Quick question for all. I have not leased in about 12 years (I purchased my last 3 Subaru /Mercedes in past 12 years with cash) but will be jumping back into leasing in next 2 weeks as I need to preserve my cash for a duplex I plan to purchase in February 2024. (Buying Investment Property is a heck of a lot more important in life than buying a car so thats my priority and reason I am back to Leasing for a couple of years)
Back in the day I always did 15k miles on my lease deals and living here in So Cal I drive easily 15k per year.
Since almost every single deal I have run across here on LeaseHackr and elsewhere quote 24/10 or 36/10 (I have even seen a few folks doing 36/7.5) what are you guys doing when you inevitably go over the 20k or 30k miles for the term of the lease? Are you just planning and budgeting in advance on paying the overage at end of lease or are you guys really only driving 10k or 7.5k miles a year?
I never went over my mileage limit on any of the 3 previous leases I have had but do remember the fee per mile for the overages where very high 12 years ago and that incented me to stay just below the mileage limit.
It’s a pretty standard term that fits most peoples needs and realistically for a couple of years there 7.5K was more than enough for many, so much so that BMW started offering it across the whole model lineup where it wasn’t an option before.
There’s nothing magic about it. 10k miles works for alot of people and generates cheaper payment. If you need 15k the deal can be adjusted but you’ll need to pay the extra $$$ - the mileage isn’t free.
I know you can adjust to 15k…have had 3 leases and they where all bumped up to 15k. I was really just curious if most of you guys are really driving less that 10k miles per year? That is difficult to do in So Cal or Montana or Nevada etc…in the Western states we drive much longer distances than folks on the Eastern Seaboard…
I live in Northern San Diego County so I dont spend hours in traffic either.
Not all of California is freakin LA…many of us are smart enough to live in rural parts of California where the distances are vast. Same with my second place up in Montana…no traffic up there unless you count the cattle up near Red Lodge but it is 125 miles from Red Lodge one way to Bozeman for example…
Everyone’s mileage use is different and that can change at any time for some people. There’s people who have 36/10k mikes who end up with 15k leftover and others who underestimated and go 15k over.
I was fine at or under 10k, but took a contract gig late 2021 where once a month I travel round trip 400 miles (all reimbursed at federal rate). Sure enough I’m about 4K miles over at lease end. I’d rather pay the penalty now than paid for miles I wouldn’t have used had this job not come up.
My wife on the other hand has consistently done 12k, she started working in 2022 and her miles have shot up, and we’ll pay the penalty and prepay for some additional miles at 22 cents vs 25 cents at lease end with bmw.
It’s not a science, but you just have to get the right mileage for your needs and be ok with leaving some on the table or paying a premium for extra miles.
Lastly you’ll also see a lot of people doing 7.5k miles on high msrp cars (above 100k), Mercedes, Audi, bmw… because paying 25-30 cents per mile is cheaper than dropping 1-2% residual with each mileage teir
12 years ago there where not really options for prepaying excess mileage…you just had to bite the bullet and pay (luckily I never went over) at lease end.
So in your case/experience BMW captive leasing (I will be going with BMW for this new lease as well) is offering a Prepay option that is about 3 cents lower per mile than the lease end overage per mile fee? How far in advance are you planning on paying your mileage overage in your case (900 bucks or so) a month or 2 before lease end perhaps?
A lease would likely be on your credit report similar to finance unless you were doing a one pay and / or MSD’s. What worked 12 years ago may not be the most cost effective answer for you today for several reasons.
MF has increased across most makes / models and rv has trended down with most cars today being more expensive than they were, it tacks on more money per percentage point drop than it previously did. With a few points drop to rv from the 10k mile leases you typically see, the equation starts to favor a finance over lease scenario.
Would you be open to finance something with CPO / Warranty if it made more sense? Are you aiming for another Merc / Subaru or something else?
No it wont. I run a S Corp and the lease will be procured with my business as where my previous leases and will only show on personal credit if I default.
Again, This is not my first time leasing and some of us lease via our businesses and not sure how my credit report came up on a question about how many miles are you guys driving nowadays…
In my case, my car- I had some equity in my truck. So instead of turning it in and paying overage fee and disposition, I elected to buy it out and am in the process of selling it.
In the other case, the bmw, I have two on my account, an x5 maturing 4/2024 and a 530i maturing 10/2023. I just checked and I have the option of prepaying mileage, say 10,000 extra miles at 23 cents and saving 200 bucks in total. I was wrong when I said 22. Still it’s an 8% discount.
However, on these lower msrp cars it’s cheaper to get the miles you need than to pay a premium even if discounted
Most lease captives offer a 7500/10k/12k/15k lease term. A few non-exotics do as few as 5k, Ford is the only one I’m aware of that has (or had) a standard 18k. For non-demo/non-loaners, change in mileage adjusts the residual. So if the quote is for 7500 and you drive 10k, your residual will be lower.
And whatever you drive, get enough miles to cover it, not too many, and maybe round down a bit. I drive 800-1000 a month and I work from home, except for a few years where I had a long commute and drove close to 15k/yr, I’ve always leased at 12k/yr. I turned one lease at 36 months with 36,002 miles.
Great. I was only asking b/c a finance & a lease could both preserve cash for your upcoming purchase. Historically the LH community could get a good to great deal leasing & have a new car under warranty with a low total cost of ownership. Since Covid / Supply Chain / whatever that has changed with a few exceptions here and there. In many cases it makes more sense to finance than lease on certain vehicles or in certain use cases. It’s your money though.
Will be getting 2023 X5 XDRIVE45E and looks like I will be able to get the PHEV pass through…if not thats fine too it wont kill the plan to get the vehicle…
