Overhaulin'

Does buying a car vs. leasing save money?

I'm thinking about buying a new BMW 328i coupe. I've looked at lease options. Monthly payment is significantly lower compared to buying but all the money is gone 100%. Am I assuming correctly that when I sell it 24 months later I will ultimately end up spending less vs. a lease? Thanks

Public Comments

1. The best thing to do is run the numbers. If you want to trade every other year or so, it may be better to lease than buy. Figure out your total cost for both possibilities and compare. If you are planning on keeping the car for a longer period or your are planning on putting a bunch of miles on it, then normally buying is again cheaper. The extra cost of excess mileage will eat you up on costs. good luck.
2. it depends on the lease and whether or not you will stay within the # of miles in the contract. usually 12-15, 000 miles. And you are not really selling it at the end of 24 months, you are returning it, with no equity, as when you buy. so basically it is a rental with the option to purchase at the end of the lease. so if you are looking to save money and can stay under the alloted mileage, and don't want to earn equity, then yes, leasing is good. if not, buying is better.
3. In my opinion, if you plan to trade in 2-3 years leasing is better. Cars typically depreciate 30% when you drive off the lot. 30% on a BMW is a lot of money. Yes, in the end, you won't have anything - but that is better than losing all your money. I had a customer last week that bought a $38K Buick less than two years ago that is only with $20K now. With a lease, you know exactly how much you are going to spend - and exactly what you have to pay if you want to keep it at the end of the lease.