Unless you’ve been in the market for a car recently, you may be confused about all the terms around buying vs. leasing a car. The truth is, leasing has a bad reputation — and that’s unfair. With leases on the rise more than ever — and most luxury vehicles like BMWs — being leased, it’s time to revisit and think more about what you’re actually getting when you lease a new car. Here’s what you need to know to make that decision for you:
Get a New Car with Every New Lease You Sign
If you’re in the market for a new BMW every two to three years, then leasing can get you there. You’ll be able to get a BMW with the latest upgrades. Sometimes this is especially important to consumers who are accustomed to driving luxury vehicles and who want the newest models available.
The only downsides are that you cannot customize your BMW and you should make sure you aren’t leasing a car that is above your means if you are planning on buying a home. Home lenders look at a car lease that is above your means — even if a lease makes it more affordable for you — as risky behavior. Barring those conditions, a lease can make sense if a new car is a priority for you every two to three years.
Don’t Worry About Manufacturer’s Defects
One of the greatest benefits of leasing a car is that because car leases typically are two or three years, there is a high chance that your car isn’t going to break down. If it does, it’s repairs likely will be covered by the manufacturer’s warranty. This includes faulty parts such as the engine, the heating and cooling system, the electronic system and more.
What it usually does not cover is normal wear and tear. Therefore keep this in mind. It’s possible that if you use the car a lot, you may need to replace the tired and brakes. If you have a dog or children who are unruly and messy — and they cause damage to any part of the car — you may need to pay a fee. Be careful and treat the car well or you may end of paying extra fees.
Put Down Little to No Money for a Downpayment
Leases are extremely attractive because you literally can walk onto the car lot, put no money down (or little money down) and drive of in a new car. When you buy a car, you will need to put down at least 10 percent or more for a downpayment. For a $25,000 car, that means you’ll need to have $2,500 cash or have to finance both the downpayment and the car — and those both come with interest. Remember that you are in control of the negotiations when considering a leased car. Negotiate the car price down, the terms, the downpayment (if there is a small one), and more. You have everything to win by doing so.
Pay Less Per Month and Get a Tax Benefit
Leases typically are about a third lower per month than car payments — and over time that can save you money if your typically car-driving behavior is to purchase or trade-in a car every three years. The reason is this is you probably won’t have paid off the car in three years, so you’ll need to pay it off and buy a new one — incurring sales tax and interest in the process. With leases you actually only pay taxes on the lease payments in most states instead of the entire price of the vehicle, which is what happens when you buy a car. Plus, if you drive the car for work, you can deduct a portion of the car’s deprecation from your taxes.
At the end of the day, deciding to lease a car is really about your lifestyle. How much will you be driving throughout the lease? Do you value new cars with upgrades? Would you prefer not to have to deal with the hassle of parts breaking down that are covered under the manufacturer’s warranty? Are you planning on getting a new car every two or three years anyway? Do you have money saved for a downpayment?
A lease can be an attractive and affordable way to drive a BMW, but keep in mind that you won’t be buying the car by leasing it. You’ll have the option to do that at the end of your leasing contract by talking to your dealer about financing the car.
Fantasizing about owning your very own BMW while strolling around an automobile showroom is not a very pleasant experience. Vehicles are one of the most expensive purchases you’re going to have to make, but with a BMW lease deal, suddenly everything becomes possible.
If you’re looking forward to having a car, but not owning one, a BMW car lease is a very attractive choice. Leasing a car is very much similar to renting one, but with very different rules, regulations, and policies. A car lease agreement allows you to have control of the vehicle after a certain number of years, but when the leasing agreement expires, you would have to turn over the car, start a new lease, or purchase the car instead.
A car lease becomes the perfect choice for two kinds of people: those who are light in their pockets, or those who are wealthy enough to constantly upgrade their cars every few years. Purchasing a brand new car is next to impossible for the first group of people, while buying cars every few years is a very impractical choice. People who aren’t looking forward to owning a vehicle just yet can sign up for a car lease, but should be forewarned of what a lease usually entails.
