Hello everyone. I have recently been torn at this decision and would appreciate an opinion. I currently have the opportunity to lease a BMW I4 EV for 7.5 miles/36 mo at around ~520m + tax (54K MSRP - $8500 Incentives) and 3k down and I like the car a lot. I also recently sold my previous 2021 Kia lease which gained me $9,000 in “equity” due to low mileage, to put towards my next car. Though I am unsure if I should lease the BMW, or just finance another midsize sedan with a budget of ~$30,000 like the Kia which would have almost equal monthly payments but throughout a 5 year loan. I understand the Kia would be cheaper, but only if I own it for a long time. To give some context I’m 23 years old and self employed and my income is ~100-150k a year (very volatile) and I live in LA and I drive around 300 miles a month because I WFH. Is financing or leasing better for me? And when I drive it’s usually business related so are there more tax advantages of a lease over finance? Is it possible to have equity in 3 years again with the BMW because I drive so little or did I have a rare situation because of the current market? Sorry for lots of questions this is just a tough choice to make.
How often do you actually need to drive?
Very little, throughout the 30 months of my Kia lease it ended up with 8.8k /24k miles available. I haven’t had a car for a month since selling that old one and haven’t had too many issues but would like to get back on the road soon.
Given your low monthly mileage requirements, I would run the math on not owning a car at all and taking public transit (yes, I know you’re in LA, I live here too, and it’s a viable option in some places!) and ridesharing or short term renting cars.
Best case scenario BMW will run $670 / month to operate. (Assuming 100 a month in insurance, and charging costs = $0 – does it come w/ free charging?)
That’s ~27 uber rides of $25 per month…
I guess I should’ve clarified. Are your driving needs more habitual (often but short distances) or sporadic (less often but further distance)
I have definitely considered this but I do love the freedom/luxury to be able to drive whenever and wherever so I’m willing to spend a bit!
Forgot to mention insurance, since I’m younger the BMW is unfortunately about $305/m whereas the Kia is $250/m with 1k deductible. It also comes with free charging for 2 years and I have a charging station a few miles away from me that participates
Definitely habitual, for grocery store trips or food. Rarely do any road trips or long drives of that sort.
I think it’s one of the 10 commandments “Thou shall not own a new bmw”. Certain cars you finance. Bmw is not one of them.
The heart wants what the heart wants.
Financially the smart decision is something boring, Japanese and likely financed.
But if you want a BMW: Lease it.
If I were in your shoes, I might consider a lightly used premium car, may be a CPO. It might be a more sound choice financially, while having a good car for both long and short trips.
If you end up driving it way less than your lease mile allowance, may be lease is not the right choice. $7500 EV rebate that BMW is passing on is attractive but it might be detracting your from making a better choice.
That’s about 500mi/mo (24k - 8.8k)
What was your lease payment + insurance + fuel during that time?
I’d look at renting your utility as inexpensively as possible. How much would your insurance change you for a driver liability only policy? What does that allow you to rent (Turo, Audi on Demand) each month for that 300-500 mi?
Wow Uber must be cheap in LA.
I’m in NYC
A twenty mile ride cost me $70 a few weeks ago.
A few months before that a 15 mile would have cost me $130 during peak hours. Needless to say, I took the train.
Lease payment was $220/m with tax + 2k down for 24mo, extended to 30. Insurance averaged about $300/m as it decreased the longer my driving history became. Fuel was about $60-80 a month.
I have not thought about renting on Turo each month, I’ll get a insurance quote for that thank you!
I have looked at some CPO options from nearby dealerships but sadly in LA the used car market is still so expensive lol! Some places were even charging above MSRP of a new car for a 2 year old CPO with 20k miles. I’ll try to look a bit further out and see if I can find better prices.
True, this might just come down to if I want to live a little or be frugal. I have always wanted a BMW sedan as a kid, but I’m also completely content with a new kia or accord 
So $660-680/mo all-in which means you’re pushing $2per mile.
660 / 300 or 680 / 500 (for months you drove more) - back of napkin.
If you’re self employed, you can write off a % of expenses for lease / insurance/ fuel but you can write off car rentals and Turo also.
You can instacart groceries and drive someone else’s flex for weekend joy rides.
This and the fact that you are asking here before pulling the trigger tells me you are going to end up making a good choice!
Enjoy the hunt and eventual ride!
The used market is still overpriced. The best deals out there will be something with the $7500 on a lease so you’re taking it over 3 years vs the life of the vehicle
It comes down to everyone’s personal situation. In the current market with MSRP pricing, crummy interest rates and few incentives, the BMW is a solid choice. No fuel costs (you’re in LA where gas costs $$$), $7500 + $1000 rebate. Not a bad deal for 3 years.
If you were to buy a “sensible” car, say an Accord, you’ll likely pay full price with a high finance rate. Fast forward 3 years and while I don’t have a crystal ball, I’d bet rates are lower and that Accord sells new for close to invoice with incentives on the hood. The BMW really isn’t a bad choice at current pricing which is very attractive
Yes I agree. I’ve been struggling to find a kia dealership for a 2023 K5 because all of them sell at 3-6k markup which is absurd. Interest rates are also high around 5%. Definitely something to consider thanks.