Thread: Crossing over
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Old 01-19-2010, 02:38 PM   #30
everlast
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Join Date: Mar 2004
Location: Ottawa
Posts: 5,847
While the scenario for BMW is a bit more favorable due to higher value when old (compared to say, a Chevy) the TCO is higher too. The "10 Lease" calculation already factors in the value of an asset at the end. After maintenance, the $ sunk into a 10 year old car, including its original cost, minus its value after 10 years, tends to equal the amount of money laid out in 3, 40 month leases. Its not a coincidence, its typically how the market dictates the value of vehicles. For a vehicle with high depreciation and low lease rate, ownership is downright stupid. (Which on the surface seems odd since you pay for most of the depreciation at the beginning, but it works.)

Then consider this: you get rear ended, hard, or sideswiped. You now own a vehicle that has considerable repairs and is worth substantially less. Or, you get a lemon or a car that in 6 years, after working great, has the cooling system take a shit. Once the used market figures this out, the value drops considerably and you're behind the curve compared to a lease. So, the risk factor is removed when leasing. It also provides predictable payments.

However, its not for everyone.. because if you do 40K kms a year, your lease rate would be outrageous.

My E90 has the sport pack. I took it (a 323i) over a 328i hands-down due to the handling. Night and day difference!
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