A BMW car lease allows you to make monthly payments based on the vehicles depreciation levels. After selecting a car from the car dealership, the car is forwarded to a leasing agency for an estimate of its depreciation cost. Your monthly payments will be based on paying for your chosen BMWs depreciation cost, which is a lot cheaper than having to purchase a brand new one.
Know full well that your credit score affects your monthly payments as well. The finance charge is an additional charge that goes along with your depreciation payments, and the amount depends on varying percentages of your credit score. If your car is damaged, or goes beyond its number of miles as discussed on your leasing agreement, extra charges may be added to your BMWs original leasing price.
Always pay attention to the BMW car lease details stated on your lease agreement. Also, keep an eye out for the car lease deals for an even larger cut on price. With a car lease, you wont have to plot your life on owning one, you can acquire your own car for as long as you can pay a very small amount.
Leasing a car can be a dream come true for some people, and there are many reasons for this. Some are simply excited to have a new car while others just want to have a new car without paying retail prices. No matter how you look at it, leasing is a great option for those who want to have a nice car and save a sizable chunk of cash.
There are a lot of pros for leasing a vehicle. For example, most BMW car lease deals end before the car’s warranty expires. This means repairs or services are covered, which puts a smile on people’s face.
What Does a BMW Car Lease Deal Involve?
This is a big question that needs to be broken down. The following are some of the things involved in leasing, which should help you plan your next move.
Your Payments Reflect the Car’s Value.
Okay, you are probably wondering how the monthly payments are figured out. Well, the monthly payment depends on the sale price, so those who want a small monthly payment should look for the most economic vehicle on the lot.
Higher Residual Percent Saves You Money.
The lessee needs to know what the car’s residual value percentage is. This is different for each car and is added to your monthly payments, which is used to cover the car’s depreciation. If you want the lowest monthly payment possible, you should look for a car with the highest residual percentage value. Ask your salesperson for those numbers, and start taking notes.
Understand Your Set Miles.
One thing that most people know about leasing a car is that there are set miles. You can think of these as your monthly mile allowance. You cannot go over this allowance, or you will be charged a fee for each additional mile. Find out how much this fee will be, and be sure to keep an eye on your miles.
Expect a Disposition Fee.
No one likes fees, but this fee is generally unavoidable. It is called the disposition fee, which is expected when you finally return the vehicle at the end of your BMW car lease. Do not fret though; it is usually $300 but no more than $500, but you should still inquire just to be sure.
Understand What Money Factor Means.
The money factor is pretty much the same as your ARP. This means saving requires that you get the lowest possible money factor that you can.
Is it Better to Lease a car or Buy a Car?
You are here so, of course, you are searching for a car. Deciding to lease a car or buy a vehicle can seem like a difficult choice. Sure, car car leases are awesome, but Zooomr thinks you need to be properly informed to make a wise decision.
You Won’t Own the Car
You will not own the car, so this means BMW car leases deal can offer you lower payments than what you might pay for a purchased vehicle. This is possible because you are essentially renting the car from the lender rather than buying it. Sure, you won’t be able to sell or mortgage the vehicle, but you are getting lower payments.
Leasing Cuts Down Up-Front Costs
Purchasing a new car may seem exciting unless you have to finance it. The problem with financing is that you will likely have to take a large sum of money out of your account to make the down payment. Of course, there are some who trade in an older vehicle, provided that its value is high enough to cover the down payment. Those that lease with car leases do not need to worry about this down payment. All you need to worry about is the first month’s payment, security deposit, taxes, and additional fees. Those who want a lower payment can still put down a large sum of cash, but this is optional.
No Need to Worry About Selling BMW Leases
Selling a used car is hard because you will not receive most of the money you invested in it. It should be noted that those who want to sell their cars will have to follow the maintenance schedule to a T, which is not always easy. Those who lease a will not have to worry about getting a car with a high resale value or do any potential customer hunting. The challenge of selling the leased vehicle falls on the dealership.
When you finance a vehicle, you will own the car when you pay your last payment, which means you finally get the vehicle’s title. The title gives you the opportunity to do whatever you want with the car since it’s yours. You will not receive the title at the end of your leasing term, unless you opt to purchase the car. What you are expected to do at the end of your term is simply return the car, and that is it. After people return the BMW lease vehicle, they get a new model.