Loan Vs. Lease

[amneziac85]

Hey everyone, Im looking into the 325ci and the CLK 320. Im favoring the BMW because of price, I can afford the Benz but im probably overly cautious and dont want to dig myself in a whole incase I lose my job or anything else.

That being the intro, this is my first car and looking at loan vs lease, is there anything I should be aware of that a new buyer might not think about? I was thinking 39 month lease, 7 or 8 down.

Thanks in advance for the help.

[LivinFast67]

i think lease's have a tax benifit, where as a load doesn't. couldnt' tell u for sure tho. i heard that

[amneziac85]

Thats interesting, anyone think of anything else?

[Gulelin]

Most lease companies will require you to carry higher limits of liability than on a loan; on a loan they don't care what your liability limits are. They also may require a policy in your name. Excuse my technical stuff, i'm an insurance agent In english it means Leases are a bigger pain in the ass than loans, so check with your auto insurance on it first...you may already have a policy that would satisfy the lease, or if not it may not be a big price increase. At any rate, you should check with your company on it first.

[2001BMW325xi]

Actually even Loan companies require some liability limits. My company stipulated no more than 500$ deductable on the car and no basic liability. But other than that it all good. Heres my take on lease/loan

Lease: Pros: Low monthly; dont have to put lotsa money down; can trade in car to dealer when done pretty easy

cons: cannot do ANY mods; limited milage; basically they tell yu how yu can drive the vehicle---not good; lotsa document hassles; you take in all the depreciation when yu trade in; high refinancing rates if yu actually want to buy the vehicle later.

Loan: Pros: everything that is con with Lease. ITS YOUR CAR.

Cons: High monthly, maybe high Down payment; yu still get hit with depreciation; yu have to try and get a good percentage of interest (BTW i got a 4.8% - used 2001 E46).


So there ya go. Hope yu make the right choice.

[StephenA]

On the leases I've had you could add mods.

The lease rates on the Benz and BMW are great. Also look at the Drivers option Program that BMW has. It's a loan that works like a lease. If you pay it off early there is no penalty like a lease. With a lease you have to pay off all payments to terminate it.

We looked at both the benze CLK 320 and the 325Ci. The main factor was I could never find a benze, much less with colors and options I wanted. The BMW drove a little better. The Benze was more of a girl car (which this car was for my wife). The BMW dealers treated me better, the benze dealers were rude. A point that the BMW dealer pointed out was that they are the leader in these types of cars and hold the market on the convertables. The CLK 320 also went up and price and they are dropping their maintenance programs.

Good Luck on what ever you get.

[Gulelin]

Originally posted by 2001BMW325xi@Aug 18 2004, 11:40 AM
Actually even Loan companies require some liability limits. My company stipulated no more than 500$ deductable on the car and no basic liability. But other than that it all good. Heres my take on lease/loan

Lease: Pros: Low monthly; dont have to put lotsa money down; can trade in car to dealer when done pretty easy

cons: cannot do ANY mods; limited milage; basically they tell yu how yu can drive the vehicle---not good; lotsa document hassles; you take in all the depreciation when yu trade in; high refinancing rates if yu actually want to buy the vehicle later.

Loan: Pros: everything that is con with Lease. ITS YOUR CAR.

Cons: High monthly, maybe high Down payment; yu still get hit with depreciation; yu have to try and get a good percentage of interest (BTW i got a 4.8% - used 2001 E46).


So there ya go. Hope yu make the right choice.

Deductibles have nothing to do with liability, and i've never heard of a loan company putting any requirements on liability, thats the states requirement. It may not even be a big deal but it's worth checking.

[amneziac85]

Great stuff, I'm learning alot here.

But about me having to take in the depreciation...

If BMW says the car will be worth 20k in 3 years, but after the 3 years its really worth 18k, how would I end up paying for the depreciation? Would I have to give them the lump sum to make up the difference? Thanks for the help.

[skawful]

I'd say loan, but thats just how my mind works.