the out of pocket costs on both. See which one comes out cheaper. Otherwise you’re just guessing.
If you run the numbers for 7-8 years then you are almost certain to be better off just financing. If it’s a low mileage car your typical maintenance for brakes and tires and other fluid changes will be much lower (ideally with a lease you are returning the car before needing any of that maintenance).
If you calculate the cost of 2.5 leases, money down for fees you’re likely going to get a higher number leasing esp after 7+ years. The difference of course is for not much more money that person will have had 3 new X5s over 7 years vs 1.
Also don’t forget what happens if you’re in an accident. Your residual value on the car (low mileage 2012 X5s are worth about $15k) will be hurt even further.
From my perspective you accept a greater risk for the chance of a slightly lower payment. If I was just buying a car based on financial decisions I’d probably focus my search for a CPO, get a 100k warranty on it and drive it for 8 years. That lets someone else take the initial depreciation hit and you’re just left hoping for no major timebombs, but tires, brakes and fluids are predictable costs especially if you don’t go to the dealer for maintenance.
My 2 cents.
If you like German cars, specifically BMWs, it makes more sense to lease than finance. They highly inflate their residual. With your mileage leasing 3~4 years would yield a ~60% residual.
However if purchase, my experience is after 6~7 years the car basically net 30% of the MSRP(quick sale or trade in).
So for the same 6~8 yr period the cost of leasing would be 80% of MSRP vs 70% purchasing.
However with leasing you will not have to pay for any repair, maintenance(BMW). Plus in the event that the car involved in an accident you don’t have to worry about diminished value. If you rolled tax into monthly, depending on which state you are in, there are also some tax benefits leasing vs purchasing if the car is totaled. And for some people like me, most importantly you get to drive a new car after the lease is up with different experience and newer tech.
Thank you for the feedbacks. There is definite benefits to leasing compared to finance esp. with BMWs or premium cars/Suvs. I might be the odd ball out there who thinks while technology keeps improving, some things they keep cutting corners or going back wards. i.e. my 2016 X5 has better dash and auto dimming side mirrors on both sides. The newer generations only have it in the driver side. I also don’t find the new dash good looking. Feels like the late 80’s ford Taurus’s digital speedometer. To make things worst. The shopping and negotiation process with dealers and brokers adds another level of anxiety. At the end, I’ll most likely lease the X5 as there is no other good choice out there.
Honestly, it boils down to how long you want to keep the car, as well as how much you drive. X5s are leasing like garbage now. The residual is not inflated and is only 55% for sDrive models and 57% for xDrive, both at 10,000 miles.
Unless you get a 50i or M50i, there are no lease incentives other than conquest/loyalty. Even for those trims, the incentive is only $1,000. The finance credit is $2,000 for the 40i and $3,000 for the other two.
I personally would not buy a German car (or any car for that matter!) due to the maintaince and upkeep over the years. However, if you want to purchase an extended warranty, that would cover you for many things, but you’d still have to pay for brakes, maintenance, etc., unless you buy an ultimate care package, which just adds more onto the price of the car.
With such low miles, you’ll probably only have to,pay for 1 or 2 brake jobs and oil changes, since you get 3 years of maintenance included. I used to just change the pads every other brake job, so with the maintenance BMW will change rotors and pads, on your dime do pads, if you need another brake job, than on the last one do rotors. It also depends where you get the work done, or if you do it yourself. Independent shops are usually cheaper, though no loaners. Oil change, probably every 18k miles if you drive easy, and not on dirt roads. Plenty of shops with good deals for that. Tires should last you 20k miles with proper alignment, so 3 sets? Air filter is pretty easy to replace. Cabin filter probably the same, don’t know where it is on the new model. This is about as low as you can expect for maintenance. So if this is ok with you, buy. If not lease and just repeat every 3 years. Remember, the X5 just had a total renovation, so history shows, that it will have a higher level of bugs and problems compared to a model that has 3 years into it. My two cents, for a 2020 model, lease it.
Now I just need to figure out whether I go thru a dealer or broker to lease. So far nyclife gave me numbers that also the same as the local dealers. Can someone give me the pro and cons of going thru a broker? I don’t get persuaded by the finance manager to buy anything extra so that isn’t a problem. The broker requires MSD vs the dealer do not. Dealer is able to order only the options I need and not others. Thanks
Brokers do not require you to “do” anything. But they will structure their lowest rates with MSDs. If the local dealer is giving you truly the same discount then just do that. But keep in mind they may offer you the same monthly for a larger DAS.
January just isn’t a good month to get into a new car.
Buying is always a better option if you keep a BMW for 5 years or more. I ran both sets of numbers on BMW’s own site and entered the appox. trade in value for a BMW X5 50i with moderate options. The advantage of buying in 60month with 2,500 down for lease or buy works out to $16,500 lower cost of financing over lease. That is around $225/month for every month over 60 months. In other words the only difference is that the person buying is driving a 4 and 5 year old car in years 4 and 5, but ends up with an extra $16,500 in their pocket if they choose. Financially this is a no brainer if you can make the higher monthly payment.
Technically, you could put the monthly difference in payment in bitcoin and you might come out ahead with leasing…
If you’re using BMW’s lease estimator tool for your lease numbers, you comparison here is irrelevant as those numbers are not indicators of what your actual cost, with some effort put it, would actually be.
Same can be said for their financing numbers. You also need to include the maintenance costs in your comparison.
