I grossly underestimated how expensive the effective 'ownership' of my leased car would be

Off-Ramp
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YMMV, this is just my take

Edit: Unfortunately I was a longterm lurker, and I have the reply restriction with this new account, so I’ve gotta wait for 20 hours to reply lol.

Hey folks, I just wanted to make PSA/discuss how easy it is to get carried away with the tempting monthly payments on entry level luxury (loaners in my case). So, for context, I was in the market for a daily driver last year as my commute had increased to about 50 miles round trip, and I didn’t want to put that kind of mileage on my 2013 M3 Convertible ( Still has only 35k miles as of today). I had already been on the hunt inactively fro a daily since mid 2017 and ending up finalizing April 2018 on an irresistible loaner c300 with 8700 miles from a Pennsylvania dealer. It had everything except the self-driving tech (Distronic I think?). I was a bit weary of the 8700 miles despite service A being performed, but the dealer ended up giving me almost 20% off msrp, putting me at an effective monthly of 375+ tax with 1k DAS. At the time I signed without even negotiating. Had I known this forum, I would have probably taken my time haha.

I ended up moving three months later to Virginia. Big mistake. I had to shell out 1200 buckeroos at the DMV upfront to register the car in VA. In addition, I’ve paid 700 bucks for the first year of personal property tax. As far as maintenance goes, my nearest 3 dealers unfortunately have a higher labor rate, and I ended up shelling out $740 for the 20k mile service B, $1090 for new tires @18k miles, $700 for 30k mile service ( Had an alignment done for $180). I also had to pay $100 for a front tow hook mount since this was a PA car w/o front license plate mount. Then, this tow hook mount failed as it was interferign with the brake assist, so I had to shell out a further $140 to get a proper bracket installed. Projecting further costs before turnin, I will have the 40k mile service, which is a major one, and was quoted $950 atm. At this rate, I will most likely also have to throw on some used OEM Runflats before turn in at a cost of about $500 for all 4. And finally, the turn-in fee, as this will be my last lease lol. I want to actually customize my cars to my liking, and hence, realized leasing isn’t for me. I do understand I don’t have to take the car to the dealer, but honestly, for peace of mind since its a lease, I prefer to just take it to the dealer.

In a nutshell, the effective cost excluding insurance and fuel is $21235. Suppose last year, I just bought a used 2016 with cash just under 20k miles (Service B performed) for ~31k as a CPO, meaning I get warranty till 2021 ending (Same as my loaner lease essentially). If we say that I put 36k miles on the car before selling it. I would have then spent about 30k + $1100(DMV Tax) + $500(PPT Year 1) + 390(PPT Year 2 ) + 350 (PPT Year 3) + $1000 (non-runflat tires) + $700(30k mile service) + $950(40k service) + $700(50k mile service)= 35,780. At the end of the 3 years of ownership, and ~55k miles on the odo, the car would be worth about 17k according to my research and instinct haha. 35780-17k amounts to about 18k ownership cost across the same 3 years I’m leasing. Not to mention the excess wear and tear costs that could in bad fortune occur. I could also save much more by taking the owned car to independent reputed shops.

TLDR: I will be spending $21,235 over 3 years on a leased c300 that would have cost me approximately 3k less had I purchased a similar example as as CPO instead. That $13,500 of payments is no where close to the actual ownership cost. Don’t let it fool you. I got stuck with two B services as well as part of my lease. Next time around, I will most likely buy, or if a lease, stick to BMW ( Inclusive maintenance)

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So if you purchased your car you’d still have those costs. Add depreciation on top of that. Your ownership cost is less expensive with the lease. Also you didn’t do your due diligence prior to signing…

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Thank you for the detailed and heartfelt post. It’s important to try to figure out what works for each person.

In my end. I do low mileage leases, short term (24 months) and usually trade-in or pull-ahead even faster so I don’t have many maintenance fees. I do pay to tint the cars everytime !

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I accounted for everything in the calculations, depreciation as well ( 30k -> 17k) .

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I see two huge YMMV factors here;

  1. Residency in VA which has obscene taxation on leased vehicles (nothing you could do about that)
  2. Insistence on servicing at the dealer at full list service prices (which you already acknowledged)

Strip those out and it’s a way different story. I also don’t think it’s valid to compare leasing to paying cash as a way to get around finance charges.

But yeah, any German car will cost way more to service than an Accord or Camry. It’s good to be aware of those costs up front if the lease does not have free maintenance. IMO, it kind of defeats the purpose of a lease to be spending thousands of dollars on maintenance. Hell, even hundreds of dollars.

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Yes! Absolutely got screwed over by VA and my insistence to service at dealer haha. I’ve added a disclaimer to the top so people don’t bash me. This post was a viewpoint from a poor soul who doesn’t live in California, which seems to be leasing heaven.

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I still think you’re better off with leasing this vehicle instead of the purchase

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You did not read my post in its entirety then :slight_smile:

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Unless you meant c300s are better to lease in general. In which case, yea obviously lol.

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It’s just to hard (for me at least) to predict what depreciation will be. Too many factors involved that’s why I like leasing.

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So you’re saying over the life of the lease, you’re paying about 10%/$2k more to be in a 2 years newer car with no risk of the car dropping value and you don’t have to lock up $30k in capital?

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Why don’t you just buy your lease out. You have that right. If you do that it’s just like you bought your car.

Now if you think you could have bought the car at a lower price than the negotiated lease or the interest rate on the lease is more than for financing a buy of the car then you may be correct that you lost some money.

That being said if you lease and think you are paying too much to turn it in and can sell the car more than the residual value, just buy the car at the end of lease.

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Good point. I agree with that, but I’m being very generous with my prediction tbh. I took a look at what 2015s are selling for today as some of my datapoints. But you’re right. Depreciation can be avoided with leasing.

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Don’t always write off the dealer’s service department. My Acura dealer is always throwing coupons my way for service and when my rear diff fluid needed changed at the most recent service they were actually cheaper than the indie shop I use for my other Honda. Labor rates and parts on heavier repairs may be a different story but for basic oil/fluid/tire rotations the coupons make them as good if not a better deal than my indie shop.

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Firstly, it was a 2017 I leased, forgot to include it in the post above. And I get your viewpoint on this, but I am not an aggressive investor, and don’t plan on investing the money elsewhere at this point in life ( Im 24).I would have realistically just put 10-12k cash down and availed the 1.99% special apr. Also, not trying to sound like a snob, but good fortune the past couple years has me in a position where 30k is a spareable amount of capital atm.

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Yes, this is a YMMV case especially for me. I could have made a 1.5 hour drive and saved 30% off services, but I chose not to

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Then why borrow 75% of the theoretical purchase? Why pay interest on tens of thousands if the :moneybag: is just laying about looking for a purpose?

:bat:

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What they’re selling for private party? What dealers have them listed for?

A better bet would be to get a quick quote from carvana or something like that on one to get an idea of what a quick, reasonable selling price would be.

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Well you’re 24. Just learn from this. Wouldn’t make me stop leasing though.

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You own a M3 Convertible…and you’re surprised at the upkeep costs of a German luxury car?

I’ve leased 8 Audi’s…never paid a penny in maintenance (Audicare) or upkeep…not even tires or brakes.

In my pre-leasing life, I owned Mercedes and Saabs…and, as they used to say, it was a real Saab story…like Captain Quint once said about lifejackets, I’ll never own a luxury car again.

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