This is the way to do it. Or buy an even older version when depreciation is at 80-90%. Especially with BMW, the forums will all have step by step instructions on how to fix just about every issue imaginable. And worst case, if the engine grenades, you arent out that much money.
2 Likes
It really depends on the car.
For BMW in your scenario, I will not touch anything higher than 5 series.
1 Like
I have been successful with a couple of 3 series. I would avoid anything M related. I always wanted a 7 series, think the E38 would have been a good candidate, but those are a bit old now (plus I would want a short one which are harder to find). I might try a 10-15 yr old X5 if I can find the right example. I’m also looking between that and a similar vintage Cayenne for a “fun” extra car.
Nice choice. IMHO e38, e39 & e46 are BMW epic design and goes downhill from there ;). Not a fan of their SUV. I may want to pick up e46 M3 coupe with mystic blue or imola red once I’m done with my kid’s college. 
1 Like
@PNWcr , the LH calculator already has tools to help someone quantify the break-even ownership duration. You can provide deal economics of a lease to get an effective monthly cost over the lease term. And there’s an option to provide the financing/purchase economics (with a corresponding sale of the vehicle after X months) to find an effective monthly cost over the ownership term.
Assuming you agree with the use of the effective monthly cost approach, then there is break-even period of ownership where the monthly costs are the same between those two approaches.
Here’s an example of it for an X3:
I believe the calculator is missing some things though. For me the glaring omissions are the opportunity cost of the equity stuck in the vehicle, and the expected cost of owning the vehicle beyond the warranty period.
As with all math exercises, this could get wildly complicated before it provides a valid comparison… so there is no easy answer we all agree on (yet).
I posted a suggestion about an example break-even calculator here:
https://forum.leasehackr.com/t/add-in-opportunity-cost-of-equity-in-the-finance-calculator-to-find-where-leasing-loan-financing/
@littleviolette , @delta737h … The OP of this thread is not a burner or alt for my account haha. I agree there seems to be an opportunity to educate users on the tool. So far, in this thread people think the break even for financing/owning to be better than a lease is somewhere between 4 years to infinity years… and “it depends”.
But at least the dialogue here is in a positive direction.
3 Likes
Yeah of course. It’s a general statement. With some of these LH deals, I should’ve said 12 years 
.
How many B58 powered models come with air suspension?
I agree with you if you’re saying BMW turbo 6s got a bad rap starting with the N54 and that the newer ones shouldn’t be tainted by that association.
But there’s a ton that can go wrong even if the engine and turbo are fine. And some BMW N/A powertrains had been problematic long before their current turbo era. I also don’t see how money spent on powertrain parts replacement is any different from air suspension parts replacement.
Now if someone wants an E39/46/60/9x specifically because of how those cars handle I’m not going to tell them to look elsewhere. Those are fine cars that, in the right spec, arguably have no equal among their peers. But I’m also not going to recommend BMW to anyone looking generically for any used luxury car; they’d be much better served getting a Mercedes W212 with the 3.5L for example
Bottom line is knowing what you like and being able and willing to maintain it.
Quite a few. X5, X7, 5 series, 7 series. X7 and 7 comes with air suspension standard whereas the others are options. Recently BMWs are a lot more reliable than Mercedes. Also, air suspension wise, even a high end japanese car with air suspension would need the same replacement. Drive train is pretty solid with recent BMWs.
1 Like
The tough part for this conversation is no individual will ever have enough information to make a reliable inference when it comes to the vehicles in their household.
But, I am aware that the profit margins for extended warranties are well over 50%. Which means if someone pays $3,000 into an extended warranty to cover a vehicle from 37 months to 70 months and 36k miles to 70k miles, the extended warranty company has data to expect average costs to cover repairs on that particular vehicle will likely be around $1,500 on average.
But we all know vehicle repair costs vary wildly. If you get hit with repairs, it’ll be very expensive. But some people won’t see any issues, so they basically paid $3,000 for nothing. And of course some warranties won’t cover a tie rod or ball joint while others will, and it’s a giant headache for everybody to fight for every penny of coverage. Sucks for the car owner.
