I’m considering whether to lease or buy a 2024 BMW i5 M60, with an MSRP of $97.2K and a residual value of $52.5K (54%) at the end of a 36-month lease. Since it is now the end of 2025, the lease would end in September 2028, making the car about 4 years old at that point. I’m concerned that the market value of the car will likely be lower than the $52.5K residual value when that time comes.
Here are my main points of concern:
Depreciation: If I buy the car new now, I’m worried about taking a significant depreciation hit in 3 years, as I expect the car’s value to drop substantially in that time. Buying a used one now seems risky as well, since the prices for used ones are close to the new car price.
Leasing Strategy: If I lease the car, is there anything I can do to set myself up to buy the car at lease end when the market value is likely to be lower than the residual value? I understand that I can’t buy the car directly for less than the residual value according to the lease contract, but I’m wondering if there are any options or strategies (such as negotiating with the dealer or financing through a third party) that could allow me to purchase the car at its market value, which I expect to be lower than the residual value at lease-end.
Long-Term Value Considerations: My primary goal is to avoid paying more than the car is worth at the end of the lease (the $52.5K residual value) when I suspect the market value will be lower. I’m trying to make a smart decision that avoids taking the depreciation hit while also allowing me to keep the car if I really like it after the lease ends.
Would you recommend leasing or buying in my situation? If leasing, are there any options I should consider to buy the car for less than the residual value at the end of the lease?
Lease, and let BMWFS worry about all of those depreciation concerns you listed above.
Then just re-evaluate your situation in 2-3 years time.
But there is no silver bullet or magic strategy that will let you buy the car out for less than RV at lease end. I would fully expect to just turn it in.
In this scenario, it would be best to plug in your car’s numbers on the LH calculator. From there, you can also see the finance comparison tab. If you become a supporter, you’ll have access to lease programs instead of having to visit Edmunds’ site to confirm the residual value, money factor, etc. Two crucial reasons to lease instead of buy EVs, would be lease-specific incentives and the financial protection against accelerating depreciation.
To answer your one question about buying the car out at a price different from the residual, you’ll need to review your lease contract. I would not count on that being a possibility, although I have not had a BMW lease in some time. Perhaps another member can speak to that.
Recap: The best way to analyze your scenario is going to need some raw numbers to parse, otherwise our opinions on leasing vs buying are really just conjecture and forecasting.
I would not buy an EV if I knew it could be far cheaper to lease it over the course of 3 years and then decide to wash my hands of it without fear of market fluctuation.
Thank you for the replies. I included a link to the lease vs buy from the leasehackr. The problem I am running into is that the lease calculation is off, and I can’t seem to get the numbers from the calculator to match the deal sheet they sent me. The lease calcu shows a payment of $864, but the deal sheet is showing $968, about a $100 difference. I cannot figure out why, which is also clouding my judgement on whether this is a good deal or not. Please provide more opinions on the lease vs buy in the deal, and also whether I should lease with the intent to buy at lease end. Thanks in advance.
@apex@j_e_f_f Thank you for your responses. I was able to create a lease vs finance in the calculator that you can see side by side. If I want to keep the car 7 year vs doing a least, twice, which is the better deal? And separately, what do you think of the leasing deal?
I appreciate what you are trying to do here, but I don’t think there is a way to “have your cake and eat it too”
I would hands down lease an EV. Things are changing fast and the technology could and probably will advance many times in the 6-7 year ownership period.
As far as buying the car you leased for a lower than residual value, I have heard of people tracking the VIN and either having someone in the “biz” buy it at auction or chase it to a dealers lot. But why? Just get a new one, or if the deal is great on used, buy any one, does it have to be your old one?
So I would call it driving an EV long term, not necessarily owning it long term. Too many unknowns still.
That’s what people think, but it’s not really true, at least wrt EV tech.
Some cars are starting to offer faster fast charging than others. But the fastest speeds aren’t available on all chargers/models.
Battery tech might change in next few years - but that doesn’t make today’s tech obsolete. Solid state batteries is I think the next innovation, tbd what actual impact that’ll have to future buyers.
More likely to see meaningful change in other tech. Autonomous driving & Software Defined Vehicles. Something you buy today won’t be upgradable.
With so much in flux, no one knows what lease deal will be available in 3 years or what the used market will look like.
If there’s a huge delta between RV and market value, just turn in your lease and prepare to lease again or buy used/CPO depending on what the market conditions are
I’m not an engineer and haven’t done a deep dive, but I think what will change in the next few yrs is that legacy car makers will do a better job at integrating the batteries, resulting in light curb weight, more efficient packing, and a structure that is better designed to protect the batteries. Legacy car makers will basically catch up to what Tesla is already doing, in that regard.
I consider all of the above to be significant (potential) upgrades.
Just lease it. The 3-year depreciation on a BMW EV regardless of whether it’s new or used is going to be more than the cost of a 3-year lease. If in 3 years you prefer a 3-year-old EV to a new one there will be plenty of lease returns to choose from at a price lower than the RV.
Batteries - Is that a manufacturing thing or a technology thing? For the latter, I didn’t think there were significant differences in energy density.
Lighter weight - think this is one potential benefit from solid state batteries. But many TBD’s here. Lots of new battery tech has been “a few years away” for at least the last 10 years.
Battery protection - What’s the context for this one? I thought the protection for them was universally crappy.
None of us know: that should be OP’s takeaway. Lease it because in this instance the option to walk away with $0 NE is valuable and because the lease is hackable
Negotiate or take the best lease deal you can based on Marketplace
Buying cars depreciate like that is always a bad investment. The money you lose on the depreciation value could lease or even buy you another car in 3 years.
Memory is that some people on LH talked about getting underbody damage on EQS that caused battery damage that ultimately wasn’t covered by ins b/c ins said that the car wasn’t designed well enough to protect the battery. I think one poster mentioned Tesla used to have a similar problem but had added sufficient protection in later updates.
yes and no. I’ve seen owers talking about their 10+ year old EVs (mostly Tesla) with over 300k miles on them. Not may ICE brands can do that with minimal maintenance.
on the other hand BMW even with ICE always has problems with their tech…
it’s not like if it’s BMW with ICE or BV - lease it and dump it.
