Help with my BMW leasing calculation
I want to get a 80k BMW and I realize leasing is much better than purchasing . Here is my calculation Rent for 3 yrs costs 1200/month total 14400*3= 43200 Same car from 2021 worth 50k, price dropped 30k. Put 80k in bank with 5%CD, got 4000/yr, total 12000. -43200 + 12000 + 30000 = -1200 At the end of 3yr I only lose 1200 and I can buy a new car from 2027 model. I only lose $1200 for 3yrs for a new BMW. Anything wrong?
What about the expensive maintenance? Is it covered?
Its a new car, most of maintenance are covered by insurance
Why are you including a $30k? You’re leasing a 2021 year car which is worth $50k. That should be your baseline for comparison. Did you also analyze the trade offs if buying?
I mean after 3yrs value of car will drop 30k of I buy it today
Naah, you are looking at the costs differently. If you had to buy the same model out right it would cost 80K now less the depcriated car value at the end of 3 yrs (X = purchade cost minus car residual value ) vs lease of cost with given 1200 per month for 3 yrs (Y) car value after 3 yrs =46.4k https://www.omnicalculator.com/finance/car-depreciation X = 80k - 46.4k = 33.6k is the true cost Vs Y is the cost to lease 1200x12x3 =43.2k You should not take the investment income into consideration as you have to pay monthly installments for the lease and you would not have true 80k to begin with
Well, 33.6 vs 43.2 which less than 10k difference. But I have to pay out 80k in front if I buy. I can safely find 3yr CD which pay me back more than 10k. Which means I use this car 3yrs for free?
Nothing is free. You pay a little more with lease with the benefit of getting some money in the form of interest and usually lease comes out little higher than owning. Lease option is not recommended for long term unless you have some sort of tax right offs or keen on getting latest model without needing to worry abt car maintenance after few yrs.
Pay cash for a used BMW.
If you are planning on only keeping the car 3-years leasing might be better. The cheapest way is to maintain with a specialist Indy after the “free” maintenance ends and just keep it. Keep it clean and maintained and you can own it as long as you want with no payments after it’s paid off
I can keep 3yrs loop again and again right?
The difference is that you can own and have 6 year loops which will save you more but you will be driving almost 6 yr old car every 6ish years. A 6 yr old car needs no major repairs if you keep up with maintenance.
Where do you get a 80k bmw for rent at 1200 per month?
Dealer
What car is it?
Does 80K include the taxes as well? If not, then leasing will actually make a lot more sense. Plus every year you have to pay the taxes to dmv, something around $600-800 for the registration. If you haven’t factored that in the 80k then add those as well.
Anyway you pay property tax every year.
Toyota Camry TRD
So what you’re saying is, leasing is $1200 more expensive over three years than buying? Ok
Leasing is more cheaper
43k<20k. Who gave you this nut job?