Anyway, for every 10 extended warranties sold, it’s likely 9 of them will incur very little covered costs during the period. While 1 person will see combined repair costs in excess of the $3k. The extended warranty business isn’t like insurance though. Insurance is highly regulated. Extended warranties can profit out the wazoo.
So these warranties are sold to prey on the fear you’ll be in the 1 out of 10. This also gives the marketing department examples of the 1/10 to put on their advertising about how smart it was to get the insurance. I guess the 9/10 got peace of mind which has an intangible value.
I usually recommended people to “self insure” for car repairs if they aren’t leasing. If you think you’re in an unreliable BMW or Mercedes that will need $2,400 a year post-warranty repairs, then it’s reasonable to set aside $100 a month from the onset of the purchase so that you have a savings of $3,600 once the vehicle warranty ends. Then starting month 37, save $200 a month. Edit, yes I am aware that this savings will likely have an investment return and opportunity cost, but come on, that’s too complicated haha.
Sure, one cracked engine block will blow up your $3,600 savings, but the chance of a cracked engine block isn’t 100%. You’re also not facing a 100% chance of an air suspension issue in Year 4.
The extended warranty companies want you to think your chance is 100% though. Fear drives big profits.
4 Likes
Yeah, that’s why I don’t get extended warranties anymore and just do more preventive maintenance instead. Repair costs are a lot cheaper at independent shop vs dealerships as well. Warranty is likely based on dealership repair costs. On average I save a lot more money vs extended warranty. In the case where I’m unlucky, I can afford the repair cost and will just take it.
5 Likes
Yeah, it’s better to find a good shop than throw money at an extended warranty.
The experience of these Throttle House guys at the end of their recent LR4 video is basically everything I’ve ever expected of extended warranties. The warranty company will do everything they can to weasel out of paying a claim.
Everybody becomes some contract-lawyer-expert at the most inopportune times.
3 Likes
Average is bit of strange concept here. It depends on each car…
I have no idea how you average my Leaf I’ve had for 21 months at $125pm and not I got Arya at $230pm. Leaf was $30k MSRP and Arya is $50k MSPR. And I know they all have Fed rebate of $7,500 but not everyone can take full advantage of that based on their taxes. So leasing for some if a way to capture EV rebates otherwise they could not get.
But on the other hand for as long as I’ve seen many Toyota models (excel for a period of everyone got a Taco and/or Tundra pre-covid) it’s better to finance than lease.
2 Likes
Fear drives more human emotion than greed. There’s a reason they make the money they do.
Long story short…buy a Toyota
Does anyone ever execute a lease with the purpose of creating equity, outside of applying lease incentives before a buy out?
There are far too many variables to establish a benchmark for how long you’d need to own a specific vehicle before the cost of leasing exceeds the cost of ownership. Plus, most people don’t lease beyond 36 months.
If you’re doing it right, your lease hacks should be good enough that you’d never have to worry about coming out ahead if you were to finance a vehicle instead of leasing it. And after 2-3 years, you’re moving on to the next car and letting someone else play mental gymnastics about TCO for your lease return.
1 Like
You are going to trigger some folks around here with that “never break the lease cycle” talk. BTW, I agree with you as if you doing right you are always going to have a payment but always have the cars you want via leasing.
In the first time in forever, we have three purchased vehicles at one time just because of the use case for each car/truck and leases were awful for all three at the time. We also have bought used and CPO, and also bought new and kept past 3 years and the warranty as well.
Generally speaking though, it is hack away for a lease then dump it and hack again.
Yeah, it just requires a lot more work versus finding one car and driving it into the ground. Plus, if I was shopping a car to own forever, it certainly wouldn’t be any of the cars I’ve leased or even remotely close to their MSRPs 
3 Likes
I’ve used it before and it varies on the vehicles, incentives, etc; that I’m aware of. I use the effective monthly cost because I’m sure it reflects the more accurate ownership cost. Thanks
I used the LH calculator for a buddy wanting a new Taco and it was one of the few vehicles where financing was better.